THE UNSTOPPTABLE RISE OF CHINAWOOD
China is seeking to shift its economy to a more sustainable model driven by domestic consumption.
China’s film industry is the most dynamic part of the country’s huge entertainment business.
The traditional drivers of China’s economy, investment and exports, are struggling, but the country’s consumers keep spending. Private consumption is now the main driver of economic growth in China.
China’s passion for movies, at home and abroad, has been driving the phenomenal growth of the entertainment industry which has already outperformed China’s traditional industries, such as manufacturing.
At four times the size of the U.S., China’s population makes it the golden goose of the film industry. As with many other countries, going to the cinema is seen in China as an affordable form of entertainment.
Two main factors are driving the incredible growth in Chinese film revenues:
GROWTH FACTOR 1:
EMERGING MIDDLE CLASS
Since 2009 the growth in Chinese box office takings, number of screens and audiences has soared around 10x. This growth reflects the thriving demand for entertainment by a wealthier and
increasingly sophisticated audience.
The emerging Chinese middle classes continue to expand and demand premium products and a wide range of services, such as education, tourism, health care and finance. The potential buying power of China’s middle class is vast.
The growing popularity of movie-going among China’s young urbanites and its burgeoning middle classes is first and foremost the primary factor for the movie industry’s exponential growth.
The Chinese population has embraced movies, both foreign and increasingly domestically made Chinese movies, with exuberance. High ticket prices and generally mediocre films haven’t deterred them from filling up movie theatres to capacity.
GROWTH FACTOR 2:
Cinemas will continue to be built in China at a phenomenal rate and China is expected to have over 60,000 cinema screens by 2020, making it the world’s largest film market.
Chinese cinema construction is booming. Thousands of new screens are opening each year, affording millions of potential customers the opportunity — many of them for the first time ever — to enjoy the movie-going experience in modern multiplexes.
The addition of screens outside the major cities, partly thanks to government subsidies, provides the industry with plenty of opportunities for steady expansion into second, third, and fourth-tier cities.
There has been an 886% increase in Chinese cinema screens from 2004 to 2014. Over 2016, the number of screens grew by an impressive 27 screens per day. At the end of 2018, China has 54,165 movie screens surpassing the 40,837 in the US.
A new Deloitte report predicts that China will be the world’s largest film market by 2020 (in both box office revenue and audience numbers).
By 2021, China will have more than 80,000 screens, nearly twice as many as the US.