A bull crashes through China's box office

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bull-in-a-china-shop

You can’t be blamed for thinking China is the next big thing in the movie business.I do and so do Hollywood suits. It’s no coincidence that Beijing saw a bit of action in the latest Transformers movie or the shameless shoehorning of a Chinese-relevant thread in the dismal Independence Day: Resurgence (yet somehow, despite 20 years of world peace in the movie, Africa is still depicted as a warlord-controlled hellhole with 50-cals on bakkies). Iron Man 3 even featured new footage and included a major Chinese star.

There is logic to this: from Point Break to Warcraft to The Last Witch Hunter, a lot of movies can thank China for pulling at least some of their fat out of the fire (but not all: Man of Thai Chi was a miserable failure, despite huge marketing in the Middle Kingdom).

As audiences elsewhere are slumping and the scope narrows to a very specific type of movie (the type that sells in 3D to young audiences at high ticket prices), China has emerged as the new land of movie milk and honey. The Chinese box office market has grown at 17 percent a year and some reports suggest that over a dozen new screens are built there every day. Of course, China’s billion-plus population, combined with a surging and aspirational middle class, makes that happen. It is expected that China’s box office might outpace the US by next year.

Well, maybe, but that might not last. The latest figures our of China show a slowdown is happening. Things started strongly in the beginning of 2016, but by the midway point problems had emerged. China is actually experiencing a 10 percent decline in box office revenues, the first in five years. According to Forbes, analysts expect that Q3 numbers will drop by 16 percent and audience numbers will have fallen by 12 percent, the first contraction since 2011.

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No Red Saviour

These don’t sound detrimental: surely China’s market needs to cool down a little or risk becoming a bubble. But no doubt many movie moguls are wringing their hands in tense meditation. The US box office is under performing by margins of 20 to 40 percent. Yet at the same time it has become very reliant on hugely expensive blockbusters. Setting aside the rare showing of a movie like Don’t Breathe, new blockbusters easily cost more than $100 million just to make (time that by two to get a sense of the break-even point). And despite the heroics of small movies, only big spenders get to the billion dollar club.

Basically, movie-making has become very high stakes and in this game it’s become smart to bet on Red.

bet-on-red

Sadly, Red is also receding. The reasons vary: some blame a changing Chinese consumer, who like the West is starting to prefer streaming services and bootleg movies over expensive ticket prices. Another reason may be that many of the movies are just not that good. Then a third argument holds that the numbers were always inflated and a recent crackdown on unscrupulous practices by Chinese distributors have brought reported ticket numbers down.

Whatever the reason, China does not appear to be the savior of the cinema. It certainly won’t disappear, but this is a reminder that the problems facing movies are not going away. Companies need to find ways to draw audiences back to films – particularly smaller ones. Cheaper movie prices for non-blockbusters would be a great start, as well as the revival of classic movies on the big screen.

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Last Updated: October 4, 2016

James

A total movie glutton, nothing is too bad or too obscure to watch, unless it's something like The Human Centipede. If you enjoyed that, there is something wrong with you. But bless you anyway - even video nasties need love...

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