China Film Industry Report 2010-2011
China Film Industry Report 2010-2011
China Film Industry Report 2010-2011
Contents
1.
1.1.
2.
3.
4.
5.
Industry 38
7.1.1 A Six-year Journey of China Film Group IPO Efforts to Be Finalized 38
39
9.
I.
Research Background
Looking back at 2010, despite global economic recession, Chinas film industry
performed exceptionally well with leaping advances.
in-depth research and analysis of the film industry, EntGroup presents 2010-2011
China Film Industry Report.
II.
Research Scope
Using data from in-depth research and analysis, this report will focus on the Chinese
film industry in 20102011. In this report, the Chinese film industry refers to mainland
China film industry, and does not include the industries in Hong Kong, Macau and
Taiwan.
III. Methodology
This report adopts both quantitative and qualitative methods, and combines revenue
figures of the film market to conduct the research on the Chinese film industry.
The
statistics used in this report is primarily from the figures announced on China Film News,
gathered from the Computer Ticketing Network Centre of National Film Special Fund
Office, while the market ranking data was obtained from the China Film Exhibition &
Distribution Association, as well as data provided by main film circuits in the country.
The above data were cross-examined by interviewing major cinema circuits and
distribution companies. All the figures and statistics used in this report were obtained
from more than one source, and they were cross-examined repeatedly and were
analyzed comprehensively, to ensure the greatest accuracy and authenticity.
The audience
The total number of sample is 9242, among which 3299 are samples from eight major
cities. The 8 major cities are selected from the top 8 cities that have their 2008 box
office revenue grossing over RMB100m.
V.
Definitions
Production Company
Companies that engage in film financing, shooting and post-production work of a film
project which includes film production companies and post-production companies.
The production company owns the original copyright of a film, and sells within a certain
time frame of the copyright to a distribution company or distributor of other channels.
Distribution Company
Companies responsible for setting up and executing marketing and promotional
strategies for the films, as well as negotiating with cinema managers on release scales
and the number of film prints or opening-day screens.
Distribution companies
purchase or represent a films distribution rights, then release the film in the
partnering cinema circuits on flat-fee or revenue-sharing basis, or in other forms of
partnership.
same company.
Cinema Circuits
Cinema
several cinemas; cinema circuits provide films prints, schedule screenings and manage
cinemas under the circuits.
prints of the movies.
productions, whereas distributors of medium or low budget films need to strive for
support from the cinema circuits to secure screening possibilities.
Cinema
The actual place where the films are screened, and where box office revenue go to;
except for the share of box office revenue, a cinemas revenue also includes the sales
of concession such as popcorn, drinks and other additional products, as well as
derivative commodities of the films, which account for approximately 10 -16 of a
cinemas total income.
Digital Film/ Digital Print/ Digital Screen
Digital film refers to films that are filmed, produced, stored with digital technology, with
the signals transmitted through satellite, optical fiber, disk, Compact Disks or other
forms of physical transmitting forms, then transformed into audio and visual data that
conforms with film technology standards, and presented on cinema screens for viewing.
Digital prints refer to film prints distributed in digital formats; currently in China, digital
prints are normally delivered in hard drives.
Digital screens refers to cinema screening rooms installed with digital projectors and
can project digital films onto the screens.
Product
placement is a marketing and advertisement strategy which aims to give the viewers
impression of the product or brand through scene arrangements to let the product or
image reappear in the program, thus creating the effect of advertisement
Cinema Advertising
Advertisements especially produced to be broadcasted along with the screening of a
film in cinemas; normally they are broadcasted before the actual film begins.
Digital Screenings
As of the end of 2010, of the 6,200 screens in China, around 4,100 were digital or 66% of
the total number, second only to the United States. 2,500 new digital screens went
online in 2010.
3D Screenings
2008
2009
2010
2011E
2012E
No. of 3D Screens
82
130
700
2020
4800
7200
700
800
1600
4100
7408
10030
Total Screens
3527
4097
4723
6256
8925
11800
20%
20%
34%
66%
83%
85%
www.entgroup.cn
10
Box Office Revenue for Share: Actual Box Office Income Operational Taxes/Fees
NFDF Fund Contribution
1.3.
11
12
1.3.2 Domestic Box Office Revenue in China: 27 films over 100M, imported
films comprise 43% of box office revenue
Box office revenues sky rocketed in 2010, reaching 10.17 billion RMB, up 63.9% over
2009.
Also in 2010, there were 27 films that brought in over 100 million RMB, compared with
only 8 in 2009. Four of these, Avatar, Aftershock, Let the Bullets Fly and Inception
passed the 400 million mark, one more than in 2009. Avatar brought in a massive 1.39
billion RMB in box office sales, becoming the first film in mainland China to break the 1
billion mark.
Copyright of Film and Television in China: small-budget films one saving grace
New Media Copyrights of Chinese Films: prices rising rapidly, gradually replacing
DVD rights
13
14
1. Creation of Script
2. Budget Creation
3. Cast/Crew Selection
4. Selection of Location and Props, etc.
5. Review of Script and Obtaining of Filming License
Filming
Post-Production
Review
2.2.
2.2.1 Analysis of Quantity of Movies Produced in China in 2010: 526 total movies
Starting in 2002, the number of movies produced in China began a period of rapid
growth that averaged about 20%. 2008 saw a slight decline, but strong growth was seen
again in 2009 and 2010. There were 526 movies produced in China in 2010, making the
country the third largest maker of films in the world.
15
Figure 2-2: Number of Domestic Movies Produced and Shown in China, 2003-2010
16
2.2.2 Number of Chinese Films Produced in 2010 by Genre: romance and action
films top list
Of the domestically produced films that garnered considerable box office sales,
romance and action films had the highest production numbers, respectively making up
25% and 20% of all films. Following these were comedies and dramas with 17% and 11%
respectively. In terms of box office market share by genre, action, drama and romances
with market shares of 33%, 20% and 15% respectively.
2.2.3 Cost Analysis of Chinese Films in 2010
2.2.4 Number of Digital Films in China
Profitable Trials in 3D
17
2.4.1
This report divides the risks of film investment in Chinese film industry in 11 categories.
Each of the below category may be influential and be a deciding factor for a films final
box office result and its social impact.
Definition
Example
Policy Risk
Over-budget
Shanghai
Red Cliff
Risk of Crew
agree
on
the
narrative
style
and
time
4
5
Joint
Liang Ge Ren De Ji
Investment
joint investors
Jie
Red Cliff
Safety
of
Filming
Reign of Assassins
6
Overlapping
vs
Detective
Dee
Subjects
7
8
9
10
11
Risks
of
Distribution
Piracy
screening
Adaptation
rights
Public
Relations
Word
Mouth
of
Driverless
Let the Bullets Fly
Royal Tatoo
Confucius
Just
after release
Nobody
Call
Me
www.entgroup.cn
18
2.5.
Aftershock
Go Lala Go
Midnight Beating
Chongqing Blues
Co-production in 2010
In 2010, 95 films have applied to China Film Co-production Company for co-production
or assisted-production, and 63 of them were approved.
19
co-production companies
Production
Sending the film to China Film Co-production Company, to be reviewed
by film censors
Passing the censorship, receving a screening permit
2.6.
China-Australia Co-production
China-France Co-production
20
Figure 3- 1 Market Share of the Top Ten Distribution Companies in China, 2010
21
films, their market shares changed more dramatically than that of state-owned
enterprises.
22
revenue of 50 million or less, and only a few films can be squeezed into the revenue
range between 50 million to 90 million. According to enbase of EntGroup, among the
148 films exhibited in 2010, 18% of them gained their theatrical revenue of RMB100
million or more, 14% of them gained 50 to 100 million, 32% gained 10 to 50 million, and
36% gained 10 million or less. Major productions and their distributed films were
mainly handled by the top ten distributors (all of the 27 films with the revenue of
RMB100 million or more were most certainly handled by top ten companies). As a
whole, the ratio of 100million films in the distribution list of ten companies is most
certainly higher than ratio of 100m films in the total number of films.
3.2
3.2.1
In 2009, China Film Group distributed a total of 62 films; the total revenue was 4.044
billion yuan, which accounted for 64.5% of the total theatrical revenue in China. Its
market share was 38.4%, a percentage that earned it the first place of the top ten
distributors. In 2010, the China Film Group distributed 90 films and gained a revenue of
8.022 billion, which accounted for 78.43% of the total theatrical revenue in China; the
market share was 36.2%, slightly lower than that in 2009. In 2010, the top ten films
distributed by China Film Group collectively created 4.23 billion in their theatrical
revenue and 64.5% of it was from imported films, much
domestic films.
3.2.2
3.2.3
3.2.4
3.2.5
23
Introduction
The cinema circuit system in China was established in 2002. The system ended the old
distribution and exhibition system which was based on geographic regions and was
formed during the planned- economy era. At that time, films were distributed by
administrative unit of a province, city or county.
distributors to go to cinema circuits directly and the circuit is responsible for supplying
films to the subordinate theaters. The cinema circuit system not only simplifies the
procedure of film distribution and enhances the efficiency, but also introduces a
competition mechanism among the cinema circuits, making film exhibition a part of the
market economy.
film industry.
For cinema circuits financially owning their cinemas, they can be more efficiently and
effectively manage the cinemas and handle the screening schedules more smoothly,
while for those cinema circuits set up in the form of alliance, their market share tend to
be smaller.
However, from the development of cinemas in 2010, we can see that more
and more cinema circuits choose to take financial control over their cinemas in order to
pursue better management and better branding.
will analyze the Chinese cinema circuits in various aspects such as size, numbers,
concentration rate and operation type, and find out the development features of
cinema circuits in 2010.
24
Size
Numbers
Revenue
Concentration Rate
Screen Concentration
Operation Efficiency
Screens
Cinema number
67
New cinemas
21
Screen
Number
New
Screens
Box Office
554
200
Gross
Increase
rate
Admissions/Screenings
140m
Admissions
36,350,000
68%
Screenings
740,000
Cinema Locations
Sourceenbase
2011.2
EntGroup Inc.
www.entgroup.cn
For the second year in a row, Wanda Cinema Line becomes Chinas highest-grossing
cinema circuit.
Screens
Cinema number
136
New cinemas
32
Screen
Number
New Screens
Box Office
684
185
Gross
Increase
rate
Admissions/Screenings
1.21billion
Admissions
33,410,000
52%
Screenings
1,000,000
Cinema
Locations
25
Sourceenbase
2011.2
EntGroup Inc.
www.entgroup.cn
China Film Stellar continues to expand its cinema and screen numbers in the form of
contracted alliance.
territories where no cinemas were built in the regions such as Liuzhou of Guangxi
province, Huangshai of Anhui Province.
Screens
Cinema number
153
New cinemas
32
Screen
Number
New
Screens
Box Office
599
184
Gross
Increase
rate
Admissions/Screenings
1.07billion
Admissions
26,690,000
63%
Screenings
720,000
Cinema
In 21 regions and cities including Shanghai, Jiangsu, Zhejiang, Anhui, Jiangxi, Chongqing,
Locations
etc.
Sourceenbase
2011.2
EntGroup Inc.
www.entgroup.cn
In 2010, Shanghai United Circuit continue to dominate the Shanghai region as well as
eastern China provinces.
Screens
Cinema number
119
New cinemas
21
Cinema Locations
Screen
Number
New Screens
Box Office
493
140
Gross
Increase
rate
Admissions/Screenings
950m
Admissions
25,880,000
56%
Screenings
670,000
Sourceenbase
2011.2 EntGroup Inc.
www.entgroup.cn
In 2010, China Film Southern takes in a box office revenue of RMB950m, which is a 58%
26
growth rate.
The impressive growth has also widen the gap between itself and its
Screens
Cinema number
96
New cinemas
21
Screen
489
Number
New Screens
Cinema Locations
Box Office
200
Gross
Increase
rate
Admissions/Screenings
790m
Admissions
22,170,000
29%
Screenings
670,000
Sourceenbase
2011.2
EntGroup Inc.
www.entgroup.cn
Screens
Cinema number
56
New cinemas
19
Cinema Locations
Screen
Number
New Screens
Box Office
325
110
Gross
Admissions/Screenings
680m
Admissions
17,910,000
57%
Screenings
470,000
Increase
rate
Sourceenbase
2011.2 EntGroup Inc.
www.entgroup.cn
Screens
Cinema number
81
New cinemas
22
Screen
361
Number
New Screens
Cinema Locations
Box Office
126
Gross
Increase
rate
Admissions/Screenings
420m
Admissions
12,260,000
61%
Screenings
410,000
Sourceenbase
2011.2 EntGroup Inc.
www.entgroup.cn
27
Screens
Cinema number
108
New cinemas
59
Screen
399
Number
New Screens
Cinema Locations
Box Office
229
Gross
Increase
rate
Admissions/Screenings
370m
Admissions
13,530,000
190%
Screenings
390,000
Sourceenbase
2011.2
EntGroup Inc.
www.entgroup.cn
With its strategy to fast expand in 2nd and 3rd tier cities, and its successful branding
and management, Dadi Digital Cinema in 2010 has a high-speed growth and for the
first time entered the top 10 list of cinema circuits.
Screens
Cinema number
47
New cinemas
12
Screen
263
Number
New Screens
Cinema Locations
Box Office
Gross
Increase
75
rate
Admissions/Screenings
3.50m
Admissions
12,090,000
72%
Screenings
340,000
Sourceenbase
2011.2
EntGroup Inc.
www.entgroup.cn
Screens
Cinema number
58
New cinemas
12
Cinema Locations
Screen
Number
New Screens
Box Office
256
75
Gross
Increase
rate
Admissions/Screenings
320m
Admissions
10,780,000
35%
Screenings
400,000
28
Sourceenbase
2010.12
EntGroup Inc
www.entgroup.cn
As
major cinema circuits are growing faster and faster, smaller circuits have seen more and
more difficult situation.
The highest-grossing circuit Wanda Cinema Line in 2010 has 200 new screens, while the
10th placed Liaoning Northern only has 47 new screens in 2010.
No.1 and No.10 has been widened as such, not to mention the gap between Wanda
and the rest of smaller cinema circuits.
For
managers of those circuits, the relation between the circuits and cinemas is merely
relied on the sharing of box office revenues.
acknowledged the issue and have begun to invest in or taking majority stakes of the
cinemas in their alliances, hoping to build up stronger financial ties between the circuit
and the cinemas, so as to set up a better management for the cinema circuit.
29
30
In addition, the total number of cinemas with box office sales of over 20 million RMB in
2010 was 87, and while these only made comprised 5.2% of nationwide cinemas, total
ticket sales revenue reached 2.76 billion RMB, or 44.5% of nationwide sales, showing
that the revenues from ticket sales has risen to a higher level overall.
According to data collected on ticket prices of the 100 top grossing cinemas in China,
the average price of tickets was 40.4 RMB.
According to data collected, all of the 100 top grossing cinemas are relatively large with
an average of 8.6 screens and seating reaching 1,500.
31
Box Office
Revenue
Y/Y Change
Average Ticket
Price
UME Cineplex
9,824.40
115%
60
7,466.70
33%
47
5,990.40
20%
44
5,764.80
25%
49
5,612.00
177%
52
4,975.70
60%
48
4,279.80
20%
43
4,275.40
67%
46
3,367.90
31
10
3,146.50
50%
44
11
3,081.50
21%
42
2,890.10
36%
55
12
32
13
2,884.80
27%
39
14
2,849.00
25%
46
15
2,480.20
12%
41
16
2,363.90
7%
32
17
2,312.00
48
18
2,162.90
8%
41
19
1,767.90
9%
39
20
1,512.70
19%
45
33
Box Office
Revenue
Y/Y Change
Average
Ticket Price
7070.7
102%
68
6069.8
22%
47
5528.8
57%
50
5341.7
44%
45
5000.6
26%
51
3585.8
25%
48
3363.5
45%
54
2956.8
81%
43
2689
29%
38
2555
51%
35
2218.7
33%
43
2158.5
22%
43
10
11
12
Daning Cinema
34
13
14
15
16
17
18
19
20
1764.9
29%
76
1742.2
31%
33
1530.9
22%
42
1438.4
9%
37
1109.2
41
1102.8
37%
33
865.9
23%
51
626.3
18%
36
35
Summary of 12th Five Year Plan for Social and Economic Development of the
Peoples Republic of China
Notice on Subsides for the Installation of 2K and 1.3K Digital Projecting Equipment
in Cinemas
Significant Increase of the Average Monthly Box Offices with Obvious Advantages
of the Movie Release Calendar for the New Year period
Market to indicate
36
In terms of release calendar e for 2010, the over-concentrated movies from frequent
release calendar remains distinctive. In particular, many movies were put on during the
National Day holiday period inthat year. However, except for Detective Dee, it is hard for
other movies to achieve desirable records inbox offices.
37
Establishment of China Film Co., Ltd.for IPO and the Future Business as Well
China Film Group to Separate the Monopolized Assets for IPO with the Fear of
Develop and Plan the Entertaining Kingdom of the Entire Industry Chain for 2010
Low Expectation of Earning from Movies for the Year, while TV Series likely to be its
Primary Business
The pyramid layout of nine businesses can be established steadily after the
Diverse types of new movies for 11 years and sequel movies as the majority
To be a shareholder of Ourpalm Co., Ltd for access to the new media platform
Being the Owner of Huayi Music, also for the Performance Mark
38
Cinema construction as the most important one in the major businesses of Stellar
Film Group
7.2 Analysis of Competitiveness of New Film Companies
7.2.1 Enlight Picture
chains
7.2.3 Dadi Movie
Background Information
Rapid expansion of the cinema line making it essential for Dadi to construct
39
Regular launch
Creative launch
40
The box office is highly concentrated, with top 10 films accounting for 75%
Films that distributing company has exclusive rights to show break CNY 100
million.
the total overseas earnings are CNY 3,517 million, increasing by 27%
from a year ago. The earnings of movies cooperated with other countries have been on
the rise from 58.8% in 2006 to 99.96% in 2010. There are 47 films and 204 times that
41
completed export deal in 2010, and there are 46 films that cooperated with other
countries. For Chinese movies, North America, Asia-Pacific and Europe are the
important export regions. There are only 2 movies exported to America, but American
box-office gross of Chinese movies wins the champion with the earnings of CNY 1,220
million. Film times exported to Asia-Pacific ranks first, and accounts for 60%
8.2.2 North American
Famous actors especially Jackie Chan and Jet Li play an important role in the
box-office
Kong Kong as the main export region, and strive for Australian market in the future
42
By contrast, Africa and Middle East are still to be developed. In 2010, only Kongfu
Dreams is exported to the above regions, which grossed CNY 28,030,000 in the seven
countries. United Arab Emirates is listed first with box-office result of CNY 13,640,000 in
the region. In 2009, there are two films named Red Cliff and Mummy 3 showed
in the region, and box-office earnings are CNY 15,470,000.
EntGroup consulting
Rm.1509, Building C, SOHO New Town, 88 Jianguo Rd.
Chaoyang District, Beijing, P.R.China
Tel:
+86-10-85899985
Webhttp://www.entgroup.cn
contact
Leon Gao| CEO
[email protected]
43
44