The Power of the Market
Blockbuster ferment had the unexpected side-effect of stimulating the cult movie market. Ning Hao’s Crazy Stone, with an investment of just RMB four million, earned RMB 23.5 million at the box office. Meanwhile Jia Zhangke’s Still Life, although not a box office hit, won the 2006 Venice Film Festival Golden Lion award for its realism.
Incipient Market Potential
The total box office earnings of Chinese films in 2007 surpassed RMB 6.7 billion, of which RMB 3.327 billion came from domestic films, breaking the 1992 record of RMB 3.2 billion. Since then the Chinese film market has burgeoned. Box office receipts increased 30.4 percent in 2008, 42.96 percent in 2009 and 63.9 percent in 2010 to a massive RMB 10.17 billion. In 2010, 17 domestic films earned RMB 100 million, champ among them Jiang Wen’s Let the Bullets Fly, which brought in around RMB 700 million.
In 2011 Chinese mainland box office returns surpassed RMB 13 billion, making its film market third only to North America and Japan. The number of screens in China that year was close to 10,000. “Dark horse” productions that the cinema-going public unexpectedly flocked to see imply the growing maturity of Chinese film audiences as well as marketing discernment. Box office earnings in 2012 exceeded RMB 17 billion.
In the first 10 months of 2012, 638 feature films were produced in China, accounting for 80 percent of total screenings. But they contributed only 41.4 percent to the total box office. 2012 marked the first time in nine years that imported films outperformed domestic films at the box office. Among the 10 top-grossing movies of 2012 only three – Wu Ershan’s Painted Skin: The Resurrection, Xu Zheng’s Lost in Thailand, and Feng Xiaogang’s 1942 – were made in China. Although China has become one of the top three in terms of movie production, it is unable to compete with European countries, the U.S., Japan or South Korea in such indexes as general income, box office, per capita frequency of cinema visits, and the number of screens per 100,000 people. In accordance with the 2012 agreement between China and the U.S., China expanded its imports to include 14 3-D or IMAX movies in addition to the previous 20-movie quota, and the income-share of the U.S. movies increased from 13 to 25 percent. The new policy has both complicated and confused the future of the domestic film industry.
The coming into effect of several other policies has added momentum to the Chinese film market’s leap forward. In 2011, three regulations among a series that China launched that year stand out. They are: that the revenues taken by cinemas can’t exceed 20 percent at the first round of screening of a film; that the annual rents of cinemas should not exceed 25 percent of their annual box office returns; and that the attached advertising should be managed by the cinemas rather than by the producers. These three regulations play a guiding role in the interest distribution of the film industrial chain, protecting content producers and ensuring film market regulation.
Today, the influence of the capital market is apparent in integrated film industry resources. Venture capital, private capital and other capital institutions are all involved in its development. The Chinese film industry moreover consciously utilizes capital, through resource distribution and adjustment of the domestic and international market, to develop trans-industrial and trans-national omni-media, and global-oriented and whole industrial chains.
The success of the Chinese film industry is no longer dependent on the country’s international directors. Ning Hao, director of Crazy Stone, and Wu Ershan, director of The Butcher, the Chef, and the Swordsman and Painted Skin: The Resurrection, achieved recognition in 2012. Both having gained valuable cinematic experience from shooting commercials, they used their own funds to make so-called underground films that later won awards at international film festivals. 20th Century Fox bought out The Butcher, the Chef, and the Swordsman while it was still in post-production, and Painted Skin: The Resurrection, with an investment of more than RMB 100 million, earned RMB 730 million or more at the box office, setting a new record for domestic movies.
Movies have thus become commercial goods in China, and the film industry looks set for ever-greater development.
ZUO SHULA is a senior film critic.
