Liu Yun, 24, a clerk with an old cinema in western Beijing, is happy with his job.

He remembers the evening of December 24, 2004 when moviegoers flooded to the cinema he works at to watch Kung Fu Hustle (Gongfu), a home-grown movie directed by Hong Kong comic star, Stephen Chow.

"Our cinema is not as good as the well-equipped multiplexes in downtown Beijing. So we did not expect so many people to come. But they queued in a long line in the cold," he said.

The long queues were repeated outside every movie theatre in Beijing and throughout the country, say market watchers.

The kung fu comedy scooped 55 million yuan (US$6.6 million) in box office income in the Chinese mainland on its first weekend.

Year of harvest

However, Kung Fu Hustle is not the only lucky one in the film market on the Chinese mainland. Among previously shown homegrown films, director Feng Xiaogang's Cell Phone (Shouji) took in 56 million yuan (US$6.7 million) and A World Without Thieves (Tianxia Wuzei) scored 90 million yuan (US$10.8 million), director Zhang Yimou's House of Flying Daggers (Shimian Maifu) raked in 150 million (US$18 million) in box office receipts, according to Gu Guoqing, an official with the Film Industry Planning Division of the Film Bureau, part of the State General Administration of Radio, Film and Television.

Gu predicts the total box office income for 2004 will reach 1.57 billion yuan (US$189 million).

If overseas box office income and the money from tie-in products such as preshow commercials, television screening and DVD copyrights are included, the account is expected to reach 3.6 billion yuan (US$434 million) -- a 66 per cent increase compared with 2.2 billion yuan (US$265 million) for the year 2003.

"In 2004, with an output of some 200 film productions, the Chinese film industry scored a decent box office record and it is for the first time some home-grown films beat imported blockbusters in box office income," Gu said.

In comparison, the top-grossing Hollywood blockbuster Return of the King took in 86 million yuan (US$10.4 million), The Day After Tomorrow raked in 82 million yuan (US$9.9 million), and King Arthur earned 26 million yuan (US$3.1 million). The much-hyped epic film Troy only gained 20 million yuan (US$2.4 million) in box office revenues in the mainland market, local media reported.

Encouraged by the huge success of home-grown movies such as House of Flying Daggers, A World Without Thieves, and Kung Fu Hustle in 2004, people are predicting even greater success this year.

"Amazing headways were made in Chinese film market last year. For 2005, the 100th anniversary of China's film, I believe people in the industry are full of hopes and expectations." said Li Baojiang, a veteran film expert with the China Film Market monthly magazine in Beijing.

Wisely sold

What attracted film insiders and critics has been the successful marketing strategies employed by the distributors for the top-grossing movies.

"When marketing 'House of Flying Daggers,' the distributors took full advantage of the thirst and curiosity of local entertainment media and potential audiences. They deliberately kept the film low profile until they launched a series of publicity stunts including the July 10th grand premiere ceremony, the late night show on July 16," explained Sun Jiansan, a veteran film historian in Beijing.

Sun said what makes the marketing of Feng Xiaogang's Cell Phone and A World Without Thieves so successful is the use of preshow advertisements and film actors and actresses used as in TV commercials, the re-use of movie footages as TV commercials, and most interestingly, the "embedded commercials" within the films.

For instance, far before the release of Cell Phone in China, the private-run Beijing Huayi Brothers Taihe Film Co, the investor and distributor of Feng's films, had reportedly recouped the investment for the film, through such deals as corporate sponsoring, DVD, TV, online and wireless screening rights deals, according to company CEO Wang Zhongjun. The distributor even collaborated with some shopping malls to market their films.

"Although these marketing gimmicks are common practice in countries where their movie industry is far more mature than in China such as the United States, the successful marketing of China's top-grossing films indicates that Chinese film circles, especially private film companies, have made a giant step forward in adopting reasonable business concepts," Sun said.

Diverse financing

"Thanks to newly enacted film policies that grant private and overseas investment enterprises easier access to film making, new blood has been pumped into the arm of Chinese film industry which has long been strapped for cash and struggling for a decent survival," said Li Baojiang.

A series of new film policies, taking effect either in late 2003 or in early 2004, allowed private and overseas money into many sectors of the local film industry including film production, distribution, film-related advertising, construction and management of movie theatres.

"In 2003 and 2004, about one third of some 200 annual film productions were shot and distributed with private or overseas investment and these films have created about 80 per cent of the total box office income in the Chinese mainland," pointed out Li.

"The establishment of joint ventures also greatly boost the growth of local film industry," noted Sun Jiansan.

Last October, Warner China Film, a Sino-US film-making joint venture, officially opened its head office in Beijing.

The Beijing-based joint venture was launched by Warner Brothers Pictures, the motion picture production unit of US media giant Time Warner Inc, together with the State-owned China Film Group Corp and the privately-run Hengdian Group. China Film Group Corp reportedly holds a 40 per cent stake in the joint venture, Warner Brothers and Hengdian each hold 30 per cent respectively.

"From now on, foreign investors are able to step into almost every sector of the Chinese film industry, including film production, post-production, distribution, exhibition and cinema management," said Sun, citing China's commitment to the World Trade Organization (WTO).

"Apart from easing the local industry's thirst for money and overseas sales channels, mushrooming joint ventures and solely run foreign film companies in China will bring about new concepts and expertise in filmmaking, film marketing and management," he said.

Sun expects more favorable film policies to be introduced during 2005 to further activate the potential of the Chinese film industry.

(China Daily January 6, 2005)