CHINA’S HAND IN HOLLYWOOD
The US film industry may be the world leader in producing silver screen blockbusters, but their success these days looks to be intrinsically tied to their Chinese counterparts
China could soon become the world leader in box office volume, thanks to the unique eco-system of its film industry and the preferences of domestic audiences, said industry experts.
According to statistics released during the 19th Shanghai International Film Festival (SIFF), China is currently the second-largest film market in the world after the United States and its box offices generated a total of 44 billion yuan ($6.68 billion) last year, an almost 50 percent increase from the previous year.
The latest Price Waterhouse Coopers report on the global film and entertainment industry also stated that China’s box office is expected to hit $10.3 billion next year, surpassing that of the US.
“China and the US will remain in the top two spots in the film market for quite a long time in the future,” said Zeng Maojun, vice president of Wanda Culture Industry Group, during a seminar at the film festival.
Wanda has in recent years been making waves in the global film industry, having acquired American cinema operator AMC Theatres in 2012 for $2.6 billion. In January this year, the group acquired Californiabased media company Legendary Entertainment for a reported $3.5 billion in cash.
The first movie that came from the US company following this acquisition is Warcraft, a fantasy film based on a series of video games and novels of same title. The film has been a massive success in China — box office takings on its opening day hit 300 million yuan and rose to a staggering 1 billion yuan within just five days. It is now the highest grossing foreign film in China’s box office history.
In stark contrast, the film earned $24 million during its opening weekend in the US, with the American box office accounting for just 10 percent of its global earnings.
This is not the first time that a Hollywood movie has been better received in China than the US. Other films that managed to wow the Chinese more than Americans include Fast and Furious 7 and Pacific Rim. On the other hand, blockbusters in the US, such as Star Wars: The Force Awakens, was met with lukewarm reception in China. Zhang Qiang,
Industry insiders have also attributed the success of Warcraft in China to the fact that Legendary Entertainment is owned by Wanda. Indeed, the Chinese conglomerate had been very proactive in promoting the movie ahead of its launch, striking up financial partnerships with fellow Chinese companies like Tencent and Huayi Brothers Media and creating a lot of hype via promotions and merchandising deals, according to Variety.com.
This incident has also served as a reminder of how Chinese companies are becoming increasingly influential in the fate of US films.
Another Chinese company that has a hand in Hollywood productions is Alibaba Pictures, a member of the Alibaba Group. The company runs one of China’s most popular online film box offices on Taobao. com, China’s largest web trading platform.
Some of Alibaba Pictures’ Hollywood investments are in films such as Teenage Mutant Ninja Turtles: Out of the Shadows, Transformers: The Last Knight, Ice Age: Collision Course and Star Trek Beyond.
“Big budget film projects easily attract large amounts of investment in China but many new directors still face a lack of funding,” said Zhang Qiang, CEO of Alibaba Pictures.
“We have made going to the movies more convenient and we now want to help make filmmaking easier for new directors too. We want to play an active part in the evolution of Chinese film.”
In the US, box office incomes often make up no more than 30 percent of the total revenue while the majority comes from various derivative industries. In China, however, box office takings amount to 80 percent of the revenue.
In order to boost earnings from derivatives, Alibaba is planning to work closely with Hollywood studios to acquire copyrights of the most popular films and characters to create products which will be sold on Taobao.com.
The main objective of the derivatives is to tap into the spending habits of Chinese fans, who have proven themselves to be a rather fanatical bunch at times. Huace Group, a leading film and television production company, released a study on this topic at the Shanghai TV Festival, which took place days before the SIFF.
The study showed that Chinese fans have in the past few years demonstrated an incredible spending prowess that has greatly impacted the local film and TV industry. For example, fans had bought advertisements on outdoor LED screens at iconic locations in major cities such as New York, Seoul and Shanghai to celebrate the 15th birthday of Wang Yuan, a member of TF Boys, one of the most popular boy bands in China.
The report said that hundreds of thousands of Wang’s fans “are more than ready to prove their love and support with money”.
Experts say that when a show features a star with a solid fan base, it is more likely to achieve success in the Chinese market, regardless of whether the show is well-produced. This craze with local celebrities has inadvertently boosted the stock of some actors.
Huang Jianxin, one of the film directors participating in the forum at SIFF, said that an actor he worked with once raised his fees by six times as a result of his popularity.
Big budget film projects easily attract large amounts of investment in China but many new directors still face a lack of funding.” CEO of Alibaba Pictures
New cinemas have sprouted across China at a rapid pace in the past few years, and according to statistics from SIFF, an average of 22 new film screens are introduced to the country every day.
As such, big film production companies in China have been quick to pay significant fees for film adaptation copyrights to fill these screens and experts say this has resulted in the major players such as Wanda and Bona Film Group “hoarding” IPs (intellectual property).
Much investments have also been pouring into China’s film industry as a result of this rapid development. Yu Dong, founder of the Bona Film Group, one of the largest film distributors in China, said that while huge investments can help filmmakers produce better movies, they can at times become a problem.
“Some people don’t want to make money from the film itself. Instead, they look to build complicated financial tools in the name of filmmaking, so as to absorb individual investors’ capital,” said Yu.
For example, the first installment of the Ip Man film series, which stars Hong Kong actor Donnie Yen, was such a success that executives from the show ended up approaching ordinary people to buy shares for the third installment with promises of high profits. Ip Man 3 failed to live up to expectations, resulting in angry investors demanding their money back.
The fast growth of the domestic movie industry has also expanded to the Internet, which is gaining prominence as a broadcasting platform. Sites like iQIYI, one of the largest online streaming sites in China, have made authorized films and TV series more accessible than ever.
Paid users can watch most of Hollywood’s major productions with a year-long membership that costs no more than 198 yuan. The company has also announced the launch of its new application iQIYI Cartoon Home for children, which provides cartoon content for free to iQIYI paid subscribers.
iQIYI announced during the SIFF that it had 20 million paid subscribers as of June 1. Gong Yu, founder and CEO of iQIYI, said that it took the company almost four years to gain its first 5 million paid subscribers. However, the number of users surged to 10 million just six months after reaching that milestone, an indication of the growing popularity of online content.
Oscar-winning Taiwan director Ang Lee said while the overall Chinese film industry has closed the gap with its US counterparts over the years, having become more experienced in areas such as logistics and technical abilities, he noted that too fast a development could prove to be unhealthy in the long run. Lee — best known for his movies Crouching Tiger, Hidden Dragon and Lust, Caution — also said that the over-reliance on big-name stars may inevitably compromise the quality of a film.
Film director Xu Zheng (left) and Ang Lee talk about their filmmaking experiences.
Left to right: Chinese actors Fan Bingbing, Tony Leung Ka-fai, Huang Xiaoming and Yang Ying (Angelababy) on the red carpet.
American actress Meg Ryan and Serbian film maker Emir Kusturica announce the Golden Goblet award winners.