Hollywood’s latest box-office success in China probably isn’t the boon you might expect.
By the end of last month, The Fate and the Furious, the eighth installment in the deathless Fast & Furious franchise, broke records to become the highest-grossing Hollywood film in China. To date, it has earned 2.65 billion yuan (about $383 million) from China’s box office, surpassing Furious 7’s final gross of 2.42 billion yuan (link in Chinese).
The series’ success in China runs parallel to Hollywood’s growing reliance on overseas ticket sales to maintain growth. In almost perfect succession, each Fast & Furious film has earned an increasing percentage of its ticket sales overseas, with the latest installment cracking the 80% mark.
Meanwhile, since the early 00’s, ticket sales abroad have made up an increasing share of total box-office revenues for Hollywood movies. In 2001, when the first Fast & Furious came out, Hollywood movies generated 43.2% of their box-office revenue from countries outside the US and Canada. By 2016, it was 70.5%.
Much of this growth is fueled by China, where Fast & Furious remains a beloved franchise. The country’s box office grew from $1.6 billion in 2010 to $6.5 billion in 2016—almost 17% of the global total.
But how much revenue is the latest installment really generating in China? Probably not as much as you’d expect, and certainly not as much as it’s making from the rest of the world.
China sets strict annual quotas on the number of foreign “imported” films screened in commercial movie theaters each year, and grants studios only 25% of the box-office revenue as their take, compared to the standard 50% in the US, and 40% in most other countries.
As a result, despite the country’s massive consumer market and growing appetite for the cinema, film producers reap a relatively small percentage of a movie’s success there. Calculations by China Film Insider revealed that throughout 2016, the 32 films imported into China generated a total of $6.5 billion in revenue worldwide—but they generated just $500 million in China, or less than 8% of the total.
“By and large, Hollywood films made less than 5% of their worldwide revenue from the Chinese market, indicating that for all the effort producers currently expend to integrate Chinese talent and story elements, and to bend their own material in ways to please Chinese censors, Hollywood’s headlong push into China remains primarily about getting early access to a market that still exists in the realm of possibility,” writes analyst Jonathan Papish at China Film Insider. Foreign studios must also pay administrative fees to China Film Group, a state-affiliated movie distributor. All of these chip away at the overall profit on a film.
Papish tells Quartz that despite the eye-catching China box-office numbers, the Fast & Furious franchise owes its longevity just as much to other markets, including Brazil, Russia, and Japan. In those countries, domestic box-office revenue as a percentage of the global take also increased with each installment.
Recently, industry analysts and Chinese state-media outlets have predicted a loosening of China’s quota of imported Hollywood films, and even anticipated an increase on the existing 25% cap on the box-office take for foreign studios. But until then, when it comes to profit, China is just one country among many others.