China and India Expand Film and TV Production Activity

The growth of the middle class in India and China particularly was fueling the construction of new cinemas. In 2019, China’s box office reached $9.2 billion, up from 2018’s $8.61 billion and 2017’s $8.06 billion (if calculated at the same rate of currency exchange), according to the Hollywood Reporter.

In the past, U.S.-produced films have accounted for much of China’s box office. China’s sales of tickets to films produced in Hollywood fell about 10% in 2018 over 2017. Without the Chinese market, U.S. movie studios would have faced financial challenges. While many of 2018 highest-grossing films in China were American productions, seven of the top 10 were filmed and distributed by Chinese companies. The trend continued in 2019, when eight of the top 10-grossing films were produced domestically. Of the total box office for the year, 64.1% was generated by domestic films and 35.9% came from imported movies, according to Maoyan Entertainment.

Domestic audiences are on the rise along with the middle classes in both China and India. At the end of 2019, China had 66,028 movie screens, up from 2018’s 59,009 and 2017’s 50,776. Although new theaters continue to open, the growth rate has slowed.

The government limits the number of foreign films allowed to be shown each year, but with Chinese investors involved, some projects with international casts, crews and shooting locales can be exhibited as domestic films.

Studios whose movies play in China collect about 25% of the box-office proceeds, after costs, up from the previous 13.5% to 17.5%. Chinese distributors keep the rest of the proceeds. (In the U.S., box proceeds are split roughly evenly between exhibitors and studios.)

Hollywood studios want to make production deals with Chinese partners. China Media Capital, a private equity firm, has signed agreements with Warner Brothers, DreamWorks Animation and IMAX, while Shanghai Media Group has a deal with Walt Disney among others.

Chinese television production is also growing. However, government censors are known to stop programs abruptly if they do not approve of the message. A small number of nationally broadcast provincial channels are emerging. Popular shows have included western-style reality series and game shows in addition to programs devoted to the arts. However, the government has prohibited many types of highly popular shows from continuing, or has significantly censored what can be said or acted out on shows that are allowed to go on. All Chinese television is subject to rigorous government standards for morality.

In recent years, a growing number of films have been produced annually in India. Major film studios include Zee, UTV, Suresh Productions, Reliance MediaWorks and Sun Pictures. One of the best known genres of Indian cinema is Bollywood, the term used for the Hindi-language film industry based in Mumbai. Bollywood musicals have become famous the world over.

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