When director James Cameron arrived in China for the Hainan Island International Film Festival in Sanya earlier this month, it was a homecoming of sorts.
“Avatar,” the first film in Cameron’s science fiction fantasy series, and the Chinese box office have essentially grown up together. In 2009, “Avatar” grossed more than $200 million of its $2.92 billion in China, at a time when the country had fewer than 5,000 movie screens and was just beginning to invest in modernizing the local film industry.
Now China has more than 80,000 movie screens, twice as many as in the US, and Chinese cinemas are much less likely to show Hollywood films than they used to be.
“When the first ‘Avatar’ movie came out, Hollywood was the only game in town,” says Chris Fenton, a media executive and producer who wrote a book about Hollywood and China called “Feeding the Dragon.” “But since then, China has become as good as we are at telling world-class stories for their own people. And now they’ve largely shut us out of that market.”
But Disney, which had a rare recent success there with the rollout of “Zootopia 2” last month, is hoping for another blockbuster in China with “Avatar: Fire and Ash,” which opened Friday. And rival Hollywood studios will be watching to see if Disney succeeds in luring Chinese “Avatar” fans back to theaters.
“Chinese audiences have a deep love for ‘Avatar’,” said Daniel Manwaring, CEO of IMAX China. “The question will be: Does that story still resonate?”
In 2012, seven of the ten highest-grossing films in China were made in the US. That was not the case in 2024. For U.S. film studios, which spent much of the 2010s banking on ever-higher Chinese box-office returns, the region has largely become an afterthought.
“Before Covid, everyone thought the Chinese box office would be the savior of Hollywood,” said one international executive, who requested anonymity because he was not authorized to speak on the record. “Post-Covid, that has all changed.”
In the decade before the pandemic, Chinese moviegoers flocked to American franchises like Universal’s “Fast & Furious” and Paramount’s “Transformers,” and Hollywood studios began crafting scripts and making decisions with Chinese audiences and government officials in mind. The Chinese government sets quotas for foreign films, and its censorship bans content sensitive to Chinese history and politics.
Disney changed the ethnicity and backstory of the Mandarin, the villain in Marvel’s 2013 film “Iron Man 3,” to make him less offensive to Chinese audiences, and added additional scenes for the Chinese release with Chinese actors. 20th Century Fox included a prominent product placement for Chinese messaging service QQ and a major role for Chinese actor Angelababy in 2016’s ‘Independence Day: Resurgence’.
As Hollywood studios adapted to Chinese preferences, local Chinese production grew in scale and sophistication, and the country began making its own spectacle-driven blockbusters, films like the 2016 fantasy comedy “The Mermaid” and the 2019 animated epic “Ne Zha.”
When Covid and Hollywood actors and writers’ strikes slowed U.S. production between 2020 and 2023, U.S. film studios had fewer potential blockbusters to offer China.
“You didn’t have that regular rhythm of Hollywood films,” the international director said. “Local producers stepped in and filled the void. And Chinese films got better.”
The highest-grossing film in China this year is ‘Ne Zha 2’, which has grossed more than $2 billion, breaking all Chinese box office records. In a sign of the power of China’s vast market, ‘Ne Zha 2’ is now the world’s highest-grossing animated film of all time, surpassing Pixar’s ‘Inside Out 2’, which is driven almost entirely by the box office in mainland China.
“Avatar: Fire and Ash” is expected to open to $340 million-$380 million worldwide, and if it follows the pattern of previous “Avatar” films, it will remain in theaters for several more weeks and possibly reach the $2 billion threshold of the previous films.
With North American movie attendance declining, “Fire and Ash” will need a robust takeoff in China to get there. The second “Avatar” film, 2022’s “The Way of Water,” grossed $247 million in China as one of the first Hollywood films to open post-pandemic, and “Fire and Ash” is expected to play similarly.
Disney has more reason to be optimistic after “Zootopia 2,” which has grossed more than $500 million since opening in China in November, the most of any U.S. film since the pandemic.
The original 2016 “Zootopia” film was a phenomenon in China, in part because of a storyline in which its talking animal characters faced the challenges of moving from the countryside to the city, just as a generation of Chinese moviegoers grappled with a similar transition. Shanghai Disneyland has a popular “Zootopia” attraction and the studio launched an aggressive marketing campaign for the sequel, including a brand deal with Starbucks with themed drinks and mugs.
Amid the success of “Zootopia 2,” IMAX’s Manwaring said he believes Hollywood studios can recapture a share of China’s huge cinema market. If they want to compete, they just need to make a few changes.
“There is still a role for Hollywood in China,” Manwaring said. “People are showing up. The ceiling is still so high. But the demands for a good film have become higher.”
At the film festival, Cameron walked the red carpet with actor Zoe Saldaña and other stars from the film. When addressing the audience, he mentioned “Avatar”’s “passionate” Chinese fan base. for helping “open the floodgates for all the great filmmakers” making fantasy and science fiction films.
“The fans of ‘Avatar’ in China have been phenomenally supportive and passionate,” he said, adding that “all of this is made possible by the enthusiasm here in China, not just for movies, but for a certain kind of big movies, splendor, emotion, 3D, very important to me anyway.”
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