China's film industry "alive and well"

Box office receipts last year topped $330 million

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BEIJING--China’s film industry is no crouching tiger. Despite rampant DVD piracy in the mainland, both mainland Chinese cinema audiences and filmmakers are "alive and well," said Matthew Brosenne, international business director at CSM Media Research, a joint venture between CTR Market Research and the TNS Group. CSM produced a survey based on 1,065 interviews in Beijing, Shanghai and Guangzhou during June 2007, among respondents aged from 7 to 55 who had been to the cinema in the previous six months.

According to CSM, more than half of Chinese aged 15 to 55 go to the cinema at least once per month. While the frequency for those 7-14 years old is lower, even that age group goes to the movies once every two or three months.

Watching films in the cinema is one of the top three most popular activities among respondents, scoring higher than playing computer games, eating out and attending sporting events. More than 70% of respondents over age 14 see cinema-going as a favorite hobby, compared to 54% for eating out, and 52% for attending sports events. CSM’s survey also found that nearly 90% of the total film audience is highly involved in supermarket and store consumption decisions.

Film preferences for audiences over 14-years-old are somewhat different than those for children between 7-to 14-years-old. The top five favorite film categories for those over 14 are: comedy (77.3%), action (70.7%), love stories (57.8%), science fiction (54.6%) and adventure (48.4%). For the 7-to 14-year-old age group, cartoons (62%), comedy (58%), action (47.3%), adventure (38%) and science fiction (37.3%) are the top five film genres.

Fewer than 50% of respondents felt taking advertising out of movie theaters would make the experience better, said Mr. Brosenne in Beijing. "This is significantly lower than figures for the other media, such as TV, radio, internet, newspapers, magazines and appears to indicate advertising in movie theaters is more welcome than in traditional media."

China’s film industry has become big business. Martial arts hits in the U.S. like the 2000 blockbuster Crouching Tiger, Hidden Dragon and global stars like Jackie Chan and Jet Li are equally popular with audiences at home. China produced 330 films last year, up 27% over the previous year, and a 375% jump compared with 2001. China is now the third-largest film production center in the world, behind India’s “Bollywood” and the U.S., according to China’s State Administration of Radio, Film, and Television.

Five of the top 10 films shown to Chinese audiences last year were made at home, not in Hollywood, and domestic movies accounted for 55% of all ticket sales. Box office revenues grew by nearly one-third last year to $336 million, from sales at 1,325 cinemas with 3,034 screens, a paltry number for a country with a population above one billion. However, ticket prices ranging from $4-$10 often can be steep in a country where annual urban per capita disposable income barely topped $1,500 last year. In rural areas, meanwhile, annual net income remains below $500.

China’s strong performance as a film market is partly due to nationalism. In an effort to stimulate the local movie industry, the Chinese government has loosened up controls on state funding for Chinese productions. The government also continues to limit the number of foreign films that can be aired in Chinese cinemas to just 20 per year, and has done little to stamp out easily accessible pirated DVD copies of foreign films in China, which cost about $1 each. Piracy in China cost filmmakers $2.7 billion in 2005, according to a survey by LEK Consulting for the Motion Picture Association of America.

The films made by renowned Chinese directors like Feng Xiaogang, Zhang Yimou and Chen Kaige and younger directors also resonate with local audiences. They include historical epic fantasies, comedies about China's changing culture and martial arts flicks.

Capitalism has also played a role. Despite their limited income, China’s rising middle class has more money to spend on leisure than ever before. Also, property developers are building clean, modern cineplexes that are vastly superior to the dirty, run-down venues that were once common in China.

While local filmmakers are prospering, the market remains tricky for foreigners. In addition to serious concerns about piracy, government regulators in Beijing strictly control western media companies such as News Corp. looking to invest in local productions for film and television, although co-productions are possible. Warner Brothers Pictures, for example, formed the first film-entertainment joint venture in China in 2004, with China Film Group and Hengdian Group. The partnership has turned out films such as The Painted Veil, a film shot in China starring Naomi Watts and Edward Norton.

China is taking steps to curb piracy, however. Earlier this month, a local court in Beijing awarded Twentieth Century Fox Film Corp. and five other Hollywood film studios $24,600 in compensation from a Chinese company, Beijing Yongsheng Century International Cultural Development Co., that sold pirated copies of their films such as Lord of the Rings.
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