China and Japan could be saving the global box office

China and Japan could be saving the global box office

Summary: The MPAA has released statistics from 2011, and the global box office is up 3 percent. Despite a decline in U.S. and Canadian markets, heavy growth in China and other international audiences is rescuing cinema from a slump.

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The Motion Picture Association of America has released its statistics from last year, and for those who are worried about the death of traditional cinema, there is some good news.

Their annual review showed that global box office receipts for 2011 came to $32.6 billion. That's a 3 percent increase from 2010.

Chris Dodd, former U.S. senator and now chairman and CEO of the MPAA, was quick to proclaim this as a victory: "The bottom line is clear: people in all countries still go to the movies and a trip to the local cinema remains one of the most affordable entertainment options."

Statistically speaking he is correct. This is a success for the film industry, which every year faces more and more suggestions that traditional cinema is losing its appeal.

There have been many arguments that the 'cinema experience' is on its way out, mostly because of the continued growth of digital cinema, piracy and drastic improvements in how we watch movies in our own homes.

So growth in the global box office is a good thing. It is a sign that people are still willing to spend money in cinemas rather than immediately torrenting new releases or just waiting for the Blu-ray to watch on their huge HD televisions with surround sound.

Frankly, it is easy to see why people would opt out of actually attending the cinema. It avoids all of the pitfalls of the cinema experience: snacks that cost more than your ticket, annoying movie goers with persistent coughs, kids, popcorn -- the loudest snack food in the world.

The thing about this growth, however, is that most of it is happening in China. The international box office accounts for $22.4 billion of that $32.6 billion total. China's box office grew by 35 percent last year alone, now standing at an estimated $2 billion.

That makes China the second biggest international market, and it trails just behind Japan, which has a market of $2.3 billion. On top of that, the number of 3D cinema screens in Asia nearly doubled last year.

Although these markets are comparatively small compared to the U.S. and Canada, they are also growing at a much faster rate.

The U.S. and Canadian market, in fact, declined last year. Despite films like 'Avatar', which broke box office records, being released the overall box office revenue was down 4 percent.

This decline was, according to MPAA's statistics, due to an equivalent decline in admissions.

As we have feared, fewer people are going to the cinema. Admissions have generally been trending downwards for about 10 years, and while gimmicks like 3D bring in more people, there is only so far that gimmick can stretch.

After all, we can now watch 3D on television, play games on the Nintendo 3DS without the uncomfortable glasses, not to mention the launch of 3D television channels. It is only a matter of time before the innovations in domestic technology squash cinemas 3D obsession flat.

When you look at the numbers for the last five years, the U.S. and Canadian box office has increased, but the growth seems to be starting to plateau. There was no considerable growth between 2009 to 2010, and now it is actually declining.

For now it looks like cinema is being given the breath of life by international markets, particularly Asia and South America. The downfall of the U.S. box office might not come for some years, but downward trends do suggest that it could be on its way.

Disney's big budget blockbuster, 'John Carter from Mars', has already been labelled a box office flop in America. The film was purported to cost $250 million to make and on its opening weekend only pulled in $30.6 million in the U.S.

Outside of America, however, the film was more successful, pulling $70.6 million on its first weekend.

It opened in China with $10.4 million, and another $6.4 in Russia. So far the international revenue for the film has far outweighed its domestic gross, but a successful run abroad could at least prevent Disney from  losing face.

Growth in China, and Japan's international dominance are very promising for the global box office. If international revenue can turn a box office flop of the purported magnitude of 'John Carter' into an even break, then perhaps it can help keep the future of cinema healthy.

In the past production companies like Warner Bros. have released films on DVD in China at the same time as they hit cinemas in an attempt to get ahead of potential piracy.

Now it seems like they should be embracing the new, budding cinema industry in Asia.

Instead of spending their budget on heavy advertising in the U.S., perhaps focusing more on the growing Chinese and Japanese audiences might save new releases from crashing and burning.

Image Source: Kenmoo/Flickr.

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5 comments
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  • Comparatively speaking ...

    China's box office growth is modest compared to the equivalent DVD and digital download growth. The only problem is that the last two are mostly of the "unlicensed" variety.

    A number of analysts in the US agree that the long-term recession has actually helped the movie industry, just like it did during the Great Depression. People who cut back on more expensive entertainment still find they can spare a few dollars for "a night at the movies." As Dodd noted, a movie ticket is still affordable, especially compared to concert and pro sports tickets.
    terry flores
  • Piracy

    I thought that piracy is suppose to be destroying the industry and yet they report sales are up 3%.

    MPAA are telling lies again.

    An I take my own snacks bought at the supermarket, weird I know, cant remember the last time I bought anything other a ticket for the film at the cinema.

    It the price of the tickets that the real problem, 9 pound a ticket last time I went, non 3d.

    The biggest problem Hollywood face is that its to American focus, it need to relies that there a much bigger market out there than America.
    Knowles2
  • home theaters.. common here.. not so everywhere

    China , Japan, numerous other locales .. Home theater options are more often very limited ( 3 generations living in same apartment!, etc...)
    jrlambert
    • good reason

      well, that's supposed to be a good reason to have a home theater system. btw, your knowledge on these 2 countries' social environment is obviously very limited.
      gundam_0083
  • There's are many reasons for the decline . . .

    - Not much worth seeing.
    - Relying too much on gimmicks instead of quality material.
    - Overall experience is inconvenient compared to home entertainment.
    - High cost compared to cheaper forms of entertainment (free concerts, gaming, hobbies, reading).
    - Sticky/dirty seats, floors and restrooms.

    The last three have always been reasons. The first two seem to gotten progressively worse over the last decade or so and are somewhat related.

    I only know of two movies that I'll actually watch in a cinema this year. One is The Hobbit (based on previous successes). The other could very well be disappointing, since some of its previous sequels have been hit or miss over the years--but I'll take a gamble.
    jlongino@...