A slowdown in box office growth in 2016 hasn’t stopped China from continuing its breakneck cinema-building pace, with the country now on track to surpass the U.S. in number of screens as early as tomorrow, say analysts at IHS Markit. Projections for the Middle Kingdom to overtake the U.S. in terms of box office sales have been adjusted, however, from 2017 to 2019.
Citing screen growth patterns for 2016, research and analysis firm IHS Markit has calculated that on November 16, China will jump over the U.S. to boast the world’s largest screen base. Screens have been going up in the PROC at a staggering rate of 27 per day this year. As of the end of September, China had 39,194 screens compared with an estimated 40,475 in the U.S., IHS says.
"The rate that China has been building cinema screens is very high,” says David Hancock, director of film and cinema analysis at IHS Technology. “In the first nine months of this year, China added just over 7,500 new cinema screens, continuing a trend seen over the past few years. China has been building cinema screens at a rate of over 10 a day for the past five years, rising to 27 a day this year.” Particular growth has been seen in the so-called second-, third- and fourth-tier cities.
In 2003, China opened the market to overseas groups and laid the foundations for growing its cinema sector, although that has come mainly from domestic investment. The Dalian Wanda Group is understood to hold about 18% of the country’s screens, making it the largest exhibitor. Alibaba also recently joined the exhibition game.
Box office, on the other hand, is a different matter. IHS Markit predicts that ticket sales in China will zoom past the U.S. in 2019. Figures for 2015 topped 44B yuan ($6.77B), up from just $121M in 2003. With 48.7% growth last year versus 2014, many had predicted that China would outpace the U.S./North America by 2017. Those projections have been scaled back given growth has slowed in 2016, on track to reach about 50B yuan for a roughly 14% increase.
In an effort to combat the trail-off, China is packing November with Hollywood movies including the recently released Doctor Strange and Billy Lynn’s Long Halftime Walk, as well as Miss Peregrine’s Home For Peculiar Children, Fantastic Beasts And Where To Find Them and Allied which are all on deck. Some are even sneaking into December — traditionally a blackout period — including Hacksaw Ridge and Sully. (Also waiting in the wings in December is Legendary’s The Great Wall.) While domestic market share for Chinese films will remain above Hollywood’s portion, the thinking goes that this end-of-year rush is to ensure box office growth continues in the double-digits.
Part of the slippage this year is down to a lack of subsidies for ticket buyers and a crackdown on box office fraud which ultimately inflated 2015’s numbers. The Chinese government last week upped the ante on cheaters by creating a new film law that comes with harsh punishment.