China’s more effective COVID-19 recovery may have a decisive impact on overall theatrical revenue for 2020.
For years, box office analysts have been predicting when China would surpass North America as the world’s largest theatrical film market.
In 2015, when movie ticket sales in the Middle Kingdom grew an astonishing 49 percent, the country’s ascendance was thought to be just one or two years away. But thanks to a wave of regulatory action in Beijing and a sudden market cool down, U.S. moviegoers have retained their crown longer than most expected. Last year, China’s box office revenue rose 5.4 percent to a record $9.2 billion (RMB64.3 billion), but North America easily remained on top with $11.4 billion.
Now, analysts believe that 2020 could finally be China’s year — because of the impact of COVID-19.
Rance Pow, president of exhibition consulting company Artisan Gateway, notes that the Chinese market has a deeper pandemic hole to climb out of but that box office momentum appears to be on its side.
As the original epicenter of the pandemic, China’s cinemas were the first in the world to fully shut down, closing their doors en masse on Jan. 24, when annual box office stood at just $315.4 million (RMB 2.2 billion), according to Artisan Gateway’s data. Almost all North American movie theaters closed nearly two months later on March 20, at which point domestic box office sales had reached $1.79 billion.
But China’s movie theaters reopened earlier than the U.S., and the country has staged a vastly more effective recovery from the pandemic overall (China has gone weeks without new cases of local infection, while the U.S. on Wednesday reported over 40,000 new infections and more than 1,000 COVID-19 deaths). Beijing regulators gave movie theaters the green light to reopen on July 20 and ticket sales have steadily snowballed, culminating in the blockbuster Aug. 21 release of Chinese war epic The Eight Hundred, which boasts a whopping box office take of $317 million and climbing. North America’s biggest COVID-19-era theatrical release, meanwhile, has been Russell Crowe’s Unhinged with $9.2 million.
On Aug. 27, U.K.-based film industry analytics firm Gower Street issued a report stating that China had become the first global market to reach a level of reopening and business activity “that would indicate full box office recovery.” The firm used a set of five benchmarks to define a full rebound, with China having hit them all (the final stage is having a week of box office sales that match or surpass “the top quartile of equivalent weekly business in the past two years”). Japan, South Korea and several European markets had all reached stage 3 of Gower Street’s hierarchy of recovery, while North America was still languishing at stage 2.
According to Artisan Gateway’s estimates, about 90 percent of China’s total screens, comprising 9,700 cinemas, have reopened. North America is estimated to be at about 65 precent total capacity, or 2,000-plus cinemas in operation. As of Monday, China’s ticket sales for the year had reached $828.4 million (RMB 5.7 billion), while North America’s sat around $2 billion.
The enthusiasm of filmgoers — and their confidence in the safety of returning to their country’s cinemas — will prove just as vital as the ready availability of infrastructure. With The Eight Hundred‘s success, China has already proved “without a doubt” that its people “want to see films in the cinema environment,” says Pow.
Both markets will face a test of their recovery on Friday with the simultaneous day-and-date release of Christopher Nolan’s big-budget sci-fi thriller Tenet. In North America, analysts say a $20 million to $25 million would be considered decent — whereas pre-pandemic expectations would have been in the $50 million to $70 million range. Nolan has a strong track record in China, where Interstellar earned $122 million in 2014 and Dunkirk brought in $51 million. As of Wednesday, Tenet had done $5.6 million in presales, tracking well ahead of Dunkirk at an equivalent stage of its pre-release.
One weekend after Dunkirk‘s rollout, the global box office is even more likely to tilt toward China, as Disney’s live-action Mulan opens in theaters there on Sept. 11. Stateside, the much anticipated remake will only be seen on the small screen, though, thanks to the House of Mouse’s controversial decision to experiment with a domestic premium VOD release over Disney+.
Adds Pow, “All things considered, this could be the year that China overtakes North America to become the highest-grossing market globally.”