LOS ANGELES — As Hollywood’s ticket sales slow in the U.S. — thanks to piracy and streaming services like Netflix and Hulu — China’s growing appetite for movies is helping to make up the difference.
Experts predict that by 2020, China will be the world’s largest cinema market, with box office revenue expected to jump from $9.9 billion in 2018 to $15.5 billion by 2023, according to a report by PwC.
In the first quarter of 2018, China surpassed the U.S. in box office revenue for the first time.
That year, China’s box office cashed in $9 billion in 2018 — just behind the U.S. and Canada, which brought in a total of $11.9 billion in 2018, according to data compiled by the Motion Picture Association of America.
“You have to be very careful before you shoot a script — knowing how big the Chinese market is — to make sure that you get China right,” Stanley Rosen, a professor of political science at University of Southern California told CNBC.
“As much as 70% or more of a blockbuster film box office comes from overseas – not North America – and China is a big part of that,” he said.
Hollywood is increasingly keeping the Chinese market in mind during its productions. More than a third of China’s highest grossing films over the last two years were made in the U.S.
But, China wants its own films to win the box office — both for financial reasons and as a matter of national pride.
In 2018, Dalian Wanda Group, which bought iconic American movie theater chain AMC in 2012, opened the world’s biggest movie studio, which was touted as China’s answer to Hollywood.
But those kinds of investments have yet to pay off as Chinese’s homegrown film market struggles to compete with Hollywood productions.
Profits at the majority of China’s top film and movie studios fell in 2018, according to the Financial Times.
More synergy between Hollywood & China
The trend has created a surge in collaborations between Hollywood and China in recent years. Between 1997 and 2013, China helped finance just a dozen of the 100 top-grossing movies worldwide each year, according to New York Times analysis of data from Box Office Mojo and IMDB. But that figure surged to 41 films in the next five years.
Chinese tech giant Alibaba has invested and promoted Paramount Picture’s “Mission Impossible” films – “Fallout” and “Rogue Nation.” China’s Bona Film Group funded “Once Upon a Time in Hollywood,” despite never making it to Chinese screens.
“China wants to be the largest film market in the world as quickly as possible,” Rosen said. “And Hollywood is absolutely essential to that.”