Picture an American movie theater: as the lights dim to darkness, a jittery audience anticipates the screening of a fantasy movie. Or at least that used to be the case. Today, such an image is a fantasy itself in most cinemas across the nation. Social media and streaming services are changing the way Americans relate to film-going, and it is showing in box office performances. On the other hand, China, the world’s second largest film market, is experiencing a boom in theater attendance. It seems that censorship laws might have something to do with it.
In the digital age, high movie ratings from critics for new releases no longer translate into box office records. Viewers are turning instead to social media to inform their movie choices. On social networks, “word of mouth” can spread quickly and make or break a movie on its very opening night. People uploading pictures and comments online, or directly messaging their friends, act as amateur reviewers. In this context of fast information sharing, big budget films either build a fanbase instantly or flop in sales by the second showing.
Streaming sites are also eating into theater attendance rates. Netflix has about 59 million subscribers in the US alone and is growing at a rate of about 10% per year. With this option available, viewers only go to the theater for what they perceive to be original content. For too long, Hollywood has been equating “original” with plotless productions rich in special effects. The industry is caught between market demand and producing riskier, more experimental content. Even if studios keep producing what currently sells, there is a high chance this strategy will soon fail. Franchises like Transformersmight soon experience declines as they lose originality and it becomes the norm to watch similar content at home.
However, the frontrunners of American social media, such as Facebook, Instagram, and Twitter, are missing from China. So are the streaming services that have stressed out traditional Hollywood studios. The country’s digital sphere is instead controlled by public companies like Baidu, Alibaba, and Tencent. These companies, which provide widespread services like QQ and WeChat, might have nudged consumers to pay attention to upcoming film releases from popular studios.
In 2017, reports by state media Xinhua citing data from the State Administration of Press, Publication, Radio, Film, and Television (SAPPRFT) revealed that ticket revenues increased by 13.45 percent that year, to reach to 55.9 billion yuan (US$8.6 billion). That is more than triple the previous year’s increase. Additionally, the number of Chinese filmgoers increased by 18 percent in 2017, while nearly 10,000 new screens were built.
With such sales records, there is no doubt that Hollywood is keen on exploring the potentially lucrative Chinese movie market. However, pushing international films into China is rather difficult. From an American standpoint, China is acting as a blatant protectionist. But China’s limits on international film imports are actually strategic. Introducing just the right amount of competition allows domestic production studios to grow. There is also a matter of balancing film revenue with the cost of “undesirable” western influences on the Chinese public. Since international movies are quite profitable, grossing 25.8 billion yuan and accounting for 46 percent of total film revenue in 2017 on the Chinese market, the government has to be careful about the restrictions that it imposes. Given the regulatory framework, Hollywood does expect restrictions to loosen up and the Chinese film market to soon become the largest in the world.
China, through SAPPRFT, has strict censorship laws in place and a rating system that allows the government to regulate film releases. Unexpectedly, this system and recent improvements in film quality are actually the factors boosting ticket sales. These regulations have influenced the types of content domestic studios choose to cover. According to one of the most outspoken critics of censorship, director Feng Xiaogang, “Everytime I want to shoot something, I have to consider: ‘Can this pass (the censorship review)?’” Films are not allowed to promote ideas that conflict with state ideologies. Furthermore, cinemas have to meet certain quotas of domestic films screenings.
Unexpectedly, this convoluted censorship system is actually one of the main factors boosting foreign film ticket sales. The exoticness of American films makes them more attractive, so that Chinese cinemas underreport sales in order to evade regulations and obtain larger profits. For instance, it is estimated that 40% of ticket sales for Skyscraper,starring Dwayne ‘The Rock” Johnson, are missing.
The imposition of Hollywood blackout periods by the government drives interest for American films even further. During blackout times, propaganda films are heavily distributed, many of them encouraging young people to strive for the “Chinese dream.” This system determines people to always be on the lookout for foreign releases. In the long run, it is unclear how the interspersed showings of domestic propaganda movies and international productions will affect viewers’ behaviors and tastes.
The American film market is becoming a tough nut to crack. Famous Hollywood director Joe Russo agrees: “It is a tough market, even for us coming off of ‘Avengers: Endgame,’ to make a darker, character-driven movie.” More modest or unconventional productions are being pushed aside by streaming sites and big studios with large special effects budgets. At the same time, the new generations shy away from going to the theater. On the other side of the Pacific, China’s censorship dynamics are propelling the country's film market, which might soon overtake the US one in size. For Hollywood, this is a wake-up call to start innovating again before it gets too late.
Esther Lee is a freshman in the College of Arts and Sciences studying Cognitive Science and Economics, with minors in Mathematics and Chinese. Her interests include behavioral economics and data science. In her free time, Esther is experimenting with creative and functional writing. In the future, she hopes to incorporate digital media in her writing.
Sources:
https://www.digitalamerica.org/how-social-media-is-changing-hollywood-nicola-freedman/
https://www.forbes.com/sites/blakemorgan/2019/02/19/what-is-the-netflix-effect/#34f3e3d05640
https://www.forbes.com/pictures/emjl45fhdh/customer-service/#4b5fe39e5e4b
https://americanfilmmarket.com/working-in-film-in-china/
https://www.nytimes.com/interactive/2019/06/20/movies/movie-industry-future.html