Hollywood Movies in China: Which are Shown in Theaters and How Large is Their Audience?

Apr 16 2015
  • Analysis in progress.
  • Co-authored with Jason Ho and Charles Weinberg.

Abstract

China is the world’s second largest theatrical movie market, yet only about 10% of all movies released by Hollywood studios each year are shown in China due to government restrictions. Using a specially constructed extensive data base of movies having a theatrical release in China over recent years, supplemented by a broader data base of movies released elsewhere, we develop and estimate a model to help understand the characteristics of movies that are likely to be approved by the Chinese government for theatrical release in China. Understanding the approval process is particularly challenging, as the objective function concerning acceptance of movies for theatrical release in China has not been fully revealed. Moreover, movie contracts can either be on a revenue sharing (the current quota is 34 movies each year) or on a flat-fee basis (no pre-set quota). For example, “Thor: The Dark World” was shown under a revenue sharing contract and “Despicable Me 2” was shown under a flat fee contract, although both had similar levels of theatrical revenues (approximately US$50 million) in China. Once accepted for showing in China, a movie’s release date can be close to that of the US release or much delayed. Recognizing that only a limited number of Hollywood movies are shown in China and that release dates vary, we then investigate movie and other characteristics that are associated with box office performance in China.

Keywords: Movie Market, Boxoffice Performance

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