Coronavirus could dent China box office for U.S. films
The effects of the deadly coronavirus are hitting China's box office hard as shuttered theaters force studios to delay and even cancel Chinese movie premieres that were scheduled over the all-important Lunar New Year holiday season.
The lockdown of millions of people in Wuhan, the region in which the epidemic is believed to have originated, and the darkening of cinema screens across the nation — the second largest movie market behind the United States — could also depress local ticket sales to American-made films slated for release in China in the coming weeks and months.
Those films whose theatrical plans for China have been indefinitely postponed include Oscar nominees "JoJo Rabbit," "Little Women" and "1917," all contenders for best picture on February 9, according to The Hollywood Reporter. Family-friendly "Dolittle," with Robert Downey Jr., also faces an uncertain fate in China.
No U.S. film could feel the squeeze more than Disney's live action-remake of "Mulan," with a March 27 release date in the U.S. It was also expected to make its China debut around the same time, before the coronavirus disrupted China's entertainment industry.
China brought in roughly $9 billion in movie ticket sales last year, or about 21% of the global box office's $42.5 billion haul in 2019. Industry analysts are using box office results from Disney's "The Lion King," released in China a week before it hit theaters stateside last July, to forecast the epidemic's potential effect on the new "Mulan."
The Chinese box office made up 11% of "The Lion King"'s international ticket sales and 7% of global ticket sales, J.P. Morgan analysts said in a research note. China was expected to contribute an even larger share of an estimated $700 million in international receipts and $1 billion in global receipts, given that "Mulan" is based on Chinese folklore and set in north China.
"We expect China to have an even higher contribution due to the nature of the film," J.P. Morgan said in its note.
If the release of "Mulan" in China is delayed over coronavirus fears, roughly $85,000,000 in international ticket sales could be on hold.
Straight to streaming
In China, some film studios are skipping theatrical premieres altogether, instead releasing what were expected to be blockbusters via video streaming services.
Chinese production company Huanxi Media debuted its film "Lost in Russia" for free on Beijing's Bytedance online platform after the Chinese government forced cinemas to close across the country. Bytedance agreed to pay Huanxi about $90 million for the streaming rights, according to Reuters.
Local theaters protested the decision, accusing the studio of "trampling" China's film industry, according to the report. China iQiyi, the makers of Hong Kong martial arts parody film "Enter the Fat Dragon," also sent their film straight to streaming.
Bad timing
The public health crisis couldn't have come at a worse time for China's movie business. In 2019, the seven day-long Lunar New Year period accounted for $721 million — or an outsized 8% — of the year's total ticket sales, according to state news agency Xinhua. Residents of China have the week off and take part in leisure activities like going to the cinema.
On the flip side, depending on how quickly the virus is contained, theaters in China could benefit from a surge of pent-up demand when they do re-open.
The virus continues to spread with little certainty as to when it will be contained. As of Wednesday morning the death toll from the virus stood at 492 — virtually all of them in mainland China — with more than 24,000 others infected. The U.S. government declared a public health emergency last week and barred foreigners from entering the country within two weeks of visiting China.
It's upended multinational industries — including cruise lines — which have cancelled sailings to and from China and banned guests and crew members who have recently visited the country.
Disney also closed its Shanghai and Hong Kong resorts over the Lunar New Year to curb the coronavirus's spread. Walt Disney Co. Chief Financial Officer Christine McCarthy said on the company's earnings call Tuesday that the closures could cost the company $175 million in operating income in the second quarter.
"We are already seeing a significant decrease in visitation to Hong Kong Disneyland from China and other parts of Asia," McCarthy said on the call.