What China’s Rise to Global Box Office Champs Means for Hollywood’s Future

In 2020, the United States fell from its perch as the world’s top box office for the first time in history. Theater closures, delayed releases of major films and public health concerns put the entire film industry in a perpetual standstill. China rose up in its place, assuming the crown of global box office champions. Now, many insiders are wondering if Hollywood will be able to regain its previous preeminence.

With the movie industry on pause, North America’s 2020 box office receipts only added up to a total of $2.2 billion—a drop of about 80 percent from 2019’s $11.4 billion. Meanwhile, China managed to bring in $3.129 billion in box office revenue throughout 2020. Even though those receipts for China’s theaters represent a notable decrease from the country’s 2019 total of $9.2 billion, it was still enough of a haul to make China the world’s top movie industry last year.

For a direct and more recent comparison of Hollywood’s woes and China’s rise, one need only look at the recent opening of Warner Bros.’ Godzilla vs. Kong. The monster-movie smackdown earned a considerably robust, COVID-era record $48.5 million at American theaters during its first five days after opening on March 31. So far, it’s made roughly $86.6 million in U.S. theaters, though viewership figures haven’t been disclosed from HBO Max, where it is simultaneously streaming.

Over in China, though, where most theaters currently operate with a 75-percent seating capacity, the film opened on March 26 and brought in $70 million in its first weekend alone. The movie has made $183 million in China to date and is projected to make around $5 million more before its run ends there, which would make it (by far) the highest-grossing Hollywood film in China since the start of the pandemic, after Christopher Nolan’s Tenet. Currently, Godzilla vs. Kong is the fourth-highest-grossing film of 2021 thus far in China; the top three films are all Chinese titles.

If the outlook for China’s cinema looked comparatively good under the circumstances of the global pandemic, 2021 has already shaped up to be better. As of April 21, China’s box office revenue for 2021 had reached $3.09 billion, according to film data provider Maoyan Entertainment. Which means in less than four months, it’s nearly surpassed last year’s 12-month total of $3.129 billion.

The pandemic-necessitated shutdown of theaters surely hastened the fall of U.S. box office dominance, with 2020 being an “aberration, an outlier year,” Stanley Rosen told Newsweek. Rosen is a political science professor at the University of Southern California, specializing in Chinese politics, society and film. Like many with knowledge of China’s movie industry, Rosen predicted this day would eventually come. “They [China] were going to do it eventually, no question about that,” he said. “It was just a question of what year.”

All of the experts Newsweek spoke with for this story agree with Rosen’s assessment that China’s claiming of the movie throne was inevitable. Still, a film expert and history professor at the University of Southern California, Steven Ross, had a more optimistic outlook for Hollywood’s future, at least in the short term. “We still have some of the most advanced structures for filmmaking, and we also have a huge pipeline in terms of talent of writers, directors, actors and producers,” Ross said. “So, I still think the U.S. is in a position to lead through the good part of the next decade or two in the 21st century. Beyond that, I’m not sure.”

One might wonder, though: How could Hollywood be overtaken by a country whose own hit movies rarely travel overseas? Well, consider the sheer numbers. China has a population of around 1.4 billion people; the U.S. counts about 330 million. Then there’s the fact that Chinese companies started to realize how much money could be made from building new theaters, sometimes in unexpected locations.

Wanda Group, China’s largest cinema operator, has been steadily staking claim in smaller-tier cities such as Chengdu, Shenyang and Wuhan, where many people live in undesirable housing. Starting in the early 2000s, the company began building modern malls with inexpensive restaurants, museums and, of course, movie theaters. This meant “families could come there on Saturday and Sunday and spend all day,” film director Scott Morgan explained to Newsweek. Before he founded Creativity First Films studios, Morgan spent decades extensively traveling throughout Asia and more than five years working within the Chinese film industry. He also predicted the country’s eventual box office takeover with his 2016 book, The Future of Hollywood-China Film, Media, and Finance.

The theater-mall model proved successful, and theaters and screens still continue growing in China, while many are closing in the United States. In 2019, China added 9,708 new screens and 1,453 new theaters. Even during the pandemic, the country added 300 more theaters and 5,794 more screens in 2020, which brought its nationwide total up to 75,581 screens. This expansion is continuing in 2021, with China’s addition of 2,188 new screens in January and February alone. Before March began, the nation counted 77,769 total screens. The U.S., meanwhile, ended 2020 with 40,998 screens, down 174 from the previous year.

More people and more screens gives China an edge, but so does the fact that China recovered from the pandemic more quickly. After six months of being shut down, theaters began reopening there at half-capacity in July, before allowing 75-percent capacity by September. (Areas where recent, small outbreaks have occurred caused capacities to drop back down to 50 percent at times, including in Beijing.) U.S. theaters have slowly reopened at limited capacities, though the largest cities have been lagging far behind smaller cities. New York City only finally reopened theaters at the beginning of March, with venues restricting audiences to a maximum of 25-percent capacity per screening.

“I don’t think that their production of films went up,” Morgan said of China’s film studios and the dramatic success they experienced during the pandemic. “But they were feeling a lot of China pride.”

That cultural pride looks to have translated into big box office returns for domestic features, a trend that had already been developing in recent years. Thirty-three out of the top 50 highest-grossing films in Chinese history are Chinese films (including several co-productions between China and Hong Kong), with the oldest domestic entries on the list being a few titles from 2015. The other 17 pictures on China’s highest-grossing films list are American films: Marvel superhero films, sci-fi action blockbusters like Avatar and entries from the Fast & Furious franchise. Rosen explained that the reason these imports play well there is because little work is required to translate action or animated fare.

“The most successful [Chinese-made] films have been patriotic films, so the government certainly encourages them,” Rosen said. Indeed, the country’s—and, thus by extension, the world’s—biggest moneymaking picture last year was The Eight Hundred. The historical war drama brought in more than $460 million, nearly all of which was made during its homeland theatrical run. Like with India’s Bollywood industry, many of China’s biggest hits underperform outside of their home country, where cultural references and topics like The Eight Hundred‘s take on the Second Sino-Japanese War carry less significance. Often, China’s most successful domestic smashes never make it onto foreign screens.

China has also relied on the help of the West in productions, like when a studio hired the Russo brothers to consult on the 2017 blockbuster Wolf Warrior 2. (That film, incidentally, is currently No. 1 on the country’s list of top-grossing movies ever.) The Russos, who have directed some of Marvel’s biggest films, also took note and in 2016 launched Anthem & Song, a studio that produces Chinese-language films for the Middle Kingdom market.

While Hollywood could very well likely bounce back from the pandemic, it will be met by a Chinese movie industry that’s been steadily growing for some time. To an extent, Rosen said, this should benefit U.S. films when they travel to China screens. “A rising tide lifts all ships,” he said. “So, [Hollywood studios] hope to be lifted with that as well, and I still think really big-budget films should do fine in China.”

Of course, some Hollywood films will have trouble in China, because of certain circumstances and hurdles that need to be cleared. China has a notoriously harsh censorship board, for one. Because of this, Hollywood will often self-censor films with anything politically risky before opening in China, to avoid losing massive ticket sales.

Take Marvel’s Doctor Strange. In the comics, the titular sorcerer has a Tibetan mentor, but that character was reimagined in the film to be Celtic, played by Tilda Swinton. Though screenwriters on the production indicated that the character’s race and background were changed to avoid controversy in China, director Scott Derrickson said he didn’t want to engage in what he felt was a bad Asian stereotype. (He was accused of whitewashing, nonetheless.) There have also been instances in recent years of American studios blatantly attempting to court Chinese audiences. One such notable example of this is another Marvel flick—the Chinese version of Iron Man 3, which included additional scenes of a Chinese doctor operating on Tony Stark.

Since it’s become more widely known that American studios sometimes tweak films to suit China, it’s turned into a political issue. Last year, Congressional conservatives introduced legislation that cut off American producers from government funding if they were found to be changing films to please China. Senator Ted Cruz cited the repeatedly delayed Top Gun sequel on the floor of the U.S. Senate last May. Noting that Tom Cruise’s character’s leather flight jacket was altered from the original film’s version, to remove Taiwanese and Japanese flags, Cruz stated, “What message does it send that Maverick, an American icon, is apparently afraid of the Chinese communists?”

The fact that the U.S. film industry has been cautious about upsetting China’s government, as well as its moviegoing public, isn’t entirely surprising. The box office in China has long been the second-largest for American films outside of the U.S., and some big-budget releases face “make or break” consequences when screened in the Middle Kingdom. For example, 2016’s Resident Evil: The Final Chapter made only $26.8 million in North America, yet it was considered a hit after it grossed $159.5 million in China.

But there’s also the matter of just getting an American-made movie into Chinese theaters. “There are still quotas in China as far as the amount of American films that can run there,” said Peter Newman, a film professor and head of the dual MBA/MFA Graduate program at New York University’s Tisch School of the Arts. Currently, the country has a quota in place that allows only 34 imported films a year to open in theaters, though there are concessions when a Chinese company co-produces.

“The policies of the [Chinese] government and the entertainment business change, literally, on a weekly basis,” Newman explained. He cited the example of Quentin Tarantino’s Django Unchained in 2013. Some of the bloodshed and violence in the film was cut to appease Chinese censors, yet the Jamie Foxx-starring Western was then abruptly pulled from theaters on the day of its opening without explanation.

Then there are national holidays, Rose noted. During those times, “Hollywood and other foreign-language films are not allowed into China. So [domestic films] have a built-in audience.” The Chinese New Year is the the country’s biggest moviegoing time of the year, and also one when only domestic films are featured. This year’s holiday broke all previous records by topping $1.206 billion for the week, surpassing the previous record set in 2019 by 32.5 percent, according to Chinese ticketing platform Maoyan Entertainment. (All theaters were shut down in the country during the 2020 Chinese New Year.)

Due to the limitations put on American and other foreign films in the market, failures at the Chinese box office are particularly costly, especially when they’re films distinctly tailored for the country. The 2016 film The Great Wall is an oft-cited example. The American and Chinese co-production featured a large budget ($150 million) and a famous native director (Zhang Yimou), but was accused of whitewashing due to the casting of Matt Damon in the lead role, and it went on to lose a reported $75 million.

More recently, Disney pinned great hopes on Niki Caro’s live-action Mulan, which opened in China last summer after not being able to screen on American shores. Historical inaccuracies and several other controversies—such as a mostly white production crew—dogged that release, which also underperformed in China.

Recent Oscar-winner Chloé Zhao also presented a dilemma for China, as well as symbolized the divide between government censors and portions of the Chinese public. Newman, a professor of Zhao’s when she attended NYU’s film school, said when Nomadland first took home the Golden Globe award for Best Picture and the Beijing-born Zhao nabbed Best Director, China’s press heralded her as “something like ‘hometown girl makes good.'” Then, a 2013 interview Zhao gave to Filmmaker Magazine resurfaced and quickly changed the narrative. In it, she discussed growing up in China, and characterized it as “a place where there are lies everywhere.”

Zhao, of course, made history at the Oscars recently when she became the first Chinese woman and woman of color to be awarded the trophy for Best Director, and her film Nomadland was recognized as Best Picture. However, her home country’s government imposed a news blackout with state-run news media outlets, mostly ignoring any mentions of the Oscars or Zhao. China’s social media platforms also worked hard at deleting or restricting the spread of news about Zhao’s big night, though clever fans blurred her name and turned photos on their sides intentionally to avoid censors.

Marvel will soon face a major test from China’s censors later this year with Zhao’s next film, Eternals, a superhero blockbuster starring Angelina Jolie, Kumail Nanjiani and Salma Hayek. Given the financial success that Marvel typically finds in China, the film not screening there could be a huge loss, should it not get by the film censors of The Publicity Department of the Central Committee of the Chinese Communist Party. (Newsweek contacted the Chinese publicity agency for comment on this story but did not receive a response as of press time.)

Needless to say, the stakes and tensions should be high as the box office competition between China and the U.S. ramps up once we’re clear of the COVID-19 pandemic. But not everyone is completely writing off a relationship between the two countries’ film industries. This is especially true when both countries can benefit financially by working together. “The pot of money is just too big,” Newman noted. “I think they’re going to keep trying to figure it out.”

Source: https://www.newsweek.com/china-box-office-hollywood-worried-1580572

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