- Overview of the global box office
- A look into China’s growing movie market
- Road ahead for the Chinese box office market
The global box office contributions for all films released in the year 2018 reached a record high of $41.1 billion, up from $40.5 billion in 2017. Of the $41.1 billion global box office market, the box office contribution by countries other than U.S. and Canada was $29.2 billion. In recent years, the Chinese movie market has exploded and in 2018 the Chinese movie market registered an increase of about 9%, accounting for about $9 billion (including online ticketing fees) in revenue – just behind the United States and Canada, the biggest movie market in the world. The growing number of cinema screen expansions and the rising ticket prices have been instrumental in this growth for China. China, which at this rate of growth will eventually surpass the North American movie market, has become a very important market for global movie producers looking to pump up their box office collections. The country has become a target market for many big budget Hollywood movies despite the country’s limited quota on imported films and strict censorships.
Despite the middle kingdom’s government allowing only a limited number of non-Chinese production to release in the country each year, the Chinese audience welcomed a variety of diversity in 2018, as several non-local movies, apart from Hollywood, were also received very positively. These include imports from India, Thailand as well as European titles, which set new box office records for foreign films in China and even surpassed the movies of the local market. With China’s box office performance registering high growth, it is one of the most attractive movie markets in the world. Of the total box office earnings, about $5.5 billion came from the domestic movies, accounting for 62.15% of the total box office; even the imported movies accounted for a healthy share considering there is a limit on the release of foreign films in the country. Of the top 10 movies in the Chinese market in 2018, five of them were domestically produced, while the other five were imports. "Local blockbusters, having become a match for their Hollywood counterparts, regained favor with audiences with increased market competitiveness and quality," as per a news article release by China Daily. In all, 38 foreign films were released in China in 2018, which was up from 35 in 2017.
Attendance to multiplexes and movie theaters in the U.S., the biggest movie market in the world, has slumped in recent years. Rising ticket prices and competition from streaming services has slowed the box office numbers for the U.S. But in China, with popular streaming services like Netflix being banned and movie tickets being generally cheaper (in comparison to U.S.), the number of movie viewers are much higher. As per industry experts in China, the factors that have contributed to the growth of movie market in China in recent years are surely because of the release of more quality domestic films and the better selection of foreign films broadcasted in the country. This growth is also furnished by increasing spending power among its residents, alongside the growing third and fourth tier cities which are contributing significantly to the rise in the industry. Also, the country has witnessed significant increase in the number of cinemas in recent years thereby making it more accessible while increasing the number of cinemas visits per person. As more and more moviegoers head to the theaters and cinemas, another important factor that is likely to contribute to the growth in revenue are the intellectual property rights from the movies, along with the already surging revenue.
China's potential to be the most lucrative movie market in the world has incited Hollywood to keep a close tab on the country’s movie market, although China limits the number of foreign films that can be released in the domestic market. Chinese government initiates these measures of limited foreign movie imports during peak seasons by providing incentives in the form of rewards and subsidies to cinemas for playing more domestic titles to help boost domestic films' performance. As mentioned above, the meteoric growth of the Chinese movie market has also been fueled by the huge increase in cinema screens across the country. China has overtaken all the countries in the world in terms of screen numbers. As per reports China has a total of 60,000+ movie screens, making it the market with the most movie screens in the world. Over 9,000 new movie screens were added in China in the previous year.
One major concern for the box office revenue collection in China, especially with the rise of online ticketing, considering it accounts for more than 80% of ticket revenues (only about 25% of tickets are bought online in the US), is the growing monopoly of Maoyan-Weying (Tencent backed) and Tao Piao Piao (Alibaba backed). These online movie ticket platforms’ have ventured into production studios and distribution business as well, leading to the domination by only a few big players and potentially fewer choices for customers. With these platforms being involved in the distribution process as well, it could enable them to control the release of films as per their choice giving them an undue advantage on the overall movie market. While this could weigh on the different segments operating in the overall movie production and distribution value chain, consumers are less likely to be affected until and unless they get decent number of movies with good quality and content.
According to projection by PricewaterhouseCoopers, the Chinese movie market is expected to surpass the United States by 2020 for the first time and become the world biggest movie market. But the change in hands of the leading movie market with the dominance of China will not be the only disruption in the movie industry. The growing dominance of streaming service and with more players (major movie production houses) venturing into the sector creating their own original content, in the form of movies and also with audience well receiving it, is another development that will have an impact on the overall movie industry. But for now, China’s growing importance in the global movie industry is evident for the near foreseeable future.
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