As Chinese box office revenue is expected to return to near pre-pandemic highs in 2021, the world’s largest cinema market is becoming more attractive – and trickier – for Hollywood studios.
Ticket sales in cinemas in China, which have largely contained the coronavirus, could climb to 60 billion yuan ($ 9 billion) this year, according to Rance Pow, founder of the consultancy firm Artisan Gateway, approaching the record of 64 billion yuan in 2019. On the other hand, while epidemics are still raging, US cinemas could absorb about a third of this total, estimates Wedbush Securities, highlighting the growing dependence of Hollywood studios on the Asian country.
China overtook the United States to become the number one cinema market last year as the pandemic shut down American theaters longer than their Chinese peers. But the growing dependence comes as Chinese viewers turn to local-language films and show greater sensitivity to representations of China and its people in Western culture, amid simmering geopolitical tensions with the United States Added pressure on studios, a bilateral pact that required China to import a minimum number of American films each year, has expired.
With new cases of Covid-19 at a handful a day, Chinese moviegoers are flocking to theaters. While January 1 saw the biggest New Year’s box office pickup in China, the Lunar New Year on February 12 saw the biggest catch in a day. Ticket sales in the first five days of the Lunar New Year holiday hit 5.7 billion yuan, beating numbers for the same period in 2019, according to Maoyan Entertainment, with Chinese films becoming the top contributors.
Shares of Imax China Holding Inc. jumped 88% in Hong Kong on Tuesday, the biggest intraday gain on record. Maoyan grew 25% and Alibaba Pictures Group Ltd. increased by 34%.
“The Chinese market is now at the heart of any major publication,” said Aynne Kokas, professor of media studies at the University of Virginia. “The shrinking market share presents a disturbing picture for Hollywood studios” who may have been relying on China to recoup blockbuster budgets, she said.
The share of foreign films, including those from Hollywood, slipped to 16% of Chinese ticket receipts in 2020 from 36% the year before, according to the Maoyan Entertainment ticketing platform. Fewer foreign films came out in China last year, as studio plans went awry amid the pandemic.
The legal framework for Hollywood studios to bring their films to China has also become less certain. An agreement with the United States that saw China importing at least 34 films a year expired in 2017 and has not been renewed or renegotiated. While the Chinese government has continued to allow American films to enter, it could cut off that access at any time, especially if it decides to use it as diplomatic leverage with new U.S. President Joe Biden.
“The expiration of the US-Chinese film deal presents a serious challenge for Hollywood studios,” Kokas said. It is not known when the new US administration will renegotiate this pact, given “the competing priorities they face in relations with China.”
The most anticipated films of the Lunar New Year season include the mysterious comedy “Detective Chinatown 3” and the family comedy “Hi, Mom” - two Chinese-language titles produced by local studios. Warner Bros. Entertainment Inc.’s live-action remake of the cartoon classic “Tom and Jerry” is the only major Hollywood film to be confirmed for release on February 26, when it opens in the US as well.
Chinese studios produced four of the 10 highest grossing films in the world last year, including top scorer, “The Eight Hundred,” according to Box Office Mojo, the industry data tracker. Meanwhile, several of the highly anticipated big-budget Hollywood films have either failed in China or faced PR issues.
Imax Corp., whose cameras were used in the filming of “Detective Chinatown 3,” had its biggest opening weekend in China during the holiday season, with sales up 45% from level. 2019. The strong holiday box office performance removed any doubt about whether people would return to the movies, Edwin Tan, CEO of Imax China, told Bloomberg Television in an interview on Tuesday.
Walt Disney Co.’s fantasy action drama “Mulan” has sparked controversy for its portrayal of Chinese culture and has also been criticized for its filming in the Xinjiang region, where the government is accused of oppressing Uyghurs belonging. to the Muslim minority.
“Monster Hunter,” directed by Paul WS Anderson and backed by Sony Corp., has been pulled from some cinemas in China after a backlash on social media following a dialogue that some viewers felt resembled a field taunt by game against people of Asian descent. The film’s co-producer apologized and edited this line.
“Chinese consumer sentiment towards everything American is at an all-time low,” said Chris Fenton, American film producer and administrator of the US-Asia Institute. With Chinese studios now making high-quality, culturally relevant films, Fenton said the days when the Chinese market saved a mediocre movie are over.