Hollywood and the East Asian Box Office, 2013

The top movie at the Japanese box office this year was the final Hayao Miyazaki movie, The Wind Rises.

Of the top ten, eight were Japanese productions, with just two American imports making the list--Disney's Monsters' University at #2, Ted at #4. And the top twenty included only four more American films--Wreck-It Ralph at #13, Gravity #17, Iron Man 3 #18, Despicable Me 2 #19.

In short, the trends of the past decade have continued, with Hollywood doing less business in Japan, and its list of successes more eclectic.1 The action and science fiction spectacles that normally top the American and world box offices in particular do less well here than elsewhere.2

As Japan has gone, so have other East Asian countries. Where seven of the top ten movies in South Korea in 2007 were American releases (and ten of the top twenty), in 2013 Hollywood accounted for just one of the top ten earners, Iron Man 3, which made only the third spot; and only four American films appeared among the top twenty (the other big imports being World War Z, Gravity and Thor: The Dark World).3

This pattern was evident in China as well. Much as the entertainment press trumpets every release in that market, the fact remains that where in 2007 six of the top ten movies there were American imports, this could be said of only two of the top ten in 2013 (Iron Man 3 and Pacific Rim), with the rest all Chinese productions, including the movie that was far and away the biggest hit, Journey to the West: Conquering the Demons, which took in $196 million.4

Simply put, China has now developed the kind of domestic market that can support (relatively) big-budget, high-concept films like Journey, which means that lucrative as the Chinese market can be, it is also much more competitive. In fairness, Iron Man 3 and Pacific Rim by themselves earned more than those six biggest American movies of 2007 combined--but their take still represented a smaller slice of a pie. It has just been the case that that pie was growing very fast, much faster than Hollywood's share of it has fallen. That seems unlikely to go on forever, with China's rate of economic growth slowing, while Chinese film production catches up to the foreign competition in resources and versatility. This suggests that Hollywood's fortunes in China will, over the longer run (and perhaps not even the very long run) suffer as they did in Japan and Korea, boding poorly for its current heavy reliance on a rising stream of revenue from this part of the world.5

1. Together the two American films in the top ten this past year took in $134 million; the five films in the top twenty, $208 million. By contrast, nine of the top ten movies in 2002 were American (fully accounting for the top six spots, one might add), while of the top twenty, sixteen were American. The highest-earning film that year, Harry Potter and the Chamber of Secrets, took in $142 million all by itself, the top five just under $430 million. The American movies in the top ten collectively made $570 million, those in the top twenty a total of $706 million. This works out to Hollywood making just a fraction of what it formerly did in this hugely important market, even without the adjustment of the figures for inflation, which would leave the drop in its earnings looking considerably sharper than that.
2. One minor bright spot in 2013: A Good Day to Die Hard took the #22 spot (compared with the #52 position in the United States). Still, this last installment in the series hardly set the Japanese box office on fire, taking in just $22 million--as compared with $32 million for Live Free or Die Hard, and an astonishing $81 million for Die Hard With a Vengeance way back in 1995 ($123 million in today's terms, more than any movie made in Japan since 2011).
3. The six American movies that made the top ten in South Korea back in 2007 took in over $200 million, more than three times as much as the $65 million Iron Man 3 made there last year.
4. It should be noted that the performance does not look quite as bad if one looks at the top twenty rather than the top ten, eleven of the top twenty earners in Chinese theaters being American in 2013. Still, the fact that so many of the biggest American hits were crowded out of the top slots cannot be ignored.
5. The six biggest American films in the Chinese market in 2007 accounted for about $112 million of the $199 million grossed by that year's top ten--about 56 percent of the total. By contrast, Iron Man 3 and Pacific Rim earned $224 million out of some $1.081 billion earned by the top ten moneymakers, slightly less than 21 percent, rather a sharp drop in their share. The drop is less steep when one looks at the top twenty, but still quite clear, American film's share of their gross falling from 54 to 46 percent of the total.