Gaming, boxoffice stay strong in China

Future uncertain as global crisis continues

BEIJING -- China is maintaining strong growth in online gaming and at the boxoffice but the sustainability of advertising-driven business models is a question mark, a new report says.

The 2009 Blue Book on China's Media Industry, released earlier this week at Tsinghua University, shows media industry output hit 422 billion yuan ($62 billion) in 2008, up 11.3% from the previous year.

China's media industry grew largely because of rising sales in online gaming, up a whopping 76.6% in 2008 to $2.7 billion, the report says, adding that the nation's telecommunications and IT industries earned related income of $7 billion from online gaming.

Also helping broader media industry growth was the country's developing movie-going habit. In a fifth straight year of growth in 2008, China's boxoffice sold $1.2 billion in movie tickets, up 25% from the previous record year, 2007.

Cui Baoguo, chief of media operation and management studies center at Tsinghua -- China's M.I.T. -- said growth could continue as consumers, especially women, turn from purchasing expensive items such as jewelry to smaller, feel-good items during a recession.

"People seek cheaper means of entertainment like playing online games or watching movies," Cui told the state-run English-language newspaper China Daily.

Indeed, the new report predicts that China's media industry output will reach $77.8 billion in 2010.

However, amid all the growth, sustainability is in question as advertising revenue continues to shrink, hit hard by the ongoing economic crisis.

At the report's unveiling, Huang Shengmin, professor of advertising at the Communication University of China, noted that China's online advertising is off 25% and newspaper advertising is down 15%.