China’s once booming box office has begun to collapse. Total revenue from movie ticket sales in the country so far this year is down 22% from last year. The results represent a dramatic drop from the strong post-COVID recovery that China’s film market achieved in 2023, when revenues rose 83% to end the year at $7.73 billion. This year has started strongly for the Chinese industry, with the box office during the Lunar New Year holiday week surpassing $1.1 billion, led by local blockbusters. Yolo ($479.6 million) and Pegasus 2 ($468.9 million). But a prolonged period of leverage extending through the summer has left Beijing’s film industry wringing its hands, wondering if a lasting market turnaround could be underway. Filmmakers and analysts suggest that a number of overlapping factors are behind the drop in revenue, but the truth is that no one fully knows what went wrong.

“I recently read a local research report that said the average age of the Chinese moviegoer has disappeared
from 22 to 26,” says Chinese author Jia Zhangke, whose latest feature Caught by the Tides premiered at the Cannes Film Festival in May. “Our young generations
except that I don’t go to the cinema anymore. We must ask ourselves: “What happened and where
have these people gone?’”

In the West, the film business has traditionally been viewed as recession-proof. Even in times of economic crisis, people need entertainment, and the cost of a movie ticket is a small enough discretionary item that most consumers can always afford it. There are worrying signs that such logic does not apply in China, according to insiders. For at least the past year, China’s economy has been mired in its most significant contraction in more than a decade as a cratering housing market and pessimistic consumer sentiment dampen growth. The decline has been particularly hard on young people. China’s National Bureau of Statistics stopped reporting data on youth unemployment in June 2023 after the rate hit a record high of 21.3 percent. The country began issuing a new, more favorable measure of unemployment earlier this year, but even after the measure, the unemployment rate among young people – aged 16 to 24 – climbed to more than 17% in July.

“There is a widespread feeling on social media about job insecurity, particularly among the ranks
new college graduates and the mid-career crowd,” says James Li, co-founder of Beijing Film.
market research firm Fanink. “As a result of all this, people are holding their wallets tight.”

Li continues: “In our recent qualitative research among China’s Generation Z population,
young people showed a clear tendency to aspire to stability in life, as seen in the record number of applicants for government jobs in 2024 (over 3 million). They don’t seem to be as ambitious
or adventurous like previous generations. Regarding movies, they report that they don’t like to take the risk of spending time and money to see a movie that doesn’t meet their expectations. In fact, many
cry that online movie marketing is getting more and more
misleading.”

Rance Pow, president of Asia box office consultancy Artisan Gateway, says his firm is expecting
China’s box-off decline will worsen before the end of the year. The company designs the box office
ending the year at $5.69 billion, down from $7.81 billion – a 27% decline for the year
and a 38% drop from the pre-pandemic peak of $9.2 billion in 2019. Pow adds that the popularity of video and mobile games – “the continued growth of short video platforms like Douyin, Bilibili, Xiaohongshu” – helped to diminishes the appeal of the cinema. The Paris Summer Olympics, hugely popular in China, also kept local audiences at home to watch TV during what is typically a peak movie window, according to Pow.

Overall, Hollywood seems to have completely abandoned its once optimistic stance toward China. And not without reason: in the first 11 months of this year, earnings for US films totaled $797.3 million – still a significant amount, but a 68% drop from sales of $2.5 billion in the same period in 2019. Throughout the pandemic, China’s film regulators have drastically reduced the number of US releases in the country (the number of US film imports recovered in 2023, but only 29 titles have been released so far this year Americans, compared to 35 in the same period last year). Worsening geopolitical relations between Washington and Beijing have also affected popular perceptions of US entertainment products.

The production values ​​of Chinese films, meanwhile, have risen to near parity with Hollywood, giving consumers the easy option of watching cinematic performances in their own language and culture instead of a foreign one. The only US blockbusters to perform strongly in China this year, not coincidentally, were creature movies – Godzilla x Kong: The New Empire ($132.2 million), Alien Romulus ($110.2 million) and Venom: The Last Dance ($72 million and counting) – one of the few genres the Beijing industry has yet to master, largely due to censorship constraints.

Overall, however, successful efforts by Beijing regulators to subtly suppress American film have added to the overall market downturn, hurting Chinese exhibitors in the process.

“If China opened up a little more to imported production, that would at least give more vitality and abundance to the supply,” explains Jia. “But this does not happen, unfortunately. China is a country with 80,000 screens – we need more titles from around the world to fill them. Chinese films need to improve through greater exchange with the outside world, and viewers deserve more choices.”