Actress Zhao Liying and actor Deng Chao in Han Han's second feature, Duckweed.
UBS Securities has lowered its projection for the compound average annual growth rate for the Chinese box office income between 2016 and 2020 to 13 percent from the earlier predicted 21 percent.
The box office income growth rate has already dropped to single-digit level during the first half of this year, down from the 50 percent annual growth in 2015. It is largely due to the challenges the movie industry has faced in terms of both supply and demand, said Liu Zhijing, director of the China media & internet research at UBS Securities.
UBS Securities' survey in the lower-rung cities shows that the cinemas there will face contracted income for each screen. Although more screens have been built in the lower-tier cities, there are not enough viewers yet, said Liu.
He also said that the Chinese movie industry lacks an audience group made up of people of different ages. At present, the young people born in the 1980s and 1990s made up the majority of the audiences, with those born in the 1980s contributing 80 percent of the annual box office income. However, those born in the 1970s and earlier show less interest in movies.
Besides, the market is still short of good-quality domestically produced movies. Most of the domestically produced works are love stories and comedies, which require limited post-production.
"But in Hollywood, a large portion of the movies produced every year are motion pictures, cartoons, fantasy films and science fiction movies, which require high-level post-production ability," he said. "Chinese movie makers should devote more efforts on these genres for opportunities lie in them," Liu said.