Make Way Hollywood?

China's Film Industry on the Up and Up

By staff reporter ZHANG HONG

Flying Swords of Dragon Gate and The Flowers of War, two theater hits of 2011. Photo by CFP

Boom Time

Zheng Gang, now in his forties, waxes lyrical about the films he watched as a teenager. At that time in his hometown in Shanxi Province, north China, Zheng Gang would often sneak off to a dilapidated auditorium that had been transformed into a makeshift movie theater to watch his favorite stars on the big screen. Zheng recalls the piles of discarded candy wrappers strewn in the hall and how staff would use megaphones to hush the audience

Moviegoers didn't mind the poor condition of theaters since watching a film was considered the height of luxury 30 years ago in China. When the Japanese blockbuster, Manhunt (Kimi yo fundo no kawa wo watare) hit local screens, Zheng Gang, 16, watched it six times in a single week. The Shaolin Temple, which is credited with starting the Kung Fu revitalization on the mainland, also made a deep impression on him. The film had such an impact that reports of teenagers leaving their homes to learn martial arts at the Shaolin Temple in Henan Province were common.

"It cost me just RMB 0.1 to watch The Shaolin Temple in 1982," recalls renowned Chinese economist Lang Xianping. "But in 2007, I spent RMB 80 to watch Transformers." Lang points out in one of his essays that ticket prices in China have soared by a multiple of 800 in the last 25 years. Although many people agree this increase is excessive, it seems it hasn't impacted on the upsurge of box office receipts in China.

The market for films in the Middle Kingdom is large and growing. Box office revenue exceeded RMB 10 billion in 2010, a 60-percent increase over the previous year. In 2011, revenue continued its upward trend, recording a 30-percent increase to exceed RMB 13 billion.

Chinese filmmakers expect annual box office receipts of RMB 20 billion in the near future. Han Sanping, a film industry heavyweight and chairman of China Film Group Corp, is even more confident about the industry's growth prospects, forecasting a future annual box office of RMB 40 billion. This may sound overly optimistic, but it is a realizable figure in the long run.

China has seen a significant uptick in film infrastructure development. In 2010, 4.3 new movie screens were opened daily. In 2011, the figure reached eight. The total number of movie screens in China surged from 6,200 in 2010 to nearly 10,000 by the end of last year.

"China's film industry has entered a stage of rapid growth," said Wang Yunping, a researcher with the National Development and Reform Commission of China. Since 2003, when more reforms were launched to help the industry, box-office receipts have shot up at an annual rate of 30 percent on average. This has defied world trends, Wang says.

Blockbuster Bonanza

In the early 1990s, China's film industry made hardly any progress at all. By the mid-90s, filmmakers saw the potential in the market and were eager to rejuvenate the industry. It was one auction that changed everything.

In 1995, film director Ye Daying was planning to release his new production Red Cherry, but was rebuffed by distribution companies in 19 provinces and cities. Eventually, Beijing-based New Film Association Co., Ltd. came to Ye's rescue and decided to auction the movie's premiere rights. According to Gao Jun, vice general manager of New Film Association Co., Ltd., films can be auctioned in the same way as antiques and artworks. Gao took charge of the auction in 1995 and clearly remembers the day Beijing Geology Hall Theater submitted the final bid for a nine-day premiere stint at RMB 520,000.

The film brought in a profit of RMB 880,000 for the theater. The price of the film's subsequent rights rose immediately. Jiangsu Film Distribution and Screening Company, having once refused the rights to Red Cherry at RMB 280,000, then had to spend RMB one million to buy them. Red Cherry, made on a budget of RMB 17 million, went on to gross over RMB 60 million in the domestic market. This represented a high water mark for Chinese films.

Inspired by Hong Kong's "New Year movie season," Gao Jun, along with Zhang Heping, founder and general manager of Beijing Forbidden City Film and TV Distribution Co., Ltd., and Wang Zhu, deputy director of Beijing Municipal Bureau of Culture, decided to introduce the concept to the mainland film market.

"Before 1995, most movie theaters on the mainland would close during the Spring Festival. It was considered a bad time for releasing a film," Gao Jun says. That belief was shattered by Jackie Chan's Rumble in the Bronx, released during the Spring Festival in 1995. The film pulled in RMB 110 million on the mainland. Nevertheless, Gao Jun and other filmmakers regarded Rumble in the Bronx as an accidental success until another Jackie Chan film, First Strike, grossed over RMB 80 million during the next year's Spring Festival.

In 1997, the New Year release of Feng Xiaogang's Dream Factory was deemed a test case for the mainland's filmmakers. To the delight of industry players, the comedy raked in RMB 11.5 million in Beijing alone, handsome proceeds indeed for a movie with a budget of RMB 4 million.

In the next two years, Beijing Forbidden City Film and TV Distribution Co., Ltd. successively produced and marketed Be There or Be Square and Sorry Baby, setting a solid foundation for the development of Chinese New Year blockbusters.

Today, the New Year movie season in China has grown into a mature and reliable market for film releases. Box office revenues for the month of December 2010 alone hit RMB 1.2 billion.

Gao Jun says tailor-making films for the New Year period is a milestone in the progress toward realizing the full potential of China's film industry. Hong Kong film director Peter Chan agrees that boosting releases in the New Year season is important for the further development of the industry. "Holidays are always the ideal time to release films. Building a holiday film culture in the New Year season should boost audience numbers at other times as well."

At present, the four "golden" movie seasons, namely New Year, the Labor Day (May 1-7) holidays, the school summer vacation period and the National Day (October 1-7) holidays all see large numbers of moviegoers. Over 50 percent of annual box office revenue in China is generated during these holiday periods.

China's film industry is booming and keeps churning out big hits. Feng Xiaogang's Aftershock pulled in RMB 500 million in just 17 days. Love Is not Blind, a low-budget domestic production, beat Hollywood blockbusters to reach the RMB 300-million mark 16 days after its release.