We've Got Hollywood Covered

How China Is Driving Its Own Box-Office Boom

Chinese movies have a 63 percent market share this year, which is running 27 percent ahead of last year

China's box office is booming, but it's not Hollywood blockbusters driving the surge, it is homegrown movies.

China's overall box office grosses had reached $1.68 billion as of June 23, according to a study released by EntGroup, up 27 percent over 2012 at the same point in the year. Significantly, Chinese films are responsible for $1.05 billion of that, giving them an impressive 63 percent market share.

In 2012, Chinese movies accounted for just 10 percent of the country's market share at this point in the year.

"This should be a bit of a wake-up call for Hollywood," said BoxOffice.com's Phil Contrino. "The numbers say China isn't starving for American movies.”

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The shift could give the Chinese an edge in terms of their often-strained relationship with Hollywood studios, who are trying to increase their footprint in that country at the same time that China is working to build its domestic film industry.

China last year surpassed Japan as the world's No. 2 market behind the U.S. with box office revenues of $2.7 billion, up 36 percent from the previous year, and it is expected to surpass the North American box office by 2020.

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Because the Chinese market is growing so fast – Motion Picture Assn. of America chairman and CEO Chris Dodd said earlier this year that 10 new screens are opening every day – Hollywood movies are still making major profits. So far this year, "Iron Man 3” has brought in $120 million, "Star Trek Into Darkness” grossed $56 million and animated kids movie "The Croods” has brought in $63 million.

But compare that with the haul of three Chinese movies this year: "Journey to the West: Conquering the Demons” (photo above) has brought in more than $200 million, "So Young” (right) has grossed $116 million and "American Dreams in China” has totaled $88 million.

"Ever since the huge success of the low-budget comedy 'Lost in Thailand,' which was released in December, Chinese viewers' enthusiasm and expectations for domestic film productions have jumped," said Huang Ting, industry analyst with EntGroup.

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There's no need for Hollywood to panic, Contrino cautioned. "I don't think it's an either-or situation," he said. "There's room for both, particularly with the market growing as fast as it is.”

But he suggested U.S. filmmakers might want to fine-tune their approach and do a better job of understanding Chinese culture in order to connect with audiences.

"I think it's misdirected to, say, shoot a couple of scenes in Beijing and think that's going to make a difference with Chinese audiences," Contrino said. "'Avatar,' which didn't do any of that, is still the biggest movie in the history of China, and I think there's a lesson to be learned there."