In 2024, the Chinese cinema industry experienced significantBox office setbacks.
Last year, China's box office earnings dropped by a substantial 23%, hitting 42.5 billion yuan ($5.8 billion), as reported by China Film News, a state-run publication under the China Film Administration, citing numbers released by the administrative body on Wednesday. This was a 34% decrease from the record-breaking year of 2019.
The highest-grossing film of the year was "Yolo," a feminist project starring and directed by Jia Ling. Jia portrays a 30-something woman who transforms her life through boxing, losing an impressive 100 pounds throughout filming. The film was a significant success, selling 3.5 billion yuan ($474 million) worth of tickets, as per Maoyan.
Liu Zhenfei, a data analyst at Lighthouse Research Institute, a market research firm, stated in the Economic Information Daily newspaper on Thursday, "Comedy remains the most popular genre among audiences, contributing 36% to the annual box office."
Despite the notable successes, the overall box office performance was lackluster. The decline in numbers was partly due to fewer movies produced. Officially, only 612 films were made in 2024, compared to 792 the previous year.
This trend isn't unique to China. According to ProdPro, a data tracking firm, the number of active film projects globally decreased by 17% from July to September 2024, compared to the same period in 2022, as the industry continues to grapple with the aftermath of Hollywood's 2023 strikes.
This decline also affected America's box office, which dipped by 3% in 2024, to $8.72 billion, as calculated by Deadline.
China's film industry's downturn was surprising to experts, given that movie theaters performed well in 2023. They were a notable bright spot in China's economy, which had slowed down after an initial recovery from strict Covid-19 lockdowns.
Box office revenues on Christmas Eve - a non-public holiday in China - dropped to their lowest in at least 13 years, as reported by Reuters on Wednesday, citing Maoyan data. The earnings amounted to 38 million yuan ($5.2 million), less than a quarter of the previous year's figures and the lowest since Maoyan started recording data in 2011.
Limited Spending
Previous trends suggest that cinemas thrive during tough economic times, offering a form of escapism at a relatively low cost. This phenomenon is even known as the "lipstick effect," where consumers spend on small luxuries during periods of uncertainty.
However, economic optimism has barely improved since leader Xi Jinping announced a much-needed stimulus package in September. Consumption remains weak despite this improvement.
"Weighed down by the prolonged property market slump and low consumer confidence, Chinese household consumption slowed in 2024," wrote Goldman Sachs analysts in a research note published on Tuesday. Tier-1 cities, including Beijing, Shanghai, Guangzhou, and Shenzhen, experienced the most significant declines due to property price losses.
Besides weak spending, China is also grappling with a property crisis, debt issues, and high youth unemployment, among other challenges. The government has not introduced major stimulus measures directly affecting consumer wallets, but it has launched "cash-for-clunkers" programs to boost car and home appliance sales.
In an attempt to revive the ailing box office, the China Film Administration introduced a subsidy program last month. As reported by Xinhua news agency, various banks and online ticketing platforms will pool together 600 million yuan ($82 million) to offer discounted tickets and raffles to boost theater attendance in the new year.
The decline in China's box office earnings can negatively impact various businesses associated with the film industry. For instance, fewer movie productions mean reduced demand for film equipment and services.
The limited spending power of Chinese consumers, coupled with economic challenges, is also affecting the business aspect of film-going, making it harder for films to recoup their production costs.
