As we get rolling into the new year, optimism and caution are part of the outlook for 2022 at the international box office. The issue of China also remains top of mind as the territory — which maintained its status as the top global market in 2021 — has been even more ornery to navigate than usual, notably not approving a single movie with a Marvel character last year, from Disney’s Black Widow straight through to Sony’s Spider-Man: No Way Home.

Before we dig further into China, however, let’s take a look at the overall international picture.

Seeking A “Version” Of Normal Moviegoing

No Way Home may prove to have been a pivotal turning point in hindsight, but Omicron is still out there, piracy remains a concern, and Q1 is looking like it may be soft. Studios consult epidemiologists, and based on those discussions, some execs expect the overseas landscape to settle by the time March comes along and spring has sprung — at least in the northern hemisphere — ushering in a “version” of normal moviegoing.

Markets around the world are experiencing different cycles of restrictions and closures while some — notably Korea, a habitual powerhouse that saw its global ranking drop a notch in 2021 — have been sluggish throughout the pandemic, with South East Asia taking a big hit. Others are coming back strong (think the European majors and Australia), and Saudi Arabia is poised for growth in the year ahead. One lesson that’s been increasingly learned is that offshore markets need to be open to as high a degree as possible in order to maximize a film’s potential.

Although there is a sense we’ll see less date-jockeying and fewer shifts to day-and-date streaming, changes remain an option amid the uncertainty of Covid’s future. Disney in just the past few days decided to send Pixar’s Turning Red to its Disney+ premium service (the only major studio platform that currently has a significant offshore footprint).

A finance source believes, “You’ll see more studios releasing and not holding product, not selling off to streamers because they want the exhibitors to know they are providing a certain piece of product.”

Says an international distribution exec: “Research is showing that the film experience is a lot safer than other social experiences out there. It’s our job to keep trying to surprise people, to get them to feel a heightened emotion so they can walk out of a theater feeling like when they see others in the same place they say, ‘Wow, isn’t that something? We experienced that all together.’ At home they know they’re not going to get that.”

On a marketing level, one of the key elements of eventizing movies that’s been missing in the past two years is getting talent out to excite fans around the world. Beginning in the fall of 2021, premieres started to come back to a degree, including the launch of No Time to Die at London’s Royal Albert Hall, and the hope is that stars make the rounds in 2022. There’s arguably no one who takes to the road and tirelessly promotes his films in the same way as Tom Cruise. When he turned up at exhibition conference CineEurope in Barcelona last October to tout 2022’s Paramount pics Top Gun: Maverick and Mission: Impossible 7, the room positively thundered.

“As an industry, we have to drum up that excitement, and the event status of what movies are in each marketplace,” a distribution source says. “You get your talent out there and remind people why they are so enamored with movies.”

As with 2021 and so many years prior, the international box office is expected to continue accounting for more than 70% of the global total in 2022. Among major titles on deck that have global appeal, Warners has five DC movies, starting with The Batman in March; and Disney has three Marvel titles, beginning with Doctor Strange in the Multiverse of Madness in May. Universal is returning to Jurassic World in June, while Illumination’s Minions: The Rise of Gru looks to animate July; Paramount will have Sonic the Hedgehog 2 starting offshore rollout in late March as well as the Cruise double-bill of Top Gun: Maverick (May) and Mission: Impossible 7 (September); and Sony will serve up Morbius (April), Bullet Train (July) and Spider-Man: Across the Spider-Verse (October). And then there’s Avatar 2 in December.

What Will China Do?

While many of the above titles would typically be major draws in China, the coming year is murky. The market has seen strong recovery at turnstiles, but may not be quite so open to Hollywood in 2022. Last year already saw fewer than 20 revenue-sharing movies let in versus 30-plus in 2019.

Indeed, China was mercurial in 2021, and some of this is attributable to it having been the 100th anniversary of the Communist Party, which put the focus on local so-called “propaganda” movies like the $900 million-plus grosser The Battle at Lake Changjin. That film’s sequel, Water Gate Bridge, is expected this year, which is again important politically as Chinese President Xi Jinping looks ahead to the Communist Party National Congress in the fall. The China Film Administration has already committed to promoting 10 domestic tentpoles per year going forward.

But there were other forces at work in 2021 — including what appears to be the targeted blackballing of Marvel. Not one film featuring a Marvel character — from Black Widow to Eternals, Shang-Chi and the Legend of the Ten Rings, Venom: Let There Be Carnage and Spider-Man: No Way Home — was granted a 2021 date. (No Way Home nevertheless crossed $1 billion global without China and may get to $1 billion overseas as well, sans the PRC — there is also still the possibility it gets a surprise delayed release.)

There are varying theories as to why this happened, and equally there is frustration. A recent op-ed in CCP mouthpiece the Global Times accused Hollywood of having “distorted values of ‘political correctness’,” and “improper use of Chinese elements in their films.” It also pointedly asked: “Should the Chinese film authority allow… films to enter just because they are Marvel films?”

On the Marvel issue, some believe it may be linked to Black Widow’s depiction of communism, while some think the slate of films was a no-go as soon as years-old comments allegedly made by Eternals helmer Chloé Zhao surfaced back in the early part of the year. Similarly, 2017 comments by Shang-Chi star Simu Liu also came to light in September, evidently further complicating matters in the mind of the government, and the propaganda department which oversees film.

USC professor and China expert Stanley Rosen tells Deadline, “Years ago, it was said, ‘If you’re a production company or a studio, in terms of what China thinks of you, you’re only as good as your worst film. You do one film that China doesn’t like, and none of your films are shown in China’.“

He points to the example of 1997 and MGM’s Richard Gere-starrer Red Corner, Disney’s Martin Scorsese-helmed Kundun and Sony’s Seven Years In Tibet. At the time, the Chinese film market was “the same size as Peru,” says Rosen, and had very few screens and a collapsed box office. Still, “they banned all of those studios even in that situation. If they could do that in 1997, they can certainly do that today as they’re a lot better off.”

Rosen suggests, “When you look at Eternals and Shang-Chi, it’s very clear. No Way Home is not clear; it would have been a popular movie. That, I think, has to do with U.S./China relations. Everything that is done by the Chinese government and Communist party is interpreted in China, as well as outside China, as a signal — and if they released No Way Home before the end of the year, it might have been interpreted as a signal that ‘We know the market is down. (People) might think we’re desperate.’ I think they could have done it quite easily and justified doing it, just as well as justifying not doing it. But they decided, ‘Why throw a bone to Hollywood at this point?’”

One international distribution executive called the move not to date No Way Home in China “offensive,” adding, “it’s so unfair they don’t let it in and then everybody’s pirating it anyway.” The issue of intellectual property theft is indeed a concern. The exec continues, “There has to be some diplomacy, and the studios need to start engaging the U.S. government and trying to figure out how to fix it.”

Does it matter to China that it left potentially hundreds of millions of dollars on the table by not releasing the Marvel movies? While an oft-heard refrain is that China doesn’t care about money, it’s also said the country does care about cultural power. And, though it may be entirely capable of churning out local films that gross well over $500M at home, without Hollywood product, sources believe it will not be able to feed its ever-growing number of screens (currently 82,248 and eyed at 100K by 2025).

Rosen says, “They don’t need Hollywood as much as they used to, that’s very clear. But, they want to be the number one film market in the world and want to show themselves as a global power and not close off. That includes film, so they need to have Hollywood product to show that.”

Notable Hollywood titles that did release in 2021 include A Quiet Place Part II, F9, Godzilla vs Kong, Dune and Free Guy. China also allowed in such films as Jungle Cruise and Snake Eyes: G.I. Joe Origins which had already been out elsewhere for months. In doing so, says Rosen, “They are showing that they’re not closed off, but they are telling Hollywood, ‘We don’t really need you and we will pick and choose for whatever reasons we want to’.”

In the reverse, a studio exec tells us, “If manipulation continues in the marketplace, U.S. companies will care less about getting their films in and it will be less important in terms of strategy.” Hollywood has been very conscious with its dating, doing what makes the most sense for China. But if the current situation is ongoing, they will “lose that power over U.S. films.” Xi is “trying to control messaging” and cultural messaging is an important part of that. “If he doesn’t have attention and care coming from Hollywood, that’s not good for him either,” we’re told.

Harrumphs another exec, “Just because they have one big propaganda movie this year, that doesn’t mean they can walk away from the rest of the world.”

Chris Fenton, a trustee of the US-Asia Institute and author of last year’s Feeding the Dragon: Inside the Trillion Dollar Dilemma Facing Hollywood, the NBA, & American Business, says, “The lopsided nature of the bilateral relationship between China and the U.S. has definitely gotten out of control, and the fortitude, or almost the cockiness, of the Chinese government — what they think they can get away with — has gotten out of control. We sort of need to push back a bit. I’m confident we can figure it out.”

Fenton continues, “I do believe if we do it right, we can go back to pre-1997 where Hollywood makes movies that are firewalled from China for one reason or another, and also Hollywood makes movies that have nothing to do with China that are emotional and character and story relevant to China, and a few of those get in. But we need to get to a point where we can make whatever the heck we want without being ‘Richard Gere-d’ out of that market.”

While Hollywood currently gets just 25% of the box office out of China, that’s still a fair bit of change on a major title. But studios aren’t factoring China into their greenlights, we’re told. “It’s the other way around, anything from China is upside. You plan for nothing, and if you get it, good,” says a source.

Rosen doesn’t believe things are going to change anytime soon. “The government follows what the Party wants, and there has been no signal that they should try and clear up relations with Hollywood.”

An international veteran is also pessimistic in the short term, but perhaps not for the medium and long term. Certainly, nothing is going to happen between now and the Beijing Winter Olympics, which coincide with the lucrative Chinese New Year moviegoing period. “After that, you have to hope, for the film industry’s sake, that there’s some sort of overall trade deal done, some sort of détente, and that allows films to get back into the marketplace,” the veteran said. The film contract between Hollywood and China expired in 2017 and there’s been little headway since.

For the studios, we’re told, China remains a very important market, but one that needs to find a fine line between what’s important politically and what standing it wants to have.