Independent China Box Office Analysis Year-to-Date

Earning a fair share of the China theatrical box office has proved to be elusive for Independents. Despite massive increases in both screens (135%) and box office grosses (372%) over the last six years, Independents’ share of box office has dropped from 6% in 2010 to just 1.5% in 2015. Theatrical numbers for the 1st half of 2016 appear at first glance to show improvement. However, using data obtained from Box Office Mojo, and other sources, an analysis done by IFTA Research reveals a possible mirage.

The Independents’ share of China’s Box Office for the 1st half of 2016 increased by 85% to $201.3 million or 5.6% of period revenue, up from a full year 2015 share of 1.5%. While it is encouraging that Independent revenue share has increased, this may be a short term development in terms of box office share.

Nine independent films were released during the period. At the same time, 16 major studio films were released, about half way to the rev share quota of 34. In the last half of the year, releases by the majors are expected to include such films as the highly anticipated “Star Wars: Rouge One” and three animated films including “Ice Age: Collision Course.” Thus, the lion’s share of 2016 box office revenue for independent films may already have been generated while major studios anticipate a robust release schedule lasting throughout the fall.

With the continuing “marriage” of Hollywood studios and Chinese companies, it is certain that the number of co-productions released will continue to increase. During the 1st half of 2016, box office share for co-productions was up significantly, increasing by 5.3% over calendar 2015’s share to 12.6% of box office. Much of the co-production increase can be attributed to “Warcraft” and “Kung Fu Panda 3,” which together topped $375.14 million and accounted for over 82% of the period’s $455.9 million in revenue. Additionally, China has been ramping up local production. Last year 245 Chinese films were released into theatres. For the 1st half of 2016, 110 local films have been released. 

July, August and December are important months in China for theatrical releases. As a result, China Film Group has in the past imposed a “blackout” on foreign films during those months. However, with China’s box office experiencing its first slowdown in half a decade, even if CFG decides to allow more foreign films into the cinema during these months, it is sure to go for the big studio releases over independent fare. This is especially likely since most observers attribute a good portion of the 2016 box office retreat to the fact that the Chinese government has discontinued its ticket subsidy program, known as “box office allowances.” These higher ticket prices for consumers will definitely have an impact on the films they choose to see and, as a result, the films that CFG will want to release.

So, despite the strong half-year results for 2016, Independents are at nearly the same place as they were at this point last year in terms of the number of films released theatrically. In 2015, no further independent films went out to theatres before year end.  Will 2016 continue the pattern?

 

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