By Robert Cain for China Film Biz

January 4, 2012

It was a December to remember in China, with the national box office hitting a new record at just over $2 billion. What has been most noteworthy about the past year—and the past decade—is the Chinese cinema industry’s extraordinary rate of growth. The quadrupling of the country’s overall economy in the decade since 2001 has been astonishing enough, but that was barely a blip compared to the nearly thirty-fold growth of China’s theatrical box office during the same period. In the blink of an eye China has matured from a minor film territory into an international powerhouse, the country to watch.

One of the bright spots in December was the ongoing competition between Zhang Yimou’s The Flowers of War and Tsui Hark’s Flying Swords of Dragon Gate. Both films performed extremely well, becoming the two highest grossing Chinese language films of 2011, with nearly $77 million in revenue for Flowers and $69 million for Flying Swords so far.  Both are in contention to possibly break the all-time record gross in China for a Chinese-language film, which is currently held by the 2010 release Let the Bullets Fly with $105 million.

And yet, in some ways December was a disappointment. Without a single major Hollywood film released during the entire month, Chinese audiences had limited choices at the multiplex, and many stayed away. For the week ending January 1^st, revenues declined by 4.5 percent compared with the same week in 2010, despite higher ticket prices and nearly 3,000 new movie screens in operation. Per-screen averages were down by about 40 percent from last year.

Six new films opened last week, but their combined revenue amounted to less than $6 million, with the Chinese action pic Speed Angels leading the way at $2.4 million. Speed Angels was the seventh film of the year released by the successful indie distributor Enlight, but it fell far short of the company’s 2011 hits Mural ($27 million gross), All’s Well Ends Well ($24 million), and White Vengeance ($23 million).

The lone American opener was the Daniel Craig-Rachel Weisz ghost thriller Dream House, which echoed its weak U.S. opening with a tepid $1.4 million take at the Chinese tills.

Flowers and Flying Swords should continue to lead the market for the next two weeks, as there won’t be any serous competition until January 15^th, when Sherlock Holmes: A Game of Shadows, hits the theaters. Things will heat up after that, with the Jay Chou action vehicle The Viral Factor opening on the 19^th, and All’s Well Ends Well 2012 opening on the 20^th.

Late in the fall American movies’ share of the Chinese box office was above 50 percent, but because the last Hollywood blockbuster release of the year—The Adventures of Tintin—came all the way back in mid-November, U.S. box office share drifted down to 46 percent by the end of the year. Home grown Chinese films captured a 24 percent share and China/Hong Kong co-productions took 22 percent.

        Share of China Box Office receipts by Film’s Country of Origin, 2011

Look for more 2011 box office analysis in an upcoming post later this week.

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.