A DREAM CHERISHED: Music is a dream cherished by the father (center with an accordion), his daughter and his lover (in red dress) in the movie, The Piano in a Factory (FILE)

Organizers of China's upcoming film festivals are finally giving recognition to the little guys—low budget films—to encourage a generation of young, talented directors.

Several nominees were announced on September 10 to compete for the Small- and Medium-Budget Film Prize of the annual Golden Rooster and Hundred Flowers Film Festival, which will kick off on October 19.

The Small- and Medium-Budget Film Prize was established this year to award any recent production with an investment less than 8 million yuan ($1.25 million). It was introduced to recognize a number of small- and medium-budget films that achieved better than expected box office performances and received critical acclaim this summer.

The Piano in a Factory, a 6-milllion-yuan 2010 production that was almost cancelled due to lack of funds, managed to make it to big screens nationwide this summer. It has since won applause from audiences and a series of awards around the world for its dark humor and realistic depiction of the lives of laid-off workers in one of China's former steel capitals.

Most Chinese films are small- and medium-budget productions in a global sense. Even Hero, the 2002 production by famous Chinese director Zhang Yimou which was seen as a "mega picture" at that time, had an investment of 240 million yuan (about $30 million then).

China's overall box office earnings exceeded 10 billion yuan ($1.56 billion) last year, increasing from less than 1 billion yuan ($156 million) in 2000. But as usual, 80 percent of the total went to blockbusters and 20 percent to small- and medium-budget productions. Nearly half of last year's productions failed to be shown in major urban cinemas because of their dim profit prospects and the scarcity of cinemas. Only 260 of the 530 feature films produced in China last year were shown at cinemas.

"China produces 250 to 300 low-budget films annually, in addition to 40 commercial mega productions and 50 art films," said Zhang Hongsen, Deputy Director of the Film Bureau under the State Administration of Radio, Film and Television.

A breakthrough

"Although blockbusters attract more attention, they also take longer to make, which leave small- and medium-budget productions enough room to survive," said Yu Dong, President of NYSE-listed Bona Film Group.

Just Call Me Nobody, a medium-budget comedy produced by Bona, was a dark horse during the Spring Festival holiday last February. With a total box office of 160 million yuan ($25 million), it boasted a higher return on investment compared with Sacrifice, a blockbuster also shown during the holiday.

Sacrifice was directed by renowned film director Chen Kaige, also known for Peking opera-centered epic Farewell My Concubine.

Han Sanping, Chairman of the China Film Group (CFG), advised a pyramid structure of investments for movie companies to avoid financial risks.

"Blockbusters are the most competitive products in the movie industry," said Han. "But a movie company should have varied investments from several hundred million yuan to several million yuan, so as to have a healthy cash flow and grow stronger."

Comparing with star-studded blockbusters, some distinct and creative low-budget films often win higher acclaim if they get shown in cinemas. However, the problem is whether operators of profit-seeking cinemas can envision that popularity and recognize their box-office potential.

The Piano in a Factory, an award winner at the 23rd Tokyo International Film Festival, cost 6 million yuan ($937,500). Although it also won several awards in the 14th Shanghai International Film Festival and the 14th Huabiao Film Awards of China, theaters in some first-tier cities began pulling it from screens almost immediately after its premiere. But some theaters in Beijing persisted, and saw its box office rebound in 25 days, despite the presence of summer blockbusters Transformers 3: Dark of the Moon and Harry Potter and the Deathly Hallows: Part 2.

In The Piano in a Factory, the hero makes a living performing at funerals or weddings with his amateur band after being laid off. After losing his job, he soon loses his wife, who files for divorce. To win custody of his daughter, who loves playing the piano, and with no money to buy her one, he forges a steel piano.

The story is set in the early 1990s when many state-owned enterprises went bankrupt and millions of workers lost their jobs and lived hard lives, and therefore has resonance with Chinese audiences.