Caixin
Jan 03, 2017 07:26 PM
BUSINESS & TECH

China Box Office Loses Luster in 2016

(Beijing) — China’s box office grew at an anemic 3% last year, ending a decadelong streak of double-digit growth, as analysts said maturing audiences could make the market more grounded in years to come.

China finished 2016 with 45.5 billion yuan ($6.6 billion) in box office receipts, a far cry from the hoped-for 60 billion yuan earlier in the year. Analysts attributed the sudden slowdown to a number of factors, most related to fading hype that earlier led many to predict that China would soon surpass the U.S. as the world’s biggest box office.

A bandwagon effect from that hype helped the industry grow by nearly 50% last year.

“Everyone wanted in on the lucrative film industry after the rate it’s grown these years, and it created a ‘bubble’ — people scrambled to become part of the festivities, putting together slapdash productions hoping to make easy money,” said Hou Tao, a partner at Ent Group, a consulting firm in Beijing. “In 2016, these sloppy movies reached cinemas, and they’ve mostly been flops.”

Industry watchers also attributed the sudden slowdown to bloated figures in 2015.

“The box office was largely exaggerated by heavy subsidizes from ticketing platforms to vie for market share, and fraudulent ‘ghost screenings,’” said film critic Nan Rumin, referring to a practice in which distributors buy tickets in bulk to boost earnings, even though many of those go unused. “This year, these are much rarer, with market share mostly established.”

The box office has also weakened as the novelty of the silver screen wears off on moviegoers in smaller cities, making them more selective, Nan added.

This year’s lack of foreign blockbusters impaired revenues even further. While 2015 hits like Fast and Furious 7, Jurassic World and Avengers: Age of Ultron raked in billions of yuan, the most profitable foreign film this year was the Disney animated film Zootopia, followed by Warcraft, both less-anticipated by Chinese audiences.

Rather than scold the underperforming industry, authorities are encouraging a return to more rational growth. The People’s Daily, the official voice of the Communist Party, recently published a commentary saying the slowdown indicates healthier growth and a maturing audience. The nation’s film regulator has even dubbed 2017 “the year of quality and creativity.”

“Bad films won’t be able to make it to cinemas anymore,” People’s Daily said.

Contact reporter April Ma (fangjingma@caixin.com)

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