BUSINESS Rebound driven by local films generates world’s top box office

BUSINESS

Rebound driven by local films generates world’s top box office

Global Times

07:21, October 16, 2020

People wait to watch films at a Wanda cinema in Taiyuan, Shanxi Province on October 8. Photo: CFP

China has become the largest box office market in the world for the first time, surpassing North America, as it gets a boost from a fast economic recovery and sets an example of how China's solid containment of the coronavirus pandemic is driving the international film industry at a difficult time.

China's box office hit 12.95 billion yuan ($1.93 billion) as of midnight Thursday, putting the nation ahead of North America's $1.92 billion as the world's largest movie market, according to lighthouse real-time data on Thursday.

Analysts said the development will inject new impetus and confidence into the global film industry.

Domestic movies gained huge popularity, with The Eight Hundred, My People, My Homeland and Jiang Ziya ranked as the top three in ticket sales. War epic The Eight Hundred ranked first in both the domestic and the world box offices, with its 3 billion yuan in earnings.

The average ticket price rose 4.1 percent year-on-year in September as entertainment consumption gradually recovered in China and movie-goers returned to cinemas, according to the National Bureau of Statistics.

The North American film market has struggled due to its governments' failures in the prevention and control of the pandemic, and Christopher Nolan's Tenet, which drew high hopes of reviving the movie industry this year, ended up with a poor box office, delaying the release of Hollywood blockbusters.

Box office revenue in North America in 2019 reached $11.32 billion, much higher than China's $9.54 billion. A stark contrast has been seen so far this year when the revenue of the North American box office only reached $1.92 billion, and no miracle is expected to make up for the decline.

Studio film production costs in North America can run up to $100,000 a day, and a two-month delay could increase a film's budget by up to 20 percent, the Los Angeles Times reported in March.

Due to the fallout of coronavirus-related decisions in the film and TV businesses, Hollywood could be hit with a $20 billion loss this year, according to The Hollywood Reporter.

With the Trump administration incapable of getting the pandemic under control effectively for months, the film industry in the US is struggling to generate cash.

Roughly two-thirds of the US market is open but theaters are operating at limited capacity and with restricted screenings, according to a Fortune report.

However, the ongoing pandemic and a lack of new movies are creating hurdles for a possible rebound in the North American market, once the leader of the world, and casting shadows over its future growth.

The global box office reached $42.2 billion in 2019, an increase of $400 million from 2018, but it is expected to decline in 2020 for the first time since 2014 due to the COVID-19 pandemic, the Motion Picture Association of America predicted.

China's box office earnings have gone against the trend this year, thanks to the rapid development of the film industry in content and the effective containment of the epidemic, which enabled China to lift lockdowns much earlier, experts said.

Yun Feiyang, a Chinese film critic with more than 1.51 million followers on China's Twitter-like Sina Weibo, told the Global Times on Thursday that he was not surprised to see the Chinese box office surpass that of North America. "It was only the matter of time."

"The Chinese cinema market has seen a huge increase driven by the nation's consumption upgrading, while the demand rebound in the post-COVID-19 era in China and the ongoing outbreak in the US have narrowed the gap in terms of box office earnings," said Yun.

China's film industry has developed rapidly in recent years, thanks to its reform and opening to the outside world, said Hong Tao, director of the Institute of Business Economics at Beijing Technology and Business University, adding that as household consumption expands, demand for films rises.

Hong believes that the digital revolution in China has also played a part in the growth of the industry by greatly upgrading cinema facilities, including the introduction of interactive seats, which has improved moviegoers' experience.

"With the Chinese market rapidly recovering, Hollywood is likely to pay more attention to China, compared with its home market," said Hong.

"It is very likely that China's box office exceeding that of North America this year will be the new norm for a long time to come," predicted Yun.

However, China's film industry is still recovering as it faces some challenges. Wanda Cinema released an estimate of its performance for the first three quarters of 2020 on Wednesday. It said that, due to the impact of the epidemic, the company expects to report a net loss of 1.95 billion yuan to 2.05 billion yuan this year.

Newspaper headline: China stars in movie revival

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