Hollywood has been spurned by American elites. Will the Chinese film market be good in the next two years?

In recent years, with the continued downturn in the global economy and the transformation and upgrading of China's economy and society, all walks of life are facing transformation and upgrading, which has led to increased downward pressure on the economy. However, it is also in this economic environment that Chinese films have developed rapidly under the influence of the "lipstick effect".

The so-called "lipstick effect" refers to a complex economic phenomenon that lipstick will become popular when there is growth pressure on the social economy. Its academic name is "low-priced product preference trend". Movies and lipstick are "cheap non-essential items" with the same function. When economic pressure increases, people's consumption level will decrease. Putting aside the luxury of buying a house, people will have more spare money and are willing to go to the cinema to spend money.

The Chinese film market has experienced a decade of rocket-like growth, and people have made a conservative prediction of 60 billion yuan in box office revenue in 2016. The Mermaid during the Spring Festival attracted more than 90 million people to the theater to "repay" their movie tickets owed to Stephen Chow, which made people believe that the Chinese film market will maintain an astonishing growth rate in 2016.

But 2016 showed a trend of starting high and ending low. In the first quarter, the domestic box office reached a peak of 14.466 billion yuan. However, since April, the growth rate of the box office has gradually slowed down, and there have been no breakthroughs during major holidays. At the end of the year, the restrictions on imported films had to be relaxed to "save the market."

Faced with such a situation, many people believe that Chinese films are facing multiple "collapses" at the capital level, content level, and spiritual level. Chinese films have unfortunately become financial derivatives before the industry is formed. In 2016, when "capital" smelled sensitive smells such as "stealing box office", "IP failure", and "bottom line failure", it was quickly withdrawing. Crowdfunding, private placement, funds, completion guarantee, bottom line distribution and other "myths" have been shattered one by one, and there are only a few hits; there is no hope for the content to break the issue price, and the audience left in disappointment.

While the box office revenue increased by only 3.73% year-on-year to 45.7 billion yuan, the number of newly added cinemas in China in 2016 reached 1,612, with a high expectation of "60 billion yuan", and the number of newly added screens reached 9,552. The total number of screens surpassed North America before the box office, reaching the "world's first" of 41,179. This data contrast has become an important argument for those who proposed the "collapse theory".

Of course, many people still believe that this is a turning point for Chinese films. Although the "60 billion yuan small goal" was not achieved in 2016, Chinese films still play an important role in the booming cultural industry. Chinese films are turning from the past "improving quantity and maintaining quality" to the future "improving quality and maintaining quantity". But in any case, the tepid 2016 is definitely a turning point for the Chinese film market.

1. China's film market in the past decade: from nothing to excellence

Let’s first look at a set of numbers. In 2000, China’s movie box office was only 860 million.

In 2007, 3.3 billion.

In 2008, 4.3 billion.

In 2009, 6.2 billion.

In 2010, 10.1 billion.

In 2011, 13.1 billion.

In 2012, 17 billion.

In 2013, 21.8 billion.

In 2014, 29.6 billion.

In 2015, 44 billion.

Since 2000, the Chinese film market has relied on the huge demographic dividend and national policy support to maintain an annual box office growth rate of more than 40%. Chinese films have not only been reborn from the endangered state, but have also become the world's second largest film market with the fastest growth, attracting global attention. In 2015, it showed a trend of accelerated development, demonstrating a rare "Chinese miracle" in the history of Chinese and foreign films.

From this perspective, it doesn't seem difficult to surpass North America in box office with some effort.

Learn from foreign countries and copy Hollywood

In recent years, the rapid development of Chinese films actually has many similarities with the development of Hollywood films in the 1920s and 1930s.

At the beginning of the century, the American film market emerged and many film companies chose Los Angeles, which has excellent climate and natural environment, as their location. A group of ambitious young, middle-aged and elderly people gathered in Hollywood and their name became known.

As a group of ambitious young, middle-aged and elderly people entered Hollywood, the American film industry burst into dazzling light, major financial groups were optimistic about the film industry and invested in the film industry, film production became more standardized and commercialized, and the far-reaching studio system was established. The capital influx into the Chinese film market in recent years is almost the same as that in Hollywood in the early 1920s.

After a large amount of capital poured into Hollywood, the star system gradually took shape, emphasizing actors to attract more audiences. Stars such as Shirley Temple were all the rage. The same is true for Chinese films now. Many production companies even focus on stars in production and publicity, making stars the brand of a film or a series of films, attracting loyal fans to spend money and guaranteeing box office success. This has become the most important means for companies to implement product differentiation strategies and compete with other competitors.

In addition, Chinese films, like Hollywood, have taken the opportunity of economic setbacks and impending transformation to enter the fast lane under the lipstick effect and attract consumers into theaters.

The difference is that Hollywood has not expanded substantially for many years, while the Chinese film market is catching up with North America at a rocket speed, and even riding the giant bear of capital, copying the Hollywood model and starting to enter the international market. It is no wonder that Hollywood keeps adding Chinese elements to its movies and is trying its best to squeeze into the Chinese market.

The rapidly expanding market is accelerating the maturation of China's film industry

Looking back at 2016, China's annual total box office was second only to North America, and the total number of screens also ranked first in the world. Behind the "steady development" of the Chinese film market, the progress of the film industry itself is also very obvious.

In the past, due to the lack of a relevant industrial chain, the influence of domestic films in the international film market was close to zero, and the technical means were decades behind the international level. However, with the rapid expansion of the market, the international influence of Chinese films has begun to increase.

The expectation of better profit prospects has also made producers willing to invest more in special effects technology. In recent years, domestic blockbusters have significantly improved their visual expression. Although they can only hire Hollywood special effects teams at present, I believe that in the face of huge markets and high profits, it is not far away for the domestic visual effects industry to mature.

In-depth cooperation with the international community is also shortening the growth period of China's film industry. From numerous Sino-US co-productions to Wang Jianlin, the father-in-law of the nation, and Jack Ma, the father of the nation, going to Hollywood to "buy, buy, buy", they have already acquired Legendary Pictures, AMC, and the cinema chain Carmike Cinemas.

The door to the international market will soon open to domestic films.

2. The turbulent year of 2016: I guessed the beginning but not the end

In 2015, the box office of domestic films such as "Monster Hunt", "Lost in Hong Kong" and "The Pancake Man" all exceeded the 1 billion mark, with the total box office reaching 44 billion. The year-on-year box office increase of 49% also set the highest increase in the past decade.

The Chinese film market has become a gold mine for the world and the absolute darling of the capital market. Statistics show that in 2015, there were 125 merger and acquisition investment cases in the film and entertainment industry, with a total amount of 92.7 billion yuan, making it one of the most active areas of investment and mergers in the domestic capital market. Film investment is regarded as the simplest and most reliable business in the industry.

Industry insiders believed that 2016 would be another bumper year. In the first 50 days of the year, the box office revenue reached 10 billion, equaling the total box office revenue of China in 2010. However, no one expected that such a good start would lead to a disastrous ending.

Looking back at the Chinese film market in 2016, there is a clear dividing line, with the first half and the second half being hot and cold, half hot and cold, half hot and cold. Let's start from the beginning. At the beginning of 2016, the good days were still far from over. At the beginning of the year, "The Mermaid" created a box office miracle of 3.39 billion yuan, becoming the single-film box office champion of Chinese films in the past five years. In the first quarter, the domestic box office reached a peak of 14.466 billion yuan.

Then, without warning, the fire was put out by the seawater. From the second quarter, the movie box office began to slump. The second quarter box office revenue totaled 10.1 billion yuan, a 4.6% decline compared with the same period last year, marking the first decline in box office in a single quarter in five years.

By the third quarter, the situation had not changed. The box office during the summer, Mid-Autumn Festival, and National Day holidays was dismal. Although blockbusters such as Feng Xiaogang's "I Am Not Madame Bovary", Ang Lee's "Billy Lynn's Long Halftime Walk", and Zhang Yimou's "The Great Wall" were released at the end of the year, the famous directors were defeated.

On the other hand, the imported film market in 2016 still performed outstandingly compared to domestic films. "Zootopia", "Doctor Strange" and "Your Name" performed well, injecting vitality into the Chinese film box office and preventing the embarrassing situation of the box office going backwards in 2016.

However, it is worth noting that the number of imported films this year has surged from 63 last year to 90. The phenomenon of "watering down" imported films to maintain box office growth is also a temporary solution to a long-term problem. In the end, the 2016 annual box office stopped at 45.5 billion, far from the 60 billion forecast at the beginning of the year. The "industry insiders" who made such a confident statement at the beginning of the year were slapped in the face.

The unexpected weakness of Chinese films in 2016 is not surprising. The abnormal development of the Chinese film industry has long been condemned by people inside and outside the industry.

Unbalanced salary distribution leads to abnormal development of the film industry

Although we mentioned earlier in the article that the Chinese film industry is experiencing an unprecedented growth rate, the fact is that the Chinese film industry is still in a shaky stage.

The reason why it does exist is that China's film market has already ranked second in the world, rivaling the scale of North America; the reason why it does not exist is that it has basically nothing to do with marketization and basically does not have a complete industrial chain. Most types of films are even completely unable to be produced. There is no mature industrial model, let alone brand and consumer recognition.

The biggest manifestation of the deformity of the Chinese film industry is the extremely unbalanced distribution of benefits in the industry.

Although Hollywood has always advocated the "star system" and has no shame in relying on big names with good looks and superb acting skills to make money, China has taken the fan economy to a shocking level.

By hiring specific actors to star in the film, the corresponding audience group is captured in disguise, and the box office returns are guaranteed. The pay of domestic stars has also risen accordingly. How high is it? It is so high that CCTV can't stand it and specially produced a special program to criticize the high-paid stars.

Of course, it is not just CCTV that is dissatisfied, but also the film producers. The sky-high salaries of stars have emptied the pockets of film production companies, so they can only be frugal in other areas. When many movies are criticized as bad movies, the directors are probably crying silently in their hearts, because more than half of the funds have been taken away by the actors, so how can the movies not be shoddy?

Of course, there are also many directors who have their own unique tricks. For example, the producer John Woo and the director Liang Bojian of the film "Young Waves" which was criticized by Huang Xiaoming two years ago only paid a guest salary, but gave Huang Xiaoming the starring position on the poster, which can be regarded as a clever strategy of not wanting to sacrifice the child but also catching the wolf.

However, not every director wants to offend the actors, so most directors have to carefully calculate how to support the film with their little surplus. The methods are nothing more than two points - 1. Increase revenue, 2. Reduce expenditure.

Opening up is simple, it is nothing more than pleasing the capital. Cutting costs is more disgusting, causing the loss of talent in the film industry. Based on Hollywood salaries, star salaries basically account for 10%-20% of the film production cost, while in China it is more than 50%; Hollywood screenwriters' salaries account for about 1%, while in China it can be directly ignored.

Why is this a serious problem? Because Hollywood has always said that "the competition for movies is essentially a competition for scripts", and the treatment of god-level screenwriters is no less than that of first-line movie stars. In contrast, in the Chinese film industry, because the price of scripts continues to fall, there are no senior screenwriters willing to take over movie scripts. Most of the good screenwriters in China are active in the more mature TV drama industry.

Speaking of good movie scripts, we have to mention Happy Twist, which has been thriving in the film industry in the past two years, and whose market value has just exceeded 5 billion. Although it has not produced many works since it crossed over to the film industry, "Charlotte's Troubles" and "Mr. Donkey" are both excellent scripts and examples of small wins and big gains.

The high-paid screenwriter team hired by Happy Twist deserves credit for this. Zhang Chiyu, a contracted screenwriter of Happy Twist, once revealed in a question on Zhihu about "earning over a million yuan a year" that he had reached this level a few years after joining Happy Twist and "had just signed a contract of over 2 million yuan." However, Shen Teng, the core figure of Happy Twist, has now received a salary of 20 million yuan, which has exceeded the total production cost of "Charlotte's Troubles" in which he starred. Happy Twist chose to give the money to the screenwriter and no longer use Shen Teng.

Capital intrusion leads to frequent chaos in the film market

Data shows that in 2016, more than 80% of Chinese movie tickets were issued through online ticket purchase systems. Anyone who has experience in online ticket purchases knows that the basic price of movie tickets purchased online is between 20-30 yuan, and there are even a large number of 19.9, 9.9, and 1 yuan tickets. Even during prime time, there are few full-price tickets. The difference in price is also included in the box office. In other words, the original 60 yuan ticket price is reduced to 30 yuan after the discount, and the ticket price will still be calculated as 60 yuan when the box office statistics are calculated. So who paid for this money? E-commerce, or in other words, the capital behind e-commerce.

If you ask me who is the fastest runner in the world, I don't think it's Bolt, nor the Hong Kong journalists, but the capital that smelled the stench of money. When the Chinese film market started to pick up, capital quietly entered. Capital provided fertilizer for this soil, and of course it was the first to roll up its sleeves and reap the fruits of victory.

The credit for assisting the development of the film market is indeed not small, but capital has a natural attribute, which is to make good things taste bad. In the film industry, it has also fully played the role of a troublemaker and successfully caused many things.

Among them, "ghost theaters" may be the most well-known. The so-called "ghost theaters" refer to the fact that although the showtimes have been scheduled, the tickets have been issued, and the money has been paid into the special fund office of the Film Bureau, there are no real people watching the movies. The empty cinemas seem to be showing movies to "ghosts". The reason behind the emergence of "ghost theaters" is nothing more than fame and fortune. After "Monster Hunt" broke the 1.2 billion domestic film box office record held by "Lost in Thailand" for many years, it was about to break the 2.4 billion domestic theater box office record created by "Fast and Furious 7". At this time, the ghost theater method was used, and it finally achieved its goal.

For money, for example, in the same period or even on the same day, there are multiple films with similar size, influence, and popularity that are very competitive. At this time, some means are used to increase the pomp, one is to squeeze the screenings of competitors, and the other is to get a high box office that overwhelms the competitors in a short period of time to increase publicity gimmicks. It is also for money. Because "Ip Man 3" is shrouded by huge financial capital, "Ip Man 3" has an investment of 100 million and a box office of 1 billion to make money, because the money for making movies is fooled by promising investors high returns. If the box office is not ideal, the capital chain will be broken, and the big guys behind the scenes will teach you a lesson in minutes. I just want to ask if you are afraid.

Of course, there are also those who use this to launder money. The most important thing about money laundering is speed. Invest in a bad movie and use the ghost theater method to convert the money into box office and then into money. In the middle, you only have to pay 5 points of special funds and 3.5 points of tax. This is equivalent to transferring money from the left hand to the right hand. The key point is low cost and fast speed.

The box office revenue generated by ghost theaters is not "fake box office" but is bought with real money. Since the final revenue from ticket subsidies and ghost theaters is real, why did the Chinese film market lack stamina in 2016?

First of all, capital is money. E-commerce is competing for users and cultivating the market. In 2016, the market has basically stabilized, so e-commerce will reduce investment, and of course the ticket price will increase, which will cause consumers to be unwilling to buy. People are greedy for small gains. If you don’t have ticket subsidies, I won’t go to the cinema. Because of the ghost theater incident, the Film Bureau has invited film producers and ticket e-commerce people to have tea.

However, the strict management of fake box office by the National Film Market Special Governance Office in the later period also made ghost theaters dare not continue to be rampant. However, it also caused the overall downturn of the Chinese film market in the later period of 2016.

At this time, another important force in the film market came on the scene. Film companies that were not confident in the potential of their works began to pay more attention to hiring water armies to create more favorable public opinion; some people were "forced" to use water armies to blacken their opponents due to competitive pressure. Water armies seriously affected the healthy development of the film market, and many innocent consumers were deceived by water armies. The Douban scores of the 2017 Lunar New Year films collectively fell apart. In addition to the problems of the films themselves, a large part of the reason was the result of malicious slander by water armies. After all, the price of "black" water armies is only one-tenth of that of "blowing" water armies, so it is less painful to blacken them.

The Internet has begun to eat into the film market, and even Hollywood cannot stop the tide

Although we keep saying that we want to punch Hollywood and kick North America, and even want to "learn from the barbarians to defeat the barbarians" and "penetrate the enemy's interior" from Hollywood, the fact is that Hollywood is now a hopeless case in the eyes of American elites.

This may seem alarmist, as Hollywood is still the world's most efficient cultural export group, and people working in Hollywood still see themselves as the most indispensable talents in the United States. However, the overall downward trend of Hollywood over the past decade is worth noting.

DreamWorks was sold to Comcast for $3.8 billion last year (Gao Xiaosong also revealed that DreamWorks had contacted Chinese capital to seek a takeover), and Paramount's recent valuation is around $10 billion, which is almost the same as the price Viacom paid when it acquired it more than 20 years ago. From 2007 to 2011, the total profits of the five major film companies in the United States (20th Century Fox, Warner Bros., Paramount Universal Pictures and Disney) fell by 40%; and currently, the profits from movies account for less than 10% of the total profits of these companies or their parent companies.

One of the reasons for this is the powerful number of trade unions (if you are interested, you can check how Detroit went bankrupt), but this has little to do with China. Only evil capitalism has this social cancer of protecting workers' rights. Our harmonious society does not have this concern.

But the impact of the Internet on the traditional film industry cannot be underestimated. For details, please refer to the blood and tears history of traditional music and print media, which is really full of blood and tears. The emergence of television did not shake the status of movies, but the Internet is not a rival of the same level.

Whenever there is a confrontation between industries, the winner is always the consumer. After all, the consumer is God.

Therefore, the outcome of the battle between Hollywood and the Internet is obvious. Watching a movie takes up a lot of consumers' time, in fact much longer than the movie time, including the journey, buying tickets (online ticket purchase in the United States is still in its infancy), waiting to enter the theater, etc., and usually you have to eat and go shopping. In contrast, sitting at home, opening a video website, paying for a movie, and choosing a comfortable time and posture to start the movie, everything is so comfortable.

Although cinemas still offer better audio-visual experiences and faster movie releases, this gap is gradually being made up by Internet technology and industry operations.

Therefore, Hollywood's enemy is not someone else, but Silicon Valley, which is located 400 miles away in San Francisco. HBO, Netflix, and Amazon cannot obtain Hollywood's franchise broadcasting rights, which has stimulated their creative potential. In the past two years, they have produced many excellent works, which seems to have the intention of overthrowing Hollywood.

This problem also exists for China's TV box office, and it is even more serious due to the wild growth of China's Internet. A large number of consumers choose to watch movies at home through smart TVs or TV boxes.

No matter from which angle, 2016 is an important year for Chinese films, and it can be called a turning point for the Chinese film industry. This year, we had great expectations, but in return, we got nothing. It is precisely because of this that the voices that the Chinese film market will collapse in the next two years have become so rampant.

3. Will the Chinese film market “collapse completely” in 2017?

Any industry will go through a transition period from boom to bubble to depression. The growth rate of China's TV box office has slowed down, but domestic cinema chains are still under construction. The profits generated by a single screen are also being continuously diluted, and the survival environment of cinemas has deteriorated significantly.

At the same time, the Memorandum of Understanding between China and the United States on resolving WTO film-related issues (hereinafter referred to as the "Memorandum") signed in Los Angeles in 2012 will expire in 2017. The "Memorandum" significantly increased the quota and revenue sharing ratio of Chinese imported films over the past five years, and this year, when it was agreed in advance to renegotiate the contract, the format has changed again.

The Wall Street Journal recently wrote that Hollywood, due to declining profits, wants to ask China to relax restrictions on quotas, revenue sharing ratios and film promotion in the new agreement. This has also become the starting point for the argument that the Chinese film industry is about to die. After all, facing the mature film industry in Hollywood, the Chinese film industry is indeed powerless.

The impact of imported films is not a big deal, and the policy tilt paves the way for domestic films

Many people in the film industry are talking about 2017, speculating whether the further opening-up policy in 2017 will destroy the Chinese film industry. Some pessimists even predict that "the last three good years for Chinese films" will be over. This is just like when China and the United States signed the Memorandum of Understanding in 2012, many Chinese filmmakers shouted "wolf".

Just like Facebook, Youtube and Twitter, which are blocked by GFW, if they were to enter China, they would certainly have a huge impact on Weibo and Youku. But on the other hand, an open, fair, transparent and free market will definitely have a positive impact on the Chinese film industry.

The Korean film industry is in a similar situation to the Chinese film industry.

Korean films, which have produced many excellent works in recent years, have actually gone through a long process of development. They only began to revitalize around the 1970s. Prior to that, they had been in a state of decline for a long time due to low production, single plots, insufficient innovation and lack of investment. In the initial stage of the development of the Korean film industry, the government proposed a "film quota system" and legislated to clearly stipulate that Korean cinemas can play Korean films 146 days a year, accounting for 40% of the number of days for film screenings throughout the year, indicating that the government has a clear policy bias towards the Korean local film industry. It is these policy protection measures that have enabled the Korean national film industry to obtain valuable development opportunities and avoid the fierce competition between Korean films and foreign film companies after the country joined the World Trade Organization.

Looking back at the current protection of the domestic film market by China's radio and television, it is similar in nature. Imported films will have a strong impact on domestic films, and the increase in imported films will definitely cause domestic films to enter a short period of downturn. Because whether it is in scripts, special effects, or technology, Chinese films still have a significant gap with imported films. In 2017, imported blockbusters are still strong, "Transformers 5", "Guardians of the Galaxy 2", "Pirates of the Caribbean 5", etc., all have great box office appeal.

The opening of policies will become a catalyst for promoting the domestic film market and will accelerate the process of domestic film industrialization. These policies can indeed give the domestic film industry valuable time to develop and avoid being involved in the fierce competition between international mature markets and foreign film companies, but blindly defending is ultimately useless. This also puts forward requirements for Chinese filmmakers to lead the overall quality of domestic films to a higher level, and to complete it within the time given to us by the policies, which is not easy.

And there is a very basic requirement to achieve this goal, which is to produce films that are popular with the audience.

The audience's likes and dislikes are the lighthouses standing on the shore, and the creative output is the ships drifting on the sea.

No matter how the market changes, as the core factor affecting box office revenue, the audience's choice of various films directly determines the direction of box office and word of mouth.

In the days when the threshold for film reviews was not relaxed, except for a few people who paid attention to some rare film journals, most people basically chose which movies to watch in a herd manner. For movie watching, whether it is out of emotional impulse or emotional resonance, although it is a mass entertainment under subjective choice, the affirmation of group opinions can undoubtedly clarify individual choices, thus promoting the box office growth trend of a film.

However, there is a contradiction between the growing aesthetic demands of Chinese moviegoers and the low productivity of Chinese films. Most people’s mentality of watching movies is that as long as there are stars, directors or themes that they like, it is always worth watching.

The audience will always mature earlier than the creators, and it depends on whether the creators can keep up in time. The audience will never be able to say what kind of movie they need to watch. Only when what you create resonates with the audience, exceeds the audience's cognition, conveys the connotation of the work in a purposeful way and brings surprises, the audience will say that this is what I need. All movies have the problem of being difficult to satisfy everyone. The best is not what everyone likes, and what everyone likes may not necessarily fit personal tastes. However, all good movies must have been tested and recognized in word-of-mouth reviews and box office returns. No matter how the projection technology is innovated, customized services are provided, and the viewing experience is improved, it will ultimately guide movie consumption. Only popular masterpieces and classics can make the audience flock back to the theater.

Laymen watch the excitement, experts like it, word of mouth drives the box office and it will become the norm in the future

In the past two years, there is an increasingly obvious trend that the box office of movies with bad reputations has fallen quickly, while the box office of movies with good reputations has also increased rapidly, such as "Mr. Six", "Zootopia", and "Operation Mekong". So, can word of mouth really determine the box office now? The box office volume of a movie is fixed according to the subject matter, the main creators, marketing, etc. Even though "Journey to the West: Conquering the Demons" has a bad reputation, it has a box office volume of several hundred million. For example, "A Chinese Odyssey" has a good reputation and caused a lot of noise, but in the end it only had a volume of 80 million.

The impact of word-of-mouth on the box office is also reflected in the differences in the tastes of mainstream audiences in various cities. Since about 2015, we have found that words such as "small town youth" and "post-90s" are used in some market summary articles. Some practitioners use these keywords to refer to specific consumer levels and then describe the changes in the film market. As the market grows, the demand for segmentation will become increasingly clear. The so-called "small town youth" audience group in third-, fourth- and fifth-tier cities used to be the main consumer of blockbuster movies with serious convergence, but now they are gradually unable to satisfy this. Therefore, some low-cost works that are widely favored by audiences in first- and second-tier cities are gradually accepted by audiences in other cities through word-of-mouth communication.

Similarly, differences in people’s motivations for watching movies also indirectly cause uncertainty in box office results to a certain extent, such as consumption driven by the fan economy, follow-up consumption by families, and specific consumption by fan groups, etc. The holiday season, which has always been the most important money-making period of the year, is a powerful potential for driving box office sales to soar.

The box office of the 2016 Spring Festival was 3.6 billion yuan, accounting for 7.88% of the total box office of 2016. This year, the "ticket subsidy" during the Spring Festival has made a comeback. Several popular films have achieved extremely high pre-sale box office without any advance previews and completely unknown reputations. Especially on the first day, the national box office exceeded 800 million yuan, but it fell to 580 million yuan on the second day, a single-day drop of 27.5%, much higher than the 19% drop in the same period last year. The box office of "Journey to the West: Conquering the Demons" and "Journey to the West: The Demons Strike Back" which have the worst reputations fell by 32% and 37% on the second day respectively. Objectively speaking, the overall quality of "Journey to the West: The Demons Strike Back" is good, but it is not suitable to compete with "Kung Fu Yoga" which has no special advantages in terms of quality during the Spring Festival, precisely because the audience needs to recognize the theme of family fun at this time.

When audiences are faced with an overwhelming amount of new movies on the market, they begin to use word of mouth to make more sober choices. This sobriety from the consumer end has intensified competition in the entire market, driven up various costs, and optimized content output.

China's film industry is immature and slow growth will become the new normal

Although the film market did not achieve the 60 billion yuan target in 2016, which is a bit disappointing, it still takes a process to go from the wild growth of pursuing speed to the rational growth of "intensive cultivation". From several key data, 2016 is still a gratifying year. From the crazy growth to the sudden brake, it indicates that the market has entered a turning point. Even so, the number of domestic moviegoers has reached 1.38 billion, surpassing North America for the first time, and the number of moviegoers has not decreased, which shows that moviegoers are still there, and there is still hope to improve the quality and boost the film market with the help of the demographic dividend.

Since we surpassed Japan to become the world's second largest box office in 2012, Chinese films have been "sitting second and looking to become first". Perhaps every Chinese filmmaker has a "super-American" dream in his heart. However, it is still a fantasy to surpass North America in the short term because the domestic film market started late. Before this century, it was dominated by the government. In recent years, the marketization of mainland films has accelerated, and the economic benefits are significant, but it still only faces the mainland market, and the annual film export output value is almost negligible. In addition, the development of the domestic film industry is overly dependent on box office, which highlights the impact of the slowdown in box office growth on the market.

my country's box office revenue accounts for more than 80% of the film industry's revenue. In mature film markets, this figure is only 30%, and the revenue from optical disc rental and sales and peripheral derivative markets accounts for a larger proportion. Judging from the performance of the film market during this year's Spring Festival, the traffic of theaters in third-, fourth- and fifth-tier cities cannot be underestimated, and derivative markets including pre-screening advertisements and film peripherals have room for development. Therefore, the domestic market has not yet reached the level of film industrialization, let alone a complete market industry chain, let alone surpassing the North American market.

The Chinese film market has been growing wildly in the past three years. Capital that has held the film and television industry hostage for many years has entered the industry in various ways, bringing bubbles to the industry and spawning a large number of bad films. However, from the fact that the Douban scores of this year's Lunar New Year films all fell, it can be seen that the audience's demand for watching movies has changed greatly. From the National Day film "Operation Mekong", it can be seen that although it is a mainstream film, the removal of the stereotyped setting not only won a good reputation, but also broke the 1 billion box office, easily beating the films of the same period. The audience has gradually become rational and no longer pays for visual effects and all-star lineups.

As for the established goal of pursuing Hollywood, Chinese filmmakers don't need to be too persistent. Today's Hollywood is like a group of bloated trapped beasts, rushing around to find a way out and release internal pressure. Under the constraints of the union and the lifeless script model, Hollywood has a tendency to be eaten up by Silicon Valley video companies.

Guan Yadi, a famous producer and film critic, once said, "In theory, China's box office should be at least three times that of the United States, which means at least 30 billion US dollars. As for the value of the entire industry, it is difficult to estimate. Overall, it will only be larger than that of the United States, not smaller. It just takes much longer to achieve than the box office."

Regarding the slowdown in the growth of movie box office this year, Wang Jianlin, chairman of Wanda Group, also publicly stated: "The Chinese film market seems to have declined significantly, but in fact this year is the real Chinese film market. The previous few years were just illusions. As long as the box office fraud is removed, the bubble will be exposed."

Indeed, the Chinese film industry has experienced a golden decade, during which we have experienced the "Speed ​​Race" that shocked the world. However, this rapid development is doomed to be unsustainable. Like the Chinese economy, the Chinese film market has entered a new normal of slow growth. Without the demographic dividend, if Chinese films want to achieve leapfrog development again, they can only hope that Chinese filmmakers will awaken and the Chinese film industry will take shape.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.