Nation's high-profile filmmakers call for affordability

Six of China's top filmmakers, including Zhang Yimou and Feng Xiaogang, are calling for cheaper cinema tickets.

It doesn't hurt that the filmmakers are all members of the Chinese People's Political Consultative Conference and have been hounded by a large chorus of journalists.

There is nothing new in their appeal for the greater affordability of their own products. Compared with other industries where bigwigs rationalize higher prices, the directors' stance with consumers sends a breath of fresh air into a business that is big on publicity.

So, how expensive are China's film tickets?

Let me first say that government statistics don't tell half the story. The average rate is laughably low, and must have included tens of millions of free admissions organized by government-run screenings in remote villages.

In urban areas, according to Xu Binbiao, general manager of Pearl River Cinema Circuit, the national average for 2011 was 35 yuan ($5.50), and Guangzhou was slightly higher at 40 yuan.

From my experience, this is the half price that we can get for early shows and Tuesdays, which are half price all day but often sold out.

In the US, an average movie ticket in 2010 cost $7.89.

If you factor in how much people earn, film-going in China is roughly equivalent to a live theater experience in the US in terms of cost-to-income ratio.

And it felt much more expensive a few years ago when everything else carried far lower price tags.

As a matter of fact, film tickets have remained relatively stable over the past decade, or at least that's the perception of a constant moviegoer like me.

The big drop came when half-price tickets were introduced a few years back.

I used to argue for lower prices, but after talking to many exhibitors I'm not so sure now. Chinese cinemas - the multiplexes, not the old-fashioned auditoriums - tend to be located in new shopping malls. This is prime real estate and expensive to rent. In addition, property owners constantly raise rents in sync with the good tidings of the film industry.

Exhibitors are squeezed, and they in turn squeeze the filmmakers. Both Zhang and Feng had their distribution companies raise the minimum price for their latest releases because exhibitors are said to share earnings based on that figure.

It sounds unfair, but filmmakers who invested in the cinema chain business are not complaining. As with television programs or supermarkets, the sales platform controls the largest stake of profits. That leaves filmmakers with a much slimmer margin.

And booms invariably leads to bubbles, which are surfacing in star salaries more than anything else. There is so much money flowing into showbiz that stars are commanding ridiculous sums for often brief appearances, such as 1 million yuan for one episode of a television drama, which may take two days to shoot.

For Zhang and Feng, it is easier to point the finger at the cinema chains than at thespians with inflated egos. As a matter of fact, the ticking bomb lies much closer to them. If Zhang's Flowers of War cost 600 million yuan last year as reported, it was simply too expensive to make. The so-called above-line expenses, that is, salaries for the creative team, made up such a hefty piece of the budget that it was out of whack with common sense.

There should be a two-pronged strategy to keep the film business healthy: One is to make it harder for speculators to harm the business by bumping up star salaries and turning out awful flicks, and the other is to distribute a higher share of the box office to producers.

The government can help by reducing or eliminating its 5-percent cut from every ticket for the "film fund". Five percent is a reasonable profit margin for many healthy businesses, and is a big burden on this business.