You Think There’s Bubble in Chinese Real Estate Market? Nothing Compared With Animation Industry in China

BEIJING – NOV 17TH, 1:50 | TAGS: ANIMATION CHINA

You Think There’s Bubble in Chinese Real Estate Market? Nothing Compared With Animation Industry in China

In 2005, the State Administration of Radio Film and Television required that no less than 60% of Chinese animation be screened on TV channels during the prime time. Then more policies that favors the Chinese-made animations are introduced, including subsidies… In terms of the output, China had became the top animation provider in the world. In 2011, China produced more than 260,000-minutes-long tv episodes of animation, which is 180,000 minutes more than Japan, the second biggest animation-output country of the world. In 2012, a total of 117-thousand-hours-long animation was aired in China. According to the State Administration of Radio Film and Television (SARFT, 国家广电总局), approximately 60% of the Chinese animation companys’ revenue came from TV stations. Yet the TV stations’ total budget for procurement transactions was not more than 50 million yuan. The average cost of the purchases for TV stations was less than 10 yuan per minute.Movie Market

Facing the challanges and obstacles in the TV field, more and more animation producers turns to the animation movie market. As a consequence, in 2012, there were as many as more than 20 Chinese animation movies shown in the theater. This year, the box office for animation movies amounts to 390 million yuan.

Estimation by the experts in the animation field says the year of 2014 would be the “Waterloo” for Chinese animiation movies. “As far as I know, it is risky for so many animation movies to flock in this immature market. It is likely that nobody would win.” says an insider of the animation business.

Prior to 2004, the animation market was inundated with imported animation movies. In 2005, the SARFT required that no less than 60% of Chinese animation be screened on TV channels during the prime time. Then more policies that favors the Chinese-made animations are introduced, including subsidies, simplification of the SARFT’s approval process, fee exemptions, research funds etc.

Great Leap

As a result, fake companies and fake projects arise in the animation industry, taking advantage of the favorable policies by enjoying the generous subsidies while contribute nothing. More than 30 animation festivals were planned in eight months, and more than 20 cities claim they are working on becoming “the City of Animation (动漫之都)”.

The subsidy policy also results in the significant reduction of the TV stations’ bid price. Some TV stations only offer 10 yuan per minute to the sellers.

Today’s animation industry is viewed as part of the creative industry, and thus lures the hot money. It is believed that a number of investors take advantage of the government’s favorable policies on the creative industry, but are only interested in easy money rather than the real animation business. For example, some businessmen got the rights to use the land in the name of developing cultural industry parks, but then used the land to operate real estate business.

In 2011, the total value of Chinese animation and game industry reached 110 billion yuan. Yet according to the data from the Animation and Game Research Center of Peking University, the gross output value of the animation industry only takes a small portion of this significant number. The investment in the animation industry seems to be far more than the total cost for animation production, but the gross output value is not satisfying.

The question is: who grabbed the fat profit margins?