China blocked all four of Disney's Marvel movies from being released in its theaters last year, a grim sign for U.S. film giants being squeezed out of the world's fastest-growing box office.
Why it matters: The Chinese Communist Party is using domestic films as a key conduit for mass messaging aimed at achieving political goals, leaving little room for foreign views.
- "It's a real turning away from the global entertainment industry," said Rebecca Davis, China bureau chief for Variety.
What's happening: The pandemic is ushering in a new era of unpredictability for Western entertainment companies that operate in China.
- "The pandemic put China in a better position to control releases," said Comscore senior media analyst Paul Dergarabedian.
- Despite Disney's best efforts to court Chinese officials to ensure its films are welcome to the region, its highest-grossing films last year — all Marvel titles — were blocked reportedly for character portrayals or concerns about comments made by filmmakers, directors or actors in the films.
- "Marvel films are typically very lucrative there, but the political aspects in blocking those films took precedence for the Chinese government over the positive box office economic impact they likely would have had," said Shawn Robbins, chief analyst at Boxoffice Pro.
By the numbers: It wasn't just Marvel films that were affected. The total share of U.S. films among China's foreign film offerings declined from 46% in 2020 to 39% in 2021, Variety reports.
- Revenue for U.S. films in China fell across the board, while Chinese films dominated the box office.
- Of the foreign films that did play in Chinese theaters last year, just 28% were 2021 titles; most were older films.
The big picture: China's leaders have set a goal for China to become a "strong film power" by 2035, Aynne Kokas, assistant professor of media studies at the University of Virginia, told Axios.
- China already surpassed the U.S. as the world's largest theatrical market for the first time in 2020 and beat it again in 2021, in large part due to its reliance on local films, per Comscore. Chinese regulators typically allow about 34 foreign films to be shown per year.
- China's massive market means films don't have to go global — they just need to be effective locally, Dergarabedian said. Of the 200 top grossing films globally last year, 44 were from China, 80 were from North America and 76 were from other regions, per an Axios analysis. Most of those 44 Chinese films made very little money outside of China.
- Beijing's desire to establish a powerful domestic film industry isn't to rival the soft cultural power that America has enjoyed through the global dominance of Hollywood, but to create and then manipulate a powerful platform to disseminate party messages, per Davis.
The impact: The highest-grossing film in the Chinese box office in 2021 — and in Chinese cinematic history — was "Battle for Lake Changjin," a propaganda war film glorifying the Chinese army's fight against the American military during the Korean War.
- The timing of the film's release came as China's leaders are mobilizing the country for extended rivalry with the United States.
- Another recent film, "Embrace Again," uses China's most popular movie stars to amplify Beijing's preferred narrative of the pandemic — as a heartwarming struggle of a people against a virus — while erasing the government failures that allowed the initial outbreak to become a pandemic. The film dominated the New Year's box office.
- "The story of the pandemic in China is in part being written by the state-backed films that have all the technical elements of a Hollywood blockbuster," Davis said.
Yes, but: The Chinese audience's interest in Hollywood films hasn't necessarily diminished, Robbins said, noting that piracy for Western films is rampant in the region.
- With the growth of streaming, the U.S. movie and TV industry is less dependent on the box office model, even if traditional production companies still rely on China, Kokas notes. And streaming platforms like Netflix aren't active in the Chinese market at all.
What to watch: "It's in a state of limbo right now, one that may shift Hollywood's near-future global strategies as well as what China itself needs to continue supporting in its own theatrical market growth in the long term," Robbins said.
The bottom line: The Chinese market "can make the difference between a hero and a zero at the box office globally," said Dergarabedian.
Go deeper: China is censoring Hollywood's imagination