China's meteoric box-office rise

BEIJING – A new box-office champion is coming soon to China – and the world.

Avengers: Age of Ultron, debuting in China on May 12, is poised to overtake Furious 7 as the Asian nation’s top-grossing movie, based on pre-release bookings. That’s no small feat since the latest chapter in the car-themed series was almost 14 per cent bigger at the Chinese box office than in the US and Canada, with US$385 million (S$512 million) so far.

Avengers reservations have been double those in the run-up to Furious 7, according to Shanghai-based ticketing agency Gewara.com. The superhero sequel would be the sixth film to exceed US$200 million in China, data compiled by Bloomberg from EntGroup and Box Office Mojo show.

“American audiences have diversified tastes and a lot more choice,’’ said Mr Peng Kan, an analyst in Beijing at Legend Media. “But Chinese favour Hollywood films because they deliver more action, surprises and better special effects.”

China’s potential has surged with a quadrupling of theatre screens since 2010, to more than 24,300 at the end of last year, versus 43,300 screens in the US, according to EntGroup and the Motion Picture Association of America’s website.

Expansion, growing incomes and urbanisation helped boost China’s total box office by 34 per cent last year to US$4.8 billion. The US/Canada total fell 5 per cent to US$10.4 billion, according to Motion Pictures Association of America (MPAA).

That means Chinese revenue is getting close to half the US level, about double the proportion in 2012. China actually exceeded the US domestic box office in February, according to the nation’s statistics bureau, a breakthrough helped by bad weather in US, while most Chinese had a weeklong holiday for Lunar New Year.

China at the top won’t be a rarity soon. Bloomberg Intelligence forecasts it to become the world’s biggest market in five years. Mr Wang Fenglin, deputy director of the China Film Producers’ Association, told Xinhua News Agency in November that the handover will be in three years. Ms Zhang Xuejing, co-chief executive officer of Gewara.com, expects the Chinese box office this year to expand by about the same pace in 2014, to as much as US$6.4 billion.

The Chinese market comes with limits, including a current cap of 34 foreign films that can be shown annually. Those must be marketed through two state-owned companies, Huaxia Film Distribution or China Film Group Corp. American Sniper, Fifty Shades of Grey and The SpongeBob Movie: Sponge Out of Water are among recent releases not shown in China.

Of the 10 biggest box-office earners in China, five were Hollywood imports. The top locally produced films were Lost in Thailand, a comedy about a group of Chinese on vacation in 2012, and Journey to the West: Conquering the Demons in 2013.

Price is another limit. The average ticket in China was US$5.79 last year, compared with US$8.17 in the US/Canada. That means 41 per cent more Chinese need to see a movie for the same revenue. One area China has a clear advantage is population, with 1.36 billion people compared to 319 million in the US and 35 million in Canada. BLOOMBERG