New cinemas and foreign films are the driving force behind recent Chinese growth, says Sen-Lun Yu.

March and April are usually slow months at the Chinese box office, when small to mid-sized films are released in batches before the blockbusters are rolled out during the May national holidays.

But this year, cinema owners across the country had plenty to smile about as box office exceeded expectations. The total box office for the first quarter of 2007 increased 42% compared with the same period last year, reaching $78.7m (rmb600m), according to figures from local trade publication China Film News. In April, box office increased by 51% to $14.4m (rmb110m).

China's 'Golden Week' holiday period (May 1-7) posted even better results, with box office doubling to $11.7m (rmb90m) compared to $5.9m (rmb45m) for the same period in 2006. This was mostly due to the release of Spider-Man 3, which accounted for more than 80% of nationwide takings with a $9.7m (rmb75m) gross, according to local distributors and cinema owners.

Growth factors
In the earlier part of the year, growth can be attributed to the increase in screens and also to the fact many flat-fee foreign films performed unexpectedly well. Around 60 films were released between January and May, of which 10 were revenue-sharing imports, nine were imported on a flat-fee basis, and 41 were local films.

The success of the flat-fee films is partly due to the growing trend for private distributors to work with the two companies authorised to handle imports - state-owned China Film and Huaxia Film Distribution - on new flat-fee releases under the 'assisted promotion' banner.

For example, Chaos, starring Jason Statham and Wesley Snipes, was released in March by China Film with Chuang Shi Xing assisting promotion and grossed a healthy $1.6m (rmb12m). Korean creature feature The Host, also released in March, grossed $1.8m (rmb14m) and has become the bestselling Korean film ever in mainland China.

To many distributors' surprise, less mainstream fare such as Alejandro Gonzalez Inarritu's Babel, for which Avrio Films assisted promotion, has had impressive sales in China, grossing $1.8m (rmb14m). The result is not a large figure for blockbuster revenue-sharing films, but flat-fee imports are considered successful if they gross more than $1.5m.

On the other hand, Hollywood blockbusters such as Night At The Museum, Deja Vu and Eragon saw very average admissions figures. The exception was Casino Royale which performed to expectations, grossing $12.5m (rmb95m).

According to Liu Jia from Sichuan Pacific Cinema Circuit, box-office grosses are becoming more evenly distributed across all releases with the top 10 films taking a smaller piece of the pie.

Arthouse imports
Because most of the non-Hollywood foreign films are jointly making progress, distributors are encouraged to introduce more diverse films into the market.

'As long as you can co-ordinate a good time slot and marketing strategy, a flat-fee film can still have a good box-office gross even if facing films such as Spider-Man 3,' says He Zhikai, general manager of Sun Wah's Beijing branch.

Sun Wah Media assisted the promotion of Kevin Reynolds' Tristan + Isolde (pictured) in April. Using a strategy to release the film in the northern regions first, before moving to southern cities, the film has so far raked in $2.5m (rmb19m). Its theatrical run coincided with Shooter and Spider-Man 3.

Another factor contributing to growth, according to Gao Jun from Beijing-based New Film Association, is increased competition.

Many of the leading cinema circuits have expanded over the past year. In 2006, Beijing Wanda Cinema opened more than 10 cinemas in Beijing, Shanghai and Chengdu. As a result, the circuit's ticket sales increased by 133% for January-March compared with the same period last year.

Also, more movies were released in the first four months of 2007 and the overall success of flat-fee imported films suggests the Chinese audience is beginning to accept more diverse movies. On the other hand, the modern cinemas and increased numbers of screens have created a new set of cinema-goers.

'We can confidently say there are more and more movie-goers in the market as a whole. And the prospects for 2007's box office look very optimistic,' Gao Jun says.