Market forecast: Will the box office of China movies pick up in 2017?

Will the box office results increase or fall in 2017? Today, let us look at several reasons for the slowdown in box office growth in 2016 and see whether these issues will improve in 2017, and use this to boldly predict the film market in 2017.

Based on the box office results in 2015 exceeding 44 billion yuan-nearly double the box office in 2014, an increase of 49%, almost everyone is optimistic about the film market in 2016. At the beginning of the year, Rao Shuguang, secretary-general of the China Film Association, gave a target forecast of 60 billion yuan in box office in 2016. This figure did not encounter any doubts in the film industry and seemed to have become a general consensus among filmmakers for a time. At that time, during the Spring Festival, Zhou Xingchi's new film "Mermaid" broke the box office record for domestic films and grossed 3.3 billion yuan, which also provided strong evidence for the realization of this goal.

However, after the national box office in the first quarter was 14.47 billion yuan, a year-on-year growth rate of 51%, the film market in the last three quarters "suddenly cooled", with negative growth in the national box office in April, May, July, September, October, November, and December.

Two important periods, summer and national day, have zero growth and negative growth. Among them, the total national box office during the summer period (June 1-August 31) was 12.429 billion yuan, which was basically the same as the total box office in the three-month summer period of 12.431 billion yuan, but the growth rate has hit a new low in recent years. Compared with the annual growth of more than 35% in this period in the past five years, this figure will definitely not satisfy too many investors in the film industry.

The National Day results during the seven-day holiday were even more chilling. The box office score of 1.58 billion yuan fell by 270 million yuan, or nearly 15% compared with the score of 1.85 billion yuan in the same period last year. This is the case for traditional ticket sales periods, but other sales periods are even worse. Obviously, the box office results for the whole year of 2016 are far from the industry's general expectation of 60 billion yuan at the beginning of the year.

On December 23, the box office of China films in 2016 finally broke through the 2015 record of 44 billion yuan, and finally ended with a full-year box office of 45.7 billion yuan, a year-on-year increase of 3.73%. This achievement made filmmakers, who had been depressed for three quarters, breathe a sigh of relief-at least this year's box office will not end with zero growth or even negative growth. However, this achievement will not be satisfactory to both filmmakers and the capital outside the door.

Has China's film market reached an inflection point? Will the box office results increase or fall in 2017? Today, let us look at several reasons for the slowdown in box office growth in 2016 and see whether these issues will improve in 2017, and use this to boldly predict the film market in 2017.

Of course, the market is changing rapidly, and the tastes of the audience are difficult to adjust. Our predictions may not be accurate, but we all hope that China's film market can develop more healthily and the industrialization process of domestic films can be accelerated to cope with the future expansion of Hollywood's imported film quotas.

1. The slowdown in box office growth is a normal phenomenon

. Before the arrival of 2016, China's film market has maintained rapid growth for more than 10 consecutive years-from 2003 to 2015, the average annual compound growth rate of box office exceeded 35%, unique in the world. By 2015, the annual box office was 44 billion yuan, a growth rate of 49%. This figure was actually achieved under an abnormal or unreasonable growth pattern, so such an increase cannot be maintained for a long time. There will always be a day that will slow down; however, this year's slowdown is too sudden, and many people were surprised.

A theater manager calculated such an account with reporters,"The box office for the whole year of 2014 was 29.7 billion yuan. If calculated based on the growth rate of 25%, it would be more than 37 billion yuan in 2015. If the same growth rate of 25%, this year's range of 460-470 is normal. So I think this year's box office growth has slowed down not because the market has changed, but because it was too high last year."

Behind the rapid growth of box office in 2016 was the intervention of factors that had not been seen in the film market in the past few years. Many industry insiders believe that ticket subsidies are a major factor. Zeng Maojun, president of Wanda Theater, the country's largest private theater line, directly pointed the slowdown in box office growth this year to the false fire caused by ticket subsidies. At this year's Shanghai Film Festival, Zeng Maojun pointed out that compared with last year's box office of 44 billion yuan, the scale of e-commerce ticket subsidies reached 4 billion yuan, a figure that was also confirmed by Zhang Hongsen, director of the Film Bureau. Later, Wang Changtian, president of Enlight Media, said in an interview with the media in July that ticket compensation this year had dropped to about 1.5 billion yuan.

The emergence of ticket compensation is the simplest and most crude cooperation model attempted between film distributors with different motives and e-commerce platforms that select seats online. For movie distributors, ticket subsidies can attract more viewers who are not sensitive to the movie itself but sensitive to price to enter theaters, while for e-commerce platforms, ticket subsidies can bring users to them.

After e-commerce attracts a certain number of users, ticket subsidies will inevitably be reduced or even eventually cancelled. In this regard, unlike the distributor, the terminal operator of the movie-the theater manager-had a skeptical or even negative attitude when the ticket subsidy appeared. A theater manager once told Interface Entertainment,"The appearance of ticket subsidy will make the audience unable to see the value of the movie itself and mistakenly think that the movie should be a cheap price. They are afraid of the impact on the market if one day ticket dealers gain enough popularity or achieve their own phased goals." Obviously, his words unfortunately came true in 2016.

It is foreseeable that money will run out one day, and ticket refunds will be less and less in 2017. While ticket refunds are reduced, ticket operators have begun to involve and participate more in middle and upper reaches of the film industry, such as investment, production and distribution. From simple ticket price subsidies to using funds for film production itself, it may be more beneficial to the film industry.

2. The large-scale entry of financial capital will reduce the number of "bad films" produced by the large-scale entry of financial capital

every year, but this year seems to be particularly high. Data shows that the average scores of domestic films on Douban from 2012 to 2016 were 5.12, 4.71, 4.75, 4.70 and 4.40 respectively, which shows that the average score of domestic films in 2016 was the lowest. The reason why there are so many bad films this year is not unrelated to the fact that a large amount of financial capital has poured into "fishing for gold" due to the rapid surge in box office in the past two years. Although these capital has objectively promoted the rapid development of the market, its speculative and profit-seeking nature determines that capital will inevitably bring impetuousness and bubbles to this market.

For these foreign investors, movies are not just an art, but also a means to make money. By quickly packaging and launching popular IPs with many fans and small fresh meat with their own traffic, you can make quick money. However, these projects, which seem to be full of "money scenes", lack stories, characters, and emotions that can communicate with the audience, and the market effect is far from meeting expectations.

In addition, there is too much project start-up, but the talent reserve in the entire film market is insufficient, resulting in many film projects becoming "active activities" or even "urgent activities" with poor quality, which affects the consumer confidence of the entire market.

The sudden cooling of the film market this year has caused more people to calmly think about what kind of work they need to produce to win the hearts of the audience. Yin Hong, vice chairman of the China Literary Critics Association and professor at Tsinghua University, said in his signed article "China Films, Why Are You Panic?""It seems that hype and marketing can no longer allow a film with average artistic quality to 'defraud' the trust of the audience. Elements other than quality have greatly reduced their impact on the film market." After this year, China film will "return to the track of relying on the quality of the film itself from the market dividends brought by reform, the channel advantages brought by Internet intervention, and the benefits brought by capital." Audiences need better films."

3. Violations such as box office fraud have promoted the gradual improvement of film policies and regulations

. The box office fraud of "Ip Man 3" in March this year attracted the attention of the entire industry. It has been discovered that the false box office boom of "Ip Man 3" is closely related to guaranteed issuance. In February this year, before the film was released, A-share listed company Shenkai shares spent 49 million yuan to subscribe for a fund based on the box office proceeds rights of "Ip Man 3". At the same time, Hong Kong-listed company Shifang Holdings purchased the film for 110 million yuan. 55% of the box office proceeds rights. Both companies are closely related to the publisher, Big Screen.

"Guaranteed issuance has been the issuance term for many years." Zhang Miao, former head of distribution for Colombia Film Company in China and general manager of the Beijing Cultural Film Division, introduced it. In his description, guaranteed issuance is equivalent to buying futures, and the characteristic of futures is to buy the future at a perceived price. "In the past two years, the attention paid to guaranteed issuance has become higher, first because the guaranteed amount has become very high, taking on extraordinary risks; second, because a large amount of capital has entered the issuance field (i.e., the financial scam behind Ip Man 3)."

It was also against the background of box office counterfeiting in "Ip Man 3" that the "Film Industry Promotion Law" was finally introduced in November and will be officially implemented in March next year. Among them, there are clear penalties for cinemas "stealing box office": if the circumstances are particularly serious, the original issuing authority shall revoke the license.

Some industry insiders have said that in fact, although these two behaviors target different links in the film industry, they both occur due to the intervention of other capital. The film companies themselves must definitely not have the strength to do such a large-scale and large-scale thing. The intervention of capital and the operation of financial methods in other industries must also be due to the fact that this industry is favored, which just shows that there is still greater room for development in this industry. Whether it is ticket compensation or guaranteed guarantees, even some new means and methods will continue to emerge. However, with the development of the market, some corresponding policies and regulations will gradually improve.

Although we have to admit that the excitement or weakness of the market is contagious for a certain period of time, and the weakness and adjustment of the box office in the second, third and fourth quarters of 2016 will continue in the future, after analyzing the reasons for the "cold cooling", we are confident that the film market will develop more positively next year.

On the one hand, the construction of screening channels for China films continues. According to statistics from the Film Bureau of the State Administration of Press, Publication, Radio, Film and Television, as of December 20, 2016, the total number of screens in mainland China has reached 40917, and the average rate of adding 26 screens every day is still maintained. At the same time, according to the Market Report of the Motion Picture Association of America, as of May 2016, the total number of screens in the United States was 40759. If the number of screens in the United States has not increased significantly, the mainland China market, which now has 40917 screens, has become the country with the largest number of screens in the world.

The slowdown in the growth rate of total box office in the mainland this year has not yet affected the construction of mainland cinemas in China. In other words, the construction of screening channels continues to maintain a relatively high growth rate.

On the other hand, judging from this year's situation, film content has increased in quantity, and there have also been extensive attempts in genre and subject matter. "Operation Mekong", which won 1.1 billion yuan in box office, provides another possibility for a main theme film;"July and Ansheng", which won the Golden Horse Award double film, also makes youth films artistic;"Donkey Get Water", a story that has been repeatedly tested in the drama market, has been brought to the big screen.

In addition, there are more art films such as "The Yangtze River Map","Roadside Picnic" and "Tallo", and more documentaries such as "We were Born in China","The Gate of Life" and "I Repair Cultural Relics in the Forbidden City". At the Changchun Film Festival in October this year, the "National Art Film Screening Alliance" was established. The first batch of 100 cinemas in 31 provinces across the country will ensure that at least three art films are shown every day, and at least 10 golden screenings will be guaranteed every week. I believe that in the future, this alliance can also solve the dilemma of art films not having a scheduled schedule in commercial movie theaters to a certain extent, and there will be no more incidents where Fang Li, the producer of "Hundred Birds Facing the Phoenix", kneeling for the scheduled schedule.

Next year, domestic films will try more in terms of themes and genres. Judging from the nearly 30 domestically produced films that have been scheduled to date, there are both large-scale fantasy films and costume action films, as well as small-budget comedy films, romance films, and suspense films.

Among them, the films to be screened during the Spring Festival include "Journey to the West to the Demon" directed by Tsui Hark and starring Wu Yifan and Yao Chen;"Making a fuss in India" directed and starring Wang Baoqiang;"Kung Fu Yoga" directed by Tang Jili and starring Jackie Chan and Zhang Yixing;"Forgetfulness Village" directed by Chen Yuxun and starring Shu Qi and Wang Qianyuan;"The Battle of the God of Cookery" directed by Ye Weimin and starring Ge You and Nicholas Tse;"The Wind and Waves" Braving the Waves "directed by Han Han and starring Deng Chao, Peng Yuyan, Zhao Liying and others.

Directed by Youpeng Su, adapted from the novel of the same name by Japanese mystery writer Keigo Higashino; the suspense action police film "The Kidnapper" directed by Xu Jinglei and starred by Bai Baihe, Huang Lixing, and Ming Dao; and the anti-drug police film "Extraordinary Mission" written and directed by Zhuang Wenqiang and Mai Zhaohui, and starred by Huang Xuan and Duan Yihong, are scheduled to be released on April 1. Huang Lei's remake of "The Troubled Family" by Japanese film director Yoji Yamada's "The Suffering of the Family" and directed by Chen Zhengdao, and the suspense film "The Master of Memory" starring Huang Bo, Xu Jinglei and Duan Yihong is also scheduled to be released at the end of April.

The films currently scheduled for the summer season include "The Legend of Wukong", which is based on the novel Today He, directed by Guo Zijian and starred by Peng Yuyan, Ni Ni, Ou Hao, Zheng Shuang, etc.;"The Founding of the Army" directed by Liu Weiqiang and joined by many stars; and "The Unparalleled Expert" directed by Lu Zhengyu, the "apprentice" of Xing Ye, and starred by Fan Wei and Guo Caijie.

Another fantasy costume action film directed by Tsui Hark,"The Escape of the Mystery", will be released during the National Day holiday. "The Legend of the Cat Demon", directed by Chen Kaige and starring Huang Xuan, Zhang Yuqi, and Sangu Jiangtai, has long locked in the 2017 Lunar New Year slot.

In addition, domestic films that have not yet been finalized but will be released in 2017 include "August", which won the Golden Horse Award for Best Picture this year,"Mobile Phone 2" directed by Feng Xiaogang,"Three-Body" starring Feng Shaofeng and Zhang Jingchu,"Without Asking the West" starring Huang Xiaoming and Wang Lihong,"The Legend of the Pearl" starring Zhang Tian 'ai and Wang Dalu,"The Bomb Removal Expert" starring Liu Dehua and Xiao Songjia,"Psychological Crime" starring Liao Fan and Li Yifeng, Andy Lau,"The Grand Theft League" starred by Shu Qi,"Antarctic Love" starred by Zhao Youting and Yang Zishan,"The Detective Hawthorne" starred by Han Geng and Zhang Huiwen;"Crazy Beast" starred by Yu Wenle and Zhang Jin, and "Psychological Crime: City Light" starred by Deng Chao and Liu Shishi.

In terms of external films,"Wolverine 3: The Battle to the Death","King Kong: Skull Island","Racing Story 3","Divergent 3: Loyalty (Part 2)","Stealing Dad 3","Transformers 5: The Last Knight","Speed and Passion 8","Pirates of the Caribbean 5","Star Wars 8","Guardians of the Galaxy 2","Thor 3: Dusk of the Gods","Rise of the Planet of the Apes: The Ultimate Battle","Spider-Man: Returns of Heroes","Ace Agent: Hollywood blockbusters such as Golden Circle, Justice League, Mummy, Wonder Woman, Beauty and the Beast, Mobile Team in the Shell, Emoji Movies: Express Yourself, Blade Runner 2049, and Star Agents: City of Thousands of Stars are expected to be introduced into China.

There are also many films in these films that can hit a billion yuan box office.

In addition to the above-mentioned construction of screening channels and release of film content, an important factor affecting the box office is the cultivation of audiences 'movie-watching consumption habits. In 2015, under the crazy ticket price subsidies, the number of movie-watching visitors reached 1.26 billion throughout the year, a year-on-year increase of 51.08%. This year, despite the slowdown in ticket compensation, the number of movie-goers reached 1.372 billion, and the growth rate slowed down to 8.89%. Although the impact is indeed significant, fortunately, there has been no zero or negative growth. In the future, audiences will gradually adapt to movie ticket prices without e-commerce subsidies.

At this point, we boldly asserted that the rapid development of the market will inevitably go through an adjustment stage, directly or indirectly giving the entire industry time to adjust and optimize. However, the general trend of box office growth in China's film market has not fundamentally changed. The box office for the whole year of 2015 was 44 billion yuan, and in 2016 it was nearly 46 billion yuan; even if the growth rate of the China market is still weak in 2017, as long as it does not decrease further on the basis of this year, we estimate that the box office for the whole year will reach 48 billion yuan, and to be more optimistic, it can even reach 50 billion yuan.

Editor: yvette