Film industry zooms in on ancillary market

Updated 2016-12-16 10:21:09 Shanghai Daily
Though box-office sales growth has slowed this year, insiders believe the coming decade will be a golden age for China’s film industry. For many, this view is based on high hopes for the untapped potential of markets beyond the cinema screen.(Shanghai Daily)

Though box-office sales growth has slowed this year, insiders believe the coming decade will be a golden age for China's film industry. For many, this view is based on high hopes for the untapped potential of markets beyond the cinema screen.(Shanghai Daily)

Though box-office sales growth has slowed this year, insiders believe the coming decade will be a golden age for China's film industry. For many, this view is based on high hopes for the untapped potential of markets beyond the cinema screen.

In Hollywood, around 60-70 percent of a film's revenue can be generated from the ancillary market, which includes sales of licensed merchandise, home entertainment products, pay television, video games, recorded music, books and theme parks. But in China, over 90 percent of a film's revenue comes from theatrical screenings and product placement. The ancillary market in China is still in its infancy.

Statistics from NPD Group show that global sales of spin-off toys from Hollywood movies reached US.7 billion last year, accounting for about 90 percent of China's total box office take in the same period. Take the "Star Wars" film series as an example. The series' box office revenues total US.22 billion, while the ancillary market has generated US.5 billion.

Success stories like these have begun to interest domestic studios. In June, Alibaba Pictures announced that it would get involved in the spin-off business. Development and sales of licensed products from "Ice Age," "Teenage Mutant Ninja Turtles," "Star Trek" and "Ultraman" are currently under way.

Testing the market

In July Wanda Cinema Line Co Ltd announced its US0 million acquisition of Mtime.com, the world's second largest film database. As part of the deal, offline and online resources have been combined to seek integrated marketing solutions. The new partnership will also explore the film merchandise market.

Mtime also recently held a charity auction for film props and spin-off products from Chinese director Zhang Yimou's latest epic "The Great Wall." The auction was broadcast live and opened to online buyers. All the proceeds, totaling more than 250,000 yuan (US,200), went to a project by the China Foundation for Cultural Heritage Conservation to preserve and restore the real Great Wall.

Kelvin Hou, vice president of Wanda Cinema Line Co Ltd and CEO of Mtime, says the auction, a new interactive mode of film promotion in China, will make film art more accessible to movie fans and collectors.

The auction attracted many movie enthusiastists. Items for sale included Chinese weapons and costumes, which were tailor-made by the famous Weta Workshop. An exquisite set of movie-themed mahjong pieces was also available. A calligraphy work of Chinese characters "The Great Wall," written by director Zhang, proved hugely popular at the auction and was sold for 88,000 yuan.

"Domestic spin-offs used to be cheap plush toys and plastic souvenirs," said Eric Wang, a movie fan who attended the auction. "To my surprise, the spin-off products for 'The Great Wall' are very delicately designed and made. Some of them are worthy of collection."

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