(Chinese Version)

In 2016, many film companies released slides of movie lists at the Shanghai International Film & TV Festival. According to statistics, a total of 200 movie lists were announced at the 2016 the Shanghai International Film & TV Festival, but only one third of them have entered the filming phase this year. This phenomenon reflects a bigger picture. Compared with the 48% box office growth, the box office last year had a big slump to merely 3.7%. In fact, in 2016 there had been seven months of negative growth.

The disappointing box office performance continues on in 2017, especially in March and May. Imported overseas films still enjoyed apparent dominance, accounting for 70% of the box office in March, April and May. Among all, Indian film Dangal gave the Chinese film industry a big slap in the face.

Under such circumstances, the 2017 Shanghai International Film & TV Festival appears to be more rational. What follows is Shanghai Film Group’s board chair Ren Zhonglun’s speech at the China Film Industry Leader Summit, edited by TMTPost:

The supply surges

Shanghai Film Group’s board chair Ren Zhonglun stated at the summit that when he was appointed as Shanghai Film Group’s director and CEO in 2013, the Chinese box office boasted over 900 million yuan and 7.5 million viewers, with 3000 movie screens scattered in the country. It’s quite hard to figure an exact number of the movie screens in such a large country, he said.

At that time, many cinemas sold clothes during day time and played movies at night. There wasn’t much of a demand side, let alone supply. The movie industry started to revive in recent years, surging from 900 million to 10 billion. It only too three years for the box office to soar to 20 billion yuan from 10 billion, and two years from 20 billion to 40 billion.

Ren also stated that due to the growth of demand in the recent years, film industry workers have been focusing on the demand side. “The movie audience is becoming larger, but we had like less than 100 Chinese movies. Now we have 7000 Chinese movies every year and 45,000 movie screens in the country,” Ren said.

The rapid growth of movies and cinemas might be able to catch up with the audience’s demand, or even further stimulates bigger demand. In the past few years the growth rate had been around 30% on average. If we look at the future market from this number, it’s easy to draw the conclusion that the market in the future would only become larger and larger.

Far from satisfied

Although we have the quantity now, the audience is still not satisfied. In 2016, only 43.8% of the audience showed satisfaction towards Chinese films, while 85% expressed that China didn’t have many good films. The number of Chinese movies is climbing up, but the profit each cinema makes is going down.

Statistics show the output of every cinema has dropped by 17.9%, while that of every screen has slumped by around 20%. In other words, the demand for Chinese films is still rising despite the slow growth rate. However, the supply side is growing faster. As supply and demand both surge, the revenue potential is decreasing.

In 2016, 85 movies passed the box office bar of one hundred million yuan, with only nine surpassing one billion. Besides that, 292 movies had a box office of less than ten million yuan. From the perspective of the production side, each investment in these films had been less than four million. Who films movie with a budget of four million yuan? This underlies a serious irrational and abnormal situation in the industry.

What does the Chinese film industry lack?

The Chinese film industry doesn’t possess enough production capacity and production pool. It lacks the core competence to product movies. The industry has a production capability stronger than creativity.

“We don’t lack good stories, or good story tellers.” Ren believes that good stories and story telling are China’s natural talent. “China has many good writers. But it’s a big transition for literatures to be adapted into films, especially in the area of production. This is where the difficulty kicks in and what we lack.”

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Translated by Garrett Lee (Senior Translator at PAGE TO PAGE), working for TMTpost.