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By Robert Cain for China Film Biz

December 18, 2012

China’s December box office rally is shaping up to be the biggest story of the year in the global movie biz. After the fall’s SARFT-induced coma threatened to dampen theatrical revenues for the rest of the year, a pair of films that barely anyone saw coming has electrified PRC audiences and kept theaters filled and queues brimming for over a month.

Back in the summer and fall SARFT crushed Chinese exhibitors’ hopes for a $3 billion aggregate 2012 box office when it set extended “domestic film protection periods” that kept Hollywood movies out of local theaters. Audiences mostly stayed away from the bland domestic product that was on view, and I revised my estimate of total year box office revenue down to $2.5 billion.

Hopes were raised in December, when many box office watchers anticipated that a trio of Chinese language films—Feng Xiaogang’s Back to 1942, Wong Kar Wai’s The Grandmasters, and Jackie Chan’s Chinese Zodiac 12 (now known as CZ12)—would dominate theaters. December did in fact bring good tidings, but not exactly as expected.

Firstly, Ang Lee’s Life of Pi confounded almost everyone’s expectations by taking the Chinese box office by storm, so to speak. What many had projected would be at most a $20 million or $25 million run instead became a blockbuster hit, with $86 million to date, making it the fourth biggest grosser in China this so far year. Not only did Life of Pi spank down Back to 1942 in China, it also handily beat its own $70 million (so far) tally in the U.S., only the third time in history that a foreign film has grossed more in China than in North America.

While Grandmasters was pushed to next year and CZ12 will open this week, it was a tiny, low-budget comedy that solidified December as one of China’s best months ever. The Hangover 2 knock-off Lost in Thailand, a sequel to the 2010 film Lost on Journey, charmed audiences out of a massive $48 million in its first 5 days, setting scads of records along the way, including:

• Best all-time Wednesday opening for any film

• Best opening day in December

• Biggest single day in December

• Biggest opening week in December

• Best opening week for a locally made film

• Best opening week for any 2D movie

The reportedly $4 million budgeted Lost in Thailand looks likely at this point to surpass Painted Skin 2 to become China’s biggest local language film ever, and the PRC’s 2^nd highest grossing film overall in 2012.

Lost in Thailand and Life of Pi paced China’s overall box office to its best-ever week as measured by admissions, with over 15 million tickets sold.

These recent events have given me the confidence to raise my year-end estimate to $2.65 billion for 2012, which would make for China’s 9^th year in a row of 30% or greater theatrical revenue growth and an aggregate 2,200% increase since 2004. To put that figure into perspective, had the North American box office grown by an equivalent amount, it would now be a $200 billion movie industry, rather than the $11 billion business that it is.

For several years now I’ve been predicting that China will surpass North America to become the world’s biggest box office territory by 2020. I’m now going on record and moving the date up by a year to 2019.

Robert Cain is a producer and entertainment industry consultant who has been doing business in China since 1987. He can be reached at rob@pacificbridgepics.com and at www.pacificbridgepics.com.