In total, U.S. imports made around $950 million in China in the 2023 calendar year. That is but a small fraction of the country’s overall market now, but Hollywood needs every dollar it can get. “The Way of Water” still would have been a $2 billion movie even without China. But something like 2021’s “Godzilla vs. Kong” made $188.7 million of its $467.8 million global total in China. That movie was straight-up saved by those ticket sales.
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Granted, in most cases, theaters keep around half of the money from the box office, whereas studios only see about 25% of that money from China (due to international taxes and other factors). Nevertheless, 25% of $188 million is still a lot of money, while 25% of $950 million is a whole lot of money. That’s the larger point here. A lot of money studios could really use right now is going to evaporate.
The other issue, as the CFA pointed out, is that Chinese moviegoers may not be as inclined to support American movies right now, given the ongoing trade war. So, even if a movie like “Mission: Impossible — The Final Reckoning” can secure a theatrical release in China, it may be even tougher sledding than it has been of late.
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For years now, mind you, Hollywood hasn’t been able to depend on China’s box office like it used to. That’s to say, major studios couldn’t depend on robust grosses from the country even before this mess. But there’s a big difference between not being able to depend on it and wiping that money off the board entirely. That’s what we’re looking at now, and at a time when the box office is more volatile than it’s ever been, the industry at large can ill-afford such setbacks. And yet, here we are. One can only hope that this is merely a short term issue and that there aren’t long term ramifications for the relationship between Hollywood and China, though that does seem like a distinct possibility.