Industry driven by China's increasingly wealthy population looks set to overtake the US, claims Ernst & Young report
China's film market – already the second biggest in the world – will surpass that of the US by 2020, according to a new report by Ernst & Young.
The report suggests the media and entertainment industry in the world's most populous nation is due to grow by 17% a year until 2015. China is also building 25,000 cinema screens over the next five years, to cope with demand from an increasingly wealthy population. Many will have the latest 4k digital technology. Growth will also be helped by the government's recent decision to relax the number of foreign movies allowed to screen each year from 20 to 34.
"The challenges for media and entertainment companies to penetrate China are still considerable; however, the vast potential of the market makes it impossible to ignore," said Ernst & Young's John Nendick. "Companies will need to understand that investing in China is a long-term proposition, and those who can make that commitment will be in a much better position to succeed."
With a potential 1.34 billion cinemagoers, China has already overtaken Japan as the biggest film market for outside of Hollywood, and studios are increasingly looking east in an effort to offset sluggish box-office growth. Disney subsidiary Marvel recently co-produced forthcoming superhero sequel Iron Man 3 alongside Chinese company DMG Entertainment, while Looper director Rian Johnson agreed to transplant the plot of his sci-fi blockbuster from Paris to Shanghai, in order to gain Chinese funding. Co-productions are exempt from the strict Chinese quota system, giving them a huge advantage at the local box office, and more are likely after officials announced plans to build a $1.27bn Hollywood co-production film studio in May.
Working in China has its drawbacks, however: Men in Black III, starring Will Smith, had a scene removed from the local cut of the movie after censors objected to the fact that the villains were Chinese.
[Movie theater in China via Flickr/dcmaster]