Chinese film industry expects big action
Liu Hongyi, 27, touts himself as a devoted movie buff. But he rarely goes to the cinema.
"Most good cinemas are far from here and are located in downtown Beijing," explained Liu, who came to Beijing eight years ago from Heilongjiang Province as a migrant worker. "The tickets are a bit too expensive for me."
Along with his girlfriend Xiao Fang, he often watches movies on a VCD/DVD player. Liu admits that a large portion of the purchased VCDs and DVDs are pirated.
Most films he watches are by European and American directors. He has watched the DVD version of only a few home grown productions, such as "Kekexili" directed by Lu Chuan and "House of Flying Daggers" by Zhang Yimou.
Liu is but one of millions of Chinese movie fans who, for various reasons, have long abandoned the habit of going to the cinema for domestic films, pointed out Sun Jiansan, a veteran Chinese film historian in Beijing.
With the new opening and reforms in the film industry that began at the end of last year, Sun hopes to see people like Liu return to cinemas to watch homemade films.
Private and foreign investment now has greater access to the film industry.
Warner China Film, a Sino-US film-making joint venture, officially opened its office last month in Beijing.
'It's a big deal'
The Beijing-based joint venture was launched by Warner Brothers Pictures, the motion picture production unit of US media giant Time Warner Inc, together with the State-owned China Film Group Corp and the privately-run Hengdian Group.
It is reported that China Film Group Corp holds a 40 per cent stake in the joint venture, Warner Brothers and Hengdian each hold 30 per cent respectively.
It is reported that the joint venture will begin work on its first film early next year.
Warner (China) also revealed that the joint venture will make two to three movies and one TV series every year for the next five years.
The production company will mainly produce Chinese language movies and TV series.
The film and TV works to be made by the venture are subject to the same film screening procedures as other domestic films.
The deal has been hailed by industry analysts as history-making, both for the Chinese film industry and for the leading player in global movie businesses.
"The joint venture marks a new milestone for the Chinese film industry and it demonstrates that the industry is quickly opening to foreign investment, and ready to take its rightful place in the global entertainment business," said Yang Buting, chairman of China Film Group Corp, who will serve as the venture's initial Chairman of the Board.
"This partnership represents a true 'dream team' - three companies that are each leaders in their respective fields. They can bring together vast, mutually complementary strengths and resources," he added.
Sun Jiansan pointed out that people may not fully understand the significance of the deal.
"It means foreign investors are able to step into almost every sector of the Chinese film industry, including film production, post-production, distribution, exhibition and cinema management," Sun said, citing China's commitment to the World Trade Organization (WTO).
The birth of the Warner China Film company has aroused discussion in the Chinese film circle.
Some people said the international presence in the Chinese film industry poses a threat to the survival of the fledgling Chinese film industry, as most local film companies remain weak in the face of fierce competition from foreign counterparts.
"With foreign investment entering, a war on film market share is unavoidable," said Zhu Hong, spokesperson of the State Administration of Radio, Film and Television (SARFT).
"Despite various pressure and concerns, the greater access of foreign investment in the Chinese film industry is on the whole a good thing."
The smooth entry of foreign investment in the domestic film industry will bring about not only competition but also new ideas, new technologies, professional expertise, market-tested business concepts and profit models, said Wang Jing, film director and professor in the Cinematography Department at the Beijing Film Academy.
"We want to make it clear that the purpose of introducing foreign investment is to make a bigger cake, not to split a tiny cake," Zhu said.
"Greater access to foreign investment will help enlarge the film market. It will, at the very least, improve Chinese cinema facilities, service and management," said Xie Xiaodong, managing director of the one-year-old Beijing Massway Film Promotion and Distribution Company.
State-owned cinemas such as the Beijing Xinyinglian Cinema Circuit, the Tianjin Yinguang Cinema Chain and the Shanghai United Cinema Circuit are badly in need of funds to upgrade their equipment and compete with joint venture cinema complexes such as the China Film Stellar Film Chain, the Beijing Century Universal Cinema Circuit and Paradise Warner Cinemas in Shanghai and Nanjing.
Xie's company has just successfully distributed a low-budget Chinese film "The Last Level" (Shengdian) among some high quality cinemas in China.
"The opening up policy has injected life into many Chinese industries, such as the mobile phone and colour TV set manufacturing sectors," Xie noted. "Protectionism will not benefit the industry."
Past and present
"I believe the Chinese mainland film market is like an untapped gold mine. There is great potential for growth. But it needs new incentives, such as reforms and opening to international investment," said Yu Dong, general manager of Beijing Poly Nona Film Distribution Co Ltd.
Yu cited some other Asian film markets for example.
The annual gross box office revenue is reportedly around 8 billion yuan (US$1 billion) in South Korea, a nation with a population of about 60 million. Cinemas generate about 1.2 billion yuan (US$150 million) in the Hong Kong Special Administrative Region, which has a population of about 6.8 million, and 1.3 billion yuan (US$ 160 million) in Taiwan, which has a population of about 23 million.
However, the annual gross box office revenue in recent years has remained below 1 billion yuan (US$121 million) on the Chinese mainland, which has a population of around 1.3 billion.
According to a recent survey by the Chinese Film Artists Association, per capita spending on cinema admission fees each year is 0.8 yuan (10 US cents) on the Chinese mainland.
"If each person on the Chinese mainland spends 10 yuan (US$1.30) at the cinema every year, the annual gross box office income would be 13 billion yuan (US$1.6 billion)," Yu said.
"Chinese cinema art had a glorious past in the 1940s, 1950s and 1980s. But now the film industry is caught in deep trouble," noted Sun, who has closely monitored the national film industry for decades.
The Chinese film industry has long been plagued by a long list of problems.
Many in the industry are dissatisfied with the current market situation, said Li Xin, a film industry observer with the China Film Press.
Audiences complain of shabby facilities at older cinemas and poor services, high ticket prices and the inconveniences that arise when going to the cinema such as traffic jams and parking.
Film distributors and managers of Chinese cinemas grumble about the shrinking number of moviegoers, the infringement of box office income by pirated films in VCD/DVD format and make a desperate cry for films that can score decent box office revenue.
Filmmakers blame the film distributors and cinema managers for their inability to attract more viewers.
Investors point out that film makers lack acumen to deliver high quality work. They are also wary of what they call the "unpredictability of the Chinese film market."
Film officials complain about the sluggish performance of Chinese films in the domestic market.
Meanwhile, film analysts and critics criticize the numbness and incompetence of the local film industry in the face of increasing competition from Western counterparts.
All the differing complaints have contributed to movie fans' reluctance to patronize cinemas for domestic films.
"We have been disappointed with some Chinese filmmakers that are too slow to change in a rapidly changing industry," said Sun Jiansan.
Sun recently conducted a random survey among 200 teachers and students from five universities in Beijing, only to find less than 1 per cent of those surveyed regularly go to the cinema for domestic films.
Sun's survey may be too small to be conclusive, but the dramatic drop in circulation of Popular Film is more telling.
The monthly magazine, under the auspices of the Chinese Filmmakers' Association, achieved a circulation of more than 8 million in 1981 and 1982. But over the past few years, the magazine has managed to maintain a circulation of only 200,000.
In the early 1980s, a few million viewers cast their votes, via Popular Film magazine, for the country's popular Hundred Flower film awards.
This year, the Chinese Filmmakers' Association only received 200,000-plus votes, delivered via questionnaires on designated national newspapers and via mobile phone short messages.
"Who will benefit most from the changes? The millions of common moviegoers. They will find it easier, cheaper, more comfortable, and more importantly worthwhile, to go watch various movies in a high quality movie multiplex," Sun said.
It is foreseeable that some people and companies within the old system of the film sector will suffer, in the face of mounting competition, Sun said. However, that will only result in a healthier and sturdier Chinese film industry, he said.