China's Booming Movie Theaters: Hollywood's Loss in the Face of Economic Turmoil

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Box office revenues reached a historic high of 23.44 billion yuan ($3.2 billion) from June to September, according to data from Dengta and Maoyan, China's top two box office tracking apps.

This surge in revenue was primarily driven by a highly successful summer season. Ticket sales during the peak months of June to August hit a record-breaking 20.6 yuan ($2.8 billion), surpassing the previous summer peak of 17.8 billion yuan ($2.4 billion) recorded in 2019.

Over the last four months, a staggering number of over 570 million individuals visited movie theaters, with the majority being women. Specifically, for the top five movies, an impressive 61% of the viewers were women, marking the highest percentage ever recorded, according to Dengta, a platform supported by Alibaba (BABA). Additionally, approximately half of the viewers belonged to the age group of 20 to 29 years.

China's economy, which had experienced a decline in momentum following the lifting of strict Covid-19 measures, has found a rare success in the box office record. During difficult economic times, movies tend to flourish as they provide affordable escapism, according to analysts. "There has been a significant decrease in consumption in China, particularly in housing and automotive sectors," stated Stanley Rosen, a political science and international relations professor at USCs US-China Institute.

"But they can afford to go to the movies. And that takes your mind off some of the depression," he said.

This aerial photo taken on September 28, 2023 shows a housing complex by Chinese property developer Evergrande in Wuhan, in China's central Hubei province.

STR/AFP/Getty Images

China's economy is expected to face long-term hardships due to the ongoing real estate crisis. In the second quarter, the country's gross domestic product only grew by a modest 0.8% compared to the previous three months. The crucial property market, which serves as a repository for 80% of Chinese households' wealth, continues to struggle. In addition, there is a growing trend of individuals hoarding cash as uncertainties about the future escalate.

Rosen made a comparison between the conditions in China and the United States during the 1930s Great Depression. At that time, Americans were also facing financial difficulties, yet films starring popular celebrities like Fred Astaire and Ginger Rogers generated huge box office revenues.

Pure escapism

Chinese films such as "No More Bets," "Lost in the Stars," and "Creation of the Gods I: Kingdom of Storms" have been the top favorites in China, surpassing the global success of "Barbie" and "Oppenheimer." Perry Peng, a 23-year-old cinephile and gallery assistant in Shanghai, expresses her astonishment at the impressive quality of Chinese movies she has watched during the summer.

"We haven't witnessed such exceptional domestic films in quite some time. It's astonishing how good they have turned out to be," she expressed, mentioning her enjoyment of "Oppenheimer" and "Barbie," both of which were distributed by Warner Bros, a subsidiary of WarnerBros. Discovery, just like CNN.

Amongst all, her top pick this year was "Creation of the Gods I: Kingdom of Storms," a martial arts fantasy film inspired by 16th century Chinese literature.

"Ive been a big fan of American and European movies," Peng said. "But I suddenly felt China seemed to have its own Lord of the Rings."

LONDON, ENGLAND - NOVEMBER 03: Martin Freeman, Florence Kasumba, Danai Gurira, Letitia Wright, Ryan Coogler, Lupita Nyong'o, and Tenoch Huerta were in attendance at the European Premiere of Marvel Studios' "Black Panther: Wakanda Forever" at Cineworld Leicester Square on November 03, 2022 in London, England. The image, taken by Gareth Cattermole, has been enhanced with a starburst filter and is courtesy of Getty Images for Disney.

Marvel movies are making a comeback in China after an absence of nearly four years. According to her, the post-2000 generation has emerged as the predominant consumer force, and their consumption patterns have undergone a noteworthy transformation.

Peng emphasized the desire to embrace the present and avoid contemplating the future. "A few of us are even reluctant to contribute to social security funds. Our aim is to savor life's pleasures while we still can and seize every opportunity that comes our way," she explained. Pency Peng, Perrys sister employed within the finance sector in Hong Kong, finds solace in affordable movies that provide temporary relief from her worries.

"The notion of houses and cars feels unattainable or beyond our grasp," she expressed. "Given our current state of misery, why are we unable to partake in the joys that bring us happiness?"

According to analysts, the greatest growth this year has been witnessed among audiences residing in the smaller cities and towns across China, where the sisters reside amid some of the country's most cosmopolitan urban centers.

"The economy is facing difficulties," stated Xuguang Chen, a professor at Peking University's School of Arts. "In terms of consumer perspective, watching a movie is a more viable option for low- and middle-income individuals."

According to Chen, the enhanced caliber and variety of movies available this summer have contributed positively.

"No More Bets," the biggest summer money maker with 3.52 billion yuan ($480 million) in sales, has an anti-fraud theme that resonated with lower-income audiences, he said.

Powered by women

Surprisingly, despite the gender imbalance in China, it is women who have played a significant role in the recent box office boom. In 2022, the statistics revealed a ratio of 104.7 men to 100 women.

"Lost in the Stars," a film that portrayed a feminist narrative and mirrored real-life incidents, recorded the highest percentage of women viewers at 67%.

"In China, although men may surpass women in numbers, the rising spending power of the latter justifies the need for more targeted investments to cater to them," stated Kevin Tran, a senior analyst at Morning Consult, in a recent report.

"With Hollywood facing challenges in reestablishing its previous box office dominance in China, it would be advantageous for studios to focus on appealing to the female population of the country," he noted.

According to CNN calculations using Dengta data, American films have only made up approximately 14% of China's box office this year. This percentage represents Hollywood's lowest annual share in over a decade, excluding the pandemic years, if the current trend continues until the end of 2023.

Warner Bros. Pictures

Chinese fans praise 'Barbie' as rare chance to see feminism on the big screen

In recent years, Hollywood's market share has been declining steadily because of stricter censorship, deteriorating bilateral relations, an increase in nationalist sentiment fueled by state propaganda, and competition from domestically produced films.

Tran suggested that international studios should focus their marketing efforts on Chinese women, particularly in genres such as romantic comedies, musicals, and others preferred by this demographic.

He added that in the upcoming year, certain studios might prioritize serving female moviegoers as there is a decline in the number of women getting married in China. This trend suggests that women will have more free time for leisure activities, such as watching movies.