Film industry needs long tail to grow

The domestic film market registered record half-yearly box office returns of 10.9 billion yuan ($1.77 billion) in the first six months of this year, up 35 percent year-on-year, and there have been excited voices saying that the Chinese film industry is about to boom in the international market. However, box office success is just part of the industry's chain, and without the further development of licensed movie merchandising, the Chinese film industry is still in the early stage of development compared to developed countries.

Movie merchandising refers to the spin-off products from a film, such as toys, audiovisual products, books, video games, souvenirs, clothes and even theme parks. Such merchandise is an indispensable part of the industry's value chain and manifests the long-tail retailing strategy of selling a large number of unique items in relatively small quantities.

The importance of such long-tail spin-off retailing for movies has been proven in developed film markets, such as the United States, where the box office usually accounts for only 22 percent of the total revenue generated by a film. The rest comes from non-theatrical releases and film-related products.