China Box Office Up 36 Percent to $1.79 Billion in First Half of 2013

2012-10 BIZ China Tickets Illustration

When it comes to doing business with China, the devil is always in the details. The recent announcement that the Chinese government finally will comply with a World Trade Organization order to treat U.S. films more fairly is no exception.

Higher ticket sales for homegrown films boosted results as the haul of imported films dropped 21 percent despite Hollywood hits such as "Iron Man 3."

Buoyed by a surge in ticket sales for homegrown domestic films, China's box office continued its rapid expansion in the first half of 2013, according to figures released Wednesday by government media regulator, the State Administration of Press, Publication, Radio, Film and Television. 

China's box office sales totaled $1.79 billion (10.99 billion yuan) in the first six months, a 36.2 percent year on year increase. The bulk of the growth came from ticket sales for domestic films, which increased 144 percent to $1.11 billion (6.85 billion yuan). Imported films, meanwhile, fell 21.3 percent year on year to $675 million (4.14 billion yuan).

By pulling in more than 62 percent of total earnings during the first half of the year, homegrown productions have been part of a drastic reversal in fortune compared to this time last year, when official statistics showed local movies taking just 36 percent of box office revenue during the first six months of 2012.

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Over the past few years, many analysts have predicted the Chinese movie market will surpass that of North America within a decade. Some are now suggesting that tipping point may occur within as few as five years.

China's total box office revenue grew by 37 percent in 2012 to reach $2.7 million, supplanting Japan as the world's second largest movie market. Meanwhile, North America's box hit $10.8 billion in 2012, up 6 percent from the $10.2 billion recorded in 2011. A North American box office total for H1 of 2013 has not been released by the MPAA. 

Of the top 10 highest-grossing films in the first half of the year in China, four were local Chinese productions, which accounted for 54.4 percent of all box office revenue for those six months.

The top three films in the first half of 2013 were Stephen Chow's adventure comedy Journey to the West: Conquering the Demons with $204 million (1.25 billion yuan), Disney Marvel's Iron Man 3 at $123 million (755 million yuan), and local romantic comedy So Young at $117 million (719 million yuan). 

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The rest of the top 10 consists of Hong Kong director Peter Chan’s mainland-set American Dreams in China (US$87.7 million/538.6 million yuan), Beijing filmmaker Xue Xiaolu’s romantic comedy Finding Mr Right (US$84.7 million/519.7 million yuan), DreamWorks Animation import The Croods (US$64.3 million/394.8 million yuan), the latest James Bond installment Skyfall (US$61.3 million/376.5 million yuan), Star Trek Into Darkness (US$57.7 million/353.9 million yuan), G.I. Joe: Retaliation (US$55 million/337.7 million yuan) and The Hobbit: An Unexpected Journey (US$51.5 million/315.9 million yuan).

Official release schedules also reveal that there were 117 domestic releases out of the 146 new films that opened in China during the first half of the year. The number belies how the boosted revenues were largely due to blockbusters, with the five Chinese films in the top 10, contributing about 44.2 percent of the total box office gross for homegrown movies so far.

While China’s film regulators could use the gross figures as proof of having brought about a drastic reversal of fortune for the domestic film industry, the stellar performances of these films have been marred by accusations of overarching intervention on the state’s part in protecting their own productions.

Instances include domestic films being given Hollywood-free clear runs during extended holidays -- a treatment So Young enjoyed during the May Day period, when Iron Man 3 was denied a release to cash in on the break.

Interestingly, several of the international imports that appeared in the top 10 have been affected by this state-backed control in timing releases: It is understood that both Skyfall and The Hobbit only opened in 2013 -- months after they were released internationally, including in nearby Hong Kong -- so as to keep them from taking money from the domestic films being released in the usual "golden" period of November and December.