The Chinese box office rose 10.3% in the first half of 2017 compared to the same period the previous year, to reach 27.1 billion yuan ($4 billion), the lowest growth rate for a first half in the past decade. Furthermore, if we exclude the service fees charged by online ticketing agencies (newly introduced in 2017), the actual box office figure would be 25.4 billion yuan ($3.7 billion) and the growth rate would then be dragged down further to only 3%. Box office growth in China has slowed down since 2016 after a dramatic growth period, and this trend seems to continue in H1 2017.
Lack of hits is one of the main reasons for the slowdown, even though a total of 211 films were released in the first half, 36 more than in H1 2015. The Chinese regulators also eased restrictions on imports, allowing 57 foreign films to be released, 14 more than last year. The highest-grossing hit so far is The Fate of the Furious. Successfully earning 2.5 billion yuan ($360.5 million) in April, the Hollywood blockbuster created expectations of dramatic growth again in the industry, but they didn’t last long. The highest-grossing local hit in the first six months is Kung Fu Yoga, which has earned 1.8 billion yuan ($260 million), however, still far behind The Mermaid’s 3.4 billion yuan ($500 million) last year.
Screen growth kept its momentum in the first half of 2017, with over 3,000 new screens added in Q1 2017 only. Normally, more screens lead to more box office, assuming a similar slate of projects and ticket price average. However, the growth rate may not be as high as before as most of the new screens are located in smaller cities where cinemas are smaller in size and ticket price is lower. Hence, these extra screens failed to increase the box office proportionately. This may also be a sign of low occupancy in the cinemas. Indeed, lack of high quality movies to attract more visitors might be one of the reasons of box office deceleration, but over-building could be another and the market should take note.
It is hard to predict what will happen in the second half of 2017. The market does have a few highly anticipated films, which could potentially push the box office up. These include Hollywood titles Spider-Man: Homecoming, War for the Planet of the Apes, Thor: Ragnarok, and Justice League; and local tiles Eternal Love, The Founding Of An Army, Wu Kong, Youth, and The Legend of the Cat Demon. In light of the screen growth and these films, IHS Markit Cinema Intelligence’s forecast that the box office in China will end 2017 with a 15.8% growth.