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Chinese Movies Threatened by Hollywood
Cover Stories Series 2013> Chinese Movies Threatened by Hollywood
UPDATED: January 28, 2013 NO. 5 JANUARY 31, 2013
The Hollywood Affair
The Chinese movie industry faces an increased Tinseltown threat
By Ji Jing

LARGER THAN LIFE: Visitors look at character models from The Avengers at the eighth China International Comics Games Expo in Shanghai on July 12, 2012 (PEI XIN)

Last year proved a bumper harvest for Hollywood films in the world's second largest market.

China's box office sales hit 17.07 billion yuan ($2.74 billion) in 2012, surging 30.18 percent year on year with Hollywood palming more than half the total earnings, according to the State Administration of Radio, Film and Television (SARFT) .

Domestic film revenue reached 8.27 billion yuan ($1.33 billion), accounting for 48.46 percent of total sales, the first time in 10 years that local movies earned less than those from foreign shores.

Weakened performance is partly due to a film agreement signed by China and the United States in February last year by which Hollywood film imports would increase from 20 to 34 per year. The additional 14 movies were mostly in 3D or IMAX formats and raked in 3.6 billion yuan ($578.9 million) last year. The United States will share 25 percent of box office revenues drawn from its film exports to China, a sharp increase from the original 13 percent.

Rivalry from imports was acutely felt during the first half of 2012, when domestic movies took up roughly 35 percent of total box office sales. Among the more than 100 local films shown during that period, only 5 percent broke even while the rest experienced losses. Matters might have been worse had it not been for the fantasy Painted Skin: The Resurrection, which grossed 700 million yuan ($112.5 million) and the low-budget comedy Lost in Thailand, which earned 1.2 billion yuan ($192.9 million), breaking the box office record for a local production. Both made up one fourth of domestic film revenue.

Tong Gang, head of the SARFT film bureau, says that, apart from the increased number of imported movies, weak domestic performance in 2012 was in part due to low competitiveness. "China's film industrialization is far from complete. The market needs supportive policies and technology to improve production," he explained, noting the need to reach out to more rural audiences and diversify subject matter.

Hollywood's advantage

At present, two thirds of Hollywood revenues come from abroad, with its films taking up more than 60 percent of market share in most countries.

Cheng Guangyan, a director of China Film Stellar Theater Chain, told Beijing Review Hollywood's success centers on industrialization. The American film industry can be compared to car manufacturing due to its similar adherence to a production line. Each employee is responsible for one specialized function, overseen by producers who manage costs, progress and quality. China's film industry by contrast lacks suitably trained and specialized talent in its film industry.

Sequels, which Hollywood does well, are another marker of the industry's success. "If audiences enjoy a movie, they are automatically attracted to the concept of 'what happens next'," Cheng explained, pointing out that Lost in Thailand is a follow-up to Lost on Journey in 2010. Although the latter only earned 50 million yuan ($8 million), it secured interest in future productions.

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