In its centennial year, local pic biz reaps record revenues

· Anacondas: The Hunt for the Blood Orchid (Huaxia/CFG)
· The Incredibles (Shanghai Film Group)
· National Treasure (Huaxia)
· The Polar Express (Huaxia)
· A Very Long Engagement (Huaxia)
2004 STATS
Top local film: House of Flying Daggers (Beijing New Picture Co., $18.5 million)
Top import: The Lord of the Rings: The Return of the King (CFG/Huaxia, $10.3 million)
Total B.O.: $180 million
Releases: Approx. 100 local pics and 50 imports
Screens: 2,396 screens
Source: B.O figures, Sarft

BEIJING — As China’s film industry marks its 100th birthday this year, the local biz is looking to maintain the momentum of 2004, when B.O. climbed 50%.

Last year was also the first year in a decade that local films reaped more revenue than imports. Foreign films have received wide cinematic releases in China since 1994. “The Fugitive” was the first one in, and they have dominated the box office ever since.

(Twenty foreign films annually are officially imported into China by the China Film Group (CFG) on a revenue-sharing basis with the studio. Distribution is shared between CFG and Huaxia Film Distribution, with regional distribs — usually Shanghai Film Group — allotted one film a year. An additional 30 pics are bought on a flat-fee basis.)

In 2004, local helmer Zhang Yimou’s “House of Flying Daggers” took the B.O. crown. He has been the poster child of the Chinese film biz since his 2003 B.O. topper “Hero.” In the summer, authorities cleared cinemas of foreign pics for weeks to make sure his latest pic would have the public’s undivided attention.

DVD sales were also up in 2004, giving some hope in a market still saturated by pirated discs.

State (Sarft) figures suggest that — if overseas B.O., preshow ads, and DVD and TV income are included — total industry rev increased a robust 66% in 2004 to $3.6 billion yuan ($434 million).

The success is partly due to better marketing, as well as an injection of private and overseas money entering the market following loosened regulations last year.

“Flying Daggers,” distributed by Zhang’s own Beijing New Picture Co., was carefully shielded from the local press until the last minute and then heavily promoted with celebrity-heavy events.

Feng Xiaogang’s “Cell Phone” and “A World Without Thieves,” were pushed as major commercial pics by local backers Huayi Brothers Taihe Film Co. (foreign money came from Columbia Pictures Asia). Huayi reported that it recouped its investment before the films were even released through a combination of corporate sponsorships and pre-sales of DVD, TV and online rights.

Regionally, local powerhouse Shanghai United Cinema Lines took the biggest bite of the B.O. pie ($24 million). The east coast exhib now boasts 79 cinemas in Shanghai and neighboring provinces, and added six multiplexes in 2004. It runs joint-venture sites with overseas companies including Warner Bros.

“Last October we were still worried that we would not be able to meet our targets,” says one of the Shanghai cinema chain’s marketing executives. “But ‘Kung Fu Hustle’ and ‘World Without Thieves’ performed exceptionally.”