Following a dramatic decrease in the number of Hollywood tentpole films that are approved for release in China, Hollywood has begun growing cold on what was the world’s largest cinema market during the pandemic. Two Hollywood studios have now entirely stopped expecting any money to be made from film releases in China, instead treating any money earned from a potential release as a bonus. The news comes at a difficult time for Hollywood studios in terms of international releases, with a block on new releases in Russia and films with LGBTQ themes and characters often shunned in Gulf States and some South East Asian markets.

Studios such as Comcast’s Universal Pictures and Warner Bros. Discovery have stopped accounting for any box-office revenue out of China when approving certain movies for production, according to people familiar with the matter. Instead, executives say, they wait to see if a movie will be accepted for release and treat the ticket sales as found money.

The Wall Street Journal

The news about China comes despite the fact that Warner Bros. this year released “The Batman” and “Fantastic Beasts: The Secrets of Dumbledore” in China, while Universal released both “Jurassic World: Dominion” and “Minions: the Rise of Gru,” the latter albeit with a modified ending to enforce the message that crime does not pay. Prior to the pandemic China was the world’s second largest cinema market in terms of box office and the largest in terms of cinema screens. With cinemas shut for longer in the United States in 2020 and 2021, China overtook North America in box office terms as well, making it the world’s largest cinema territory by all metrics. This year China has struggled with intermittent lockdowns in major cities such as Shanghai that has impacted cinema earnings and releases in the first half of 2022.

The retreat of Hollywood expectations from China comes after Disney saw most of its recent Marvel films not granted a release in China, including “Shang-Chi and the Legend of the Ten Rings”, “Doctor Strange in the Multiverse of Madness” and Sony Picture’s “Spider-Man: No Way Home.” Marvel films have also often failed to gain release dates in Saudi Arabia, Gulf states, Malaysia and Indonesia due to LGBTQ+ issues in its films, which is also what happened to Disney/Pixar’s “Lightyear.” Three of the world’s biggest cinema markets: China, Russia and Saudi Arabia (alongside neighbouring Gulf states) are thus no longer a certainty when calculating potential international grosses for Hollywood. North America (aka Domestic) looks set to once again become the biggest cinema market in the world. The “loss” of the above territories means that Europe is growing in importance, though it cannot make up for losses in other markets. Particularly as attendance continues to trail pre-pandemic numbers by around 25% or more.