ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintTitle ChevronIcon Twitter
Coronavirus

Coronavirus deals another blow to troubled China film industry

Lackluster Bangkok debut of Better Days signals tough times in 2020

A closed cinema in Hangzhou in east China's Zhejiang province on Jan. 27. The government has asked people to stay home as much as possible in response to the recent coronavirus outbreak. (FeatureChina via AP Images)   © AP

BANGKOK -- The Chinese blockbuster movie "Better Days" reached Thai cinemas on Jan. 30, but it seems unlikely that one of China's top-grossing movies in 2019 will manage to sweep Thai audiences off their feet.

According to one website that monitors box office takes, "Better Days" pulled in just 75,000 baht ($2,400) in its opening days. Hollywood films "Dr Dolittle" and "Bad Boys for Life" both vastly outperformed it.

"Better Days" figures prominently in China's aspiration to dominate global cinema. Soon after its successful mainland opening in late October, the angsty teenage drama about high-school bullying debuted in North America, the U.K., Australia and Malaysia. It was also available on Netflix, the U.S. streaming giant.

"It is a tough story with serious content," film critic Nattanun Chalermpanus told Nikkei. "That is why the film has quite limited fans here."

"Better Days" arrived at a particularly bad time with Thailand already reporting 19 coronavirus infections as of Monday. Health concerns may have kept some Thai movie fans at home, critics say.

The coronavirus also helped get things off to a bad start for the entire film industry in China. Seven top movies set to debut over Chinese New Year have all seen their launches delayed until further notice under a government directive.

Many theaters and malls have closed in line with people being asked to minimize activities outside their homes. Box office takings on the first day of the lunar new year were just over 1.8 million yuan -- less than a hundredth of the same day in 2019.

Superficially, China's box office numbers look promising. However, TV and film pundits told the Nikkei Asian Review that a rough road lies ahead. In 2019, the total box office take was a record 64.3 billion yuan ($9.3 billion), putting it on track to overtake the U.S. lead in the coming years. But the increase was only 5% -- well short of the 9% in 2018 and 2017's stunning 14%.

"2019 was a difficult year," Zhang Xin, a senior research analyst with IHS Markit, told Nikkei. "Reasons for the slowdown are more complicated for China, and don't come down to just one or two [things]."

Many factors have taken their toll, according to industry watchers, including notorious censorship.

A tax evasion scandal involving a superstar that kicked off in 2018 snowballed in 2019 leaving investors wary of funding new productions.

According to data from Itjuzi.com, which monitors mainland internet activity, China's culture and entertainment industry saw funding drop by 85% in the first half of 2019 to slightly over eight billion yuan.

"The tax evasion set the industry on fire, leading to the most severe controls over the sector in history," said Yao Xuanjie, an analyst with New Times Securities, a brokerage.

Yao said that in the first half of 2019 China's box office take contracted 2.7% year on year to 31.2 billion yuan. This was the first drop in 15 years.

Chinese media reflected the hard times, reporting how A-listers failed to land roles while 2,000 small studios shut up shop.

The bloodletting was no surprise to Wang Changtian, chief executive of Beijing Enlight Media, a studio backed by e-commerce giant Alibaba. Its productions include "Ne Zha," China's second-highest grossing movie in history, which raked in over five billion yuan last year.

At an industry forum in June 2018, Wang predicted that many of China's 20,000 plus TV and film studios would face bankruptcy in the next few years. At the Shanghai International Film Festival exactly a year later, he admitted that the bad times had arrived even sooner than expected. "The industry has hit rock bottom," the influential 54-year-old executive said.

While China's box office still broke records last year, industry insiders told Nikkei that Beijing was partly responsible. Blockbusters like "Better Days" and "My People, My Country" were released over national holidays in October to coincide with the 70th anniversary of the founding of the People's Republic of China and to buoy patriotism.

It was also reported that China Film Administration met in December with major cinema chains and the top two online ticketing platforms, Maoyan.com and Taopiaopiao.com, to ensure box office data from all sides tallied with no major discrepancies.

"The meeting stated something very clearly: the 2019 box office must hit 64 billion yuan," a cinema executive was quoted saying in Caixin, a respected independent Chinese business news portal. The pressure was on from Beijing to maintain box office growth for the whole year and obscure signs of a decline.

The regulator particularly wanted cinema numbers to be as accurate as those of the apps. Some cinemas under-report their box office take, the report said, and online ticketing platforms generally produce more precise figures. Many Chinese prefer to book online for convenience and discounts. Tickets at cinemas cost more unless they are bought with a prepaid membership card of some kind.

Many were already wondering how China's movie industry would fare in 2020.

China's main filming center, Hengdian World Studios, is reeling. The Chinese answer to Hollywood announced on Jan. 27 that all its studios would close until further notice to protect staff and film crews. This came after it offered in December to allow production companies working on modern, contemporary and sci-fi-themed productions free access to studios to beef up sagging business.

Making matters worse, Chinese censors are expected to be even stricter in the coming years as the communist party prepares to celebrate its 100th anniversary in 2021. Sources say Chinese filmmakers are being especially careful not to overstep boundaries.

"Better Days" was originally scheduled for national release in the summer, but was held back by the government for screening in October. There was also talk of the authorities becoming more censorious.

Zhang believes Chinese cinema has been expanding too fast with too much emphasis on quantity. "The market needs a slowdown to rectify itself, improve the quality of movie production, cinematic experience and services," she said. "No market can continue to grow so rapidly. There must be a point when it starts to slow down and achieves more stable growth."

Hengdian Studios employs over 5,000 people who appear in cameo roles, staff the hotel, or fill transport and tourism-related roles. The studios produce a third of all China's TV series and films, and also serve as a tourism resort with theme parks, and spa and shopping facilities for movie buffs. Spread across 30 sq. km, Hengdian has over 100 studios, the largest of which covers 12,000 sq. meters and is the world's biggest.

Additional reporting by Apornrath Phoonphongphiphat.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more