Hollywood needs a reboot in China
Future. While Hollywood films made a lot of money in China over the past decade, they’re no longer doing well in the country… or even being allowed to play there. That downturn coincides with an exploding Chinese film industry that can mimic the scale of American movies and the changing tastes of moviegoers in the region. The loss of big returns in the market may cut into profits in the short-term… but in the long-term, it may free Hollywood from needing its blockbusters to please Beijing or the whims of Chinese audiences.
Kicked out of the Middle Kingdom
After The Batman failed to make much of a dent at the Chinese box office, Hollywood is reassessing its relationship with China… after the country has pretty much done everything but end its relationship with Hollywood.
- Movies don’t make what they used to. In 2012, Hollywood films made up 48.2% of the Chinese box office, but that number dropped to 12.3% in 2021. While China used to be considered the rising cash-cow market, only two films — Godzilla vs. Kong and F9 — have made over $100 million there. Meanwhile, 20 Chinese films made that much in the same period.
- They’re also not expected to make as much. The loss in revenue isn’t surprising, especially to Hollywood analysts, who now track titles to open way under what they used to in years past. The Batman was only tracking to make a low $25-30 million, and it’ll probably end up with only $22 million. The last pure Batman film, The Dark Knight Rises, made $52.8 million in 2012 when China had 80% less theaters.
- And not as many movies are playing. Only 20 Hollywood films were allowed to play in China last year (potentially due to the 100th anniversary of the Chinese Communist Party), and many upcoming Hollywood blockbusters have not been given the greenlight for exhibition in the country by government regulators.
- What Chinese audiences want changed. All of this isn’t to say that the Chinese box office is waning. Instead, Chinese films are taking off… they just happen to be in a genre described as “main melody films” — “quasi-propagandistic movies embodying the official ideologies of the Chinese Communist Party.” Many of those films view America as an antagonist.
The irony is that China has never exactly been a great bet for Hollywood — U.S. studios only get 25% of the box-office revenue (down from the typical 40-50% in major international markets). In addition, they can’t control their release dates and have traditionally been subject to intense scrutiny by Beijing.