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It was quite a ride — beginning a century ago with the likes of D.W. Griffith, Darryl Zanuck and Charlie Chaplin — but America’s reign as the dominant audience for movies will end in 2019, to be supplanted by China. This year, the U.S. box office may end up at $12.11 billion compared to China’s $11.05 billion, according to new projections from PricewaterhouseCoopers. But in 2020, China’s fast-growing sales at the box office will exceed that of the U.S., $12.28 billion to $11.93 billion — and the country will dominate for the foreseeable future.
China, with its population of 1.4 billion compared with 328.9 million in the U.S., has been selling more movie tickets than any other country since 2015, but 2020 marks the more significant sea change: the first time it will lead the world in revenue. PwC analyst C.J. Bangah notes that some may find it surprising that the theatrical industry overall will still grow through 2023 — 4 percent annually worldwide and 1 percent yearly in the U.S. “With on-demand home video, there were a lot of folks who thought cinema would die,” says Bangah. “But tickets, admissions and screens are all projected to rise.”
The disruption in the entertainment industry doesn’t end with China. PwC’s report also indicates that, while streaming customers in the U.S. are still growing at 10 percent annually, upcoming services from Disney, WarnerMedia, NBCUniversal and others likely will have to rely on international markets if they intend to truly challenge Netflix’s dominance. Globally, the so-called over-the-top market will grow 14 percent annually through 2023, according to the research and accounting firm famous in Hollywood for tabulating Oscar votes each year.
Netflix reported in April that it had 149 million subscribers worldwide but acknowledged its growth is slowing due to near-saturation domestically and competition from Amazon, CBS All Access, HBO Now, Hulu and others. “The first-mover advantage in streaming video that Netflix has capitalized on to date continues to be eroded,” PwC notes. Disney, with its new 21st Century Fox assets, will launch Disney+ on Nov. 12, which, as PWC says, “marks the start of a new challenge to the currently established order in the subscription VOD sector.”
This story first appeared in the June 5 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
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