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China's summer 'blackout period' box office revenue lowest in 4 years

Revenue from China's film box office during the summer "blackout period" in 2019 dropped to US$1.16 billion. That marks the country's lowest in four years, according to data from box office data provider OpusData and data compiled by S&P Global Market Intelligence.

While not officially announced, the summer blackout period in the Chinese film industry refers to the months of June and July, during which only local titles are released; international titles are withheld in order to boost sales from homegrown productions, according to local media reports. There are other "blackout periods" in the year, such as the Lunar New Year week and the first week of October, but the summer blackout period is known to be the longest.

However, two international films, "Dark Phoenix" and "The Lion King," were released during the blackout period this year, on June 6 and July 12, respectively. China film experts say the fading of this year's summer blackout period was done to generate overall revenue in what has been a sluggish quarter.

China's aggregate gross film box office revenues released during the June and July period dropped 33.93% year over year, according to data from S&P Global Market Intelligence and OpusData. Revenue during the 2018 and 2017 blackout periods were US$1.76 billion and US$1.83 billion, respectively, while box office revenue during the 2016 blackout period was US$1.28 billion.

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The fall in revenue is linked to tightened censorship by China's various film affairs bodies this year, according to a manager of a Chinese state-backed film production company.

A change in the regulatory oversight of China's film industry is among the reasons for stricter film regulation, the manager said.

The Publicity Department of the Central Committee of the Communist Party became the regulator of film distribution, production, exhibition and content censorship in March 2018, according to a government document published by state media Xinhuanet. The party assumed the oversight of film from the National Radio and Television Administration, or NRTA, because it could "better distribute social values and thoughts through the film industry," the Xinhuanet report said.

At least six Chinese films were canceled during the summer blackout period of June and July. In comparison, in the same period of 2018, four films were cut, according to data from film information company Maoyan. There were no major adjustments to film releases during 2017's summer blackout period, according to S&P Global Market Intelligence.

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Due to the lack of homegrown large-scale productions, box office growth did not receive the boost it normally gets during the summer season, Han Haoyue, an independent Beijing-based film critic told S&P Global Market Intelligence.

China's gross box office revenue from domestic and international titles dropped in the second quarter of 2019 to US$1.92 billion from US$2.14 billion in the second quarter of 2018, according to OpusData and S&P Global Market Intelligence. The 2019 second-quarter revenue was up from second-quarter revenues generated in 2017 and 2016.

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A bright spot during the summer was the nationwide July 26 release of blockbuster fantasy animation film "Ne Zha," which was produced by China-based October Media, Horgos Coloroom Pictures Co. Ltd and Coco Cartoon and distributed by Beijing Enlight Media Co. Ltd. The movie grossed 4.72 billion yuan as of Sept. 1, according to China Movie Data Information Network.

As of Oct. 3, US$1 was equivalent to 7.15 Chinese yuan.

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