A visitor looks at posters of Legend Of The First: The Return Of Chen Zhen, produced and distributed by Enlight Pictures, at a cinema in Changchun, Jilin province. The company is to invest in and distribute eight to 10 films next year. [Photo / China Daily]

BEIJING - The film All's Well Ends Well 2010 produced by Wong Bak-ming, a Hong Kong producer and actor, picked up box office takings of 56 million yuan ($8.42million) when it was released at the beginning of the year, to the surprise of many industry insiders.

It wasn't the money that raised eyebrows, but its source. Audiences in big cities including Beijing and Shanghai were not attracted, but it was a success in second-tier cities such as Shenyang and Xi'an.

However, Zhang Zhao, president of Enlight Pictures Co, was not the least bit caught off guard: "We made the right decision at the right time, so we got the high profit return."

Beijing-based Enlight Pictures, founded in 2006 by private entertainment group Enlight Media, was the distributor of the film. The company did not spend much distributing it in first-tier cities. It decided it would appeal more to audiences in second-tier cities and set out its marketing strategy accordingly.

"Differentiating the markets and making the right films for the right niches are what we did," said Zhang.

His company has a sales team of 15 employees working in 40 cities in China to promote films and collect audience information so the company can design a production plan. It aims to have the sales network covering 50 cities by the end of this year.

"It is an inevitable trend that Chinese film producers and distributors become more localized," said Wang Jinsong, vice-director at the Performance Institution of Beijing Film Academy.

He said different films were suitable for different types of audience so distribution has to be specifically targeted.

Identifying audience types before the film goes into production is beneficial for investors, filmmakers and audience, said Wang.

A localized distribution model is just one of the business strategies employed by Enlight Pictures.

Brand building

Zhang said the company is going to strengthen its brand building to win in the competitive Chinese film market, which is dominated by the US blockbusters.

Enlight Pictures is for the first time making two new series: The Seven Weapons and The Four Famous Chinese Detectives.

"Every film of the weapon series we make will tell the story of a mysterious traditional Chinese weapon. The series of Chinese ancient detectives can be compared with the US' X-man series," said Zhang. "I believe they will attract both domestic and international audiences."

Zhang predicted that in the future, cinema foyers will be full of film character toys and related products for sale. Popular film characters will help the company develop brands and make money outside the box office.

Enlight Pictures plans to follow the Hollywood model of being less dependent on box office takings and using the branding of heroes to earn money.

With three years of film distribution experience behind it, Enlight Pictures is now morphing into a film production company. It invested in eight films in 2010. The target box office takings are 450 million yuan, about 10 percent of the domestic film market.

The company is to invest and distribute eight to 10 films next year. It will produce six itself.

"We want to complete our production chain by producing more because there are too many uncontrollable elements if we just focus on distribution," said Zhang. "We can distribute a film well through our group's huge TV, Internet and media networks."

Fundraising

Wang said if private film companies want to seize the opportunity to get bigger, they may need to get more financial support from the stock market.

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Although the company has not confirmed its intentions, Wong Bak-ming said it is the best time now to go public because the rapid development of China's film industry offered big opportunities.

Three more film screens are built every day in China and increasing numbers of people have been going to the cinema in recent years. Many filmmakers are building their own cinemas to create more outlets for their wares.

"With such a competitive market, the earlier a companies goes to the market, the better," Wong said.

Wong is now focusing his Hong Kong-listed Cinema City Company Ltd on the mainland because of its huge market.