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Investment Opportunity: Famed Director Says Chinese Film Market to Surpass Hollywood’s

Chinese studios are increasingly more lucrative


Oscar-winning director Ang Lee is echoing what a number of other film insiders are publicly admitting: That Chinese film market could earn more revenue than Hollywood in the next decade.

Lee, speaking ahead of the Golden Horse Film Awards in Taiwan, said that the huge demand by Chinese movie-goers would continue to grow.

“I think in ten years’ of time maybe our market will be bigger than the Hollywood market. Things will come naturally.”

The Brokeback Mountain and Life of Pi director is just the latest Hollywood name to point out the obvious: Chinese cinema is becoming a force to be reckoned with (via AFP).

Industry analysts have predicted that China — which collected an estimated $2.8 billion in box office takings last year, compared with Hollywood’s $10.8 billion — will at the current rate of growth become the world’s dominant market by 2020.

As well, the number of screens in China have quadrupled from 2009 to 2012, according to entertainment consulting firm EntGroup Inc.

From the Journal:

For investors who want to profit from the new consumption trend, there are a couple of avenues. One is to invest in real-estate developers who build and own the theaters and shopping malls where they tend to be located.

China is expected to add 5,000 screens a year for the next few years, giving it roughly 30,000 screens by 2015. Despite the growth, that still will be 10,000 fewer than in the U.S. The downside is that higher real-estate costs and more competition means it will take longer to earn back the cost of a theater, experts say.

With more Chinese hitting theaters, Hollywood is reaping some rewards, but Chinese studios are the real winners.

According to the Wall Street Journal, domestic films’ box-office revenue has doubled in the past year, “hitting $1 billion for the first six months of 2013. Chinese films topped foreign offerings for the first time in at least five years.”

Article printed from InvestorPlace Media,

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