For the second year in a row, China ended 2021 as the world’s largest theatrical film market.
Total movie ticket revenue in the country clocked in at $7.3 billion (RMB 47.3 billion, assuming an average annual exchange rate of RMB 6.45 to $1), more than double last year’s total and down just 26 percent from a pre-pandemic high of $9.2 billion (RMB 64.3 billion) in 2019, according to data from regional box office tracker Artisan Gateway.
Ticket sales at the domestic North American box office, meanwhile, where the industry faced much harsher disruption and fallout from the pandemic throughout the year, revenues are estimated to have remained nearly 60 percent behind 2019 at $4.5 billion.
Worse still for the U.S. industry, Hollywood’s foothold in China’s huge and rapidly recovering marketplace continued to erode over the past year. U.S. movies accounted for just 12 percent of China’s total box office sales, or $899 million (RMB 5.8 billion), down from a 30 percent share in 2019 and total sales of $2.8 billion (RMB 19.4 billion).
During much of the China box office boom era of the late 2000s and 2010s, the Hollywood studios saw their revenue grow in China every year, while they commanded an annual market shares as high as 30 percent to 50 percent.
The foremost problem for Hollywood in China in 2021 was simply a dearth of product hitting local screens, analysts say. Just 20 revenue-sharing U.S. titles were released in Chinese cinemas last year, compared to 31 U.S. tentpole releases in 2019 (during China’s peak pandemic year of 2020, there were still 17 studio releases).
Hollywood’s own pandemic-related release postponements were the chief hinderance for the studios in the first half of the 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 several bankable Hollywood movies in the final stretch of the year. The casualties included Disney’s Marvel tentpoles Black Widow, Eternals and Shang-Chi and the Legend of the Ten Rings; Warner Bros.’ Space Jam; and Sony’s Venom: Let There Be Carnage and Spider-Man: No Way Home — all fan-favorite properties that collectively could have earned hundreds of millions.
The domestic Chinese industry, meanwhile, continued its remarkable post-COVID recovery (or mid-COVID, depending on how 2022 unfolds…). Some 472 Chinese movies were released in 2021, exceeding the 428 titles the country put out in 2019 before the pandemic. And total sales revenue for Chinese films reached RMB 39.9 billion ($6.19 billion), just shy of 2019’s total of RMB 41.2 billion (about $6 billion according to exchange rates at the time).
Eight of the top ten biggest films of the year in China were local, lead by record setters The Battle at Lake Changjin ($899 million), Hi, Mom ($822 million) and Detective Chinatown 3 ($686 million). Hollywood’s top earners were Universal’s F9: The Fast Saga ($216.9 million), Legendary and Warner Bros.’ Godzilla Vs. Kong ($188.7) and Disney’s Free Guy ($94.8 million).
Many of the biggest Chinese hits of the year, such as the leading title, Korean war epic The Battle of Lake Chongjin, were “main melody” films — propagandistic stories celebrating the glory of China and its leaders — released around the occasion of the CCP’s 100-year anniversary.
“The success of ‘main melody’ films has had a virtuous cycle effect for local films,” says Rance Pow, president of Artisan Gateway. Pow sees three factors driving the commercial resurgence of Chinese cinema over the past year: “The Chinese audience’s growing perception and pride in its nation’s success and position in the global context, home grown films that cater to local tastes, and a growingly sophisticated film production, marketing, and distribution ecosystem that is backed and overseen by the central government.”
The industry also benefited from increased ticket prices during the year — the average ticket rose to RMB 40.5 ($6.37) in 2021, up 8.7 percent from the 2019 average of RMB 37.1 — despite the fact that total movie theater admissions remained down 29.4 percent from their 2019 peak of 1.7 billion.
New movie theaters also continued to be built at a rapid clip throughout the year. The country added nearly 6700 new screens, hitting a national total of 82,248, with most of the new construction taking place rural areas where Chinese-language films play most powerfully.