news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

This year's summer season is quite quiet.

According to Maoyan Professional Edition data, as of 17:00 on August 14, 2024, this year's summer box office was about 9.48 billion yuan. In comparison, as of August 14, 2023, the summer box office had exceeded 17 billion yuan.

According to data from Lighthouse, in July 2024, the national box office was 5.378 billion yuan, a year-on-year decrease of 38.4%. This summer, there were only two blockbuster films with a box office of more than 1 billion yuan, which was significantly different from the "relay" release of four films with a box office of more than 1 billion yuan last year.

Such a situation will directly squeeze the survival space of the upstream and downstream industries. A staff member of a film production company that recently started filming admitted to the reporter of 21st Century Business Herald that it is difficult to attract investment for the project. The film has a large number of popular stars and the queen of the industry participating in the film.

The good news is that policy support is on the way.

New policy introduced

Nowadays, the cultural and entertainment industry has become an important part of promoting consumption.

On July 30, the Political Bureau of the CPC Central Committee held a meeting to analyze and study the current economic situation and deploy economic work in the second half of the year. From the perspective of policies in various fields, one of the most noteworthy statements is that "domestic demand should be expanded with a focus on boosting consumption, and the focus of economic policies should be shifted more to benefiting people's livelihood and promoting consumption."

In fact, the conference has already proposed directions for expanding domestic demand. Among them, service consumption has become an important tool for expanding and upgrading consumption. The conference mentioned that it would support service consumption such as cultural tourism, elderly care, childcare, and housekeeping.

Soon, relevant details were released.

On August 3, 2024, the State Council issued the "Opinions on Promoting the High-Quality Development of Service Consumption" (hereinafter referred to as the "Opinions"). The "Opinions" proposed to tap the potential of basic consumption such as catering and accommodation, domestic services, and elderly care, stimulate the vitality of improved consumption such as entertainment, tourism, sports, education and training, and residential services, cultivate and expand new types of consumption such as digital, green, and healthy, and require enhancing the momentum of service consumption, optimizing the service consumption environment, and strengthening policy guarantees.

The cultural and entertainment market is an important part of the "Opinions".

The Opinions mentioned that it is necessary to expand the supply of cultural performances, improve approval efficiency, and increase the number of performances. It is necessary to enrich the supply of films, support the distribution of films in differentiated modes such as split-line distribution, and promote film-related consumption. It is necessary to improve the quality of online literature, online performances, online games, radio and television, and online audio-visual, deepen the management of TV charging and complex operations, accelerate the development of ultra-high-definition television, and encourage the development of new formats such as immersive experience, scripted entertainment, digital art, and online broadcasting.

In addition, the "Opinions" mentioned the need to strengthen policy guarantees and strengthen financial and taxation support for related industries.

Specifically, regions with conditions are encouraged to use existing funding channels and actively guide social investment to support the digital empowerment of life services, the cultivation of industrial clusters and agglomeration areas, the construction of public service platforms and standardization. Government financing guarantee institutions are encouraged to provide financing and credit enhancement support for qualified small and micro enterprises and individual industrial and commercial households in the service industry. Financial institutions are guided to optimize credit products and provide differentiated services. In accordance with the principles of controllable risks and commercial sustainability, credit support for key service consumption areas is increased, and the supply of financial products that meet the development needs of new consumption formats such as the sharing economy is increased.

This will directly help the financing of the film market.

In addition, on July 21, the full text of the "Decision of the CPC Central Committee on Further Comprehensively Deepening Reforms and Promoting Chinese-style Modernization" (hereinafter referred to as the "Decision") was released. Among them, the cultural field has become a high-frequency word.

The "Decision" mentions that we should focus on building a socialist cultural power, adhere to the fundamental system of Marxism's guiding role in the ideological field, improve the system and mechanism for the development of cultural undertakings and cultural industries, promote cultural prosperity, enrich the people's spiritual and cultural life, and enhance the country's cultural soft power and the influence of Chinese culture.

Specifically, we need to improve the cultural industry system and market system, and improve cultural and economic policies. We need to explore effective mechanisms for the integration of culture and technology, and accelerate the development of new cultural formats. We need to deepen the reform of the administrative approval and filing system in the cultural field, and strengthen supervision during and after the event. We need to deepen comprehensive governance in the cultural and entertainment fields.

The "Decision" also points out that it is necessary to expand the catalogue of industries that encourage foreign investment, reasonably reduce the negative list of foreign investment access, implement the comprehensive abolition of restrictions on foreign investment access in the manufacturing sector, and promote orderly opening up in areas such as telecommunications, the Internet, education, culture, and medical care.

Changes occur

Now, with the implementation of favorable policies for the cultural and entertainment industry, the film industry has already felt the changes.

On August 9, Huayi Brothers released a new version of the fixed increase plan. The issuance targets of this plan shall not exceed 35 (including 35), which shall be legal persons, natural persons or other legal investment organizations that meet the conditions stipulated by the China Securities Regulatory Commission. The number of shares issued shall not exceed 780 million shares, and the total amount of funds shall not exceed 1.03 billion yuan. After deducting the issuance expenses, the total amount of funds raised will be used for film and television projects and to supplement working capital.

In fact, Huayi Brothers' current round of private placement has gone through twists and turns. The first version of the private placement plan was released in April 2020, when it was planned to issue no more than 824 million A shares at a price of 2.78 yuan per share, with a total amount of no more than 2.29 billion yuan.

Behind the progress of Huayi Brothers' current round of private placement is the fact that fundraising in the entire entertainment industry seems to be supported.

On August 9, Tangde Films' plan for a private placement was approved by the Shenzhen Stock Exchange's Listing Review Center. Objectively, it was not easy for Tangde Films to raise funds in this round. The private placement plan went through three rounds of inquiries from the exchange. The amount of funds raised in the plan did not exceed 410 million yuan, and Yitong Company, the single largest shareholder, would subscribe for no more than 105 million shares. After deducting the issuance expenses, the raised funds will be used to repay bank loans and supplement working capital, and will not be used to repay shareholder loans.

In addition, as the "Opinions" clearly stipulates to enrich the supply of films and the "Decision" points out to promote orderly expansion of opening up in areas such as culture, more and more films will be released in the future.

This will greatly alleviate the problem of "film shortage" in the film market.

In June, director Jia Zhangke called for expanding the number of overseas films introduced at a forum related to the Shanghai International Film Festival.

Jia Zhangke runs two cinemas. "The idle rate is relatively high, especially for multi-hall cinemas that are not fully occupied. On the one hand, the daily attendance is not enough, and on the other hand, the attendance in the morning and afternoon is very low. We have built more than 80,000 screens (nationwide), and we have a very solid industrial foundation in terms of quantity, but the construction of the entire film market urgently needs to be refined, and we urgently need to increase the output of these 80,000 screens." He said.

Jia Zhangke gave an example, as of the end of 2023, there are more than 14,000 commercial cinemas in mainland China, 86,000 screens (86,310 according to the National Film Administration), and only more than 500 films can be screened. In comparison, Japan had 3,600 screens last year and screened 1,232 films.

The difference lies in the number of foreign films introduced.

In addition, Jia Zhangke also said on Weibo that international films are not just Hollywood blockbusters. Hollywood blockbusters are currently aesthetically fatigued, but there are still many exciting films in the world that have not entered the vision of Chinese audiences, such as Latin America, other Asian countries, and Eastern Europe. The so-called international refers to excellent films within the global vision.

He stressed that domestic films alone cannot meet the demand of theaters for high-quality films, and there is often a "film shortage" problem. Introducing high-quality foreign films can jointly boost the Chinese film box office, solve the problem of a cinema showing the same movies in more than a dozen halls, and increase attendance. More diverse films will also help restore the audience's enthusiasm for movie consumption and help boost the box office of domestic films.

"We must ensure that Chinese films maintain their status as a major global film market. Generally speaking, a buyer's market certainly has more say and influence. If we are a big buyer in the international market, our say will certainly be greater; conversely, if we lose our status as a major market, of course our influence will decline," said Jia Zhangke.

Overall, "opening the floodgates" of financing for film and television companies will help the survival of films, and the release of more films will save terminal theaters.

All these changes will give the film industry a break.