China box office drops for first time in 5 years

China's box office saw a decline in growth for the first time in more than five years, though industry watchers said it was indicative of a changing market and that growth will likely resume for the rest of the year.

Second-quarter growth fell by 4.6 percent, with ticket sales totaling $1.51 billion, down from $1.58 billion in the same period last year, according to figures from Ent Group, which provided data to the Hollywood Reporter. Official figures from the government will be released next week.

The decline follows one of the biggest first quarters at the box office in China, with movies released during the Lunar New Year that raked in nearly $1 billion — Stephen Chow's The Mermaid, the animated Monkey King 2, and From Vegas to Macau 3.

In the second quarter last year, Hollywood flicks like Furious 7, Avengers: Age of Ultron, and Jurassic Park performed exceptionally well at the Chinese box office, boosting totals for the April-to-June period.

Stanley Rosen, professor and director of the East Asian Studies Center at the University of Southern California, said industry-watchers should "expect to see these blips more frequently as the box office grows even more".

Films like The Mermaid or Furious 7 can "inflate the box office in a given quarter", he said.

Rosen said that Chinese movie consumers eventually will be more discriminating about what they watch.

Similar to China's economy at large, "the box office can't grow at an equivalently high rate for every quarter, or even every year, particularly when the overall box office is getting so high", he said.

Marc Ganis, president of Jiaflix, which helps US studios distribute films in China, said another factor is that the government may be stepping in to make sure ticket sales are not inflated, as it did after distributor Beijing Max Screen was punished three months ago for fabricating $8.7 million in ticket sales to Ip Man 3.

"What you're seeing is one of the primary reasons for what some are seeing as a remarkable shift downward is actually more of accurate reporting. The government has taken a very positive role in trying to get the reported box office numbers to be more reliable," he said.

"And that's a great thing that SARFT is doing," he said, referring to the country's media watchdog , the State Administration of Radio, Film and Television.

The Chinese box office is so enormous that "the exaggerations that may have occurred years ago to establish a perception of the size of the Chinese market are no longer necessary and may be counterproductive", he said.

Ganis predicted that the rate of increase in box office for the year will be closer to 20-25 percent as compared to the 48.7 percent reported last year, which is "still great" given the size of the Chinese market, and particularly because the numbers will be more accurate now.