Coronavirus shatters China's dream of beating Hollywood this year

Jiang Ziya: Legend Of Deification was one of the films scheduled to open over the Chinese New Year break, but whose opening was cancelled.
Jiang Ziya: Legend Of Deification was one of the films scheduled to open over the Chinese New Year break, but whose opening was cancelled. PHOTO: GOLDEN VILLAGE

HONG KONG • China is no longer on track to dethrone the United States as the world's No. 1 movie market this year.

The coronavirus has clobbered the burgeoning Hollywood rival, virtually wiping out ticket sales during the recent seven-day Chinese New Year holiday - a week that has historically been the busiest for box-office collections.

Theatres across the country have remained shut since Chinese New Year's Eve on Jan 24, while the fear of infection has prompted people to avoid crowded places.

Losses from the collapse of ticket sales mounted to US$1 billion (S$1.4 billion) during the festive period, according to estimates by Mr Rance Pow, chief executive of cinema industry consulting firm Artisan Gateway.

That number is about 10 per cent of the anticipated revenue this year and is set to rise as uncertainty over the outbreak persists.

The impact of a virus that has killed more than 600 people and slammed the local movie market is likely to spread to Hollywood, which is increasingly relying on Chinese audiences for growth as domestic ticket sales decline.

Walt Disney said this week that the epidemic is a headwind for its studio.

Mr Lindsay Conner, partner and leader of the entertainment consultancy of Los Angeles-based Manatt, Phelps & Phillips, said: "The loss will do significant financial damage to both theatres and production companies in China, and if theatres remain closed for several more weeks, the financial harm will expand."

He added: "With Chinese theatres closed due to the outbreak, Hollywood's plans for distributing new films in China are also uncertain."

China has already overtaken the US in terms of numbers of cinema screens following a building boom that helped box-office sales climb sixfold since 2010.

Analysts were predicting the market to surpass the US in terms of revenue this year.

Movie ticket sales in the country, excluding booking fees, rose 4.1 per cent last year to 58.9 billion yuan (S$11.7 billion), compared with 9.7 billion yuan in 2010.

Imported films accounted for about 36 per cent of box office sales last year in China, the largest overseas market for US films.

Exhibitors have said they have set no date for re-opening cinemas.

That means potential delays in China for big-ticket films from Hollywood such as Disney's Mulan - based on a legendary Chinese female warrior - and Pixar's Onward, both of which are set to debut in the US next month, according to Mr Pow.

For companies such as Disney, the hit is not just to the movie business. Its theme park in Shanghai has closed as well, along with Disneyland in Hong Kong, which had already been hit by the city's political unrest.

Executives at the Burbank, California-based entertainment giant said on Tuesday the theme park shutdowns would pare about US$175 million off revenue in the current quarter.

Chinese-language movies set to open during the Chinese New Year holiday, then cancelled, included Detective Chinatown 3, the third instalment of one of China's most commercially successful comedies; Leap, based on the true story of the Chinese women's volleyball team; and Jiang Ziya: Legend Of Deification.

Mr Chris Fenton, a film producer and US-Asia Institute trustee, said: "Even if the virus ended today, the backlog of films to release - all Chinese - is pretty large."

A delay in the China release of Mulan would also raise the question of whether Disney would postpone the US release, he said.


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A version of this article appeared in the print edition of The Straits Times on February 08, 2020, with the headline Coronavirus shatters China's dream of beating Hollywood this year. Subscribe