China boxoffice keeps climbing

Fifth straight year of growth for Chinese exhibitors

Updated: June 2, 2009, 08:29 PM ET

BEIJING -- Moviegoing is getting to be a habit with the Chinese -- and Hollywood is clearly taking a closer look.

China produced 406 feature films in 2008 and saw its boxoffice jump 30%, the fifth consecutive year of more than 25% growth.

In its annual report on the nation's media industry progress, the State Administration of Radio Film and Television said overall 2008 boxoffice receipts reached 4.3 billion yuan ($635 million), led by such companies as the state-run China Film Group, Huayi Brothers Pictures, the Shanghai Film Group and the New Picture Co.

Hollywood too is becoming more bullish about prospects in that country of 1.5 billion potential moviegoers -- despite still stringent regs and many restrictions on rentals.

"It's a fantastic market full of people who love movies," said Mark Zucker, president of Sony Pictures Releasing International.

He pointed to the optimism his studio feels toward the June 9 China opening of action title "Terminator Salvation" on 1,200 screens and the release later this summer of director Tony Scott's "The Taking of Pelham 1 2 3" with Denzel Washington and John Travolta.

Securing a play date in itself is something of a coup for a Hollywood major given the market's strict import restrictions. Despite these, "China is a territory of increasing significance," added David Kornblum, Disney vp international theatrical sales and distribution.

Five years ago, China was off the radar as a significant boxoffice revenue source for studio features. Now it ranks among the world's top 25 largest boxoffice hauls for the big six -- Warners, Disney, Paramount, Fox, Universal and Sony.

According to the MPA, the studios extracted from China $25 million in theatrical rentals out of boxoffice grosses of $194 million in 2007. In other words, the China market still has one of the lowest rations of rentals to grosses of any foreign territory -- roughly 13 cents of each dollar spent for a ticket is returned to the U.S. distrbutor as rental revenue.

Still, five years earlier, the rental figure was just $7.9 million. In short, the market has more than tripled for Hollywood studio films.

As impressive is China's enthusiastic embrace of digitalization. The market has the second largest number of 3-D screens overseas, after the U.K. -- which is by far the largest international feature territory for the Hollywood studios.

China now has 209 3-D situations (the U.S. has about 1,560). This means that China is a growing source of studio boxoffice distributors of films in 3-D.

Kornblum noted that Disney's "Bolt" last year generated $6.7 million in grosses exclusively from 3-D situations in China.

Although data shows that China's newly built urban multiplex theaters filled faster than ever before, the final 2008 tally was lower than industry estimates of 4.6 billion yuan.

Leading the way was "If You Are the One," director Feng Xiaogang's comedy about a middle-aged man's hunt for love, which raked in $47.6 million. Starring Ge You, the film beat out Hong Kong- and Hollywood-based John Woo's war epic "Red Cliff," which ranked second with $46.9 million.

SARFT said that despite the popularity of imported films like "Kung Fu Panda" and the Bond films (seen in a booming business for pirated DVDs and illegal downloads), domestic movies took the lion's share of theatrical boxoffice sales. One reason is that SARFT limits screenings of imports to 20 a year -- a practice that is a centerpiece of an ongoing U.S. lawsuit against China in the World Trade Organization.

Of the 10 highest-grossing films in China in 2008, seven were homegrown or made as co-productions with a Chinese partner.

After Feng's and Woo's films, the homegrown hits were "Painted Skin" ($34 million), Steven Chow's "CJ7" ($29 million) and the Jackie Chan-Jet Li starrer "The Forbidden Kingdom" ($27.5 million).

Imports "Kung Fu Panda" and "Quantum of Solace" followed, ranked sixth and seventh, respectively. They were followed by the domestic productions "Kung Fu Dunk" and "Forever Enthralled," with the import "The Mummy: Tomb of the Dragon Emperor" rounding out the list.

On the exhibition side, China's 36 theater chains, led by firms like Beijing-based Wanda Cinemas, built 118 multiplexes in 2008, raising the nationwide total to 1,545, up 8% year-over-year.

China has 4,097 screens, SARFT said, up 16% from 2007. The report acknowledged that moviegoing was slower in China's second- and third-tier cities, which lag Shanghai, Guangzhou and Beijing, where the total boxoffice in 2008 hit $75 million in 2008, up 42% from 2007.

SARFT's final 2008 boxoffice tally does not include discounted tickets sold in China's ongoing government-subsidized program to screen films for rural communities and factory workers.

China remains the third most-prolific filmmaking nation in the world after India and the U.S., but SARFT data shows that revenue from all Chinese films sold overseas added up to just $378 million in 2008. By comparison, "Iron Man" alone grossed $318 million worldwide in 2008, and it was Hollywood's second-highest-grossing film of the year after "The Dark Knight."