Market Concentration and Performance of Chinese Film Industry Based on SCP Paradigm

Abstract

With the continuous improvement of Chinese urban per capita national income, leisure and entertainment has become an important part of people's life, and the entertainment expenditures are accounting for an increasing proportion of total consumption. Movies, as a leisure project, has attracted more and more Chinese people' interest. At present, China is the second largest film market in the world, which is fast growing. According to the PWC's report in 2014, in 2018, Chinese film box office revenue will increase by 88%, from $31.3 billion in 2013 to $59 billion. It is suggesting that Chinese film industry has a bright prospect. This paper uses SCP paradigm of industrial organization theory to research China's film industry. We find that: Chinese film production market is a competitive market; the film issuing market is oligopolistic, type III market; and the film cinema market belongs to an oligopolistic, type IV market. At the same time, the film market behavior and market performance analysis shows that China's film market is in the stage of vigorous development. Finally, this paper proposes several suggestions for the development of China's film industry. With the continuous improvement of Chinese urban per capita national income, movies, as a leisure project, has attracted more and more Chinese people' interest. At present, China is the second largest film market in the world, which is fast growing. According to the PWC's report in 2014, in 2018, Chinese film box office revenue will increase by 88%, from $31.3 billion in 2013 to $59 billion. It is suggesting that Chinese film industry has a bright prospect. This paper uses SCP paradigm of industrial organization theory to research China's film industry. We find that: Chinese film production market is a competitive market; the film issuing market is oligopolistic, type III market; and the film cinema market belongs to an oligopolistic, type IV market. At the same time, the film market behavior and market performance analysis shows that China's film market is in the stage of vigorous development. Finally, this paper proposes several suggestions for the development of China's film industry. In 1959, Bain, Kaysen and Turner, which were called as Harvard School, proposed empirical research as the main means of the industrial analysis, and there are three aspects: the structure, conduct, performance, which is denominated SCP paradigm analysis framework, to analyze a specific industry, and through the public policy of the government to adjust the competition pattern of the industry. At present, there are many scholars studying the competitiveness evaluation, industrial organization, experience in trade and industry chain of China's film industry. Among them, Dong Xiao Lin and Wu Shan, in American movie industry trade experience and of China's film trade revelation, revealed the development experience and inspiration of the American film industry trade for China film industry and found out the effective way to promote the globalization development of China's film industry. Gao Cheng, in High osmium based on the SCP analysis framework, China Film Industry Research, used SCP paradigm to study China's film industry, but the data was before 2005, coupled with the rapid development of the industry in the recent years, the research is slightly outdated. In view of the film industry of our country, the present cultural life of the residents, and the recreational importance of the industry, further analysis of the film industry's market concentration and performance will undoubtedly have a significant importance.