A January 8th, 2014 post to China Daily recaps an amazing 2013 for the motion picture business in China.
In a major change from 2012, Chinese-produced films dominated the market:
"Domestic films accounted for 58.65 percent of the total market, raking in 12.77 billion yuan [US $ 2.11 billion] at the box office, and improving their showing 54.32 percent year-on-year."
Unlike 2012 (which started with Hollywood films taking over 63% of total Chinese box office and embarrassing the State Administration of Press, Publication, Radio, Film and Television or SARFTR), 2013 saw a flowering of home-grown Chinese films.
At the top of China's box office in 2013, Stephen Chow's action comedy Journey to the West: Conquering Demons grossed a stunning 1.24 billion yuan (that's over US $ 200 million). Released on February 10, 2013 to take advantage of the Chinese New Year, the film set several records including the biggest single-day gross - which had previously been held by Transformers: Dark of the Moon.
While Stephen Chow stood alone at the top of the 2013 box office in China - other Chinese filmmakers were able to make significant marks.
In all, 7 of the top 10 films in China were locally-produced, including 5 more films that passed the 500 million yuan mark: So Young (#3 at 717 million yuan), Young Detective Dee: Rise of the Sea Dragon (#5 at 600 million yuan), Personal Tailor (#6 at 581 million yuan), American Dreams in China (#7 at 538 million yuan) and Finding Mr. Right (#8 at 519 million yuan).
With so many titles approaching (or topping!) US $100 million at the box office in China - ambitious studio execs might consider studying Mandarin.
But Hollywood's influence in China was seriously challenged in 2013.
Only 3 of the top 10 films originated in the West.
And, of that number, 2 of the 3 Hollywood movies that made the top 10 list - Iron Man 3 (a distant 2nd behind Journey to the West: Conquering Demons, with ticket sales of 753 million yuan) and Pacific Rim (#4 with ticket sales of 694 million yuan) - notably had prominent Asian elements.
Iron Man 3 was produced in part with Chinese money and used Chinese locations and stars for a version that was released only in China. And Pacific Rim had a Japanese woman as a protagonist - and featured a climactic battle in Hong Kong Harbor.
Only Gravity (#10 with ticket sales of 435 million yuan) might be described as an all-North-American film - although the presence of a female lead and a Mexican director and DP working on a film that cost well under US $100 million might also be distressing news to studio execs who've gone all-in on fanboy-superhero franchises.
The lesson from 2013 is that Chinese audiences were very receptive to films made outside the Hollywood studio mold.
What's a Hollywood executive to do?
The booming Chinese box office demands respect.
But getting Hollywood films into the mainland (the quota system and censorship issues remain in place)... and figuring out how to market to Chinese viewers once you're on Chinese screens....?
Film industry folk who are also China-watchers may remember that SARFT relented in the face of heavy lobbying and gave a local filmmaker exclusive access to Chinese theaters over the first two days of holiday weekend in late April 2013, helping So Young to get a head start over Iron Man 3. SARFT also pulled Django Unchained from theaters on its opening day in April 2013, only allowing a re-edited version of Quentin Tarantino's film to unspool one month later into fewer theaters and facing tougher competitive headwinds.
The hurdles for Hollywood filmmakers in China are great. But the need to make content that works in the Middle Kingdom - China is now the #2 theatrical film market in the world and on pace to eclipse North America by 2020 - is simply unavoidable.
Will the boom in motion pictures in China - especially the theatrical side - taper off?
Maybe eventually... But China Daily quotes Yang Shuting, senior analyst with Beijing-based EntGroup Consulting, citing two trends that have not stopped yet: "The growth of annual box office receipts is mainly driven by the continuously accelerated establishment of theaters across the country, as well as the improved quality of Chinese movies."
Basically, the growth in China's appetite for new films doesn't show any immediate signs of slackening. In fact, in addition to the theatrical side, the market for online content - and the systems for monetizing that online content - show every sign of strengthening.
In short, for Hollywood filmmakers with their eyes on China, it's the best of times and the worst of times.
With no clear models, it's a challenging new frontier.
Yes... The risks are huge. But the potential rewards require, now more than ever, making Chinese audiences (and officials) happy.
Thanks to Todd Gordon for the link to the CNN video above - that features comments by Rob Cain, whose ChinaFilmBiz blog is a great resource.