Will Surge Pricing for Movie Tickets Become the New Norm in China?

When China’s theatrical sector roared back during the recent Lunar New Year holiday, hitting a record $1.2 billion in ticket revenue in a single week, a new strategy played a surprising role: surge pricing.

During 2019, the last full year of normalcy before the pandemic, a ticket to the movies in China averaged 37.2 Chinese yuan ($5.70 at current exchange rates). During this year’s Lunar New Year holiday, average ticket prices rose to 48.9 yuan ($7.50) — and those were just the nationwide averages. An opening-weekend ticket for the holiday’s most popular titles, such as Wanda’s comedy Detective Chinatown 3 or Beijing Culture’s family film Hi, Mom, was selling for as much as 150 yuan ($23) in the busiest commercial districts in some cities.

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Exhibitors’ pricing moves were decisive in driving the record earnings during the holiday — Hi, Mom became China’s second-biggest film ever with $790 million, and Detective Chinatown 3 is now fifth in the all-time charts with $683 million. (The government also urged the public to stay put in major cities and not return to their home provinces as is customary over the holiday, prompting younger moviegoers to head to theaters, which added to the overall haul.)

Since the end of Chinese New Year, prices have fallen back toward historical norms: On Feb. 20, an average ticket was down to 43.3 yuan ($6.64) and by March 6 it was 38.5 yuan ($5.90). But demand has receded since the holiday, too. The question now is whether surge pricing will be a recurring feature of China’s industry during peak periods of moviegoing. If it’s here to stay, might Hollywood’s most popular franchises benefit from the phenomenon, too?

“There are likely a number of factors that drove higher ticket prices through the Chinese New Year holiday period,” says Rance Pow, president of exhibition consultancy Artisan Gateway. In an effort to prevent the spread of COVID-19, regulators required cinemas in many northern Chinese cities, including Beijing, to limit capacity to 50 to 75 percent during the holiday; higher pricing enabled exhibitors to recoup some lower-attendance losses.

Despite the pandemic-related circumstances surrounding this year’s holiday price surge, James Li, co-founder of Beijing- based film market research firm Fanink, says he believes “it’s quite likely” that surge pricing during periods of escalated demand will become an enduring feature of the Chinese exhibition industry.

Li adds: “A more flexible, demand-based system of pricing is actually a more efficient industry practice that should benefit both consumers and industry players over the long term.”

This story first appeared in the March 3 issue of The Hollywood Reporter magazine. Click here to subscribe.