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 Daily (Canada) - - SHANGHAI - By ZHANG KUN in Shang­hai zhangkun@chi­nadaily.com.cn

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.

GAO ERQIANG / CHINA DAILY

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.

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