In China, US films struggle against homegrown movies

With audiences in North America steadily shrinking, Chinese moviegoers have never been more important to Hollywood. But China has also poured billions of dollars into its own film industry.

Aly Song/Reuters
People watch a movie at Dalian Wanda Group’s Oriental Movie Metropolis ahead of the studio’s opening, in Qingdao, China.

The opening of “Avengers: Infinity War” in China in May went about as well as Hollywood could have hoped. The Marvel and Disney blockbuster raked in more than $200 million, making it the second-biggest three-day weekend opening in China when measured in Chinese currency. (“The Fate of the Furious” is No. 1.) 

The movie also became the highest-grossing Marvel outing in China. “Captain America: Civil War,” which had previously held the top spot, made only $180 million during its entire run.

The success of “Avengers: Infinity War” in China was, in some ways, icing on the cake after its release in much of the rest of the world two weekends earlier. The $630 million the film earned then was the biggest global opening of all time.

But $200 million is still a lot of money. And with audiences in North America steadily shrinking – movie attendance fell to a 22-year low in 2017 – Chinese moviegoers have never been more important to Hollywood. 

China has the fastest-growing film market in the world. The challenge Hollywood faces is keeping audiences in China engaged, especially as the country’s domestic movie industry starts to catch up. Guan Yadi, a film producer and critic in Beijing, says the Chinese movie industry has gained momentum by improving production quality and focusing on themes that appeal more directly to a Chinese audience. Mr. Guan warns that as the industry continues to develop, Hollywood’s competitive advantage could disappear. 

“China cannot solve Hollywood’s problems,” Mr. Guan says. “Audiences here still enjoy Hollywood movies, but in future, I think they will be more interested in seeing movies about China’s own stories.”

The growth of the Chinese film market, the second largest in the world, is staggering. While revenue in the United States and Canada dropped 2 percent last year, ticket sales in China grew by 22.3 percent to reach $8.59 billion. 

To keep up with the surging demand, the number of movie screens in China increased from 12,407 in 2012 to more than 40,600 in 2017. By 2021, China will have more than 80,000 screens, nearly twice as many as the US, estimates PwC, an accounting firm also known as PricewaterhouseCoopers.

In the first quarter of 2018, China’s box office overtook North America’s for the first time. Several major Hollywood productions released during that time – including “Ready Player One,” “Pacific Rim: Uprising,” and “Tomb Raider” – even had bigger debuts in China. Yet even the most successful Hollywood blockbusters struggle to compete with homegrown Chinese films. So far this year, China’s biggest hit has been “Operation Red Sea,” a military action flick that hauled in more than $579 million worldwide. “Detective Chinatown 2,” a buddy comedy, comes in second with more than $544 million worldwide. 

One of the biggest challenges Hollywood faces in China is political. The Chinese government not only limits the number of foreign films that play in the country, but also unofficially bans them from playing during Lunar New Year. The seven-day holiday is one of the most lucrative release windows of the year.

But China has also poured billions of dollars into its own film industry with the aim of competing with Hollywood-style blockbusters. On April 28, two weeks before “Avengers: Infinity War” premièred in China, the Oriental Movie Metropolis, the world’s biggest movie studio, opened in the northern Chinese port city of Qingdao. The studio was built by the Dalian Wanda Group, one of China’s leading real estate developers, which also controls the US theater chain AMC Entertainment and the Hollywood studio Legendary Entertainment.

Wang Jianlin, the group’s billionaire founder, has pledged to give filmmakers generous subsidies while indicating a focus on Chinese movies. The studio expects to host around 100 film and TV productions each year. 

“We will boost the Chinese movie industry development,” Mr. Wang said at the studio’s opening ceremony. “This is the largest investment the global film and television industry has ever seen.”

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