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China’s once booming box office ended 2016 with a whimper.
After averaging yearly growth of 35 percent for more than a decade, China’s movie ticket revenue expanded just 3.7 percent in 2016, clocking in at ?45.7 billion for the year, according to official data from China’s State Administration of Press, Publication, Radio, Film and Television.
The Chinese currency weakened against the dollar throughout the year, meaning that 2016’s total actually amounted to a decline in U.S. dollar terms. Total box-office revenue this year was $6.58 billion compared to $6.78 billion (?44 billion) last year.
Growth of 3.7 percent would be considered a healthy number in many mature markets around the world — North America’s box office grew 2.1 percent to hit $11.36 billion in 2016 — but for China, it represents a drastic deceleration from last year’s 48 percent expansion rate.
The boom times continued at the start of 2016, with local blockbusters like Stephen Chow’s The Mermaid, which earned $528 million in China alone, driving growth of over 50 percent in the first quarter. Many analysts then predicted that China would surpass North America to become the world’s biggest theatrical market as early as 2017. But growth fell off a cliff in the second quarter — a 4.6 percent year-on-year decline, the territory’s first such fall in half a decade — and it has yet to bounce back.
Hollywood studios fared slightly better in China in 2016. Imported international films — the vast majority of which are U.S. studio titles — accounted for 41.7 percent of total box office in 2016, compared to 38.4 percent revenue share in 2015. Overall, international movies earned $2.7 billion (?19.06 billion) in China, compared to $2.6 billion (?16.99 billion) last year, despite the less favorable exchange rates. Revenue was up 10.9 percent for the year.
The forces behind China’s slowdown were 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 fast-growing online platforms, 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).
China’s state-backed international radio station tried to put a positive spin on the slowdown in its English-language coverage of the SAPPRFT figures, saying, “the film industry in China kept a steady development momentum in 2016 amid the ‘new normal’ of the country’s economic development” — a reference to China’s slowing overall economy. The news source also said that China’s film sector faced “multiple challenges, including the rapid development of the internet.”
The SAPPRFT data shows that the number of movie tickets sold in China in 2016 was up slightly to 1.37 billion, an increase of about 8.9 percent year-on-year. The average ticket price was down, however, reflecting the expansion of cinema construction into provincial markets that are less economically developed.
China built 1,612 new cinemas this year, bringing its total to 41,179 screens. That was enough to top the U.S. total — 40,759 screens, according to the National Association of Theatre Owners — making China the country with the most cinemas in the world.
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