China’s film fans spend on home-grown entertainment as Hollywood struggles amid pandemic and geopolitics

Ticket sales for the first four days of the Lunar New Year holiday surpassed 2019 levels to around 4.5 billion yuan
Chinese studios are now making high quality and culturally relevant films, leaving little room for mediocre American movies, says US producer

China society

Bloomberg

Published: 1:16pm, 16 Feb, 2021

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With China’s box office takings expected to return to near pre-pandemic highs in 2021, the world’s largest movie market is becoming more attractive – and more tricky – for Hollywood studios.

Ticket sales from cinemas in China, which has largely contained the coronavirus, may jump to 60 billion yuan (US$9 billion) this year, according to Rance Pow, founder of consultancy Artisan Gateway, closing in on 2019’s record haul of 64 billion yuan.

By contrast, with outbreaks still raging, US cinemas may take in about a third of that tally, Wedbush Securities estimates, underscoring Hollywood studios’ growing dependence on China.

China overtook the US to become the top movie market last year, as the pandemic shut American cinemas for longer than their Chinese peers. But the increasing reliance comes as Chinese viewers pivot to local language films, and show a greater sensitivity toward portrayals of China and its people in Western culture, amid simmering geopolitical tensions with the United States. Adding to the pressure on studios, a bilateral pact that required China to import a minimum number of American films every year, has expired.

“China’s market is now central to any major release,” said Aynne Kokas, a professor of media studies at the University of Virginia. “Diminishing market share presents a worrying picture for Hollywood studios” that may have been relying on China to recoup blockbusters’ budgets, she said.

The share of foreign films, including those from Hollywood, slipped to 16 per cent of Chinese ticket receipts in 2020 from 36 per cent the year before, according to ticketing platform Maoyan Entertainment. Fewer foreign films were released in China last year as studios’ plans went awry amid the pandemic.

The legal framework for Hollywood studios to get their films into China has also become less certain. An agreement with the US that saw China import 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 movies in, it could pull the plug on that access any time, particularly if it decides to use it as a diplomatic lever with new US President Joe Biden.

“The expiration of the US-China film agreement presents a serious challenge to Hollywood studios,” Kokas said. It was unclear when the new US administration would renegotiate this pact, given “the competing priorities they face in the relationship with China”.

What makes a Lunar New Year film? These are some of Hong Kong’s best

With new Covid-19 cases down to a handful a day, Chinese film-goers are flocking back to cinemas. While January 1 saw the highest New Year box office collection in China, the Lunar New Year on February 12 recorded the highest one-day taking. Ticket sales for the first four days of the Lunar New Year holiday surpassed 2019 levels to touch 4.5 billion yuan, according to Maoyan, with Chinese films emerging as the top contributors.

The most anticipated films this Lunar New Year season include mystery comedy Detective Chinatown 3 and family comedy Hi, Mom, both Chinese language titles made by local studios. Warner Bros Entertainment Inc’s live-action remake of the cartoon classic Tom and Jerry is the only big Hollywood film confirmed to release on February 26, when it opens in the US too.

Chinese studios produced four of the 10 top-grossing films globally last year, including the top scorer, The Eight Hundred, according to industry data tracker Box Office Mojo. Meanwhile, several of Hollywood’s highly anticipated, big-budget films either flopped in China or faced public-relations issues.

Walt Disney Co’s fantasy-action drama Mulan stirred up controversy for its portrayal of Chinese culture and was also criticised for filming in the Xinjiang region, where the government is accused of oppressing Muslim-minority Uygurs.

Monster Hunter, directed by Paul W.S. Anderson and backed by Sony Corp, was pulled from some cinemas in China after a social media backlash over a dialogue that, according to some viewers, was similar to a playground taunt against people of Asian descent. The movie’s co-producer apologised and edited out that line.

“Chinese consumer sentiment toward anything American is at an all-time, modern-day low,” said Chris Fenton, an American film producer and trustee of the US-Asia Institute. With Chinese studios now making high quality and culturally relevant films, Fenton said the days of China’s market saving a mediocre movie were over.