Does Hollywood Need to Rethink Its China Strategy?

  

Does Hollywood Need to Rethink Its China Strategy?

When news spread in February that Warner Bros.’ The Batman had been granted an official release date in China of March 18, just two weeks after its North American debut, it was cause for considerable relief among executives engaged in the international distribution business. No Hollywood superhero movie had made it to China in more than two years, thanks to pandemic delays and a mysterious clampdown on U.S. tentpole releases by Beijing’s film regulators. Now, at last, a top-tier title — one with the Caped Crusader, no less — could remind the industry of what a Hollywood blockbuster was capable of in the world’s largest theatrical market.To get more breaking entertainment news, you can visit shine news official website.

The week before The Batman was set to unfurl, China was hit with its worst COVID-19 infection flare-up since the pandemic began in Wuhan in late 2019. Cinemas in such major cities as Shenzhen and Shanghai shuttered, and a smattering of smaller outbreaks in some 28 provinces cast a chill over consumer activity nationwide. After bowing to $134 million in North America, The Batman opened to just $12.1 million in China and is projected to finish its run in the country with about $22 million.

If there’s a silver lining in the present moment, it’s that U.S. theatrical product has begun to resume its flow into China.“The Hollywood studios can at least be a little more optimistic that their movies are being introduced into the country again,” notes MKM Partners analyst Eric Handler.

In 2021, just 20 revenue-sharing U.S. titles were released in Chinese cinemas, compared with 31 U.S. tentpole releases before the pandemic, in 2019. Hollywood’s own COVID-related postponements were the chief hindrance for the studios in the first half of last year, but by summer, their distribution pipelines were pumping again. By then, however, local politics surrounding the 100th anniversary of the Chinese Communist Party dictated that Beijing regulators would leave American product on the shelf in favor of patriotically themed Chinese fare. Surging nationalism and political sensitivity among the local public, encouraged by the fraught diplomatic relations between Beijing and Washington, later derailed the release prospects of a slew of bankable Hollywood movies in the final stretch of the calendar, including Marvel tentpoles Black Widow, Eternals and Shang-Chi and the Legend of the Ten Rings from Disney, Space Jam: A New Legacy from Warner Bros., and Venom: Let There Be Carnage and Spider-Man: No Way Home from Sony — all fan-favorite properties that collectively could have earned hundreds of millions of dollars.
In recent weeks, China has begun to reopen the gates. Sony’s Tom Holland starrer Uncharted opened March 14 (also hamstrung by COVID-related theater shutdowns, it is projected to finish its run with around $15 million), and additional dates were given to Roland Emmerich’s indie-financed disaster film Moonfall (which opened March 25 to $9.7 million), Sony’s animation sequel Hotel Transylvania: Transformania (April 3) and Warners’ Fantastic Beasts: The Secrets of Dumbledore (April 8).

In the case of Matt Reeves’ The Batman, however, some analysts, upon closer examination, see additional cause for concern. More significant than the woeful results, which could be explained by the circumstances, are the earnings projections for the film that preceded the COVID flare-up. Early tracking suggested an opening in the $25 million to $30 million range — arguably healthy by today’s diminished standards but lowly compared with contemporaneous Chinese films and the performance of any well-received Hollywood superhero title just a few years ago. Marvel titles have regularly earned vastly more, but even the comparatively poorly received Justice League opened with $52.1 million in 2017, Aquaman debuted with $94.2 million in 2018, and Christopher Nolan’s The Dark Knight Rises brought in $52.8 million way back in 2012, when China had about 80 percent fewer screens than it has today.

The low earnings expectations for The Batman before the latest COVID outbreak suggest a continuation of a trend of Chinese audiences’ waning enthusiasm for Hollywood storytelling as the country’s domestic film sector churns out gradually more accomplished action spectacles of its own. In 2012, Hollywood films amassed a 48.2 percent share of China’s box office revenue, according to data from consultancy Artisan Gateway. By 2016, the U.S. share had slipped to 36 percent, and in 2021 it was 12.3 percent.

Hollywood’s increasingly exiguous China earnings of the pandemic era are all the more striking in comparison to local blockbusters’ relatively enormous sales over the same period. During the past two years-plus, only two Hollywood films have earned at least $100 million in China — Legendary Entertainment’s Godzilla vs. Kong and Universal’s F9: The Fast Saga. Meanwhile, more than 20 Chinese titles have hit that milestone.
The biggest Chinese movies of the past several years, by far, have tended to be “main melody films,” a genre unique to the Chinese industry that refers to quasi-propagandistic movies embodying the official ideologies of the Chinese Communist Party. The top local hits of the past year are representative: The Battle at Lake Changjin, which earned $899.4 million in 2021, and its sequel, The Battle at Lake Changjin: Water Gate Bridge, which has brought in $638 million since its Feb. 1 release. Both films are emotionally rousing war epics glorifying China’s victories over U.S. forces during key episodes in the Korean War (known in China as the “War to Resist U.S. Aggression and Aid Korea”).


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