(Forbes) Since the creation of Hollywood itself, the United States has been the home to the world’s largest box office. That will change as early as next year when China is widely expected to take its spot.
While studios and exhibitors in the U.S. try to figure out how to bring audiences back to the theater, companies in China are building new theaters every day just to meet the demand. China’s box office has already seen 50% growth in 2016 compared to this point last year. And don’t expect it to slow down anytime soon. While the United States has roughly 100 theaters per million residents, China has only 23 theaters per million, meaning it has a long way to go before fully reaching its potential audience. Most executives agree that China’s box office will more than double the size it is now before flattening out. The size and scale of its box office was seen last year when Furious 7 made more money in China alone ($391m) than in the United States ($353m), a record amount.
China’s focus on Hollywood has become clearer as more of its companies have become involved in the business. Wanda Group, run by
Wang Jianlin, China’s richest man, has in the last few months purchased both AMC Theatres and Legendary Entertainment. Alibaba ngIf: ticker Pictures, a subsidiary of Jack Ma’s Alibaba, was a co-financier of 2015′s Mission Impossible: Rogue Nation.
Moreover, a handful of Chinese individuals and corporations have taken interest in purchasing a stake in Paramount Pictures.
The Chinese government currently only allows 34 foreign films to be released there each year, making it increasingly competitive to have an American film get released there, forcing even Star Wars: The Force Awakens to release in January this year as opposed to a month earlier due to the country reaching its quota. Studios are finding ways to get around this law by co-financing films directly with Chinese companies. Major studios like Universal Studios and Dreamworks Animation and newcomers like STX Entertainment and Jeff Robinov’s Studio 8 have set up financing deals with Chinese companies for this exact reason.
So, what does all of this mean for the film industry? Well, for one, in the not-too-distant future, Hollywood won’t be the only one cranking out international hits. While Chinese filmmakers haven’t had too much success at international box offices besides with films like Crouching Tiger, Hidden Dragon, that will soon change as their focus turns to the global market. Moreover, Chinese production companies will be paying premiums to attract Hollywood talent. An example of this will be seen later this year in The Great Wall, a co-production between Legendary Entertainment and China Film Group starring Matt Damon directed by Chinese director Yimou Zhang.
Competition from China will force studios to make better films in order to compete for an audience.
As a young filmmaker growing up in this rapidly changing environment, I can only be excited for what’s to come. A larger international box office means more opportunities for filmmakers around the globe.
Source: Forbes by Adam Faze
