Cathay Pacific Haitong: Expanding supply capacity in the performing arts industry and building long-term competitiveness by continuing to reuse resources

The Zhitong Finance App learned that Cathay Pacific Haitong released a research report saying that the performance market has moved from restorative growth to a stage of supply expansion and efficiency competition. Core indicators related to commercial performances across the country will continue to grow in 2025, and industry evaluation standards will gradually shift to a refined operating dimension. Artists and IP rights parties control the demand portal and can obtain strong bargaining power due to the scarcity of content. Profits are more likely to be deposited in links that can control scarce resources, form a unified trading network, and continue to accumulate user relationships. The bank suggests focusing on the three main investment lines of ticketing platforms, venue operations, and high-quality copyright.

Cathay Pacific Haitong's main views are as follows:

The performance market has moved from restorative growth to a stage of supply expansion and efficiency competition

In 2025, the number of commercial performances, box office revenue, and number of spectators across the country continued to grow. Both supply and demand sides remained active, but the growth rate of shows was faster than the number of spectators, and the new supply placed higher demands on attendance, single event output, and refined operation. By business format, large-scale shows rely on leading artists, scarce content, and cross-city audiences to form a strong box-office agglomeration effect. The revenue for a single event is high, but the project also fluctuates greatly. The schedule, approval, transportation organization, and weather all affect project implementation. Tourism entertainment is based on destination passenger flow, with high supply frequency and long operating cycle. Revenue stability depends on location conditions, product iteration, and channel transformation.

Theater performances form an important supply for the city's daily cultural consumption. The market is more fragmented, and content reserves, scheduling efficiency, and user repurchases determine the quality of operations. There is still room for expansion in the three business categories, but industry evaluation standards are gradually shifting from the number of shows and total box office to higher occupancy rates, content reuse, and user retention.

Bargaining power in the industrial chain mainly depends on the ability to control scarce content, the degree of box-office risk tolerance, and the ability to reuse key resources across projects

Artists and IP rights parties control the demand portal and can obtain strong bargaining power due to the scarcity of content. Organizers connect content procurement, production, promotion, ticketing and on-site execution to bear box office, cost, and compliance risks. Revenue flexibility is high, but stability is relatively insufficient. Venues influence the upper limit of project revenue by location, capacity, and schedule. Operators with the ability to continuously introduce high-quality content and develop comprehensive consumption are more likely to form stable cash flow. The ticketing platform connects content, venues, and visitors, and undertakes infrastructure functions in real-name verification, payment and settlement, inventory management, refund after-sales, and user operations. The number of participants in the industry is large, the characteristics of the project system are obvious, the overall pattern is scattered, competition on ticketing platforms is relatively stable, and it continues to expand to advertising, membership, data and content services. Profits are more likely to be deposited in links that can control scarce resources, form a unified trading network, and continue to accumulate user relationships.

International comparison: The competitive advantage of the mature performing arts market comes from the continuous reuse of content, venues, ticketing, and user resources

LiveNation, the world's leading offline performance leader, also covers performance promotion, venue operation, Ticketmaster ticketing, and sponsorship advertising, connecting artists, venues, brands and audiences through a unified network. Performance promotion contributes mainly to revenue and passenger flow, and the ticketing and sponsorship business contributes high profits with light capital attributes and network effects, and supports project acquisition, pricing, and marketing through user data. The venue network has expanded its content carrying capacity and also provides an entrance for revenue from ticketing, sponsorship, catering, and parking.

London's West End and Broadway in New York rely on long-running shows in parallel, high-frequency schedules, and touring releases to extend the life cycle of works

After mature works have gone through the first round of market verification, early investment can be shared through rearrangement, card rotation, multi-city tours, regional licensing, and cross-media adaptation, and repeated use of venues, ticketing, and audience systems in different markets. International cases show that scale expansion needs to be based on reusable resources and coordination mechanisms, and simply increasing the number of projects is difficult to continuously improve the quality of profits.

It is recommended to focus on the three main lines of investment

(1) Ticketing platforms connect content supply, venue inventory and audience demand. Technical systems and user accounts can be reused across venues, cities, and projects. As the scale of transactions expands, network effects and profit accumulation are formed. It is recommended that priority be given to platform-based enterprises that can obtain stable access to leading projects, have a high transaction share and active user base, and can extend ticketing traffic to promotion, membership and content services. (2) Stadium operations can expand revenue from ticketing, sponsorship, catering, parking and commercial space around stable passenger flow. It is recommended to focus on professional operators with long-term operating rights for high-quality venues in core cities, stable income from basic management fees, low capital expenditure pressure, and the ability to continuously import content and develop comprehensive consumption. (3) After high-quality copyright has been verified by the market, the revenue cycle can be extended through residency, rearrangement, multi-city tours, regional licensing, and cross-media adaptations. It is recommended to focus on content companies that have long-term core copyrights, mature project reserves, and cross-regional distribution networks, and can continue to launch works and achieve multiple rounds of monetization.

Risk warning: risk of box office falling short of expectations; risk of artist morality impact; risk of post-ticket sales disputes; risk of competition intensifying risk; risk of tightening regulations.