A Few Thoughts on China’s Foreign Film Blackouts

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By Robert Cain for China Film Biz

September 21, 2012

I was invited recently by a French cinema publication to write an article about the SARFT-imposed summer blackout of foreign films, or “domestic film protection” period, in SARFT’s parlance. As I put the finishing touches on that piece, I thought I’d share a few pertinent thoughts here, along with a bit of data.

First, a picture.

This is a week-by-week chart of box office grosses in China in the weeks before, during and after the summer blackout. The red areas represent revenues from Chinese films and China co-productions (mostly with Hong Kong), the blue areas represent grosses from American films, and the green represents other foreign films. The gray shaded area represents the period when the blackout was in effect.

The blackout was a partial one, in that it excluded all major live-action Hollywood films, but it did allow for the releases of a couple of Hollywood animated films, Ice Age: Continental Drift and The Lorax, and three non-studio action pics, The Mechanic, Abduction and Lockout.

The main goal of the Chinese authorities was to open up more screen time for Chinese films and to give them a shot at making some money without being overwhelmed by Hollywood’s summer tent-poles. As I’ve stated before, I don’t believe that the goal was to diminish the grosses of American movies, although that was undoubtedly a consequence of the blackout.

A few observations:

1. The blackout was successful for a handful of Chinese films, but it went on far too long. That big red spike in week 26 represents the opening of Painted Skin: Resurrection, a Hong Kong-China co-production that became China’s highest-grossing film ever, with a $115 million final tally. There’s no question that the movie benefited greatly from the blackout. But Chinese filmgoers weren’t much interested in other Chinese films, and attendance flagged throughout all of July until Ice Age came along to rescue the exhibitors.

2. Attendance suffered. Prior to the blackout, China’s year-to-date movie exhibition revenue was up by 41 percent over the same period in 2011. During the blackout revenue dropped by nearly 10 percent relative to 2011. By my reckoning the blackout cost China’s exhibitors about 30 million ticket sales and over $200 million in revenue.

3. The blackout created pent-up demand for Hollywood films. Just look at those big blue spikes in weeks 35 and 36. The Amazing Spider-Man and The Dark Knight Rises. Enough said.

Even though the blackout was costly for China’s distributors, exhibitors and mall operators, I expect we’ll see more such “protection” periods in the future. If SARFT learns its lessons from the experience of the summer, it will make future blackouts shorter and less punitive to Hollywood imports.

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