Will Hollywood Films Bounce Back in China in 2021?

Top Gun: Maverick - H - 2019
Paramount

Paramount's 'Top Gun: Maverick'

As the Middle Kingdom claims the No. 1 box office mantle, questions grow about whether the country has moved beyond U.S. imports.

China finally usurped North America as the world’s biggest box office territory in 2020, generating an estimated $3 billion in ticket sales compared with about $2.28 billion stateside. All it took was a global pandemic.

China's cinemas were hard hit by the first phase of the novel coronavirus outbreak, as lengthy closures drove total ticket sales down 68 percent from 2019’s $9.2 billion. But by mid-August, Beijing’s aggressive tactics had suppressed the virus within the country's borders to an extent that cinemas could return to 75 percent capacity and moviegoers felt safe. The result was a robust 4 1/2 months of sales for local studios and exhibitors. Newly minted Chinese blockbusters included patriotic epics like The Eight Hundred ($450.6 million, the most of any film worldwide last year), My People, My Homeland ($410.1 million) and The Sacrifice ($162.3 million).

By December, the Chinese film market had recovered to a monthly earnings level of 92 percent compared with the same period in 2019. Hollywood, however, was conspicuously absent from the recovery party. U.S. studio releases took a record small share of China’s theatrical pie in 2020, making up only 10 percent ($304 million), compared with 29 percent in 2019, which was already a historic low, according to consulting firm Artisan Gateway.

Within the Chinese industry, there are two competing views about what went wrong for the U.S. studios in 2020 — each with different implications for the coming year. Optimists say Hollywood's shortfalls were mostly a matter of weak content, as the most bankable U.S. tentpoles were pushed into 2021. Artisan Gateway president Rance Pow notes that 18 Hollywood studio films opened in China in 2020, compared with the usual average of about 40 per year. And many of the U.S. tentpoles that did open, whether Mulan or Wonder Woman 1984, were panned by Chinese critics and moviegoers.

Marketing was also an issue. As release dates were left to the last minute and studio operations hobbled at home by California's lockdowns, marketing efforts in China went noticably thin on the ground. "The marketing campaigns for all of the recent Hollywood releases were much, much weaker than usual," notes James Li, co-founder of Beijing-based film market research firm Fanink. Li worries that U.S. executives have slipped into the trap of assuming that the whole world has shut down just because Hollywood has. "COVID-19 gives you the perfect cover to not spend marketing dollars and not be held responsible if the movie underperforms," he adds."But if that attitude doesn't change soon, it could end up costing Hollywood a lot of money in China."

Still, the optimists believe the studios will indeed bounce back as soon as they return to the field with their A-game. Franchise tentpoles lined up for the first half of 2021 include China-friendly titles like Marvel's Black Widow, Universal's F9, A Quiet Place: Part II, MGM's No Time to Die and Legendary's Godzilla vs. Kong.

“We remain bullish on China in the long term for foreign import films, including U.S. studio films,” adds Pow. “While the timing for market recovery remains to play out, Hollywood’s brand of properties, stories and talent will remain compelling.”

The pessimists, meanwhile, contend that the geopolitical ground has fundamentally shifted — and taken much of the Chinese audience along for the ride. “The whole culture has changed,” says an executive at one of Beijing’s leading distributors, who believes that China's increasingly adversarial relationship with the West — see Trump's U.S.-China trade war, rising nationalism in both countries, and Xi Jinping's increasingly assertive foreign policy stance — has already begun to affect Chinese consumer attitudes towards pop culture.

China's swift rebound from the pandemic has accentuated such tendencies, other insiders say. "Because of COVID-19 and how well the government managed the situation here, compared to the chaos internationally," explains a programmer for one of China's nationwide theater chains, "we are seeing a growing national confidence that somehow reduces interest in international content."

The evidence for such dynamics was the demonstrable appeal of last year's biggest hits, whether war films like The Eight Hundred and The Sacrifice, or China's 2021 Oscar submission Leap ($122.5 million), which extolled the glories of China's national women's volleyball team.

“The most exciting thing for the audience now is a big exciting movie that makes them feel proud to be Chinese,” adds the distribution exec. “Hollywood movies are not automatically welcomed with open arms. Average films will struggle and even the strongest franchises are probably going to earn a lot less in China in 2021 than they did in the past.”

This story first appeared in the Jan. 6 issue of The Hollywood Reporter magazine. Click here to subscribe.