Opportunity Knocks Loudly for Hollywood in China

Cinemimi[Monday, March 07, 2011]
An interesting overview of the galloping growth in Chinese movie exhibition in Sunday’s L.A. Times suggests that whatever the complications, there is opportunity here for Hollywood.

“Over the last four years, the number of screens in China has doubled to more than 6,200, a figure that's projected to double again by 2015,” reads the article by David Pierson, reported from growing Shengzou (pop. 800,000).

In a mature domestic U.S. market, that sounds like ka-ching to me.

Chinese box office revenue hit $1.5 billion last year, according to official Chinese figures. About 40 percent of that went to Hollywood movies. (Article continues below chart.)The

MPAA – God bless them – has long chafed at China over limits on the number of foreign films that can be shown in Chinese theaters. That may be a necessary effort.

But even with those constrictions, China is clearly the largest target of potential growth on the horizon for a Hollywood hungry for new sources of income. “Avatar” is the top-grossing film of all time in China, the article notes, taking in more than $200 million at the box office.

And since the Chinese filmmaking industry is lagging behind the construction of cinema houses, that’s all the more opportunity for Hollywood over the next several years.

That’s a contrast from a few years ago, when Hollywood studios like Warner Brothers were getting into the theater-building business in China. That ran up against government constraints on foreign ownership, and Warner’s pulled out.

But the perspective of capturing a new, avid moviegoing audience has to be at least as compelling as the prospect of owning the theaters themselves.

The MPAA released its figures a couple of weeks ago demonstrating once again that when it comes to the box office, international is the place to focus. The worldwide box office total now owes fully 67% of its power to the international market, up from 64% in 2009.

“Box office for all films released in countries outside the U.S. and Canada increased 13% in 2010,” read the MPAA report.

In China, that growth is turbo-charged by a growing middle class, the rise of leisure time, the lack of available leisure activities and the explosion in the building of high-quality cineplexes.

Most charming of all was Pierson’s reporting in observing Chinese moviegoers experience the big-screen as something completely new.

He writes:

"At an early-evening screening of "Harry Potter and the Deathly Hallows," the differences between the Chinese and American moviegoing experiences were clear.

"Viewers talked through the entire film, reading subtitles and gleefully sounding out the English dialogue whenever they could.

""Ah, I get it now, they all have magic," said one woman to her companion in an excited voice, some oversharing that carried to the other 50 patrons.

"Cellphones rang incessantly. One woman answered her iPhone six times.