After years of seismic growth, the Chinese box office flagged in 2016, sparking fears in Hollywood that one of the movie industry’s major sources of ticket sales is slowing down.
On Monday, John Zeng, president and board director at Wanda Cinemas, Asia’s largest exhibitor, told a crowd of theater owners and studio executives that box office revenue in the country will continue to rise, fueled by new theater construction and a vast audience of young, movie-loving consumers. Through a translator, he predicted that the Chinese box office will continue to grow at a rate of between 15% and 20% annually.
“The Chinese market is still strong,” Zeng said during remarks at CinemaCon, the annual exhibition industry trade show taking place this week in Las Vegas. He did offer one caveat: “For a Chinese market to be better you have to have the content.”
Last year, the Chinese box office grew just under 4%, a steep drop-off after years of increasing at an average of 35% annually. Zeng said the movies making their way to China weren’t as compelling and noted that tastes in the Middle Kingdom differ from those in the United States. “Rogue One: A Star Wars Story” was the biggest domestic hit last year and “Finding Dory” was the second-highest-grossing release, but their box office revenues in China paled in comparison. In contrast,”Warcraft,” one of China’s top movies with $220.8 million, bombed domestically, eking out $47.4 million. Zeng said that animated movies were not as popular in China as they are domestically, and noted that Chinese audiences are particularly interested in special-effects-heavy action films.
Hollywood studios have long been worried that younger generations aren’t interested in going to the theaters. The thinking is that they’re more animated about streaming services and buzzy television shows than they are about the latest big-budget movie. The situation is different in China, where younger consumers are driving ticket sales. Zeng said that 71% of Chinese ticket buyers are between the ages of 18 and 39. In the states, that demographic represents 47% of the theater-going crowd.
Zeng’s morning remarks were paired with a presentation by Andrew Cripps, president of 20th Century Fox International. Cripps stressed that there are reasons to be optimistic about the state of the movie business, noting that the domestic box office is surging on a wave of hits that includes Fox’s own “Logan.” Yet, he also sounded a cautionary note, arguing that the cost of making and marketing movies is continuing to rise, and the fight to get consumers’ attention is growing more fierce.
“Audiences are faced with a proliferation of choices … and cinema is just one choice out of many,” said Cripps.