After years of making the Chinese market, its primary source of funding and marketing movies, Hollywood is preparing to lose billions of dollars in 2020 as the deadly Coronavirus ravishes the region.
Variety has reported that major studios are preparing for a massive drop in moviegoing in China, South Korea, Japan, and other countries hit by the coronavirus.
The spread of coronavirus could possibly result in billions of dollars in lost box-office revenue. Upcoming films such as Disney’s Mulan remake and Universal’s latest James bond film No Time to Die could be the biggest casualties of the outbreak as those films will not be able to recover their massive nine-figure production budgets without the international market.
Over the last 15 years, Hollywood has shifted its business model to focus less on the domestic box office and more on international ticket sales. China is currently the second-largest movie market in the world and has become a vital market for Hollywood blockbusters that have received billions of dollars to offset the falling American market.
“China has become one of the primary reasons why film budgets have ballooned to the sum of $200-300 million dollars for major studios such as Disney, Universal, and Paramount.”
The United States box office only accounts for about 33% of Hollywood’s box office haul on average and according to The LA Times, In 2016, Chinese investment in the U.S. entertainment industry hit $4.78 billion, an all-time high.
A Chinese shutdown would be a massive blow to an industry that has invested so much of its future into the region.