Releases in China of blockbusters Wicked and Gladiator II suggest the potent market’s appetite for Hollywood fare is steadily returning, in the view of Imax CFO Natasha Fernandes.
“We continue to see more positive signs,” she said Tuesday at the Wells Fargo TMT Summit, with “even the censorship, when you think about it, allowing more diverse content to get in. We’ve seen some rated-R movies make it in this year, edgier titles like Alien: Romulus and Deadpool: Wolverine. … Wicked is due to release this upcoming week. Titles that you would have historically never thought would get in …. You’re seeing that they want the box office to return. That trend suggests that there will be even more Hollywood titles getting in even in the next years.”
Fernandes didn’t offer specific reasons why the specific films gaining slots proved surprising. As far as the economic impact of the territory’s new posture toward Hollywood, she said it is “hard to pinpoint” given the unpredictability of film performance. China accounted for 16% of Imax’s total box office through September 30, and as of October 31, Greater China had brought in $181 million. Prior to Covid, the territory’s boom made it a potent engine of profits for many Hollywood films. More recent times, for various reasons, have brought vastly diminished returns.
Imax CEO Rich Gelfond, speaking to Wall Street analysts on the company’s third-quarter earnings call, conceded that China has “lagged behind the rest of the world in 2024.” He said that was due in part to a “pretty weak” overall economy in the country.
While some sectors of the U.S. economy are bracing for the impact of proposed tariffs and a potential resumption of a trade war during Donald Trump’s second presidential term, Gelfond has expressed optimism. He noted on the call that titles like Venom: The Last Dance and Godzilla x Kong: A New Empire brought in more box office in China than in the U.S. Local-language titles, a key element in the territory’s rise in the 2010s, is also returning, with several titles slated for Chinese New Year in February. China, Gelfond added, “also offers fertile testing ground as we open our aperture with new Imax events and experiences.”
Fernandes said the country is “continuing to emphasize the cultural and entertainment sectors as an important driver of their growth,” citing as examples the government’s support of festivals, local production and infrastructure.
Notifications about which films will get a release in China and when – news that is often kept completely under wraps, with the process by which titles are vetted an accompanying mystery, is also improving, Fernandes said. “This year, it could be a week or two out and you’re suddenly hearing that a film has been approved,” she said. “More recently, though, we’re getting a little bit more lead time.” Knowing the Chinese New Year slate several months in advance “allows enough time for marketing” and building audience awareness, she said.
