Author | Song Wanxin
Editor | Zhang Fan
This year, the Chinese film market has presented a very interesting phenomenon – all of the several blockbusters are animated movies. It is truly a great year for animation.
From Nezha 2 at the beginning of the year to the currently hot – showing Zootopia 2, and then to Demon Slayer: The Infinite Castle Arc. If it weren’t for macro – factors, according to the pre – sale results, it would also be a candidate for a blockbuster this year.
The box office and word – of – mouth of the three movies have almost exploded. The overall box – office of the film market has been continuously sluggish. The total box – office last year decreased by 22.7% year – on – year, and the box – office during multiple holiday periods has returned to the level of a decade ago. Against this backdrop, the popularity of the three animated movies has emerged out of nowhere.
Zootopia 2 achieved a box – office of 228 million yuan on its opening day, setting the highest opening – day box – office record for imported animated movies in the Chinese mainland. And just three days after its release, its box – office had already surpassed that of its prequel nine years ago, becoming the champion of imported animated movie box – office in the Chinese mainland.
After the pandemic, changes have taken place in both the supply and demand sides of the film market. This change can be summarized as the entire industry starting to pursue “certainty”. The popularity of the three animated movies is a result of “certainty” as an industry operation rule.
01 The Victory of Sequels
36Kr checked the data from Dengta and found that as of now this year, among the top ten movies in terms of box – office, 6 are IP sequels, and 5 are domestic. Among them, The Little Monsters in Langlang Mountain is a movie version based on an existing animated TV series, so it can also be regarded as having an IP foundation.
(Source: Dengta data)
The trend of serialized movies ranking high in the box – office became apparent last year. Among the top ten movies in terms of box – office last year, 5 were sequels, and 4 were domestic.
If we look back at the Chinese film market in the past decade, the serialized works among the top ten movies in terms of annual box – office were basically dominated by live – action series from Hollywood giants such as Marvel.
What is particularly special this year is that among the 6 sequel movies, 4 are animated movies. They are Nezha: Reborn in the Demon World, Zootopia 2, The Little Monsters in Langlang Mountain, and Boonie Bears: Blast into the Future. This indicator has reached the highest level in recent years.
Coupled with Demon Slayer which has a high reputation, the animated IP sequels have proven to have an extremely broad audience base this year.
Serialized movies are a more industrialized way of creation, which has been proven in Hollywood. However, in China, film and television companies mainly operate on a project – by – project basis. There is a lack of content companies that make long – term investments in a certain IP, resulting in a rather bumpy and unsystematic exploration of serialized movies, including live – action movies.
Domestic film directors generally have a low willingness to shoot sequels. It wasn’t until around 2015 when commercial – minded directors like Chen Sicheng emerged that some relatively well – known serialized movies such as the “Ex – Files” series, the “Detective Chinatown” series, and the “The Wandering Earth” series were produced.
The advantages of sequels are obvious. From the supply side, in terms of investment, based on the success of a previously market – verified prequel, the probability for the distributor to create a blockbuster is greatly increased, and the certainty is higher than that of new content.
In terms of screenings, new series with an existing audience base will also receive more screenings from theaters. Take Life in Langlang and Ex – Files 4 as examples. Both are movies released during the National Day holiday, both are comedies, both feature well – known actors, and their Douban ratings are similar. However, Dengta data shows that the screening percentage of Ex – Files 4 is significantly higher than that of Life in Langlang.
(Data source: Dengta data)
This pursuit of certainty has been growing in recent years. After all, online traffic is getting more and more expensive. Promoting a movie from scratch is naturally inferior to serialized works that have a head – start.
The annual report of Damai Entertainment (formerly Alibaba Pictures) as of March this year shows that the gross profit of the movie business has sharply decreased to 73.21 million yuan, compared with 810 million yuan in the same period last year, a decrease of 91%. In the first half of this year, the gross profit of this part further decreased by 22%, reaching 95.2 million yuan. That is, the gross profit margin is only 8.9%, while the industry average gross profit margin of movie distribution companies is between 20% and 50%.
It can be seen that the cost of movie promotion and distribution is getting heavier and heavier, and the cost – effectiveness of “betting on blockbusters” is getting lower and lower.
Among serialized movies, animated series movies have a stronger IP attribute than live – action series movies and are also more convenient for industrial chain operation, becoming the choice with the highest certainty.
Compared with general movie audiences, fans who follow a certain IP are special. Their movie – watching consumption is highly targeted and they have high loyalty. Therefore, the retention rate for a specific IP is very high, and a few – year interval will not affect their consumption enthusiasm.
This is basically consistent with the Japanese otaku culture, and Hollywood calls such movies “fan movies”.
Zootopia 2 is a typical example. In fact, the box – office performance of Zootopia in the Chinese mainland nine years ago was not outstanding, only 1.5 billion yuan. In contrast, Nezha: Birth of the Demon Child in 2019 had a box – office of 5 billion yuan.
However, in the past nine years, Zootopia has not only maintained its popularity but also successfully increased its popularity through IP operations in theme parks and other aspects, amplifying the IP effect.
Since its simultaneous release in North America, the cumulative box – office of this movie in the Chinese mainland has even far exceeded that of the North American market, making it the largest box – office market for this movie globally.
02 Animated Movies Can’t Revive the Overall Box – Office
The audience portrait of Zootopia 2 shows a very different side. Dengta data shows that the 20 – 29 age group accounts for half of the audience, with the 25 – 29 age group being the largest. On the overall market, the proportion of 20 – 29 – year – old audiences has decreased by 10 percentage points compared with last year, only accounting for 34% of the overall market. The audience of this movie goes against the overall market trend.
That is to say, at least from this year’s perspective, young people under 30 no longer love watching movies but instead purely follow IPs.
This involves a major trend in the portrait of movie audiences after the pandemic – the audience is getting older. In other words, only the same group of people have the habit of watching movies. As they get older, the overall audience portrait also ages.
Dengta data shows that as of October 17 this year, among movie audiences, the proportion of the 35 – 39 age group has increased by 5 percentage points, accounting for 20%, and the proportion of audiences aged 40 and above has increased by 6 percentage points, accounting for 23%, becoming the largest age group.
(Source: Dengta data)
Against the background of the change in the movie audience, this year, the viewing tides of Nezha 2 and Zootopia 2 have jointly created a spectacle in the movie industry: the top – tier movies keep setting new highs, but the periodic overall box – office keeps hitting new lows. For example, the box – office during this year’s May Day holiday was less than half of last year’s, and the box – office during the National Day holiday has returned to the level of a decade ago.
In essence, the popularity of animated movies this year does not mean the recovery of the movie – watching habit but only represents the boom of the IP economy.
Dengta data shows that the average number of movie – watching times per person this year has dropped to 2.02, the lowest in three years. More than 60% of the audiences have only watched one movie this year, the highest in three years.
03 The Decline of Live – Action Movies and the Rise of Animated Movies
As mentioned above, the domestic movie market once had a short – lived high – light moment for live – action series movies, such as multiple – sequel series like the “Detective Chinatown” and the “Ex – Files”, as well as series like the “Fengshen” and the “The Wandering Earth” that have only reached the second installment.
However, in recent years, live – action series movies have shown a downward trend.
On the one hand, many series movies are popular at the box – office but receive poor reviews. Detective Chinatown 1900, which ranked second with a box – office of 3.6 billion yuan this year, only has a Douban rating of 6.4. The third installment in 2021 even created a gap between a box – office of 4.5 billion yuan and a rating of 5.3. Fengshen 2, which ranked eighth in terms of box – office this year, also saw its Douban rating drop from 7.7 in the first installment to 5.8.
On the other hand, past successful cases have not attracted more creations of live – action series movies. A rough search by 36Kr of the top 100 movies in terms of annual box – office shows that in the three years from 2023 to now, the only new domestic live – action series movie IP that has been released is the “Fengshen” series.
The decline of live – action series movies is a global trend. The live – action movie industries in China and the United States have both experienced varying degrees of decline in recent years, and the money – making ability of Hollywood – style series movies such as Marvel has significantly decreased.
On the supply side, as the popularity of IPs has increased, the increase rate of actors’ salaries has far exceeded the growth rate of box – office. Compared with the first Marvel movie, by Avengers: Endgame, Robert Downey Jr.’s salary as “Iron Man” had increased by 150 times, while the box – office had only increased by 5 times.
Comparing the costs alone, the gap between live – action movies and animated movies is not large. The production cost of most Marvel movies is about 1.4 billion yuan, while the cost of most animated movies is about 1 billion yuan. Moreover, the production cycle of live – action movies is short, while that of animated movies is long.
However, in terms of monetization, live – action movies obviously do not have a high cost – effectiveness compared with animated movies. Audiences no longer blindly trust well – known directors and actors, and the IP development space is also smaller.
Against this background, animated movies have become the common risk – avoidance choice for the industry.
Three Marvel movies launched by Disney this year have all encountered difficulties in making profits. After that, Disney frankly expressed its goal of winning back the Chinese market with Zootopia 2. And Enlight Media also recently stated that it will allocate more IP resources to animated movies.
The decline of live – action movies, the popularity of IPs, and the risk – avoidance of sequels have given rise to this great year for animation, which may be the turning point for the future development of the film market.
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