China Box Office Returns to Robust Growth in 2017, Hitting $8.6B

Wolf Warrior 2 -Still 3 -Publicity-H 2017
Courtesy of Well Go USA

Hollywood had a particularly strong year in the market, with international movies accounting for 46 percent of revenue, up from a 42 percent share in 2016.

China's movie box office is back to a healthy state of expansion.

Total ticket sales for 2017 grew by 22.3 percent to reach 55.9 billion yuan ($8.59 billion), according to data released Monday by Beijing's top media regulator.

The solid performance puts China back on the path to overtaking North America as the largest theatrical film market in the world sometime in the next several years. The figure also stands in stark contrast to the downbeat 2017 performance of world's current No. 1 market: In North America, ticket revenue dipped 2.3 percent, according to comScore.

China's 2017 tally also represents a robust comeback from the market's shock correction of 2016, when local box-office growth abruptly stalled at just 3.7 percent after expanding by an average of 35 percent for more than a decade.

The 2017 results are particularly encouraging for Hollywood. International films — the bulk of them U.S.-made — claimed 46 percent of revenue in 2017, up from a 42 percent market share in 2016 and a 38.4 percent share in 2015.

China's big growth rate partly came courtesy of accounting changes by Beijing's bean counters, however. At the start of the year, China's media regulator — the State Administration of Press, Publication, Radio, Film and Television — quietly began including the fees charged by online ticketing services when reporting box-office figures. Subtracting the online fees, China's 2017 ticket revenue grew by 13.45 percent, rather than 22.3 percent.

Regulators are believed to have begun including the fees both to offset slowing growth and to more accurately reflect the way movies are consumed in the country. Although North American box-office data does not include such fees, over 80 percent of all movie tickets are bought online in China, compared to less than 25 percent in the U.S. The online fees may go towards the bottom line of ticketing platforms rather than film studios, but they still represent millions in consumer spending on moviegoing

A steady strengthening of the Chinese currency against the dollar during the year further tweaked the financial picture for the Hollywood studios. In U.S.-dollar terms, China's box office grew 30.5 percent from $6.58 billion in 2016 to $8.59 billion in 2017 (including ticketing fees).

The five biggest U.S. titles in China this year were Universal's The Fate of the Furious ($392.8 million, the most ever by a non-Chinese film), Paramount's Transformers: The Last Knight ($228.8 million), Disney's Pirates of the Caribbean: Dead Men Tell No Tales ($172.3 million), Legendary's Kong: Skull Island ($168.2 million) and Disney's Coco ($177 million). Underscoring just how important the Chinese film market has become to the U.S. majors, all of those pics, except Coco, earned more in China than they did in North America (Coco earned $178 million in North America, but it remains on release in China, which will become the film's top market sometime in early 2018).

The year's biggest story in the Chinese industry, of course, was the heroic performance of patriotic action blockbuster Wolf Warrior 2, which collected a record $870 million — a height previously reached only by Hollywood's biggest hits. Other major earners were Never Say Die ($333.9 million, the most ever by a comedy in one market), Jackie Chan's Kung Fu Yoga ($254.5 million) and Tsui Hark's Journey to the West: The Demons Strike Back ($239.5 million).

The Chinese marketplace also welcomed new diversity in 2017, as several non-Hollywood titles put up big numbers. Indian import Dangal, starring Amir Khan as a father who coaches his two daughters to become champion wrestlers, earned an astonishing $193.1 million. Thai high school thriller Bad Genius, meanwhile, earned $41.1 million, and Spanish crime film Contratiempo brought in $26 million (more than five times what it grossed in Spain). 

The staggering growth of China's theatrical film sector over recent years — from $1.47 billion in 2010 to $8.6 billion in 2017 — has been fueled by breakneck cinema construction across the nation. Midway through the year, China overtook the U.S. to become the most-screened country in the world. Over 26 new movie screens, on average, were erected in China every day of 2017. The country now has 50,776 movie screens.