The Rise Of The Chinese Box Office Is Staggering, And It's Transforming Hollywood

Optimus prime model transformers Age of Extinction Hong KongREUTERS/Tyrone SiuA 21-foot tall model of Optimus Prime is displayed at the world premiere of ‘Transformers: Age of Extinction’ in Hong Kong.

The Chinese box office grew by an astounding 27% to $US3.6 billion in 2013, according to the Motion Picture Association of America. To put that number in comparison, China’s $900 million dollars box office growth was more than the total size of all but eight international box offices.

China brought in $US1.2 billion more than second place Japan and $US1.9 billion more than the third place United Kingdom. The U.S./Canada market remained the largest at $US10.9 billion, up 1% from 2012. Globally, box office revenue increased 4%.

Although China’s box office won’t soon overtake the U.S., it’s growing fast. In 2012, the Chinese box office grew at an even-more-impressive 36% and overtook Japan as the world’s largest international market. As recently as 2008, the Chinese box office pulled in only $700 million.

Hollywood is taking notice of China’s astounding rise, as studios cast Chinese stars in major movies, fill up with Chinese product placement, and remove potentially offensive elements such as having a Chinese character play the villain. Beyond these examples, studios will increasingly consider the basic question of what will do well in China, as well as in other foreign markets.

The recently released “Transformers 4,” which included Chinese actors and was partly filmed at Chinese locations, was the first major American blockbuster to perform better in China than it did domestically, according to Box Office Mojo — potentially a watershed moment.

As pointed out by the FT, that movie reaches new extremes for Hollywood in terms of Chinese product placement and pro-China themes.

Hollywood has little leverage in China, however, as studios have been forced to accept less favourable business terms. As reported by The Wrap, studios receive around only 23% of ticket sales in China compared to around 50% in the U.S., and in some cases they have had trouble collecting earnings,

Here are the top 20 international box office markets:

The top five remained the same as in 2012, while Germany dropped from sixth to eighth and Brazil dropped from 10th to 11th, as South Korea, Russia, and Mexico moved up.

Here are the top 10 from 2012:

Screen Shot 2014 07 25 at 2.57.48 PM

The Asia Pacific region surpassed the box office region encompassing Europe, the Middle East, and Africa for the first time this year to become the top region in the world, bringing in even more money than the U.S./Canada box office.

Asia Pacific growth was fuelled largely by China, as it became the first international market to surpass $US3 billion in revenue. Latin American growth was mainly due to large increases in both the Mexican and Argentinian box offices, while the nation that led the Europe, Middle East, and Africa region in growth was Russia.

Here is how the international box offices compare by region:

Screen Shot 2014 07 25 at 2.06.49 PM

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.