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What's behind China's box office slow-down?

Screen reveals the context behind a weak Q1 and looks to the future.

Following an annual increase of only 3.7% in 2016, the Chinese box office slowed down further in the first quarter of 2017.

Total Q1 2017 box office came to $2.08bn*. When compared to the same period a year ago, this represented a marginal drop by 1.7%. But the gap would become wider – by 6.5% - if the online booking fees, which are now added to the box office, are removed.

Rance Pow, founder of consulting firm Artisan Gateway, told Screen that “part of the slowdown lies at the feet of a dearth of Chinese-language box office”.

“Box office for revenue-sharing imports was up by 43.9% and fixed-fee imports by 72.2%, while the important Chinese New Year trading period was up only by 8.9%,” he says.

Readjustment

Kung Fu Yoga

Kung Fu Yoga

Last year, Stephen Chow’s The Mermaid emerged as a massive Chinese New Year blockbuster ($492m); the film’s success was followed by Disney’s surprise animation hit Zootopia ($222m) in March. Those two titles were unsurpassed during the year with The Mermaid becoming China’s most successful film ever.

But the line-up was less impressive in the first quarter of this year. None of the Chinese New Year offerings – from Kung Fu Yoga, Journey To The West: The Demons Strike Back to Duckweed and Buddies In India - could match the phenomenal success of The Mermaid.

Meanwhile, the top grossing non-Chinese film, xXx: Return of Xander Cage ($163m) trailed far behind Zootopia.

The content line-up isn’t the only reason for the contrast, however.

“The Chinese market is now undergoing readjustment to get rid of irregularities such as box office fraud,” says one executive who doesn’t want to be named. “What we get now is probably more accurate than the inflated figures in the past.”

Pow says that it is taking time for the new accounting of the box office to work its way through the system under the new China Film Promotion Law. Some 300 cinemas have already been penalized since the implementation of the law in early 2017.

He also points to another local market change as a contributing factor to the slow-down.

Chinese audiences had grown accustomed to discounts offered by online ticket platforms. Such discounts have been removed (except during Chinese New Year) this year meaning that some customers are experiencing higher costs.

Growth ahead?

Fast Furious

But it’s not all doom and gloom. Jimmy Wu, CEO of upscale exhibitor Lumiere Pavilions, believes that the momentum is set to pick up again in the second quarter of 2017.

“Starting from Furious 8, the box office should come back,” he says.

The Fate Of The Furious is scheduled for April 14, followed by another Hollywood tentpole Guardians Of The Galaxy 2 on May 5.

Back in 2015, Furious 7, which was also released in April, made history in China when it earned $352m. The movie remains the top non-Chinese film ever at the local box office.

Now expectations are running high for the franchise’s eighth instalment. The pre-sales for its first three days (Friday – Sunday) have already reached a record-breaking $22m (as of today).

Notable Chinese films are also waiting in the wings for the May 1 Labour Day holidays.

This Is Not What I Expected, a romance-comedy produced by Peter Chan and starring Takeshi Kaneshiro and Zhou Dongyu, is due to open on April 27; ahead of Chen Zhengdao’s Battle Of Memories, starring Huang Bo and Xu Jinglei, and Hong Kong action-thriller Shock Wave, starring Andy Lau, on April 28.

More will be added to the line-up once authorities have dated them. In general, Hollywood titles don’t secure a release date until around one month before their opening.

Looking ahead, Pow of Artisan Gateway sees a moderate uptrend in growth.

“We don’t anticipate a near-term return to the 30% average annual growth we’ve witnessed over the past decade,” he cautions.

“But cinema building will continue at pace, as will an increasing number of Chinese-language foreign co-productions, both positives for the market,” he says. “Our best estimate at this time is that the 2017 Chinese box office may reach low double-digit growth.”

* all numbers are based on current exchange rate

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