China's cinema booms

Warc, 11 July 2013

BEIJING: Growing box office sales at China's cinemas, especially for Chinese films, are attracting the attention of advertisers as well as cross-border investors.

Overall box office sales were up 36.2% in the first half of 2013 to 10.99bn yuan ($1.79bn), but this figure hid a significant shift. Ticket sales for Chinese films leapt 144% to 6.85bn yuan, while those for imported films fell 21.3% to 4.14bn yuan according to data from the State Administration of Press, Publication, Radio, Film and Television.

Of the top ten highest-grossing films, four were domestic, accounting for 54.4% of total revenues in the first six months of the year.

Growth figures like these have pushed China into a position as the second largest movie market in the world, behind the US. Now two leaders in cinema advertising from those countries, NCM Media Networks and Beijing China Times Media Advertising, have joined forces to help global brands reach audiences in their respective territories.

"Many of our national advertising clients are international brands, so this is a unique opportunity for us to be able to help them or their media agency reach the same highly engaged, enthusiastic movie audiences in China that they do here in the US," said Cliff Marks, president of sales and marketing with NCM Media Networks.

"This new arrangement also creates a conduit for Chinese companies that would like to reach American moviegoers through our NCM network," he added.

Further, a recent survey of corporate executives, investment bankers and private equity practitioners by Los Angeles-based law firm Manatt, Phelps & Phillips found that more deals were likely between players in the media and entertainment sectors in the two countries.

"There is going to be substantial growth and we've seen a lot of activities flowing along that line, with most activities within China, the expansion of movie theatres and film groups and the extension of television production and digital media," said Lindsay Conner, a partner and co-chair of the entertainment and media practice at Manatt.

"Based on the pace of the theatre building in China, it will become the number one film market in the world within the next 10 years," he added.

Earlier this year, Chris Dodd, head of the Motion Picture Association of America, said China was building ten screens a day and had a "voracious appetite for product".

Data sourced from China Daily, People's Daily, Wall Street Journal, Guardian; additional content by Warc staff