Film industry expects slowdown

Movies seem flashier than ever, but the domestic market is a slowgrowth one.

PwC expects annual U.S. box office revenue to grow at a compound annual growth rate of just 1.2% between 2016 and 2021.

To offset that slowdown, the industry is focusing on China, which is still posting double-digit box-office growth and is set to overtake the U.S. as the world’s biggest movie market this year. The highest-grossing movies of the year so far all generated the majority of their revenue from markets abroad.

Note that a movie’s distributor only receives about half the box-office gross, with the rest going toward theaters. These figures indicate Disney and Comcast’s Universal still dominate with cross-cultural popcorn fare such as cartoon remakes and Marvel films. But they also highlight the stunning popularity of Chinese franchises such as Wolf Warrior — which generated almost all its revenue from its home market. These trends should persist.

Leo Sun owns shares of Walt Disney. The Motley Fool owns shares of and recommends Walt Disney.