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Even ‘Avatar 2’ Can’t Fix China Doldrums

January 18, 2023 by Robert Marich Leave a Comment

China boxoffice
YouTube channel Behind Box Office details under-performance in China as Hollywood imports decline.

There’s little chance for a return to past highs for Hollywood in the China cinema market, which is the world’s second largest overall. And it’s not just because of pandemic. While “Avatar: The Way of Water” is a blockbuster, Chinese regulators reduced theatrical distribution slots for foreign imports — meaning Hollywood films — that in years past bulked up overall cinema revenue.

In March 2018, which is two years before the Covid health crisis, the film bureau agency was taken over by the Propaganda Department, in a break from a decade-long tradition. This led to a new regulatory approach toward the film industry. There was a greater emphasis to reduce foreign cultural influence and also boost domestic films so home-grown fare accounts for a bigger share of boxoffice. Regulators aim to make the Chinese film industry “reborn” with a more domestic flavor.

Analyst Michael Chen

Since 2020 when the pandemic hit hard, the segment of local films snapped back but “a lack of Hollywood blockbusters has prevented a full-scale return to pre-pandemic peak,” says China-based boxoffice analyst Michael Chen. He posts video reports on YouTube under his Behind Box Office series. 

While most top cinema territories posted double-digit percentage gains in 2022, in comparison to 2021, China fell about 36%, notes Chen. Most of the decline is due to a comparatively light slate of Hollywood imports (a permanent situation).

China researcher/consultant EntGroup estimates Chinese boxoffice tumbled to 30 billion RMB (US$4.1 billion) in 2022, versus 47 billion RMB in 2021 (for that 36% decline). In 2022, “despite a brief recovery in summer, the theatrical market headed into red again amid a rise in positive (Covid) cases,” reports Chen.

A reduced number of Hollywood imports can still shine. After premiering Dec. 16, Walt Disney’s “Avatar 2” has surpassed US$200 million in Chinese boxoffice.

China boxoffice 2012-22
China boxoffice peaked in 2019 at US9.2 billion.

Keeping a lid on Hollywood imports over the long run could cost China. India is surpassing China in population and some experts suggest it will move into No. 2 in a few years, given India cinema construction and favorable regulation.

Right now, Japan is No. 3 with static boxoffice of US$1.5 billion. North America (the United States and Canada) is No. 1 with US$7.5 billion in 2022 boxoffice. In 2018, North American peaked at an impressive US$12.9 billion in boxoffice. China’s high-water mark is US$9.2 billion in 2019, after which the government effort to tap down Hollywood imports took hold as part of a periodic five-year plan.

Analyst Chen has over a decade of researching North American and Chinese cinema-going market, helping to launch the first boxoffice reporting website in China, and is currently based in Shenzhen and Hong Kong.

Related content:

  • Behind Box Office video: Even ‘Avatar’ Can’t Save China Box Office

Filed Under: cinema distribution, global, news Tagged With: economics, regulations

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