China Pushes Cinemas Into AI, Retail as Attendance Slumps

China’s cinemas are under mounting pressure as streaming services, short-form video and home entertainment compete for viewers’ time. Ticket sales and conventional concessions are proving insufficient to support large venues with high fixed costs. The government’s response marks a broader shift in strategy: repositioning theaters as mixed-use destinations for film, social activity, entertainment and retail, while creating revenue streams less dependent on the box office.

The China Film Administration and the State Administration for Market Regulation issued a joint notice dated June 17, 2026, outlining 10 measures across three areas. Cinemas are encouraged to add AI agents, karaoke, video games, cafés, bookstores, cultural merchandise and art exhibitions. China’s box office totaled 17.3 billion yuan in the first half of 2026, down more than 40%, with 421 million admissions. Average occupancy fell to 4.8% during the year, the lowest in nearly 12 years.