In 2016, India's movie-goers exceeded 2.2 billion, becoming the world's number one. China's film market is in crisis

How to learn from the highly mature North American market and ask for the future of China's film industry will be an issue that requires continuous and in-depth research.

Original title: Behind the Picture Association of America report, the code of the Chinese and American film market is hidden.

Last week, the Picture Association of America MPAA released the latest annual market statistics: the global box office closed at US$38.6 billion in 2016, only a slight increase year-on-year. 1 percentage point, setting a new low in recent years.

Among them, the combined box office output of the United States and Canada was US$11.4 billion, up 2% from US$11.1 billion last year, becoming the biggest driving force for maintaining overall growth; in contrast, although the box office in mainland China maintained a positive growth of 3.73%, it has fallen significantly from the increase of nearly 50% and the net increase of more than 14.4 billion in 2015.

What is slightly embarrassing is that if the adverse effects of RMB depreciation are taken into account, the domestic box office in 2016 was equivalent to approximately US$6.584 billion, a 2.7% decrease compared with US$6.768 billion last year. From this perspective, the rapid development of the China market that lasted for more than 20 years has actually come to an abrupt end. Starting this year, the expired Sino-US Film Memorandum of Understanding will be renegotiated. Hollywood's pressure on quota increases will further increase. China's film ecosystem is facing a sense of urgency for restructuring and upgrading.

The following will take the MPAA report as an entry point to provide an in-depth analysis of the box office performance and future trends in various key markets, especially China and the United States.

1. Exchange rate fluctuations have led to box office stagnation. In 2016, the number of movie-goers in mainland China

ranked first. The top five film markets in the box office were North America, mainland China, Japan, India and the United Kingdom. From a ranking point of view, even if there is a "change from rise to fall" due to exchange rate fluctuations, the mainland still ranks firmly as the world's second largest market outside North America, and the situation of China and the United States leading the way will continue for several years. However, due to the weakening trend of the British pound after the "Brexit" referendum, the overall box office of the UK shrank by about 10% to US$1.7 billion, and the ranking was also overtaken by Japan and India, slipping to fifth place.

In contrast, the Japanese market recorded an increase of 8.5% in local currency, coupled with a slight rise in the yen against the US dollar, and the annual box office exceeded the US$2 billion mark; the Indian market also achieved double-digit growth and entered the top three in the world. It is only a matter of time.

Another noteworthy indicator is the number of moviegoers: Although the MPAA does not disclose relevant data, film organizations/associations in various countries have statistics, which can be used as a reference factor in addition to box office.

In 2016, the number of movie-goers in mainland China was 1.372 billion, a year-on-year increase of 8.89%, and the national average ticket price further dropped to 33.32 yuan. However, the number of movie-goers in the North American market fell slightly to 1.315 billion, thus surrendering the throne of the world's second largest ticket sales market. The top spot still belongs to India, which has more than 2 billion visitors.

At the same time, the per capita number of movie viewing times in mainland China has exceeded one. Although it is far from the per capita number of four in the United States, South Korea and other places, it has also entered the ranks of moderately developed markets.

Excluding ticket prices, Japan and the United Kingdom had 180 million and 168 million movie-goers respectively, which actually lags behind South Korea's 217 million. From this point of view, even if the box office growth is not satisfactory, the demographic dividend in the China market has not yet been fully released, and it is expected to move closer to India's 2 billion visitors in the future.

2. North America is showing a high concentration. The national film "Putian" has not yet matured to complete

the survey of the world's top five markets. Next, we will focus on analyzing the detailed structure of China and the United States.

The first is North America. As one of the most concentrated markets in the world, 96.94% of the overall US$11.4 billion box office in North America was produced by local Hollywood films, which is even higher than the 96.8% in 2015.

This strong performance is closely related to the enhanced control of the six major film companies over the market: the major companies led by the traditional six major companies + Lionsgate account for 89.8% of the market share, but the number of films produced is less than 1/5 of the overall. Coupled with the six major brands that specialize in distributing independent films, it is not surprising that all the top 100 films in a single film are produced in Hollywood.

It is worth mentioning that Disney alone earned US$3 billion in box office in North America, setting a new annual box office record for a single studio. With three major acquisitions over a decade, Disney is realizing the full explosion of its brand value, as evidenced by the fact that "Finding Nemo 2"(Pixar),"Star Wars: Grand Theft One"(Lucasfilm) and "Captain America 3"(Marvel) ranked among the top three. Coupled with the continued resilience of the animation department and the steady progress of real-life adaptations, all 6 seats in the top 10 have gone to Disney.

In addition, Sino-US co-productions experienced a small upsurge in 2016, among which "Kung Fu Panda 3"(US$143.5 million in North America) was the masterpiece, while films such as "The Great Wall" and "We were Born in China" were postponed until this year's release.

However, the performance of domestic films (including co-productions between Hong Kong and Hong Kong) was unsatisfactory. Only "Mermaid"(US$3.23 million) and "Ip Man 3"(US$2.68 million) ranked in the top 200, with a negligible market share of 0.12%. Although Radio and Television took the lead in establishing a global distribution platform of "China Films, Putian Films" last year, which led to an increase in the number of domestic films released in North America, how to expand a new audience beyond the Chinese still seems to have a long way to go.

In contrast, there are 4 films in Hollywood in India that have a total of more than US$3.5 million. The foreign-language film corps in North America still maintains its leading position, and there will be special analysis in the future.

3. Hollywood has regained its strength in the mainland market, and the box office distribution of domestic films is unbalanced

. In the China market, it is a different scene. First of all, the overall share of domestic films has declined, from 62% in 2015 to 58% last year, and the box office has shrunk by 692 million yuan. Among them, the total output of Sino-US co-productions represented by "Kung Fu Panda 3" and "The Great Wall" was 3.3 billion yuan, accounting for a total of 7.2% of the market space.

After falling to a trough of 33% the year before last, the Hollywood Legion made a comeback in 2016, with its market share rising back to 38%, with a net increase of 2.85 billion yuan. Among them, Disney once again played a key role: "Zootopia"(1.53 billion),"Captain America 3"(1.25 billion),"Fantasy Forest"(980 million),"Star Wars: The Force Awakens"(830 million) and "Doctor Strange"(750 million) all ranked in the top 20 of the year, helping its box office total exceed the 6 billion mark.

On the other hand, although domestic films dominate in quantity, there are only 44 "quasi-hit" films with more than 100 million yuan, while there are as many as 209 "cannon fodder areas" with less than 5 million yuan, accounting for nearly 60%. In 2014 and 2015, there were still about 100 domestic films with box office less than 5 million yuan. To a certain extent, this is one of the consequences of the influx of "hot money" in the past two years, and the polarization is still strengthening after market growth slows down. In contrast, whether it is a Sino-US co-production or an imported film, the overall box office distribution is relatively balanced.

Of course, for the mainland market, which is still in the development stage, this irrational situation is inevitable. How to learn from the highly mature North American market and ask for the future of China's film industry will be an issue that requires continuous and in-depth research.

Editor: Nancy