Global box office sales rose 4% in 2013 to $35.9B.
China accounted for a good portion of the gain with sales rising 27% to $3.6B.
Box office growth in the U.S. was more tepid at 1%. Movie studios (DIS, LGF, SNE, VIAB, TWX, FOXA, VIA, CMCSA) increasingly relied on tentpole releases in the U.S. as the number of titles topping the $100M mark domestically went up to 35 from 31.
The Chinese government is considering giving tax breaks to real estate firms which put movie theaters in shopping centers, according to The Hollywood Reporter.
There are close to 40 Chinese exhibitors that could benefit from the initiative - including AMC Entertainment (AMC) owner Wanda. Lower development costs could also benefit IMAX (IMAX) which is in growth mode in China.
What to watch: A booming Chinese movie industry will please Hollywood movie studios (TWX, FOXA, SNE, CMCSA, LGF, VIAB) which have been increasingly gearing their strategy around China's box office.
The recent warnings up and down the retail sector on slow store traffic trends haven't gone unnoticed by movie studios and theater operators as they look for ways to reach revenue targets this year and beyond.
The toughest nut to crack for the movie industry might be "Generation Z" - a group that is more focused on devices and streaming options than traditional film distribution channels. Media analysts think the "all-or-nothing" nature of Gen Z increases risk for studios with their big budget films.
Rentrak (RENT) is one company that is on top of tracking Gen Z. The research firm recently signed a deal with CBS to provide advanced demographics culled in part from online measurements of social engagement.
The box office tally for 2013 is forecast to reach $10.9B to edge out last year's mark of $10.8B.
A string of Q4 hits and box office surprises helped the industry after the first three quarters of the year saw some worrying high-profile misfires for studios (CMCSA, DIS, TWX, LGF, SNE, DWA, FOXA, VIAB) .
The outlook for 2014 looks brighter after theater operators (CKEC, CNK, RGC, MCS, RDI, AMC) saw success late in the year with higher pricing and with the IMAX (IMAX) format more entrenched with moviegoers.
The Hunger Games: Catching Fire has another week to dominate the box office before getting a serious challenge from Warner Bros' The Hobbit: the Desolation of Smaug next week. Estimates see the film which has already toppled the $300M level for box office sales in the U.S. pulling another $35M-$40M this weekend.
Disney's (DIS +1%) Frozen is forecast to add another $30M to $35M to the coffers. The success of the 3-D animation could also help drive consumer products sales for Disney.
Though shares of Lions Gate (LGF +0.5%) haven't seen a bounce from the Hunger Games frenzy due to the sky-high expectations already baked in, analysts think theater operators (CKEC, CNK, RGC, MCS, RDI, AMC) could report better-than-expected Q4 numbers.