China's cinema universe has come a long way since June 2011, when "Kungfu Panda 2" had its release. if not for the virus, ticket sales during the seven-day Lunar New Year holidays could have topped $1 billion. Image Credit: AP

Hong Kong (Bloomberg): China is no longer on track to dethrone the US as the world’s No. 1 movie market this year.

The coronavirus has clobbered the burgeoning Hollywood rival, virtually wiping out ticket sales during the recent seven-day Lunar New Year holiday - a week that’s been historically the busiest for box-office collections. Theaters across the country have remained shut since January 24, while the fear of infection has prompted people to avoid crowded places.

Losses from the collapse of ticket sales mounted to $1 billion during the festive period, according to estimates by Rance Pow, CEO of cinema industry consulting firm Artisan Gateway. That number is about 10 per cent of the anticipated revenue in 2020, and is set to rise as uncertainty over the outbreak persists.

The deadly virus is also threatening to hurt Hollywood, which is increasingly relying on Chinese audiences for growth as domestic ticket sales decline.

“The loss will do significant financial damage to both theaters and production companies in China, and if theaters remain closed for several more weeks, the financial harm will expand,” said Lindsay Conner, partner and leader of the entertainment consultancy Manatt, Phelps & Phillips. “With Chinese theaters closed due to the outbreak, Hollywood’s plans for distributing new films in China are also uncertain.”

Building up a lead

China has already overtaken the US in terms of numbers of cinema screens following a building boom that helped box-office sales climb six-fold since 2010. Analysts were predicting the market to surpass the US in terms of revenue this year.

Movie ticket sales in the country, excluding booking fees, rose 4.1 per cent last year to 58.9 billion yuan ($8.5 billion), compared with 9.7 billion yuan in 2010. Imported films accounted for about 36 per cent of box office sales last year in China, the largest overseas market for US films.

Exhibitors have said they have set no date for re-opening cinemas. That means potential delays in China for big-ticket films from Hollywood such as Disney’s “Mulan” - based on a legendary Chinese female warrior - and Pixar’s “Onward”, which are set for March debuts in the US, according to Pow.

Even spreading to theme parks

For companies such as Disney, the hit is not just on the movie business. Its theme park in Shanghai has closed as well, along with Disneyland in Hong Kong, which had already been hit by the city’s political unrest. Executives at the entertainment giant said the theme park shutdowns would pare about $175 million off revenue in the current quarter.