Imported films steal the show at nation's cinemas

Authorities said domestic films have performed better than expected, although they earned less box office revenue than imported ones last year, the first time in 10 years.

The State Film Bureau, the top regulator of the industry, announced on Wednesday that the country's box office revenue in 2012 reached 17 billion yuan ($2.7 billion), a 30 percent rise over the previous year. Domestic films made up 48.5 percent of the revenue, raking in 8.27 billion yuan.

Tong Gang, president of the bureau, called the past year a tough time for domestic filmmakers because they faced fiercer competition from Hollywood.

In February, China and the United States inked an agreement that increased the number of foreign films released in the country from 20 to 34. The additional 14 films need to be in 3-D or IMAX, which usually have higher ticket prices than ordinary pictures.

"Domestic films faced unprecedented pressure in 2012, but their performance was better than we expected," Tong said.

Li Dong, director of the managing committee of the National Film Development Fund, an organization affiliated to the film bureau, revealed to China Daily that the bureau had expected domestic films to take 45 percent of the market share in 2012.

"The agreement between China and the US was breaking news for even the insiders and film officials," he recalled. "We had to confront the challenges on short notice. We were indeed worried."

The impact of Hollywood films was instant. Geng Yuejin, a senior distributor, said that the share of revenue by domestic films in the first half of 2012 was only around 32 percent.

A number of local productions contributed significantly to the box office in the following six months, however, such as the fantasy film Painted Skin 2 and the small budget comedy Lost in Thailand.

Lost in Thailand, made for 25 million yuan, grossed nearly 1.2 billion yuan. According to the film bureau, 36 million tickets were sold, more than those of Avatar and Transformers 3.

Painted Skin 2, with ravishing visual effects, secured sales of 700 million yuan.

But the fact that the two films made up one-fourth of domestic films' total revenue is not a sustainable path for the industry's sound development, according to some analysts.

"If we put those two films aside we will find very few domestic films can really compete with Hollywood blockbusters, either in story or technology," said independent box office analyst Wu Panpan.

Tong of the State Film Bureau is aware of that.

"One of the most urgent issues the industry has to address this year is that the rise in quality of local films has severely lagged behind that of the quantity. The industry is short of both technology and talent."

The way to survive tough competition is to be better at local content, said Geng, the senior distributor.

"The most probable approach for local filmmakers to compete with Hollywood is to use their understanding of the local minds and values, to make stories that audiences find easier to relate to."

China has risen to become the second-largest film market behind the US, according to a report by Ernst and Young in November. The industry has continued rapid growth, seeing more than 3,800 new screens built last year. The country now boasts more than 13,000 screens, compared with 1,845 a decade ago.