China is currently the second largest movie market in the world, making it an enticing territory for Hollywood. (Photo : www.wantchinatimes.com)
Alibaba Group Holding Ltd. has announced plans to partner with a major cinema chain in Beijing that would allow customers to swap their tickets, or simply get a refund, the China Daily reported.
Alibaba introduced a management system last month that allows tickets to be rescheduled or refunded for the Capital Cinema chain.
According to the report, customers have to apply 24 hours before the screening time to get a refund and three hours to change their tickets for a later show.
The new service, launched by Guangdong Yueke Software Engineering Co., Alibaba's software division, also allows customers to enter theaters by flashing their smartphones as well as helping cinemas schedule movies through big data analysis.
"Our years of experience in the movie sector, coupled with Alibaba's technological prowess, can help theaters deal with larger traffic and boost their efficiency," Li Xiangxiong, general manager of Yueke, said.
Yueke, bought by Alibaba for 830 million yuan ($134 million) in June, provides software support to more than 1,500 of the 5,780 cinemas in China.
The report said the development is part of the latest move by major Internet players to enter into the country's thriving film industry, as the big three giants--Alibaba, Tencent Holdings Ltd. and Baidu Inc.--have already attracted half of the country's moviegoers to buy tickets online.
"For Internet companies, cinemas are the ultimate gateway to link customers with other online services," Huang Guofeng, a movie analyst at the information technology consultancy Analysys International in Beijing, said.
"They want to turn cinemas' VIP members into loyal users of their websites. For the movie sector, teaming up with tech companies can affect traffic and boost efficiency."
China is now the world's second-largest cinema market, next only to the United States. As of Sunday, Oct. 11, box-office receipts in China totalled 35 billion yuan for this year, surpassing the 29.6 billion yuan for 2014.
Analysys International said, however, that despite this, more than 70 percent of China's cinemas are in danger.
Data from entertainment market research company EntGroup Inc. showed that China's top 500 cinemas accounted for 42.8 percent of the 20-billion-yuan box-office receipts in the first half of this year, leaving more than 5,000 cinemas to compete for the remaining 57.2 percent.
"Cinemas over-rely on box office as a major revenue source. It has a low profit margin of between 10 percent and 20 percent," Wei Huan, a movie researcher at EntGroup, said. "They need to boost sales of movie merchandising, which has a profit margin as high as 30 percent. This is exactly why Internet giants are moving into the sector."
With Alibaba's new system, cinemas can sell products targeted at moviegoers through big data, although it remains to be seen if the model will succeed nationwide, the report said.
"Alibaba's system is more like a unilateral effort. It is okay to improve user experience. But I think it needs input from theaters, film distributors and industry regulators to work out a joint solution," Cao Yong, deputy manager of Beijing UME International Cineplex's Anzhen branch, said.
