A DREAM CHERISHED: Music is a dream cherished by the father (center with an accordion), his daughter and his lover (in red dress) in the movie, The Piano in a Factory (FILE)

Organizers of China's upcoming film festivals are finally giving recognition to the little guys—low budget films—to encourage a generation of young, talented directors.

Several nominees were announced on September 10 to compete for the Small- and Medium-Budget Film Prize of the annual Golden Rooster and Hundred Flowers Film Festival, which will kick off on October 19.

The Small- and Medium-Budget Film Prize was established this year to award any recent production with an investment less than 8 million yuan ($1.25 million). It was introduced to recognize a number of small- and medium-budget films that achieved better than expected box office performances and received critical acclaim this summer.

The Piano in a Factory, a 6-milllion-yuan 2010 production that was almost cancelled due to lack of funds, managed to make it to big screens nationwide this summer. It has since won applause from audiences and a series of awards around the world for its dark humor and realistic depiction of the lives of laid-off workers in one of China's former steel capitals.

Most Chinese films are small- and medium-budget productions in a global sense. Even Hero, the 2002 production by famous Chinese director Zhang Yimou which was seen as a "mega picture" at that time, had an investment of 240 million yuan (about $30 million then).

China's overall box office earnings exceeded 10 billion yuan ($1.56 billion) last year, increasing from less than 1 billion yuan ($156 million) in 2000. But as usual, 80 percent of the total went to blockbusters and 20 percent to small- and medium-budget productions. Nearly half of last year's productions failed to be shown in major urban cinemas because of their dim profit prospects and the scarcity of cinemas. Only 260 of the 530 feature films produced in China last year were shown at cinemas.

"China produces 250 to 300 low-budget films annually, in addition to 40 commercial mega productions and 50 art films," said Zhang Hongsen, Deputy Director of the Film Bureau under the State Administration of Radio, Film and Television.

A breakthrough

"Although blockbusters attract more attention, they also take longer to make, which leave small- and medium-budget productions enough room to survive," said Yu Dong, President of NYSE-listed Bona Film Group.

Just Call Me Nobody, a medium-budget comedy produced by Bona, was a dark horse during the Spring Festival holiday last February. With a total box office of 160 million yuan ($25 million), it boasted a higher return on investment compared with Sacrifice, a blockbuster also shown during the holiday.

Sacrifice was directed by renowned film director Chen Kaige, also known for Peking opera-centered epic Farewell My Concubine.

Han Sanping, Chairman of the China Film Group (CFG), advised a pyramid structure of investments for movie companies to avoid financial risks.

"Blockbusters are the most competitive products in the movie industry," said Han. "But a movie company should have varied investments from several hundred million yuan to several million yuan, so as to have a healthy cash flow and grow stronger."

Comparing with star-studded blockbusters, some distinct and creative low-budget films often win higher acclaim if they get shown in cinemas. However, the problem is whether operators of profit-seeking cinemas can envision that popularity and recognize their box-office potential.

The Piano in a Factory, an award winner at the 23rd Tokyo International Film Festival, cost 6 million yuan ($937,500). Although it also won several awards in the 14th Shanghai International Film Festival and the 14th Huabiao Film Awards of China, theaters in some first-tier cities began pulling it from screens almost immediately after its premiere. But some theaters in Beijing persisted, and saw its box office rebound in 25 days, despite the presence of summer blockbusters Transformers 3: Dark of the Moon and Harry Potter and the Deathly Hallows: Part 2.

In The Piano in a Factory, the hero makes a living performing at funerals or weddings with his amateur band after being laid off. After losing his job, he soon loses his wife, who files for divorce. To win custody of his daughter, who loves playing the piano, and with no money to buy her one, he forges a steel piano.

The story is set in the early 1990s when many state-owned enterprises went bankrupt and millions of workers lost their jobs and lived hard lives, and therefore has resonance with Chinese audiences.

Many viewers said they went to see the movie with low expectations, but were surprised by the story and the way it was told, and considered it the best low-budget movie they had seen this year.

"No supermarket will sell just one shampoo brand, and likewise theaters should figure out a proper proportion for films of various genres," said Ding Junjie, Vice Director of the Academic Board of the Communication University of China. "The true prosperity of China's movie industry will rely on whether China has an established group of professionals for small- and medium-budget productions."

What investors value

The Piano in a Factory set an example for Chinese moviemakers to make good films with small budgets.

Zhang Xianliang, a writer who founded the China West Film in the Ningxia Hui Autonomous Region, pointed out only a few of the 100 classic movies of the 20th century chosen by Americans are mega productions.

"The future of low-budget films is promising because low-budget productions usually have higher returns on investments, although they cannot match blockbusters in box office," said Zhang.

Two low-budget movies directed by Chinese director Xie Jin (1923-2008) in 1980s, Herdsman and Hibiscus Town, were box office successes too. Herdsman, a 1982 production adapted from Zhang's novel only cost 1 million yuan ($150,000); Hibiscus Town, made in 1986, cost 4 million yuan ($620,000). The latter, with the average ticket price at less than one yuan ($0.15) at that time, yielded more than 100 million yuan ($15 million) at the box office.

"The two movies addressed contemporary Chinese issues, depicted the 'cultural revolution,' and reflected common ethics and aesthetics of one generation, which is why they resonated with millions of audience members," said Zhang. "Whatever the investment, we have to produce films that are both visually pleasant and emotionally striking."

Crazy Stone, released in 2006, is another example of success for Chinese low-budget films. Produced with less than 3 million yuan ($460,000), the film earned 30 million yuan ($4.61 million).

"Like a carpenter about to make a chair or a desk, a director should exactly decide what kind of film he is going to make before he starts shooting it," said Ning Hao, director of Crazy Stone. "My concern during the Crazy Stone production was how to make my 'chair' as comfortable and enjoyable as possible for the audience."

Behind the success of Crazy Stone was an investor who had an eye for good screenplays and gifted directors.

At a film investment fair in March 2005, Ning and his film script aroused the interests of Hong Kong superstar Andy Lau. Lau has his own studio for film investment, production and distribution. He decided to invest and advised Ning to localize the story. As a result, Ning chose Chongqing.

"Investors need to be farsighted and have the right mindset when they decide to invest in a film," said Wu Jun, General Manager of the Guangzhou Branch of GF Fund Management Co. Ltd. "No one knows whether an investment will be profitable at the beginning and I think Lau is quite aware of it. Even if he won't reap huge from the investment, it's good to support a promising director to grow."

But that's not to say Lau didn't care about the profitability of his investment. "The most valuable part of Ning is his persistence in carrying out his ideas despite difficulties, in addition to his innate sense of humor and artistic gift," said Wu.

Several years ago, CFG launched an investment program to support production of young film directors.

"Returns from investments were not encouraging, but the situation has improved after Ning Hao, and Lu Chuan, director of City of Life and Death, and other established young directors were included to court more confidence from investors and producers in the program," said a CFG manager Zhao Zuohai. "One problem that still plagues us is how to get box-office recognition for young directors' works and therefore yield returns for producers," said Zhao.

Marketing efforts

"Equal importance should be paid to marketing, the finishing touch to ensure box-office success for a movie," said Wang Dayong, President of CashFlower Culture Communication Co. Ltd., the marketing agent of The Piano in a Factory. "We largely attribute the movie's improved box-office performance several weeks later to effective word-of-mouth marketing."

Unlike blockbusters, low-budget films cannot secure contracts of most theaters nationwide. That's why Crazy Stone selected some cinemas in Beijing and Shanghai, expecting the effects of word-of-mouth marketing—high acclaim from the audiences attracted more curious viewers to the theaters.

It's also important to find an ideal screening time and avoid competing for viewers with blockbusters, said senior film distributor Gao Jun.

The Golden Rooster Awards

Established by the China Film Association in May 1981, the Golden Rooster Awards are China's most prestigious film awards, the equivalent to the Academy Awards. Award winners are chosen by a jury of actors, directors and critics. The awards consist of 19 prizes for films, actors, directors and other professionals. Special and honorary awards are also given.

Originally, Golden Roosters were only available to mainland nominees of China, but the awards opened up the acting categories to actors from Taiwan, Hong Kong, and elsewhere in 2005.

The Hundred Flowers Film Awards

The Hundred Flowers Awards were initiated in 1962, sponsored by the Popular Cinema magazine, which has the greatest circulation of any entertainment-focused magazine in China. The annual awards are decided by the number of votes submitted by the general public.

The awards are called the mass awards as they only represent the views of ordinary moviegoers. Every year, the Popular Cinema magazine issues ballots to its readers and the awards are produced according to the number of votes that each film gets. The awards consist of seven awards in five categories, namely best film, best actor and actress, best supporting actor and actress, and three awards in the best film category.