2020 was poised to be the year that China overtook the United States as the largest market for moviegoers in the world.
Hollywood’s commitment to the Chinese market has turned America’s film industry into a foreign entity on its own land. However, new reports state that Hollywood’s all-in gamble on China is looking to costs them at least 5 billion dollars as the region’s film industry comes to a crashing halt due to the outbreak of Coronavirus.
The American box office use to be the bread and butter of a once-respected industry but due to Hollywood’s expansion of foreign markets, The domestic box office only accounts for 35% of major Hollywood blockbusters such as those of Walt Disney Studios.
Hollywood has relied on kowtowing to the Communist Chinese Government in order to fund their major production and marketing budgets, some of which total over half of billion-dollar per blockbuster.
While the China First business model of Hollywood has brought them success over the last decade, that model is going to cost them billions of dollars due to the deadly virus that has savaged the region and is slowly spreading across the world.
According to The Hollywood Reporter, total Chinese ticket revenue for the past 20 days is $3.9 million, compared to the $1.52 billion taken in by the box office for the same period last year.
China has closed the majority of its theaters in order to neutralize the fast-spreading illness. The lack of access to the region has now put Hollywood in a dire position as many future releases such as Disney’s Mulan are now looking at losing millions at the box office as the film was specially made to cash in on the Chinese market.
Other projects are now looking into securing alternative sources of funding seeing how money China gives to Hollywood went to covering massive nine-figure productions such as the upcoming No Time to Die which has a production budget of 250 million dollars before marketing is added.
In a report by Lisette Voytko of Forbes, Hollywood executives are begging the Chinese Government for money as potential losses would put some of the major studios in a serious financial hole, a hole that would lead to plummeting stock prices and a devalue of the company’s worth.
Hollywood’s boosting of the Chinese film industry has seen China able to produce multiple million-dollar blockbusters of their own such as The Wandering Earth which grossed 700 million dollars from its own market.
The belief before the Coronavirus outbreak was that Chinese within a few years would have a thriving film industry that would no longer need Hollywood to sustain content similar to India’s Bollywood industry.
The lack of access to Chinese audiences and government money has left the industry in tough spot of needing a big-money market that can finance their big-budget projects.
In 2018, Hollywood attempted to court the Saudi Arabian government to fill the hole that the loss of Chinese funds would create, however after the brutal murder of Saudi dissent Jamal Khashoggi, Hollywood quietly backed out of the deal to sell its film industry to Mohammad Bin Salman Al Saud.
With Hollywood looking for an international backer to continue to fund it’s dominance over the world’s film industry, domestically, signs show moviegoers are giving up on the Hollywood machine. A big part of the reason why China is poised to overtake the American box office is the fact that Americans are not going to theaters as they once did.
Attendance had dropped to 25-year lows before a recent bump attributed to such films as Avengers: Endgame. That drop in US attendance allowed China to close the gap in box office revenue.
Hollywood dependence on China means the industry won’t be reinvesting their efforts to make up with American audiences, especially given how hostile the industry has become against non-progressive audiences.
Tinseltown now has the lie in the Chinese bed it has made for itself. The industry is losing billions with no reliable safety net to fall back on. If Hollywood would rather fall than come crawling back to the audience that made them in the first place…