China wants cinemas to sell you karaoke and coffee, not just tickets

China's National Film Administration and State Administration for Market Regulation issued new guidelines encouraging cinemas to add AI concierge agents, karaoke booths, coffee shops, and merchandise stores to diversify revenue amid a 40.6% box office drop in the first half of 2026. The policy formalizes a 'film-plus' strategy to integrate cinemas with retail and cultural venues, though smaller operators may struggle with implementation costs.

China’s cinemas are being told to stop relying on tickets alone. New guidelines from the National Film Administration and the State Administration for Market Regulation encourage theatres to add AI concierge agents, karaoke booths and coffee shops to their lobbies, according to Bloomberg https://www.bloomberg.com/news/articles/2026-07-04/china-envisions-ai-karaoke-and-coffee-at-cinemas . The same guidance nudges operators toward movie-themed merchandise stores, licensed products, art exhibitions and pop-up shops, turning idle screening rooms and lobby space into retail and cultural venues. The timing is not subtle. China’s box office fell 40.6% year on year in the first half of 2026, to roughly $2.56bn, according to Screen Daily https://www.screendaily.com/news/china-box-office-plunges-406-in-2026-first-half-despite-strong-performers/5218303.article , the weakest first half since 2014 once pandemic years are excluded. That is a sharp reversal from 2025, when the country’s 93,187 cinemas, more than any other market on the planet according to the Hollywood Reporter https://www.hollywoodreporter.com/movies/movie-features/chinese-cinema-trends-in-2026-1236528349/ , pulled in roughly $7.45bn, up nearly 22% on the year before. Audiences showed up in 2025. In 2026, for reasons ranging from a thinner release slate to competition from short video and AI-generated micro-dramas https://thenextweb.com/news/china-micro-drama-ai-state-funding , they largely have not. The new guidance is not really a new idea so much as a formalisation of one. Luo Yang, deputy head of the China Film Administration, described a “film-plus” push last year to integrate cinema with tourism, dining, technology, gaming and merchandise, detailed in a Xinhua report http://english.scio.gov.cn/m/chinavoices/2026-01/27/content 118301370.html carried by China’s State Council Information Office. That report put a number on the ambition: each yuan spent at the Chinese box office is estimated to generate 15.77 yuan of output in related industries, among the highest such multipliers globally. Nezha-branded coffee drinks selling five million cups in three days are the kind of result regulators now want written into every cinema’s business plan, not just the lucky ones with a blockbuster attached. Beijing has also tried subsidy over suggestion. A “Film Consumption Year” initiative, reported at roughly $130m by Screen Daily https://www.screendaily.com/news/china-launches-130m-film-consumption-year-in-bid-to-boost-box-office/5204133.article , set aside ticketing deals and discounts to get people back into seats. The karaoke-and-coffee guidelines take a different tack. Rather than paying people to watch films, they ask cinemas to give people other reasons to walk through the door. Regulatory nudges of this kind tend to move faster on paper than on the ground. Converting a screening room into retail space, or training staff to run a coffee counter, costs money many operators do not have with attendance down sharply. The guidelines carry no disclosed enforcement mechanism or funding, which puts the burden of adoption on cinema chains already absorbing the revenue hit the policy is meant to address. Smaller, independent cinemas are likely to feel that burden hardest. A national chain can pilot a merchandise counter in one flagship venue and see what sticks. A single-screen operator in a smaller city, running thin margins on a lighter release slate, has far less room to gamble on a karaoke booth nobody asked for. The broader context is a film industry trying to hold two ideas at once. It wants to be seen as a cultural and economic engine, citing an industry output of 817.26 billion yuan in 2025 per the same Xinhua report, while also quietly accepting that ticket sales are no longer the whole story. China’s AI sector has been closing gaps https://thenextweb.com/news/stanford-ai-index-2026-china-us-performance-gap with rivals elsewhere at pace, and even its AI video generation unit https://thenextweb.com/news/kling-ai-2-billion-kuaishou-spinoff-video is chasing growth beyond its original niche. Cinema operators appear to be borrowing that same logic. If people are not coming just to watch a screen, give them an agent, a song and a flat white while they are there. None of this addresses the more basic problem of what is actually playing. A thinner blockbuster slate, and what industry reporting suggests has become a narrower window for Hollywood releases in China, appear to have done more to empty seats than any lack of coffee ever did. Karaoke booths and AI concierges might keep the lights on between hits, but they read as a hedge against a weak slate, not a replacement for one. Get the TNW newsletter Get the most important tech news in your inbox each week.