When Chinese blockbusters take shape, a predicament follows: the higher the cost, the more the criticism. When a Chinese film attracts a huge investment, name directors and actors, advanced technology and a variety of marketing methods, it seems that Chinese audiences become hard to please. In other words, these blockbusters fall far short of viewers’ expectations.

“Movies with a mere investment of about 3 or 4 million yuan have no attraction. We must grab the market with blockbusters,” said Wang Zhongjun, President of H. Brothers Media Group, a private movie studio. Wang has made over 10 movies in five years, topping the domestic box office for three years before Hero.

Under the previous system, the Chinese Government only recognized 16 state-owned movie studios. If independent filmmakers such as Wang wanted to enter the industry, especially the distribution channel, they had to first get the approval of relevant authorities, and most importantly, they had to obtain a certificate number from a state-owned movie studio. Only 150 to 200 such numbers were issued annually in the country, with each costing several hundred thousand yuan, which stopped many independent filmmakers.

As a result, although many people question the current trend in the film industry, the emergence of blockbusters reflects confidence on the part of movie producers that greater investment will mean higher income. It also demonstrates that the reform carried out by Chinese film supervisory bodies since the 1990s, which emphasizes a market orientation, has scored impressive achievements.

Government-financed movie production lasted for over 40 years, until January 1, 1993, when all of the Chinese state-owned movie studios were opened to market forces without government financing and had to make a living from the market. Under the old system, heads of state-owned movie studios did not have to consider economic returns, as long as the films could present a positive social influence.

However, given small box office receipts, they did not have much money for new movie production. Since they could not be sure that the next movie would produce a profit, they set their sights on cutting costs.

Finding a new economic model

When the last privilege of state-owned studios was removed, they entered into a competition with independent or private filmmakers. Currently, state, private and overseas investments coexist in the Chinese movie industry. Since 2002, the total revenue and box office of the Chinese film industry has been increasing by 40 percent each year, far exceeding the growth rate of China’s gross domestic product, which makes it possible to invest in expensive and powerful movies.

“It is risky to invest over 100 million yuan in a movie,” said Wang Zhongjun. “During the three months of shooting the movie The Banquet, each day cost on an average 1 million yuan. Even if I was enormously rich, I couldn’t have afforded it, especially the market risk. Therefore, we need a better financing channel.”

H. Brothers once brought the U.S.-based Columbia Pictures into its investment group. Wang said he firmly believes that “High investment leads to high revenue,” while he is also aware that a blockbuster must be guaranteed by prudent preparation, distribution and marketing efforts.