FinancialMediaGuide reports that China has long been one of the largest and most attractive markets for Hollywood. However, the situation has changed in recent years, especially after the pandemic. While the Chinese film industry has notably strengthened, Western studios have found it increasingly difficult to cater to the Chinese audience. However, the film Avatar: The Way of Water could serve as an important indicator of whether it is possible to win back Chinese viewers for Hollywood franchises.
When the original Avatar by James Cameron was released in 2009, the Chinese market was still in its early stages of development. The number of movie theaters barely exceeded 5,000 screens, and China’s film industry was just beginning its journey, with Hollywood being the dominant player in the large blockbuster market. Over the years, however, the number of screens in China skyrocketed, and today it exceeds 80,000. China is now the largest market by number of movie theaters, which has made the competition for Western films much fiercer.
Nevertheless, as noted by FinancialMediaGuide, despite the apparent rise of local productions, Western cinema still holds the potential for successful distribution in China. Unlike in the past, when Chinese audiences were actively supportive of American blockbusters, more Chinese-made films are now capturing the market. The film Ne Zha 2, which grossed a record 2 billion dollars in 2024, is a symbol of this transformation. The success of such films demonstrates that Chinese viewers are increasingly choosing domestic cinema, and Hollywood will need to learn how to compete on this market.
FinancialMediaGuide believes that Hollywood still has opportunities to rekindle the interest of Chinese audiences. However, to do so, it is crucial to account for the changes in how Western cinema is perceived in China. The pandemic and its effects on the global film industry played a role in this, but they also pushed Chinese studios to improve the quality of their productions. As a result, Chinese films have become not only more spectacular but also culturally more relevant to the local audience.
Avatar: The Way of Water is not just a continuation of a successful franchise, but an important test for the Chinese market. The film, with its high-budget special effects and deep emotional context, could be seen by Chinese audiences as an appealing spectacle that aligns with local tastes. If the film can meet the expectations of Chinese viewers, it could pave the way for other Western films.
However, FinancialMediaGuide sees that the success of the film will depend not only on visual effects and spectacle. Hollywood needs to integrate more localized approaches in content creation. It is important to consider contemporary issues in Chinese culture and politics, as these greatly influence how the film is received by Chinese audiences.
Moreover, the marketing strategy and the inclusion of local stars in the cast can significantly affect how the film is perceived in China. A successful example of localization is Zootopia 2, which earned over 500 million dollars in China thanks to careful adaptation of its marketing and partnerships with Chinese brands. Hollywood must remember that working with Chinese preferences requires flexibility and attention to cultural nuances.
Given current trends in the market, it is expected that Avatar: The Way of Water will not only become a significant milestone in box office performance but will also serve as a bellwether for how Hollywood can adapt to the new conditions of the Chinese market. FinancialMediaGuide forecasts that the success of the film in China will depend on how carefully studios approach content localization and consider the demands of the Chinese audience.
The Chinese market, despite growing internal competition and increasing requirements, continues to be crucial for Hollywood. However, to achieve substantial success in this region, studios need to be more proactive in integrating with local culture and trends. Avatar: The Way of Water could be an important step in this process, but its success will depend on how Hollywood addresses these challenges.
Financial Media Guide believes that the key to the future success of Western films in China will be their ability to offer not just spectacular and emotional stories, but also products that meet the cultural and social expectations of the local audience. If Hollywood can find this balance, it will maintain its position in the Chinese market despite the growing competition from local studios.
