Hollywood Movies in China – More Than a Business?

Written by Anirban Mal

Restrictions on film imports to China are already considerable for Hollywood; the country caps foreign films at 34 per year. The Office of the United States Trade Representatives is currently negotiating to lessen those terms.

Producers often accuse studios of “Hollywood accounting,” but the rise and rise of foreign box office may have introduced studios to Chinese accounting. According to reports, the MPAA has hired a firm to audit ticket sales in China. That’s of grave concern when China is often the biggest market for American movies — and one that provides only 25% of its revenue to studios. China’s ascent is the economic story of the 21st century, and the entertainment industry is no exception.

“The Chinese film market is going to be the largest film market in short order,” said Charles Rivkin, a former US assistant secretary of state who in January took over from Christopher Dodd as MPAA chairman. “They’re building about 25 screens a day.”

An average of 22 new screens was unveiled in China in 2015 — each day. That year, the Chinese box office surged by almost 50% over 2014, and Hollywood is counting on an expanding Chinese middle class to make up for vanishing audiences at home. Over the next couple of years, the Chinese box office may well surpass that of North America as the worlds biggest, even if last year’s China numbers fell — as has box-office revenue in Hollywood — amid a general economic slowdown in the country. Still, even Hollywood movies that bomb in the West can be redeemed by Chinese interest. Last summer’s World of Warcraft, which cost $160 million to make, managed less than $25 million at the U.S. box office on its opening weekend.

More importantly, it’s a vivid illustration of what’s become a very inconvenient truth: While tentpole movies are essential to Hollywood, Hollywood no longer controls the tentpoles. The real power lies in the foreign box office for those blockbusters, with China as the retaining wall.

Since the Chinese New Year period, when local-language films did big business, turnstile traffic in the Middle Kingdom has all gone Hollywood’s way. In April and May, titles including “XXX: Return of Xander Cage” and “The Fate of the Furious” lifted Hollywood’s monthly box office share to more than 80%. June should see a repeat of that, thanks to “Wonder Woman,” “The Mummy,” “Alien Covenant” and the soon-to-be-released “Transformers: The Last Knight.”

“Transformers: The Last Knight” earned $70 million in its first five days in North America. It’s a very weak showing compared to the last installment, which earned about $100 million in three days. Stories are similar for “Pirates of the Caribbean: Dead Men Tell No Tales” and “The Mummy,” among others, all with the same rationalization: Foreign is strong, and will/could make up for domestic shortfalls.

The numbers tell us American audiences’ opinions of American movies will continue to be discounted. As more top films struggle at home, an increasing portion of studio release schedules will include films with marginal domestic interest. The biggest budgets will be allocated to films of foreign interest, not domestic. That means the box office stagnation we’ve seen this year will continue, and likely grow worse.

Where the world’s top-performing movies used to be nearly the sole domain of American franchises, the competition for top-performing movies now extends to Japan and China with films like “Your Name” (Japan), “Kung Fu Yoga” (China), and “Journey to the West: The Demons Strike Back” (China). All have grossed $250 million or more, with virtually no contribution from North America.

Another Chinese production, “The Great Wall,” had some interest in the West with star Matt Damon, but their overriding interest in the actor lay with his overseas appeal. It earned $332 million worldwide, with only 13 percent domestic.

Top 20 Movies of 2017 to Date, Worldwide

1. Beauty and the Beast: $1,257 million /Domestic: $504 million (40.1%) Foreign: $753 (59.9%)
2. The Fate of the Furious: $1,238 million/Domestic: $225.2 (18.2%) Foreign: $1,013 million (81.8%)
3. Guardians of the Galaxy Vol. 2: $852 million/Domestic: $380.6 (44.7%) Foreign: $471.2 (55.3%)
4. Pirates of the Caribbean: Dead Men Tell No Tales: $680 million/Domestic: $160.9 (23.7%) Foreign:
5. Wonder Woman: $657 million $519.1 (76.3%)/Domestic: $321.2 (48.9%) Foreign: $335.8 (51.1%)
6.Logan: $618 million/Domestic: $226.3 (36.6%) Foreign: $391.8 (63.4%)
7. Kong: Skull Island: $566 million/Domestic: $168.1 (29.7%) Foreign: $398.1 (70.3%)
8. The Boss Baby: $493 million/Domestic: $173.1 (35.1%) Foreign: $320.3 (64.9%)
9. Fifty Shades Darker: $379 million/Domestic: $114.4 (30.2%) Foreign: $264.4 (69.8%)
10. Your Name: $354 million/Domestic: $4.9 (1.4%) Foreign: $349.5 (98.6%)
11. xXx: The Return of Xander Cage: $346 million/Domestic: $44.9 (13.0%) Foreign: $301.2 (87.0%)
12. The Mummy: $345 million/Domestic: $69.5 (20.2%) Foreign: $275.2 (79.8%)
13 .The Great Wall: $332 million/Domestic: $45.2 (13.6%) Foreign: $286.8 (86.4%)
14. Resident Evil: The Final Chapter: $312 million/Domestic: $26.8 (8.6%) Foreign: $285.4 (91.4%)
15. The LEGO Batman Movie: $311 million/Domestic: $175.8 (56.5%) Foreign: $135.1 (43.5%)
16. Split: $276 million/Domestic: $138.1 (49.9%) Foreign: $138.8 (50.1%)
17. Transformers: The Last Knight: $272 million/Domestic: $73.2 (26.9%) Foreign: $199.2 (3.1%)
18. Kung Fu Yoga: $254 million/Domestic: $363k (0.1%) Foreign: $253.8 (99.9%)
19. Get Out: $252 million/Domestic: $175.5 (69.7%) Foreign: $76.3 30.3%)
20. Journey to the West: The Demons Strike Back: $247 million/Domestic: $880k (0.4%) Foreign: $245.7 (99.6%)
Source : Box Office Mojo

Summer blockbuster season isn’t just an American phenomenon. In China, Hollywood movies are poised to earn about $580 million this month, continuing a dominant run in 2017 that’s likely to have wider implications for the Sino-U.S. relationship, including ongoing talks on import quotas and revenue share.

“The world is changing day by day. Climate, environment, human behavior also changing accordingly but photography is a lifetime journey and it will follow our mind in every step of life”. Anirban’s a photographer whose photos are exhibited in several international exhibitions and he received many Awards. His works have also been published in many leading journals. He loves to explore people and human behavior and has a keen interest in documentary photography. Besides photography, Anirban also has interest in other art forms.