New York CNN Business  — 

The movie industry grew up in Hollywood, but this iconic American institution is now relying on the rest of the world as it seeks to recover from a pandemic that has devastated the global box office.

For years, Hollywood has focused on the domestic box office as the heart of a film’s financial life. But as the international market has matured, its grosses have become critical to studios’ profitability. For now at least, thanks to the pandemic, the US role in the equation is diminished even further.

Studios are hoping that international revenue can help sustain the movie industry while the US struggles to regain its footing after a fumbled coronavirus response. With theatrical exhibition in the US only now lurching back to life, revenue from other countries — especially China, but also Europe — is the most closely watched barometer for the industry.

And for Disney (DIS), Hollywood’s biggest studio, the US is not even a part of its theatrical strategy for this weekend’s “Mulan.” After multiple delays, the studio is releasing the live-action remake of the 1998 animated classic only on its new streaming service Disney (DIS)+ in the US on Friday. It will also open theatrically in a handful of smaller, international markets.

The idea of a blockbuster like “Mulan” opening in theaters overseas but not in the US was inconceivable only a few months ago. The move could be a “transformative” moment for Hollywood, according to Aynne Kokas, an associate professor at the University of Virginia and author of “Hollywood Made In China.”

“The US is the largest box-office market in the world. It likely will not maintain that title this year if the COVID restrictions continue,” Kokas said. “This could be a blip if the US is able to return to its previous situation, or it could be an inflection point.”

“‘Mulan’ was tailor made for Chinese audiences”

Disney finally opted to experiment with a premium video-on-demand option for “Mulan” — charging $29.99 to access the film through Disney+. The studio also announced that the film would be released in markets where theaters are open and the service is not available.

But no matter how well it does on streaming, the studio will also get revenue from markets outside the US, especially in China, where the film is set to open in theaters on September 11.

China, the second biggest movie market in the world, is vital to Disney and “Mulan.” The country has been growing into a box-office behemoth for some time. Last year, the Chinese box office represented roughly 22% of the global box office, according to Comscore (SCOR), up from 8% in 2012.

According to the analytics firm Gower Street, China is also the nation closest to rebounding to something approaching pre-pandemic levels, based on its “blueprint to recovery” that requires it to hit various benchmarks.

Notably, China released a genuine blockbuster of its own in August: “The Eight Hundred,” from China’s CMC Pictures. The war epic grossed more than $100 million in the country on its opening weekend and has accumulated more than $300 million in China thus far, per its distributor, while generating modest numbers in Australia, New Zealand and the US.

Shawn Robbins, chief analyst at, told CNN Business that it’s unlikely Disney would have released “Mulan” on Disney+ right now “had China’s theatrical market not been open.”

“The math behind this strategy suggests the combination of a premium streaming release combined with theatrical in China and other international markets is the best-case scenario to break even,” he said.

The film, about a legendary female Chinese warrior who disguises herself as a man to fight for her country, was designed to be a blockbuster in the US and China. It has an international cast led by Yifei Liu and is a more straightforward epic than the animated version.

Indeed, “Disney’s ‘Mulan’ was tailor made for Chinese audiences — from casting, to story, to execution,” Jeff Bock, a senior analyst at entertainment research firm Exhibitor Relations, told CNN Business. “It was always meant to be a film that China would embrace, and hopefully, turn into a commercial juggernaut.”

“The scenarios are far and wide-ranging at the moment”

“Mulan” is not the only blockbuster focusing on the international marketplace right now.

“Tenet,” the Christopher Nolan film from Warner Bros. (like CNN, a unit of WarnerMedia), exceeded expectations in its initial release last weekend in 41 territories — including Canada, but not the US — amassing $54 million.

The movie, which opens in the US this weekend, has a strong chance of continuing to perform well given how little competition there is from other high-profile titles.

Results from the next few weeks will be watched closely.

“The scenarios are far and wide-ranging at the moment,” Robbins said. “Once we can gauge the long-term domestic and overseas runs of films over the next few months, we’ll have a better idea of what kind of evolution — if there even is a significant one — is taking place in the global market.”