Will a New Report on China's American Film Fatigue Change Hollywood?

A new report says that Chinese audiences are growing tired of the repetitive nature of imported films, which bodes poorly for Hollywood's penchant for sequels, remakes, and special effects-driven blockbusters.

While China's box office is growing at a rapid rate — 2013 was up 27.5% from 2012 — the majority of that money is going to homegrown Chinese films and not American imports. Chinese films grossed 2.06 billion of the box office in 2013, which is up 54.3 percent over 2012 and makes up 58.6 percent of the total. Imports, on the other hand, only saw 2.3% growth — the lowest since 2007.

Compare the top-grossing movie, the local comedy Journey to the West: Conquering the Demons, to the only American movies in the top ten. Journey to the West made $196.7 million. The only American movies to crack the Chinese top ten were Iron Man 3, which came in second with $121.2 million, and Pacific Rim, which was fifth with $111.9 million.

An Entgroup survey found that part of the reason for this slowdown was "the lack of variety in recent imported films, many of which are sequels and re-releases, and heavily driven by special effects. In contrast, local films, such as 'So Young,' 'Seeking Mr. Right' and 'Tiny Times' are more diverse and relatable."

If the survey is right, that's bad news for Hollywood. The Chinese market has been the saving grace of many an under-performing film in the past. The aforementioned Pacific Rim's domestic box office was "tepid," while simultaneously doing gangbusters in China. If a sequel is actually made, it's going to be on the back of the film's international, not domestic, success.

More recently, Edge of Tomorrow's domestic take was $29.1 million. This put it in third place over its opening weekend, losing to The Fault in Our Stars's massive $48.2 weekend and Maleficent's $34 million second week. But in China, Edge of Tomorrow's $6.7 million opening day gave it the fourth biggest opening of the year and allowed it to supplement its total box office by $25 million at the end of the weekend.

The amount of money in the Chinese market has already led to some changes in how Hollywood makes its summer tentpoles. Iron Man 3 was technically an American-Chinese co-production, with an alternate Chinese version of the film including added scenes of Iron Man in China. Looper also had an alternate Chinese version. And the upcoming Transformers 4: Age of Extinction is also an American-Chinese co-production and has included a fair amount of the film in China.

If the survey is right about the way Chinese film tastes affects the box office, and the grosses for American films in China continue to trend down, that could be a real problem. Hollywood's been consistently turning out more and more remakes, reboots, sequels, and special effects spectacles. And when these expensive films fail to make money domestically, the studios need the Chinese box office returns to break even.

If growth in China continues to slow, or even stops, how will Hollywood react? They could cut back on the potential blockbusters and do more medium- and small-scale films. What's interesting is that the not-sequel, not-reboot Pacific Rim and Edge of Tomorrow did do well in China. But so did Iron Man 3, which also managed to make money domestically. Hollywood may not abandon the current conventional wisdom that reboots and sequels of existing franchises are sure bets. But it could abandon making expensive original works and fledgling franchises like Pacific Rim.

No matter what they do, this isn't good news for Hollywood.