Hidden Flaws Plaguing China’s Film Market, Says Tencent Report

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China’s total box office may have hit another record high in 2019, but a struggling exhibition sector and plummeting growth in lower-tier cities will likely sow seeds of trouble in 2020 for the wor…

’s theatrical market has grown an impressive 60-fold in the past twenty years, but since 2015, growth rates have seen a “cliff-like decline,” the report notes. Last year’s box office was essentially propped up by just four films that accounted for around a quarter of total earnings.

On average, Chinese citizens each went to the cinemas 1.23 times last year, according to Tencent, which reports ticket sales of 1.66 billion in 2019 from a population of 1.35 billion. Furthermore, an average of just 11.1% of seats at each screening in China were occupied — the lowest rate of the past five years. Even at peak occupancy back in 2015, attendance rates were just 17.4%.

Market growth was thought to be dependent on getting larger numbers of “small town youths” from China’s third-, fourth-, and fifth-tier cities into cinemas. But the proportion of China’s overall box office coming from these cities has drastically declined in the past three years, at rates that Tencent deemed “alarming” and “shocking.

The gap between the size of the North American and Chinese theatrical markets last year narrowed slightly, mostly due to a fall in the North American box office, rather than a boom in China. While China’s box office reached a record high of RMB64.3 million in local currency in 2019, its U.S. dollar value remained the same as the previous year, at $9.2 billion. Meanwhile, the North American box office fell from $11.9 billion in 2018 to $11.3 billion.

Last year, films broke the RMB100 million mark more quickly than ever before, but there were fewer such titles than in previous years. There were noticeably fewer romance films, actioners and comedies released in 2019, and titles in those genres did markedly less business than in previous years, particularly comedies. Sci-fi and animation, meanwhile, were way up.

Tencent says online films have seen “wild, barbarous growth” because they require less investment than theatrical titles, are made on a shorter cycle, and involve fewer, more controllable risks, since they’re commissioned and distributed by the platforms themselves, in-house.

 

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Would really love to read the original report. Thanks! rebeccaludavis

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