"But the fact is, there are different ways to recoup a movie's expenses, not just from ticket sales," Zhang said. "We have to judge whether a movie makes a profit or loses money in the long run, which is quite a complicated process," he said.
Currently, Chinese filmmakers mainly raise funds on their own, but new channels for raising capital are emerging. "With the improvement in China's banking system, more and more film and TV companies are relying on financial institutions to raise money, with box-office income, copyrights and sometimes an individual's personal reputation as guarantees," said Wang Ran, CEO of Yikai Capital Co. Ltd.
In the past, Huayi Brothers—which became a public company in September 2009—helped Director Feng several times to obtain collateral-free bank loans. To a great extent, Feng's great renown in China had already become a guarantee for box-office sales. But less famous filmmakers, and productions without famous stars, can't expect the same ease in attracting funding.
"To measure whether or not China's film industry has reached maturity, we have to see how many investment companies are actually operating normally and regularly in this field," said Wang.
Many Chinese directors believe that acclaimed stars are the best way to attract audiences. This may explain why three directors—Feng, Chen and Jiang—chose Ge You, a Cannes Best Actor winner in 1994, to play the leading role in their films released in last December.
"As a matter of fact, there are not many highly rated films to sustain the market," said Gao Jun, Vice General Manager of the New Film Association Co. Ltd., a Beijing-based cinema chain. Citing the 27 domestic films shown in October last year as an example, he said that only one made a profit, while all the others lost money. "In the final analysis, the audience is more concerned with quality than other elements."
"Altogether some 500 films were produced last year. If they equally shared the 10 billion yuan ($1.49 billion), each would gross no more than 20 million yuan ($3 million) on average and the net profit for each movie's producer would be just 3 million or 4 million yuan ($447,760 to $597,000). In other words, many studios could not even recover their costs," Gao said.Nevertheless, Director Jiang's Let the Bullets Fly, starring himself, Ge, and Hong Kong star Chow Yun-fat, appeared to be a huge box-office success. This film, which had a budget of 110 million yuan ($16.42 million), brought in 400 million yuan ($59.7 million) in its first two weeks.
"To attract an audience of 20 million, box-office receipts should exceed 600 million yuan ($90 million). That means we have to let at least 200 million people hear of the movie in advance, if 10 percent of them eventually show up at the cinema, in order to reach this goal," said Ma Ke, the producer of Let the Bullets Fly. Therefore, he spent 50 million yuan ($7.46 million)—nearly half of the movie's budget—on advertising.
"Of course, the prerequisite is that we must shoot a good movie that is really appealing to the audience. A person who spends dozens of yuan going to the cinema wants to have an artistic treat, not be fooled by low-quality stuff. We must manage to meet the needs of the people; then naturally we shall be repaid by good box office sales," he said.
Jiang and Ma attached great importance to screenwriting, which ensured the quality of the film and helped to bring in huge box-office takings at the same time.
The year 2010 also featured more cooperation between Chinese and foreign filmmakers.
Actually, three films jointly produced by Chinese and American studios—Shanghai starring American actor John Cusack, Chow and Chinese actress Gong Li, The Karate Kid featuring kungfu star Jackie Chan, and Hot Summer Days—drew large audiences last year.
In late December 2010, Director Zhang Yimou announced that British actor Christian Bale would join the cast of his latest movie Nanjing Heroes.
Last December, a major Hollywood studio also bought the rights to remake Director Jiang's Let the Bullets Fly, and Jiang himself has been invited to direct the U.S. remake.
This cooperation trend continues this year. A 3D animated cartoon, Little Big Panda, made by Chinese and German studios at a cost of 350 million yuan ($52.24 million) will be shown in China during the Spring Festival period starting from February 3.
A film summit between the United States and China—with the theme of Co-production and Cooperation—was held in Los Angeles last November. This shows that the enormous Chinese market has attracted the attention of Hollywood directors and producers.
"Breaking the cultural barrier is the foundation of the bilateral cooperation in the film field," said Bill Mechanic, who served as chairman and CEO of Fox Filmed Entertainment from 1994 to 2000. In collaboration with Hong Kong director John Woo, he is currently planning to shoot a movie about Chinese immigrants building railways in the United States in the late 19th century. "We hope to produce a movie enjoyed by both Chinese and American audiences," he said.
In the past, Hollywood sold a lot of U.S. films to China, but seldom cooperated with Chinese studios in making movies. Such a situation may be changing soon. Hawk Koch, Co-president of the Producers Guild of America, has had a pleasant experience working with his Chinese colleagues. He believes China will become the world's second largest film market in the near future.