The overseas gross of Chinese films dropped by 48 percent between 2011 and 2012, but private companies and a new genre gave the industry more potential than ever before, according to a report released by the Institute for International Communication of Chinese Culture on Wednesday.

Jointly founded by Beijing Normal University and International Data Group, the institute aims to promote Chinese culture across the world.

"China's domestic box office has been booming in recent years, but Chinese films' exposure and influence in the global market has not lived up to many people's expectations," said Huang Huilin, professor of Beijing Normal University and one of the report's compilers. "The report tries to study the films' performance in the global market and how that can be improved."

The report found that 59 titles were released overseas in 2012, a 13 percent increase from 2011, but receipts, including box office and copyright sales, were only 1.06 billion yuan ($170 million), about half of the 2011 gross.

Local films had a broader global reach, however. In 2011, Chinese films were released in 22 countries and regions, with that number nearly quadrupling in 2012 to 80, the report said.

Among the 59 titles, 23 were action films, which was the favorite genre of 1,117 people from 107 countries according to a survey in the report. Kung fu followed as the second favorite.

The first two genres are the same as the report's 2011 version, said Huang, but the third favorite genre in 2012 was comedy, replacing art-house.

The survey also tried to ascertain which factors are preventing international audiences from appreciating Chinese films.

"Logic of story" turned out to be the biggest obstacle, as 30.7 percent of those surveyed said they could not follow the plot of Chinese films.

Translation came next?- 29.9 percent of respondents said poor subtitles made it difficult for them to fully understand the films.

The report suggested filmmakers and distributors are paying more attention to new media, which became the most frequent way for international audiences to watch Chinese films in 2012. According to the report, 58 percent of those surveyed found and watched Chinese films on the Internet.

The report also found that while State-owned enterprises such as China Film Group Corp used to be the leading player of Chinese film companies in the international market, in 2012 some private companies had shown their potential in winning over wider audiences.

Huayi Brothers, for example, contributed 24.2 percent of the total revenue of Chinese films overseas in 2012, by distributing films such as the epic Painted Skin 2, action comedy Tai Chi and urban romance Love.

Bona Film released six films in international theaters, grossing 120 million yuan, or 10.7 percent of the total revenue of all Chinese films overseas.

"The report shows that Chinese films have a long way to go before speaking to a global audience effectively," said Zeng Qingrui, professor of Communication University of China.

"Cultural differences and the language barrier are still major concerns. We need better storytelling techniques, deeper exploration of human-interest subjects and more diversified communication channels to overcome the obstacles."