Since the beginning of this year, the domestic entertainment industry, led by the film industry, has shown a significant recovery trend. Putting aside the objective factor of the sluggish economic environment, there are three reasons that cannot be ignored:

The first is the cyclical return of entertainment. Due to many force majeures during the three years of the epidemic, many people have turned to online entertainment, and emerging content represented by short videos has flooded into a large number of users. In terms of film and television, online content that has not previously established a mature system, such as online movies, has also reaped a wave of dividends, and the market size has surged. Three years is enough time for a type of product to complete its cyclical cycle. Since the beginning of this year, phenomena such as Douyin's divine music has lost ground, online movies have been in the cold, and live streaming has been marginalized. In contrast, more and more people have begun to return to offline entertainment. It is not just the movie and movie theater popcorn popper markets that have recovered rapidly. The offline performance industry has also bottomed out this year.

Secondly, for movies, the current booming market also benefits from the concentrated release of audience demand. Many people have verified that theater movies are entertainment products that are difficult to replace. Its business model is unique, and the experience that movie theater popcorn machine can bring to the audience is difficult to replace by other film and television works. Therefore, even though many viewers have found new entertainment products in the past three years, this will not reduce their desire to watch movies. It can even be said that in the past three years, when watching movies has become a "difficult thing", many viewers' enthusiasm for watching movies has increased instead of falling, forming a retaliatory movie-watching mentality. Regardless of its own quality, it also relies to a large extent on the audience's vengeful movie-watching mood. After this year, this consumer psychology still holds true.

Finally, the internal factor of improving the supply quantity and quality of new films in the film market also plays an important role. In the past three years, it is not only force majeure factors that have prevented audiences from entering, but also internal industry problems such as insufficient supply of new films and difficulties in setting schedules. After this year, the situation has been greatly improved, and a large number of projects that have been backlogged in the past three years have been successfully scheduled for release. While more projects have entered the market, the quality of films has also improved significantly.

In this cycle of rapid growth, the rapid development of the film market is also inseparable from a group of outstanding creators and a large number of high-quality films with high national popularity. This has obviously not been affected by the economic environment. However, before these two views had time to be verified with longer-term data, the three-year epidemic directly broke the calm. When the market returns to the right track in 2023 and the low-growth economic environment remains unchanged, the discussion of the "lipstick effect" will resurface. In our view, the sluggish economic environment will definitely benefit film consumption to a certain extent, but at present we do not have sufficient basis to completely equate the economic environment with the prosperity of the film market.

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