China has lost its position as the world’s leading box office territory, following a collapse of its cinema market by 36% in the past year. Data by Maoyan Research Institute found that China’s cinema market was CNY 30 billion (USD $4.4 billion) in 2022, which represents a drop of 36.4% on the previous year. This comes after box office in China grew for two consecutive years. This means that 2022 was down 53.2% on the pre-pandemic 2019 year. China was the world’s largest box office territory in 2020 and 2021, after having reopened its cinemas faster than the rest of the world under the country’s previous Zero Covid policy, now abandoned.

Compared to 2020 – when cinema operations were brought to a complete standstill for 178 days – more than half of all cinemas were closed for 46 days in 2022. The operating rate for cinemas fell below 50% from March 21 to April 22 and below 40% from November 24-30. The number of cinemas reached 12,123 of which 54% earned between $146,000 and $731,000 (RMB1-5m) in annual ticket sales while 33.3% earned below $146,000 (RMB1m).

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Several key metrics were flipped in 2022. Average screen attendance fell to 8.6 in 2020-2022 compared to a three-year average of 15.3 in 2017-2019. Average ticket price was CNY 40.1 (USD $5.86) in the period 2020-2022, compared to CNY 35.7 (USD $5.21) for the three-year average of 2017-2019. Cinema opening rate rose to over 70% by the time “Avatar: the Way of Water” opened and the film has grossed CNY 953 million (USD $139.4 million), falling short of prediction between 1.5 and 2 billion CNY. This was because the wave of Covid infections, following the lifting of the Zero Covid policy, kept people from going to cinemas.

Apart from “Avatar 2” the only other Hollywood title to reach the Top 10 of 222 was “Jurassic World: Dominion”, with many Hollywood titles such as “Top Gun Maverick” denied a release permit. China’s top three titles of 2022 were war drama “The Battle at Lake Changjin 2” (CNY 4.07 billion or USD $594.75 million), sci-fi comedy “Moon Man” (CNY 3.1 billion / USD $453.6 million) and comedy “Too Cool To Kill” (CNY 2.7 billion or USD $390 million). Together these three films alone accounted for a combined 32.5% market share of the total Chinese box office in 2022. Ahead of this year’s all-important Spring Festival season, when only Chinese films are released, both “Avatar: the Way of Water” and “Puss in Boots: the Last Wish” were granted extensions to their 30-day window.