Schlocky Hollywood blockbusters shouldn't count on Chinese audiences to bail them out

Left to right: Optimus Prime and Bumblebee are two of the computer-generated machines in "Transformers: The Last Knight."


By ADAM MINTER | Bloomberg | Published: July 4, 2017

It certainly looked like a bomb. “Transformers: The Last Knight,” which cost Paramount Pictures over $350 million to make and market, earned a lame $69 million during its first five days in U.S. theaters in mid-June. Paramount executives could overlook that performance because in China, where the “Transformers” series has enjoyed a decade of wild popularity, the film earned over $123 million during the same period. But the time when Hollywood filmmakers could count on Chinese viewers to rescue them from disaster might be rapidly coming to an end.

The world’s second-biggest movie market (and soon to be its biggest), China has bailed out Hollywood’s box-office bombs for years. The list of examples is long, led by the first four “Transformers” films, all of which have been massive hits in China despite generally poor reviews elsewhere.

It’s easy to see why, too. To this day, Chinese films can’t match the technical and artistic standards found in Hollywood productions, even the clunkers (a state of affairs acknowledged by China’s best filmmakers). Government censorship worsens the problem.

In 2007, the first “Transformers” film was China’s top-grossing movie. (In the U.S., it was number three.) That was quite an accomplishment: Chinese authorities limit foreign theatrical releases to very limited runs, ideally at times they won’t compete against strong Chinese films. Pirated DVDs reached many more Chinese who couldn’t see the movie in theaters, and its 2009 sequel doubled the first film’s gross, becoming China’s second-biggest film of the year (just behind “2012,” another Hollywood shlockfest).

Since then, the audience for the “Transformers” series has grown roughly at the same rate as China’s box office, giving executives at Paramount and other studios good reason to believe that Chinese audiences had an inexhaustible appetite for nonsensical, humorless storylines about battling alien robots. Indeed, earlier this year, even the abysmal “xXx: The Return of Xander Cage” earned 47 percent of its $346 million gross in China (the U.S. contributed a mere 13 percent).

Two years ago, after a string of U.S. flops did particularly well in China, articles complained that the country had become a Hollywood “dumping ground.” China’s otherwise patriotic social media users largely dismissed the criticism, noting that “bad Chinese films are worse.”

The opening for “Transformers: The Last Knight” would seem to confirm the pattern. But the numbers tell a different story. Although the movie’s China gross is expected to hit $250 million, that would be 17 percent less than its 2014 predecessor — at a time when China’s box office has grown 80 percent.

That’s a warning that China’s tastes are changing for the better, and Hollywood isn’t ready. In addition to “Transformers,” the pirated DVD boom of the 1990s and 2000s introduced Chinese audiences to a broad range of Hollywood and other fare otherwise blocked in China. More recently, smartphones and streaming video apps have brought an even more diverse set of entertainment options to Chinese audiences.

As a result, Chinese are becoming more discerning about what they pay to see, and are no longer as easily seduced by Hollywood spectacle. Last summer, Chinese box office receipts declined for the first time in five years (box office fraud may have also played a role).

The biggest Chinese box office surprise of 2017 wasn’t a sci-fi adventure, but “Dangal,” a critically acclaimed Indian family drama in which two young women push back against traditional gender roles. The theme resonated strongly in still-conservative China (even the country’s traditionally minded President Xi Jinping praised the film), and so far it’s earned over $190 million — making it China’s fourth-biggest film of the year so far. And, unlike “The Last Knight,” which has experienced precipitously falling receipts since its release, the weekly take for “Dangal” actually increased over much of its run.

If, as expected, China expands the quota for foreign films, big Hollywood productions will face competition from smaller and more sophisticated U.S. dramas, too. And it’s not just U.S. and Indian movies that’ll tempt viewers. Chinese films continue to improve, with locally produced fare now successfully competing against Hollywood’s best (and worst). Last year, “The Mermaid,” a Hong Kong-Chinese romantic comedy, earned the biggest box office in Chinese history, while other local comedies are regularly outselling the Hollywood competition.

That hardly means that Hollywood doesn’t have a future in China. Diverse, character-oriented action films like the “Fast and the Furious” series continue to do well on the mainland, and special effects blockbusters — especially good ones — will always be popular anywhere in the world. But the days of Hollywood being able to assume that its worst efforts will see their best returns in China are numbered.

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