Study: China to be Largest Movie Market by 2020

Posted by on Nov 30, 2012 in Blog | 0 comments

The “Spotlight on China” study, prepared by Ernst & Young, estimates that China’s media and entertainment industry will grow at a 17% annual rate between 2010 and 2015, significantly faster than the country’s economy overall. Part of that surge is driven by theatrical box office revenues. China recently surpassed Japan as the world’s No. 2 movie market and Ernst & Young says China will move past the United States to claim the top spot by 2020.

With all of the growth, though, come any number of obstacles. Chinese consumers have “constantly shifting” tastes and “have traditionally paid little or nothing for traditional content and have easy access to pirated digital content,” the report says.

Even with Chinese authorities trying to rein in piracy, media and entertainment companies will “struggle to get fair value for their products and services,” the report says. And, as has been the case with Chinese quotas on imports of American movies, government restrictions “limit or close certain sectors from either domestic or foreign private participation.”

“The challenges for media and entertainment companies to penetrate China are still considerable, however the vast potential of the market makes it impossible to ignore,” Ernst & Young’s John Nendick said in a statement accompanying the report.  “Companies will need to understand that investing in China is a long-term proposition, and those who can make that commitment will be in a much better position to succeed.”

The report was particularly bullish on China’s middle class and overall spending on media and entertainment. In 2010, the report said, Chinese spending on entertainment and recreation was $350 billion, which jumped to $547 billion last year.

That spending was largely driven by the middle class, which numbered 247 million people in 2011, or 18% of the population. The study said experts predict the Chinese middle class will grow to more than 600 million by 2020.

– LATimes

Also, Canadians making small inroads in Chinese movie production:

Fresh from winning the prestigious Golden Horse Award in Taiwan for his documentary China Heavyweight, Montreal-based filmmaker Yung Chang is talking about a big departure (a youth-oriented fiction film he’s calling Space Race) and the market he has his eye on: China.
Chang burst on to the scene in 2007 with Up the Yangtze, a quietly searing look at the uprooting of Chinese people as a result of China’s enormous Three Gorges Dam project. The film was banned in mainland China. But just a few years later, he managed to team up with Chinese producers to create a rare Canada-China co-production in China Heavyweight.
On Thursday, he’ll be at British Columbia’s Whistler Film Festival to pitch his Space Race idea – which he describes as “Charlie and the Chocolate Factoryin space” – to a panel of Chinese producers at the inaugural China Canada Gateway for Film Script Competition.

“I don’t think a space film has ever been made yet in China,” Chang said from Taipei on Monday. “And it would require some really good partners.”

Many – including Chang, the Whistler Film Festival and big Hollywood studios who are establishing a presence there – recognize China as the land of filmmaking opportunity: with available financing, a growing market and a strong desire to beat Hollywood at its own game.
At home and internationally, the global economic powerhouse has underperformed in the area of film production. Domestically, foreign films dominate the Chinese box office, despite the fact that so few have been allowed into the country.  Internationally, Chinese-produced films have not made much of a dent.
In the wake of a World Trade Organization agreement last February that will see 14 additional foreign films a year exhibited theatrically in China (provided they’re in enhanced formats such as 3-D or Imax), the country more than ever needs to strengthen its domestic offerings.
This week, word emerged that two large Chinese state-owned film studios are planning to sell shares on the Shanghai Stock Exchange. The move would help the studios raise money for big-budget blockbusters to compete with Hollywood. They also need help on the creative side, and co-productions – accessing expertise and talent from countries such as Canada – might be just the ticket.
 – G & M

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