Occupancy rate only 4.8%! Chinese cinemas are struggling to survive: introducing AI, selling coffee, opening KTV, and hosting art exhibitions...

China's National Film Administration and State Administration for Market Regulation jointly issued a notice encouraging cinemas to introduce AI agents, coffee book bars, KTV, and other business formats, and even open creative merchandise stores and art exhibitions, so they no longer rely solely on ticket sales.
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Table of Contents

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• Becoming a Place That Sells Everything
• Why Can't Cinemas Just Rely on Ticket Sales Anymore
• No Longer Just a Cinema

When the cinema screens still light up on time, but the audience keeps dwindling, this is the reality unfolding in China's film market, and also the reason why the authorities decided to step in. However, this time, the National Film Administration and the State Administration for Market Regulation did not choose to subsidize ticket prices, but instead asked cinemas to find their own way to survive.

Becoming a Place That Sells Everything

In early July, the National Film Administration and the State Administration for Market Regulation jointly issued the "Notice on Promoting Diversified Operations of Cinemas and Thriving Cinema Culture," which proposed 10 measures from three aspects: encouraging diversified business integration, strengthening brand operations, and improving service quality. Key points include:

• Introducing AI agents, i.e., AI service roles that can interact, guide, and even chat with audiences in the lobby
• Opening leisure and entertainment spaces such as video games and KTV, linked with culture, arts, science popularization, and education
• Selling high-quality dining, light meals, baked goods, desserts, coffee book bars
• Expanding film derivative specialty stores, creative product collection stores, art exhibitions, pop-up stores
• Building themed brands such as art cinemas, tech cinemas, community cinemas
• Upgrading LED digital projection systems, promoting VR movies, establishing membership systems, and linking with surrounding shopping districts, tourism, and cultural venues

In the official vision, "watching a movie" should become a complete consumption trip, not just two hours of darkness: the lobby or idle screening rooms can be transformed into cultural activity and retail spaces, so cinemas no longer have to make money solely from movie tickets.

But it must be noted that this notice mainly uses guiding words like "encourage" and "support," and whether it can be implemented ultimately depends on the execution of each local cinema.

Why Can't Cinemas Just Rely on Ticket Sales Anymore

In the first half of 2026, China's total box office was only 17.3 billion RMB, a year-on-year decrease of over 40%, with 421 million moviegoers and an average ticket price of 41.1 RMB. Even the Spring Festival period, which historically guarantees box office revenue, only brought in 5.75B RMB this year with 120 million moviegoers, a year-on-year drop of 39.5%, hitting an 8-year low.

More critically, the occupancy rate: as of 2026, the national average cinema occupancy rate is only 4.8%, the lowest in nearly 12 years. In other words, out of every ten seats, less than one is occupied.

More and more people would rather spend ten minutes scrolling through a short drama than spend two hours in a theater; the rapid release of new films on streaming platforms also weakens the reason to "have to go to the cinema." Short videos have no screening schedules, no need to go out, and no need to wait for trailers to finish. What cinemas need to win back is not just the audience's wallets, but their remaining attention.

No Longer Just a Cinema

Stuffing AI agents, coffee book bars, and KTV into cinemas essentially acknowledges one thing: a movie alone is no longer enough to keep audiences coming into the theater. When the screening hall changes from "the sole purpose" to "an additional option," the role of the cinema quietly shifts from content distribution to a composite physical space business.

From a global perspective, this is not a new script. North American chain cinemas have long relied on popcorn and drinks to sustain considerable gross margins; cinemas in Japan and South Korea have also gradually integrated dining and entertainment complexes. If even a major global film market like China needs policies to hold onto audiences' willingness to enter cinemas, then "cinemas only selling movie tickets" itself may soon become history.