China's Pivotal Role in Hollywood's Billion Dollar Movie Club

This weekend Avengers: Age of Ultron became the 21st movie in Hollywood history to top $1 billion in worldwide box office revenue. Whether it will go on to surpass the $1.5 billion global revenue mark set by its 2013 predecessor Marvel's The Avengers (the third highest grossing film ever behind Avatar and Titanic) will ultimately come down to its performance in two key territories: North America, and the People's Republic of China. And China is certainly doing its part: about $150 million of Age of Ultron's total so far has come since Tuesday from the PRC, where it will tally a final gross of somewhere around $250 million.

The billion dollar box office mark isn't so much a magic number that guarantees profitability as it is a sort of symbolic Hollywood holy grail. After all, with more than half the box office receipts going to theater owners, and as much as a half billion dollars in production expenditures and global marketing costs, most studio blockbuster films rely far more on home video, digital distribution and TV sales than they rely on box office to break into the black. The billion dollar figure is important mainly because it offers the promise of big box office bonuses to the filmmakers and studio executives behind such successes, and bragging rights for everyone involved. If Hollywood gave out platinum records the way the music industry does, they would undoubtedly go to the producers of billion dollar bonanza movies.

Until recently, before its modern day cinema boom started, China mattered little in such affairs, because it accounted for only a negligible share of global cinema revenue. But since 2011, when it emerged as Hollywood's most important overseas box office territory, China has played an increasingly essential role as kingmaker for those films aiming for the rarefied billion dollar threshold. And more often than not in recent years the major Hollywood studios' key objective has been to generate films that cross that ten-figure threshold.

Of the 12 films that have reached billionaire box office status since 2011, half wouldn't have gotten there without China's ticket sales. The two most recent Transformers films, Pirates of the Caribbean: On Stranger Tides, The Hobbit: An Unexpected Journey, the Jurassic Park re-release and now Avengers: Age of Ultron all made it over the top thanks to China's movie-going audiences.

As China's share of the global box office continues to rise—it will exceed 16 percent market share this year—Hollywood will need to keep a close eye on movie-going trends there to continue cranking out its billion dollar hits. If current trends continue it may not be long before China starts generating billion dollar blockbusters all on its own.

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