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TheGrill 2016: Why Online Ticketing in China Is All About Social Media (Video)

Movio co-founder Will Palmer and vice president of WeYing Technology Luke Xiang talk about that country’s box office explosion

Online ticketing in China is huge, and social media deserves a lot of the credit.

Speaking on Tuesday at the 2016 edition of TheGrill, TheWrap’s annual entertainment and media conference at the Montage Beverly Hills, WeYing Technology VP Luke Xiang and Movio co-founder Will Palmer talked about how social media is changing the online ticketing game in the country via platforms like WeChat and QQ, which promise a convenient and cheap moviegoing experience.

That, in turn, allows users get in the habit of going to the cinema to see a movie, rather than waiting for it to come out on DVD.

“We are very glad to see the market growing and there are a lot of drivers,” Xiang told TheWrap’s Matt Pressberg during the panel. “Part of the drivers is online ticketing social media.”

In China, 79 percent of tickets are sold online, with 88 percent of those via mobile apps. Compare that to the U.S., where 30 percent of tickets are sold online, with Fandango, the biggest U.S. online ticket seller, selling about 70 percent of its tickets via a mobile device.

However, in China, the BAT companies — Baidu, Alibaba and Tencent — dominate movie ticketing by providing their own payment apps such as Tencent’s WeChat. They also heavily subsidize ticket prices, which has helped them gain market share.

In exchange, the main motivation of third-party ticketing providers like Alibaba and Tencent, which owns both WeChat and QQ, is to gather data on what movies users like and when they want to see the movies, so the providers know exactly how to market and cater directly to the user.

Xiang said that almost every smart phone in China has WeChat installed, so embedding the online ticketing service on two of the most popular social media networks is a crucial step for online ticketing success.

“We embed the ticket service on the social network and there are electronic wallets [on the app],” he said. “On the wallet, you can find movie tickets, you can order taxis, pay for restaurants. … A lot can be done through the mobile social network.”

He added, “You always carry a wallet, and whenever you open [it], there is a button for movie ticketing. … We can push to you based on your interests or historical habits, so we make the ticketing experience so smooth, so easy, from starting the browsing for the tickets to picking the seat, finding special deals and making the payment. Everything can be done in 10 seconds.”

So if you are paying your restaurant bill and ordering a taxi on the same app, it is much easier to push a button to buy a movie ticket.

Palmer also spoke about how these mobile apps create an ecosystem that is extremely convenient and cheap.

“There has definitely been a major pricing element in China that I think we can learn from,” he said. “That there is price sensitivity to buying online and it is affecting online purchases in other countries. And for online penetration to grow, it’s about convenience and about price.”

And the major driving force for bringing the prices down is “a massive land grab from a number of companies to win the costumer battle for these third-party platforms.” For example, if Fandango offered tickets for $5, their “online ticketing penetration would increase.”

While online ticketing and the box office in China is increasing dramatically — Xiang said that last year’s box office was close to $7 billion with 700 million tickets sold in the first half of 2016 already, up from $200 million in 2004 — Xiang added that they are “still looking for ways to pull more and more audiences to come to the cinema rather than waiting for DVD or online, while forming a habit.”

“[We want] to invite young people to come to the cinema instead of spending time or money on other forms of entertainment,” he said.

Watch the video above.