Chinese Movie Promoters Gamble on Foreign Films

2011/10/8 11:32:00 (Beijing Time)   Source:CSN2    By:Hui Luo
Chinese box office figures reached record levels in 2010 at 10 billion, compared 6 billion in 2009. At the beginning of 2011, some producers set their sights 20 billion but most people predict that 2011 Chinese box office figures will be no more than 13 billion.

Analysts and industry insiders said that Avatar and Inception are the main reasons why the Chinese box office take increased dramatically (which were about 6 billion yuan in total). Meanwhile, China’s own blockbusters were attracting people to go to cinema as well, such as Let The Bullets Fly, After Shock and If You Are The One 2.

Normally, there are two types films in China, one is filmed or invested by Chinese (include the films with joint investment from Hong Kong and Macao) and imported foreign films. At present, China maintains a global quota of 20 foreign films per year to be imported for distribution on a revenue-sharing basis.

Recently, amid more good feedback and benefits from foreign films, the quota of 20 cannot satisfy Chinese audiences anymore. Consequently, wholesale films have become popular among Chinese film investors.

In general, there are 45 foreign films released in China each year, 20 of them are imported films, and 20 of them are wholesale films and the last five films are for 3D. Imported films are basically from the USA which are more likely to be commercial films. In other words, they are expected to be blockbusters. So the foreign producers will keep the right to share the profit from Chinese box office. But for wholesale films, the Chinese producers will buy the right of films in the Chinese market and will be responsible for profit or loss. So we can see the wholesale films are usually some low cost films and without a lot of promotions.

In fact, wholesale films have received a high reputation in the market since 2008. These films usually cost much less than the potential blockbusters. So if they become the dark horse winner of the box office, the investors can receive an appreciable profit.

Because of this, an increasing numbers of Chinese producers would like to take the risk to buy foreign films and do the promotions by themselves. For example, Season of The Witch, Source Code and Norwegian Wood (Japan) will be released in cinemas as the quota of the wholesale films.

There are big risks involved. Take “The Expendables” as an example. The price of The Expendables was 500 thousand dollars but The Expendables 2 is up to 5 million dollars already. It means its box office has to reach at least 150 million to recover the cost, which is a huge risk for the producers.

Furthermore, Chinese censorship is a barrier for all foreign movies. Even the Chinese investors have paid the subscription, these movies might be banned in Chinese market if they contain some sensitive content. It will be probably for the Chinese investors to lose their deposit. According to an industry insider, a wholesale movie will need to pay copyright payment, dubbing voice, tariff, copies fee, promotion fee and so on. If the cost of a wholesale movie is around 3 million yuan, it will not make a profit if its box office take is less than 10 million yuan.

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