http://www.hollywoodreporter.com/news/china-box-office-flatlines-2016-957831
China Box Office Flatlines in 2016
Courtesy of Sony Pictures
Stephen Chow's 'The Mermaid' earned $526.8 million in China in February, before the market began to soften.
After expanding 48 percent to $6.78 billion in 2015, it is projected to grow just 4.5 percent this year.
The year began with projections that China was on the verge of becoming the world's largest movie market, but 2016 might end up being remembered as the year the country's film sector fell back to earth.
For over a decade, China's box office has expanded at least twice as fast as the country's overall economy — from 2003 to 2015, year-over-year growth averaged 35 percent or more, according to state media regulators. The Chinese market's huge performance in 2015 —
box-office revenue grew 48 percent to $6.78 billion — and an even bigger first quarter this year (50 percent growth; the territory's first half-billion-dollar movie,
Stephen Chow's The Mermaid), left analysts hurrying to bump their forecasts of China's ascendance to early 2017.
But the second quarter delivered a surprising correction: a
4.6 percent year-on-year decline, the territory's first full-quarter slide in half a decade. And the downward trend has only
deepened in the second half of the year. From July 1 to Dec. 15, China's box office contracted 10.5 percent compared with the same period in 2015, according to Beijing-based box-office monitor Ent Group.
Thanks to the huge first quarter, box office for the year so far — Jan. 1 to Dec. 15 — is still up 5 percent. But the remaining two weeks could erode that bulwark a little further.
Legendary Entertainment's Matt Damon-starring co-production
The Great Wall has injected some much needed energy into the marketplace,
opening to $67.4 million last weekend. Local fantasy adventure
Mojin: The Lost Legend, however,
earned even more during roughly the same window last year. That film debuted to $92 million and went on to earn $255.7 million — a total
The Great Wall won't match.
Factoring in the remaining releases of 2016, Ent Group forecasts that China's full-year 2016 growth rate will land at 4.5 percent — way below the 30 percent China's media regulators had targeted.
The forces behind the slowdown have been a regular subject of debate — and hand-wringing — throughout the year. Most industry observers converge around a combination of factors: weaker local films, a crackdown on box-office fraud, cutbacks in last year's generous ticket subsidies from online platforms trying to build market share, overall weakness in the Chinese economy and increased consumer discernment among China's new moviegoers (for a more detailed look at the causes of the slowdown, see
here).
Hoping to escape the ignominy of a full-year decline — and the political heat that would come with it — China's regulators turned to Hollywood for help late in the year.
First, they relaxed their usual blackout on foreign-film imports during the summer blockbuster season. For years, regulators have boosted local films by keeping Hollywood imports out of the market during most of July and August. This year, several Hollywood titles were allowed in — Paramount's
Teenage Mutant Ninja Turtles: Out of the Shadows on July 2, Warner Bros.'
The Legend of Tarzan on July 19, and Universal's
The Secret Life of Pets on Aug. 2.
Even more striking, in late fall, officials discreetly
loosened their infamous quota on foreign film imports. Under the terms of a trade deal negotiated in 2012, foreign studios usually can release just 34 films in China each year (on revenue-sharing terms). But regulators were wiling to let this lever go rather than countenance the threat of a full-year decline. By mid-November it was clear that at least 38 foreign titles would be brought in, with Warner Bros.'
Sully and 20th Century Fox's
Miss Peregrine’s Home for Peculiar Children scoring early December dates, along with Japan's anime smash hit
Your Name. In past years, December was reserved as a local-movie-only blackout period.
A spokesperson for China's film bureau denied to local media that the quota had been breached, saying that the additional titles were "cultural exchange projects." Insiders describe this characterization as a face-saving exercise — however it was described, more movies were brought in.
Hollywood's year in China has been slightly rosier than the local industry's as a whole. The first half of 2016 seemed to spell trouble — imported films saw only 5 percent growth year-on-year. But thanks to the lighter hand taken by regulators, the second half has improved. Revenue from imported titles — most of which are U.S. studio films — is up 18.9 percent from July 1 to Dec. 15. Imported titles also have claimed 43.5 percent market share at the Chinese box office thus far (Jan. 1 to Dec. 15), up from 38.4 percent in 2015.
China's year-end box office total is usually released on Jan. 1. This year's tally will be met with less fanfare, and more scrutiny.
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