Showbiz suffers huge losses due to gala ban

China's showbiz industry has suffered huge losses due to central government's order to ban lavish galas, China Business News reported on Wednesday.

The Beijing Trade Association for Performances recently released its statistics and analysis of Beijing's performing market in 2013. A total of 23,155 performances were staged across 123 venues in the last year, with 10.14 million people attending. These data are 7.8 percent lower than those of 2012. The total box office grosses in 2013 accumulated to 1.424 billion yuan (US$235 million), 5 percent lower than during the same period one year earlier.

"We have to wait until March or April to know the exact figures on how big the nation's performing industry is and how big it went down, " said Mao Xiubing, general manager of the Center for Culture Industry Research of the Dao Strategy Company.

In the past years, China's performing groups and companies would perform at one gala after another. They simply didn't have the time to rest with various local galas, enterprises' galas and government galas keeping them very busy.

Nevertheless, this year, just before the arrival of the Chinese lunar New Year, the industry is experiencing a dark and cold winter, leaving performers with no galas to attend.

China's central authorities issued a circular last August to halt the organization of lavish official galas and punish those who do continue to host such events. China's ban on extravagant official galas illustrates the efforts of the Communist Party of China (CPC) to fight corruption and support a healthy development of the related markets. Earlier "thrifty" decisions were also part of the efforts to implement the "eight requirements" that the CPC leadership began promoting as of December 2011, in its bid to reject extravagance and bureaucracy.

Government funds should not be used to hold commercial celebrations or pay for expensive entertainers, according to the circular. In addition, it read that lavish festive celebrations damaged the image of both the CPC and the government, and triggered complaints from the public.

With TV networks and local governments obeying the ban, countless galas have been cancelled. Industry insiders told China Business News that the State-owned art and performing groups grossed some 12.4 billion yuan (US$2.05 billion) in 2012, two thirds of which stemmed from government support and subsidies. In 2013, the frugality decisions and extravagance ban would cause the State-owned art and performing groups to lose two thirds of their income.

"This is a huge blow," said one anonymous director of a performing group, "For the showbiz industry, the galas of the government and State-owned enterprises are also a kind of commercial pattern. And that pattern has its reasons to form."

Within the cultural industry, the movie and TV industries have benefitted from government support to reform and develop. Yet China's performing industry currently remains in a tight spot. As they are trying to figure out which performances could meet the audiences' and market's appetite, the government and enterprises' galas form their commercial pattern and lifeline during this particular phase.

Another commercial pattern for the industry is exploring tourism showbiz, much like New York's Broadway shows and Las Vegas shows. Take "Impression Liu Sanjie" as an example, this grand outdoor performance, set in the real mountain and river décor of Yangshuo and directed by Zhang Yimou, together with other five similar performances had made more than 2 billion yuan (US$330 million) since 2003. According to the newspaper, China's local governments have invested 9 billion yuan (US$1.488 billion) into the construction of new theaters.

However, Dao Strategy Company's Mao Xiubing said that due to China's new tourism laws taking effect last year, tourist agencies have had to cut out shopping and other arrangements which could in fact get commission. For that reason, they raised prices, but this action would bring in fewer tourists, consequently resulting in less income for the tourist showbiz.

As the gala mode is suffering, various theater dramas, musicals, concerts as well as classic foreign hits like "Chicago," were booming in China in 2013. According to a Shanghai Oriental Art Center report, more and more young people have started to become consumers of the show industry.

"On the short term, campaigns of frugality may seriously impact the market," Mao added, "But from a long term perspective, this also may be an opportunity."