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April 25, 2014

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Right on queue: Discount movie apps cut wait, cost

ENGINEER Max Zheng used to go to the movies only on Tuesdays because that’s the day all local theaters provide an all-day 50-percent discount.

“The discount really matters,” says Zheng who otherwise would have to pay a full price of 60-80 yuan (US$9-12), and 120 yuan for 3D films.

Now he goes to the cinema whenever there’s a good release because he can buy discounted tickets from Gewara.com and Douban.com — and their mobile apps. Sometimes there are also flash sales of tickets for online purchase.

Discounts are usually 40-50 percent.

Zheng recently bought two tickets for 3D “Captain America: The Winter Soldier” through the smartphone app of Gewara.com. Each ticket for a downtown cinema cost around 50 yuan.

“I can get website discounts even for some hot evening screenings,” Zheng says, “and I can arrange my preferred time, seat locations and post my own reviews.”

They can also interact with stars and other fans.

Compared with buying tickets at a box office, booking websites also offer flexibility, freedom and options. They are changing the way Chinese people watch movies.

To date, Shanghai-based Gewara.com has more than 18 million registered users, mostly well-educated professionals aged 25-35.

Since it was started in 2008, the website has cooperated with more than 800 theaters in around 70 cities.

Every day more than 80,000 tickets are sold. A service fee of several yuan is charged for each ticket.

It also sells slightly discounted tickets for concerts, sporting events and other entertainment and leisure activities.

Abel Zhang, a founder and CEO of Gewara.com, started the website because it was difficult to get instant information about film screenings, discounts and reviews years ago.

“We try to distinguish our service from the usual ticket buying with more individuality, flexibility and warmth,” he says.

The website also provides information on traffic conditions, parking and dining for each cinema. Users can write their feelings on e-tickets. It has even been used as a creative way to propose marriage.

In the era of big data, Zhang and his team are eager to develop new business strategies and opportunities apart from online booking.

They can’t make big profits from online ticketing, but they can offer new services to film producers, such as detailed data analysis of customers, popular film content and delivery.

Analysis of website data has the potential to influence many aspects of the film industry, including script selection, casting, shooting, marketing ad sales.

In 2013, Gewara.com cooperated with distributors of more than 100 movies. Instant pre-sales information and online feedback make it possible to quickly respond to filmgoers and adjust marketing strategies.

“We can also profit from selling film byproducts and providing services for advertisers who employ product placement in a film,” Zhang says. Since advertisers want their brand and product name repeated, the website can plan special events such as lucky draws and sponsored discount tickets.

China’s film market is growing rapidly. Last year the total box office was a record 21.77 billion yuan.

Online booking is booming and accounts for a rising market share.

In Shanghai, around 50 percent cinemagoers bought tickets on websites last year, according to Zhang, based on a survey they did last year.

The success of online booking has also increased confidence in such websites by venture capital and angel investors. Last year CDH Investments led a US$20 million round of funding for Gewara.com. CDH and Shanda Capital jointly invested in the company three years ago.

“With lower costs and diversified services, movie ticket selling websites have nurtured many users who expect a more convenient, interactive and distinctive cinema experience,” says Alex Huang, an IT professional in his 30s and frequent moviegoer.

He expects a lot more tailored marketing services.

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“Based on the users’ browsing history, websites can send potential customers specific information and service packages, such as movie trailers, screening schedules and discounts at neighboring cinemas,” he says.

The relationship between ticketing websites and theaters is delicate.

On one hand, websites pose a competitive threat to cinemas that don’t sell tickets online, on the other, they boost occupancy for all screenings.

According to Gu Min, marketing manager of Time Antaeus Cinema Line, the 24-hour online ticketing system is a good supplement, especially during film exhibitions and festivals. It also decreases manpower costs.

“But the website service fees (usually 3-5 yuan per ticket) may hamper future development,” says Gu. “When ticket sales grow, it will become a big cost to the cinema.”

He says websites should set a more reasonable commission charge based on sales, “otherwise, theaters might strictly limit the amount of tickets for online selling.”

Online discount sales have also made discount VIP movie cards less attractive. People are required to pay certain sum for a 20-30 percent discount, less than the usual 40-50 percent discount tickets bought online. VIP cards are still a good choice for seniors who don’t use computers or smartphones, he says.

Yonghua Cinema is the first cinema that cooperated with Gewara.com. Dai Guoping, Younghua’s deputy general manager, says online sales and mobile payments are a very important marketing channel for the theater.

“It has helped nurture and gather a lot of loyal movie fans at our cinema,” Dai says. The internet also offers chances for the theater to promote special events and services.

He considers the cooperation a win-win for both parties.

“The website gives us instant audience feedback and helps us get to know our audience and market better.”

The growth in China’s box office revenue is still largely based on the big increase in theaters and screens in smaller cities.

Shi Chuan, critic and vice president of the Shanghai Film Association, says a variety of payment methods is good for the audience.

“As with the boom in mobile tax booking apps, customers should have more choices,” he says.

Despite their current popularity among young ticket-buyers, websites should explore other ways to make a profit to reduce risk.

“One day cinemas can restrict the amount of tickets for online sales and cinema chains can launch their own booking websites,” he observes, adding that data analysis by websites could be a major earner.




 

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