China is no longer the biggest film market. Blame the pandemic lockdowns.


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China has lost its top spot as the world’s largest film market. Here: people watch a movie in 2020 in China when cinemas reopen.

STR/AFP via Getty Images

After two years as the world’s biggest film market, China has lost its top spot to North America, thanks to Covid restrictions in Shanghai, Beijing and elsewhere in the country.

Last week, the North American market surpassed China at $2.461 billion from $2.458 billion for 2022, respectively, according to Comscore Movies data.

The downside is not how analysts predicted the Chinese film market at the start of the year.

While the world suffered for two years from the pandemic, China in 2020 surpassed box office sales between the United States and Canada, as it had largely eradicated the virus within its borders. The trend continued in 2021. In February of that year, 82% of global ticket sales came from China alone, according at Gower Street Analytics.

With few areas locked down, sales in China have remained strong this year, sitting just 5% below 2021 box office receipts in the first quarter, according to Gower Street. But things quickly changed in March, when the Omicron variant began to spread, erupting in China’s worst wave of the entire pandemic.

Ticket sales in China are now nearly 40% lower than last year. Meanwhile, all markets in the world are outperforming their sales compared to last year, except for mainland China and Hong Kong, as well as Taiwan and Russia, the latter mainly due to Western boycotts. .

As Omicron infiltrated China, Shanghai saw the biggest surge in cases and suffered a crushing two-month lockdown, which hurt the country’s economy. The cases have finally been brought under control and the city is slowly getting back to normal.

Public transit is being reopened, schools are allowed to resume classroom classes with a voluntary attendance policy, and supermarkets, malls and retail stores can open within the limits of public capacity. customers, the city’s vice mayor, Zong Ming, told a news conference on Tuesday.

But one prominent consumer destination remains closed in the city of 26 million: cinemas.

“Whenever there is an epidemic, cinemas are the first to be closed and the last to reopen,” a theater manager in Jiangsu province told Chinese media.

Since last month, estimates from several industry analysts on cinema closures across the country from a distance from 30% to 50%, although cities with zero cases are beginning to reopen. In Beijing, which recently overcame a smaller spike in cases, most cinemas are now open, but with a 50% capacity rule, according to the ticket service provider

Maoyan Entertainment

(1806.Hong Kong) data.

There are also aggravating factors, such as recent movie selections and viewer tastes in China.

“There have been more hurdles that Hollywood films have faced in accessing the Chinese market. These include both official access (major blockbuster films like ‘The Eternals’ and ‘Shang-Chi ‘not being approved for release) and unofficial censorship (poor box office response to movies coming out as ‘Wonder Woman 1984’ due to a surge in anti-American sentiment),” said Michael Berry, director of the UCLA Center for Chinese Studies.

In its place, China released a series of domestic nationalist blockbusters.

“The most interesting question once cinemas reopen will be: what is China’s appetite for patriotic-themed feel-good movies and war movies about self-sacrificing heroes?” It remains to be seen whether the recent grassroots backlash against China’s zero-Covid policy and extended lockdowns will also lead to increased audiences in the face of the deluge of ‘positive energy’ films that have taken over Chinese multiplexes,” said Berry. barrons.

These uncertainties – how China’s lockdowns will play out, how many attractive US blockbusters will receive approval and what a nation weary of government policy will want to see – have analysts wary of industry forecasts.

“As we have learned throughout the pandemic era, the specific market dynamics of each country can be as difficult to predict as the stock market, so it will depend not only on the effect that Covid has in the region on the ability of theaters to open their doors to patrons, but also the strength of local Chinese titles and of course the now apparent importance of having American titles available to local moviegoers,” said Paul Dergarabedian, senior analyst media at Comscore. barrons.

Either way, for Timmy Chen, a professor at Hong Kong Baptist University’s Film Academy, the slowdown could give way to alternative formats. “Indie, low-budget, short-form content is increasingly being produced, broadcast and consumed, at home or elsewhere,” he said. barrons. “Streaming and theatrical experiences will co-exist. To quote “Top Gun: Maverick”: the end may be inevitable. ‘But not today.'”

Meanwhile, “Top Gun: Maverick” has not been approved for broadcast in China, and the first Tencent Holdings investor withdrew because of the film’s pro-American military themes, The Wall Street Journal reported, citing people familiar with the matter.


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