'If You Are the One', a top performer at the Chinese box office (RMB 340 million)China’s film industry is one of the few industries that are immune to the current financial crisis. I watched a TV program entitled Economy Cools While Films Get Hotter (《冷了经济 火了电影》) on CCTV a few days ago. A number of actors, producers and some other professionals involved in the film industry are interviewed in the program. The lipstick effect is believed to have played a role in China’s fast growing film industry under the current financial climate. There is no doubt that China’s film industry has been growing by leaps and bounds in the recent 5-7 years. According to the program, the number of homegrown films grew from 88 in 2001 to 406 in 2008. Box office sales grew to RMB 4.341 billion ($638 million) in 2008 from RMB 950 million ($140 million) in 2003. Despite the impressive growth of the film industry, the program points out a number of issues that need to be addressed:
- A small number of homegrown films are making money. Most homegrown films are either losing money or merely at breakeven.
- It’s difficult to raise capital. Many film production companies spend more time raising capital rather than actually creating and producing films.
- Lack of original/excellent creation in film production.
- Box office is the only main revenue stream. More revenue streams need to be utilized.
In short, China’s film industry is prosperous and full of potential. However, there are still a lot of losers out there. It can be very risky to invest in this fast growing industry.
BTW, Transformers 2 has been on screen for a while and I will contribute 80 yuan to China’s box office sometime next week.
Related reading: China's film industry on fast track