Chinese cinemas are showing old propaganda movies. Is Hollywood going to lose out?

The disappearance of the films — which had been remastered in time for the first movie’s 20th anniversary — from theater schedules in early April took many in China by surprise. Warner Bros., which did not respond to questions about why that happened, had been advertising their return to Chinese movie theaters for weeks. (CNN and Warner Bros. are both part of WarnerMedia.)

But on April 1 — the day a Beijing-led effort to promote movies celebrating the founding of the Communist Party took effect — promotional posters and ticketing information for “The Lord of the Rings” vanished from major ticketing apps. ​At the same time, decades-old movies that promoted the Party and which were favored by regulators flooded theater schedules.

The China Film Administration, which released the directive to promote Party-approved movies, never put out any public statements calling for Hollywood movies to be removed from theater schedules. The agency did not respond to a request for comment from CNN Business.

But industry analysts and movie fans in the country were quick to blame Chinese film regulators, who they believed to be the obvious culprits.

“We just want to watch popcorn movies,” one person wrote on the Chinese social media website Zhihu on April 5. “Don’t bother us with US-China relations here, please.”
“We are not being unpatriotic,” wrote another on the Twitter-like social platform Weibo a few days later. “We just want to watch good films.”
And then, just as suddenly as they had disappeared, “The Lord of the Rings” films were back. In a statement posted to its official Weibo account, Warner Bros. said on April 14 that the movies would be shown, ​starting with a screening of 2001’s “The Fellowship of the Ring” just two days later. It did not explain the delay.

“The Chinese film industry is not just production studios, but also movie theaters and distributors. And the distribution and exhibition sector makes huge amounts of money off Hollywood imports,” said Chris Berry, a professor of film studies at King’s College London. “They may be worried that they will suffer financially as a result of this policy. After all, the audience can watch other things on TV and on the internet.”

The dust-up over “The Lord of the Rings” in China illustrates a couple of major challenges that face Beijing as it tries to instill party loyalty among young people and bolster national industries, such as film production.

“There is resentment about the ‘nanny state’ that determines what you can and cannot see in terms of culture,” said Stanley Rosen, a professor at the University of Southern California who specializes in Chinese politics and society. “Nationalistic pride, which certainly exists, can only go so far.”

It’s also a sign that no matter how mighty the Chinese box office has become — it just surpassed the United States last year as the world’s biggest — Western productions remain important to keeping its momentum going, especially as the industry tries to get people back in seats after the coronavirus pandemic.

“China will need those [foreign] films to continue to be the number one box office in the world, assuming the North American market recovers sufficiently,” Rosen said.

Building the world’s biggest box office

China has relied for decades on at least a few big Hollywood hits to bolster its box office ​each year. The People’s Republic of China imported its first recently produced Western blockbuster — the Harrison Ford-led action thriller “The Fugitive” — in 1994 for general theater release.

At the time, the movie industry was in crisis. Ticket sales plunged more than 40% from 1990 to 1993 as audiences shunned local productions, according to ​a 2012 paper published by Liu Fan, an associate researcher with the Chinese National Academy of Arts, a government research institute.

But that changed as the country accelerated the opening of its economy. Along with foreign trade and investment, China began welcoming foreign culture, too.

“The Fugitive” turned out to be a smash hit. It grossed nearly 26 million yuan (worth about $3 million at that time) that year, more than three times the amount achieved by the second biggest film, a Chinese production based on the 1945 Chongqing Negotiations, famous peace talks backed by the United States between the Communists and the then-ruling Nationalists vying for control of China.

Since then, authorities have allowed a few dozen foreign films to be screened in the country each year, most of which typically come from the United States.

What if China no longer needs Hollywood? That's bad news for the film industry
Those imported films have been a big contributor to the Chinese box office’s explosive growth. From 1995 to 2019, ticket sales increased nearly 7000%, according to government statistics, enough to catapult it to the status of the second biggest movie market in the world.

Foreign films accounted for more than 40% of yearly receipts on average for the past two decades, according to Chinese brokerage firm Dongxing Securities.

But locally made films have been surging in popularity in recent years.

As China overtook the United States to become the world’s largest box office in 2020 — a milestone achieved in large part because the United States struggled to contain the coronavirus pandemic — many of the biggest box office draws were produced by Chinese studios and production companies, including last year’s top film, the Chinese war epic “The Eight Hundred.” Hollywood films “Mulan” and “Wonder Woman 1984,” meanwhile, flopped with audiences.

‘Loving the Party’

The strength and influence of the country’s box office hasn’t gone unnoticed by Chinese regulators, who in late March ordered every cinema to screen at least two movies promoting the Party per week through the end of 2021.
The objective: to honor the 100th anniversary of the Chinese Communist Party’s founding. The movies will focus on themes of “loving the Party, the country, and socialism” and “singing the praises of the Chinese Communist Party, the motherland, the people, and its heroes,” the China Film Administration said early last month in another statement explaining its goal.

Many of the movies the regulator approved for April are old propaganda films that were popular during the time of Mao Zedong, who led Communist China from its founding in 1949 until his death in 1976. They highlight themes of patriotism and were specifically created to educate viewers about the history of the Party.

The regulator emphasized a desire for “young people” to “grow their affections” of the Party and socialism by watching the movies.

Targeting young people at the movies makes sense, in theory. More than 70% of moviegoers were born between 1986 and 2001, according to the major Chinese ticketing app Maoyan. But younger generations have grown up with a lot of exposure to Western culture — a reality that the blowup over “The Lord of the Rings” appeared to demonstrate.

“I support domestic films,” one Weibo user wrote last month as “The Lord of the Rings” controversy unfolded. “But I hope I can freely choose what I like, not what you want me to like!”

That sentiment appeared to bear out in box office receipts. The first two “Lord of the Rings” films collected nearly 98 million yuan ($15 million) in combined box office through the second half of April. That puts them among the top 10 movies last month, behind the likes of Japanese animation “Detective Conan,” US monster film “Godzilla vs. Kong,” and Chinese drama hit “Sister,” among others.

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Meanwhile, audiences gave the propaganda films a chilly reception. One film, 1961’s “The Red Detachment of Women,” played to empty theaters, according to China’s National Radio and Television Administration (NRTA). (The data showed that between April 1 and April 15, the movie was screened nearly 1,500 times. But there were 14 days that recorded zero attendees for each screening. On April 11, an average of one attendee for each screening was recorded.) Another, 1956’s “Battle on Shangganling Mountain,” has sold just more than $3,000 worth of tickets.

“After more than 30 years of marketization [of China], people are used to thinking of themselves as consumers with choices, not as pupils to be educated through entertainment,” said Berry from King’s College London. “Even if they enjoy some ‘patriotic’ films, I think Chinese audiences don’t like being told what to do.”

Still needing Hollywood

The overall performance of the Chinese box office, meanwhile, is waning this year. Despite wildly successful Lunar New Year and Labor Day holiday periods, this year’s ticket sales had reached just 22.4 billion yuan ($3.5 billion) as of Friday morning. That’s the worst performance for the period since 2017, excluding last year, when theaters were largely shuttered because of the pandemic, according to the NRTA. For April alone, box office sales reached 2.5 billion yuan ($390 million), the worst April since 2014, excluding 2020.

Xiaoning Lu, a lecturer in modern Chinese culture at SOAS University of London, said that the propaganda screenings have a “symbolic significance” this year, as the 100th anniversary of the Party will hit on July 1.

That means cinema schedules will be reserved for propaganda movies at certain times​, Lu said. “But I cannot imagine this will be a long term practice.”

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China’s movie market still needs Western blockbusters to draw people back to cinemas, said Tan Ke, a movie sector analyst for Beijing Yiqipaidianying Culture Communication, a film consultancy company, in a recent research report.

“We need more ‘Avatars’ and ‘The Lord of the Rings’ to save the market,” wrote Tan.

He said the drama surrounding “The Lord of the Rings” was a regulatory blunder, adding that the last-minute decision to show the movies caught viewers, cinemas and distributors off guard.

“It has hurt the movie’s ability to save the box office market,” Tan added. ​

The film industry needs whatever help it can get. Box offices worldwide were rocked last year by the pandemic as theaters shut down to curb the spread of Covid-19. Even reopened cinemas imposed steep restrictions on how many people could attend, and many moviegoers remained wary of gathering. China might have been the world’s top movie market last year, but even that figure requires a serious caveat: Box office sales declined sharply to 20.4 billion yuan ($3.2 billion) in 2020, a third of the amount recorded in 2019.

Qiao Qi, a media analyst for Central China Securities, expects a few more Western films to help boost the box office this year. ​”F9,” the latest in the “Fast and Furious” franchise, for example, will debut this month.

“There are not many blockbusters imported since the pandemic, as Hollywood has delayed the releases of many films. Without good films, people lack interest in going to cinemas, especially during non-holiday periods,” he said in a recent research report.

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