"We're not a competitor of traditional cinemas. We're a supplement."

Most of the films now running on Smart Cinema are comparatively low-budget arthouse features that struggle to compete with Hollywood blockbusters or domestic tentpoles.

For instance, The Taste of Apple, a biographical drama based on the true story of agriculturist Li Baoguo, was released on only 0.7 percent of all urban cinema screens in early August. A blockbuster typically occupies 30 percent of screenings on its premiere day.

China has 58,530 screens in 10,417 cinemas on the mainland.

"But it's really a good movie that deserves more screenings," Gao says.

"The film tells a very touching story about how Li was dedicated to helping residents of Gangdi, Hebei province, overcome poverty."

He recalls the distribution team releasing the film in Gangdi village. The village has no cinema, and it takes at least three hours to reach the nearest town with a movie theater.

And despite China having the most cinema screens on Earth, many rural or mountainous areas in the country don't have theaters.

Over 900 counties have only one cinema, and more than 300 towns have none, Chinese Minority Writers' Society secretary-general Zhao Yanbiao says.

"(Smart Cinema) will be good news for people who want to watch films but live in an area without a cinema," Zhao says.

The China Promotion of Minority Culture & Art Association's film and TV committee recently signed a cooperative agreement with Smart Cinema in Beijing to promote ethnic films at home and abroad.

Also, China's top movie regulator gave screening permits to 970 films last year, but only 412 films, or 42 percent, were generally released in theaters.

China has 802 million internet users, who account for nearly 60 percent of the country's population, the China Internet Network Information Center's latest figures show. And 98.3 percent of China's netizens use smartphones to surf the web.

Gao says he believes online cinemas will become a trend. He predicts the new screening model will push China's box office total beyond 100 billion yuan in 2020.