Is China’s Box-Office the Golden Child?

China’s box-office is big, but it is not going to overtake the North American Box-Office in the the Long Run. Even if it does out-gross it in the coming years, this will not be a sustainable outcome in the long term.

By Ryan Carroll, Editor-at-Large

March, 2019.

Editorial.

I have previously addressed this “fear” by Hollywood pundits that China will become the most “important” box-office in the world, with it overtaking Hollywood by 2020, or 2019, or 2017!!!

Yep, 2017 came-and-went, without it overtaking North America. Who would have guessed???

I did!

Speculators that say China will become the dominate box-office in the world, fall prey to every other industry that China supposedly is going to overthrow, to become its Golden Child for the future.

Yep, I’m throwing a little shade their way. To all those who have said, “China will take over the North American box-office by ….”, from just looking at projected figures / population size, and not analyzing the overall picture.

We yet again had a tremendous Spring Festival box-office weekend in China, and it is breaking all the rules and records that have been previously set by the two previous Chinese Lunar New Year weeks (yes, weeks not weekends).

2017 even saw a February box-office that was bigger than North Americas, something even ye ol’Deadpool could not stop! While in 2018 not even a Marvel superhero more badass than Shaft, could stop China’s box-office February from being bigger than the one on this side of the pool.

The Chinese long Spring Festival box-office will will dominate its month worldwide from here-on, but do not look at this as the norm to China’s projected outcome of worldwide box-office dominance for the proceeding year.

Chinese movie going is begin to level off, establishing movie going trends that will see fluctuations in major box-office breakouts at the local market. As the days of heavily subsidized tickets are over, and local audiences begin to choose their movie going outings more carefully.

2015 saw a major boost to the China box-office due to heavily subsidized mobile ticketing purchases. Where the newly established mobile ticketing apps – Maoyan / Weiying / Tao Piaopiao – offered insanely low priced movie tickets, to which they reimbursed the movie theaters / distributors at full price.

Instigating a huge drop off at the China box-office in 2016 (it was just one of the reasons) when the heyday of cheap subsidy movie tickets came to an end.

But, the move by the major internet & entertainment-tech companies behind these mobile ticketing apps, has led to the Chinese cinema market being dominated by mobile ticketing purchases. Which makes up 80% of all ticket sold in the Middle Kingdom.

The end of subsidized tickets also began the maturity of the China box-office in that, Chinese movie going audiences have become more selective in their choices of which movie to see. As they take into more consideration, which film will they spend their disposable incomes on at the big screen.

Arguably, one of the major contributing factors to ‘Wolf Warrior 2’ Avatar-like single box-office take. A box-office, though $870MMUSD worldwide, was made up of 98% of its total gross in one-single market; China.

This phenomenon occurred because the average movie-going audience in China, have begun to select that once-a-year movie that must be seen in the cinemas of China.

We saw this in the past with Hollywood tentpoles; Fast and Furious & Transformers: Age of Extinction, and we are now seeing it with the likes of domestic fair such as, The Mermaids & Monster Hunt.

Wolf Warrior 2 follows this pattern and was more of the anomaly than the norm.

This trend has continued with this Spring Festival box-office season weekend.

A weekend that garnished over a half a billion dollars, from its top 5 films.

Entire Spring Festival Top 5 weekend take: $535MMUSD

  1. Monster Hunt 2 – $190MM
  2. Detective China 2 – $154MM
  3. Monkey King 3 – $80MM
  4. Operation Red Sea – $70MM
  5. Boonie Bears 5 – $41MM

Though technically not all of these are sequels, it can be argued that Operation Red Sea is a pseudo-sequel to Operation Mekong, and even to Wolf Warrior 2.

A new form of “Main Melody” red films that when a Hollywood blockbuster subverts this newly formed Jingoistic film, from a director that has a track record in China, and perceivably does not do “well”, everyone starts “loosing their minds!

The growing tastes and trend we are seeing in the China box-office is normal, and should have been expected from every China Watcher out there, but this was obviously not the case.

As everyone who looks in at China, always looks at the size of the figures it represents, but not the story being told behind the pure statistical information.

China’s continued box-office growth now lies with 3rd & 4th tiered cities, regions and demographics that have different tastes than those before it, from the higher educated and affluent city dwellers in the 1st & 2nd tier cities.

China’s box-office was all the interest of Hollywood studios from 2010 to beyond, but it was not because of the cash cow that it potentially offered.

Transformers: Age of Extinction, the biggest box-office film of its time, by a large margin at $320MMUSD, only pocketed less that 25% of that box-office take or less-than $80MM for its studio parent, Paramount Pictures & Allspark Pictures.

Significant, but it and the Fast and Furious movies that preceded it, were anomalies rather than the norm. The only real studio that benefits from having all their major films released in China, no matter how substantial their box-offices may be, is Disney.

Tied to its tried-and-true business model of, licensing and theme parks, based around its Mr. Moneybags IP library via Shanghai Disney Resorts.

Universal is on a similar trajectory, guided by its Fast & Furious franchise, as its planned Universal Studios theme park is set to open outside of Beijing in 2019.

Beyond this, China’s box-office will continue to always be focused towards the domestic homegrown market, and protectionist cinema ticket sales.

Beijing has taken even further measures to assure that the local box-office always dominates over 50%+ of the yearly take. By implementing incentives to Chinese cinema chains, and individual theaters, that airs two-thirds of the cinema screen’s daily run-time to local films.

The new draft law will provide a tax rebate to those cinemas who follow these upcoming guidelines.

This is not the end of Hollywood at the China box-office, but those who are proclaiming the end of Hollywood and dominance of China. Should fall back, and examine all the underlying factors that has, and will, propel China’s continued growth.

One must look beyond just the weekend figures of China, to its entire country and economic trends, in all sectors of its growth and decline. An example being the decline of the Chinese international tourist, and its link to a weakening disposable income of the emerging middle class. Something that will affect their cinema going habits in the years to come, as the market as a whole begins to mature and plateau.

Stay tuned China Watchers – Same Silk Thread, Same Silk Publishing!

As the market will continue to provide new surprises, and I reiterate my point that; I am not saying that the Chinese box-office may not over take North America’s, but if it does. It will be short lived, and like we have seen before, be an anomaly rather than the norm.


Note: Here is an interesting stat from 2016. China Film & TV Industry brought in $86.3Bn to the local economy, while Disney by itself brought in $55.6Bn in revenue as a single company.

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About the Author
Born and raised in the Missouri-Ozarks Ryan studied Film Production, and East Asian Culture, at the University of Kansas where he was a UGRA recipient that led him on a seven-year long, Journey From the West, to China. Where he worked with Warner Brothers, the China Film Group Corp. and the National Bureau of Statistics of China. Before returning to the States, where he specializes in Chinese Anime & Comics, China’s Box-Office, and Chinese entertainment-tech industries. He has a dog in China, Abigail, and a dog in the Arkansas-Ozarks, King Blue, who help ease his anxiety of suffering from the “Two-Dimensional Complex” that is trying to understand the Culture Industry landscapes of the Middle Kingdom.

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