Newsletter2-China Box Office, Audits & Mojo

Chinese Ticket Sales – Declining?

Chinese Ticket Sales – once a booming bastion to save Hollywood’s massive and expensive screen extravaganzas – are softening at the box office.  In this New York Times article, we note that, despite the general euphoria from Hollywood executives about Chinese box office, there are concerns:

New data from comScore, a Virginia-based analytics firm, indicates that Hollywood is having a tough time in China. From Jan. 1 to June 30, Chinese cinemas played 24 movies from Hollywood, generating $1.76 billion in ticket sales. In the same period a year earlier, the country let in 22 Hollywood movies, which collected about $1.73 billion.

That is a 1.7 percent increase — a far shot from 35 percent, the figure for all imported movies. Films from countries other than the United States made up the difference. One was “Dangal,” a Bollywood drama (partly financed by an Indian subsidiary of the Walt Disney Company) that collected a runaway $191 million in China in May.

This situation is particularly worrisome for the American box office as tickets sales in the United States are slumping.  At one point, a domestic American film would earn about 70% of its box office in North America (Canada, US, Mexico) and 30% on the International Markets. That has been reversed for a decade or more.

Some Hollywood offerings have done very well in China this year. “A Dog’s Purpose,” made by Steven Spielberg’s Amblin Partners, collected a strong $88.2 million; in comparison, it took in $64 million in North America, which remains the world’s No. 1 movie market. Sony’s “Resident Evil: The Final Chapter” collected about $160 million in China; it managed only about $26.8 million in North America.

At the same time, however, Hollywood suffered a parade of duds in China, including “The Lego Batman Movie,” “Sing,” “Power Rangers” and “King Arthur: Legend of the Sword.” Even “Rogue One: A Star Wars Story” did only so-so. And after that initial box-office pop, “Transformers: The Last Knight” fell off a cliff.

Audience Behavior Changing

Audience are changing in not only the United States but in China.  With movies going online at a furious rate, Chinese audience behavior is changing in much the same way as the expansion with Netflix and Amazon did to American audience behavior.

Two Important Equations to Know About American Films Released in China:

  1.  Resrictions:   China restricts American film imports to about 34 films per year.  That’s it.
  2. Box Office Take:  Studios in the United States get about 50% of the take from the box office. Now that depends on the film with major releases negotiating for higher rates but that’s a broad figure.  In China, the American studios get about 25% of the box office.
  3. Genre:  The films that do best in China are Science Fiction, Action, Thrillers.   That’s not say that there can’t be surprised like “A Dog’s Purpose” but, with the above restrictions, probable genres seem the best bet.

Audit On Its Way

With Chinese Box Office Playing a more critical role in its overall Box Office, Hollywood wants to perform an Audit.   And who doesn’t welcome an Audit!  A common method to shift receipts from one film to another – which happened a fair amount in the United States before electronic and online ticketing was this:   When the customer buys a ticket for “Transformers”, they pay but get a ticket for “A Dog’s Purpose.”  Now the customer is going straight to the “Transformers” show.  But who gets the money when all the accounting is done.  “A Dog’s Purpose”.

Hollywood getting tough on China’s ticketing fraud and ordering an audit of the Chinese box office might anger some local players who have been reaping rewards from the country’s cinema boom. But the greater scrutiny will only benefit the Chinese film industry in the long run, some insiders in China say.

The Motion Picture Association of America’s decision to audit Chinese box-office results for selected Hollywood titles doesn’t just defend Hollywood’s interests, according to China analysts. If China aims to take over as the world’s leading film market and production center, then cleaning up the box office is a must.

The announcement of the audit late last month made headlines in the West, coming just ahead of the renegotiation of agreements between Hollywood and China, including Hollywood’s current 25% share of local gross box-office receipts for their imported titles.

Source:  Some in China Welcome MPAA’s Audit of Chinese Box Office

Get Some Mojo

Finally, if you want to keep up with the Chinese Box Office, then you should add a Tab to your browswer with BoxOfficeMojo – the Chinese version.    This venerable website was started in 1999 and then purchased by (the film credit database) which is – naturally – owned by Amazon.