How Ne Zha 2 Set Records & The Logistics of the Film Industry
You’ve probably heard of Ne Zha 2 (‘Nezha the Demon Child Conquers the Dragon King’), which just dropped in Chinese theaters on January 29th 2025, and sequel of the much-loved animated film Ne Zha (2019).
You’ve probably also heard that this movie set records after more than $1.6 billion at the box office. These titles include highest grossing film in China, highest grossing non-English language film, highest-grossing animated film, highest-grossing film of 2025, and 9th-highest-grossing film of all time. Not only that, it also became the highest-grossing film in a single box office territory, surpassing Star Wars: The Force Awakens (2015) in North America.
So now you may be wondering, what makes this animated film so appealing to moviegoers?
Why Ne Zha 2 Is So Popular?
The answer is actually surprisingly simple, and I’ll try to explain it spoilers-free so that you can still go watch it in cinemas.
Many people who went and watched the film were particularly astounded by its stunning graphics and special effects scenes. According to Puck, IMAX China CEO Daniel Manwaring called it the ‘best animation quality China has ever done’, showcasing just how good the visuals and animations were for this film.
The Chinese mythology and folklore that this film and its predecessor are based on also resonates with a lot of Chinese people, with the cultural connection enhancing many viewer’s experience. Some foreigners have even said that after watching the film, they developed a newfound interest in Chinese mythology, proving this film really did a profound job in connecting with its audience.
In addition, the portrayal of the main character Ne Zha also has a lot to do with the film’s popularity. Instead of a storyline mainly focusing on the development of a group, this film focuses on Ne Zha and his personal experience as he battles dragons to try and save his hometown. The story of individual growth is a quite moving ones, even if it’s in an animated film. That’s why movies are interesting - they make you forget about reality, making you so engaged in the storyline and the character(s) you feel like it’s real.
You could say that Ne Zha 2 is a blend of both the director’s ability to convey a compelling story and the graphics from China’s advanced gaming industry.
Last but not least, any successful film also has to have a powerful advertising campaign to support it. The much awaited hype around this sequel achieved that goal, and it’s also received many positive reviews on various platforms, further boosting its publicity and popularity, both within China and in theaters overseas.
However, I started questioning the movie, mainly how much of the $1.6 billion is revenue for the production company, and how do these theaters earn a profit?
The Logistics of the Film Industry
To answer my questions, I first had to understand the different parts that made up the film industry.
The people who make the movie (the producers) are responsible for both the production and promotion of the film, as well as things like legal and regulatory as well as financing.
A movie starts with production, an umbrella term for the pre-production (i.e. script-writing), filming (i.e. sound recording and shooting scenes), and post-production (i.e. editing and visual effects) phases. This is basically the period of everything related to creating the film, and by the end of production, you’ll have a fully-finished film.
Normally after the production of a film, sufficient advertising is required to boost the film’s hype and publicity before its scheduled release, which can help generate more revenue from the film. The industry standard for advertising and promotion costs is roughly half of the production budget, meaning if a company spent $100 million to produce a movie, then an additional $50 million should be spent on promoting the film, That means to not make the movie a loss, the production company has to earn back $150 million, and even then, they still haven’t made any decent profits.
However, the producers aren’t the only player in the film industry. Theaters are also an important part regarding the exhibition of a movie.
Theaters are the ones who show the movies on big screens, and usually are independent from producers, though they’re collaborative partners. Producers make the movie and rent it to theaters for a price, while theaters charge a fee (the ticket) to consumers to watch it, and that ticket revenue is normally split fifty-fifty between producers and theaters. This way, both producers and theaters can have a steady amount of revenue.
But the ticket you buy isn’t the only way that producers and theaters can make money.
If you’ve ever went to a theater to watch a movie, you probably also bought some concessions (foods and drinks and merchandise) that were ‘overpriced’ to say the least. These are a major way theaters earn money, by selling you stuff at a huge profit margin. Not only that, they try to maximize the chances that people will buy these products by having those very eye-catching signs and giant sections dedicated to selling concessions, just so that they could sell you super-expensive popcorn that you’ll never possibly finish in one sitting. It’s sneaky, however it works. What moviegoers are buying isn’t actually the product, it’s the experience of munching on buttery popcorn and watching the big screen while sipping on soft drinks in huge bottles.
Theaters also get a portion of their revenue from the utilization of ads. If you got to a movie early, you probably would’ve witnessed them playing an ad, and then the trailer of the movie. But before the actual movie starts, another ad will be played. While you may be annoyed at the appearance of ads before the action, it’s crucial that theaters have them, especially the second one, which is the golden spot of advertising inside the industry because of its profitability.
You see, the movie doesn’t start at the specific time on your ticket. It’s delayed to have time for all audiences to settle into their seats, and in that period, ads can be played. The golden spot is particularly profitable because it’s just before when the movie is scheduled to start, and the period when practically all moviegoers have arrived. This means that lots of pairs of eyes will be watching the screen, increasing the effectiveness of an ad.
For producers, there’s also been a growing number of ways they can earn money as well, especially with the introduction of digital platforms in recent years. Streaming (i.e. Netflix, Disney+), DVD, and licensed merchandise can all be effective flows of revenue for a production company once their movie has taken off the ground.
The time that a movie is in theaters exclusively (or ‘only in theaters’) has a special name, the theatrical window, where the production company can’t show the movie on streaming platforms or others. This is to ensure that people would actually go to theaters to watch it, instead of watching it on the couch at home, so that theaters can earn money.
However, if you can wait a few months and resist the urge of rushing into theaters with your friends to see what the Ne Zha 2 movie and the hype around it is all about, the movie will eventually be released online to a variety of platforms and you can watch it there.
Conclusion
Like any other industry, the film industry is particularly complex, and what we covered today is a simplified version of the production and distribution side of it. There are also other parts to it, including the complex legal side that is copyright protection law, the financing of huge movie projects, and the planning of entire franchises, that sadly can’t all be included in one article. However, if you’re interested in film-making, don’t hesitate in pursuing your hobby.
Who knows, maybe someday, your movie will become the next blockbuster!
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