China’s New Focus on Hollywood
After its rise to economic superpower, China becoming a leader in geopolitics, trade and multilateral banking was no big surprise.
One area where the Chinese sleeping giant has surprised most everyone is in its moves – both rapid and deep – into taking on the international-film industry.
The country’s film industry, once known for Jackie Chan action comedies and martial arts dramas, has in recent years branched out in many ways.
Dalian Wanda Group
For North American filmgoers, one of the most dramatic moves in recent times was when the Dalian Wanda Group, already a major player in the mainland China entertainment industry, bought AMC Entertainment Holdings in May 2012 for $2.6 billion. At that time, AMC Entertainment was already the largest cinema chain in the United States and Canada, with 347 theaters in North America. Since that acquisition, Dalian Wanda Group has leveraged AMC further by acquiring Odeon, UCI and Carmike Cinemas in the United States and other acquisitions in Europe to become the largest movie theater chain in the world. It currently has over 2,200 additional screens in 244 theaters in Europe. Worldwide, the chain now covers a total of 8,200 screens in 661 theaters.
Besides the massive control of what movies get shown where that goes with that, Dalian Wanda has also made investments in the film industry in recent years. One of the bigger ones happened in January 2016 when it bought Legendary Entertainment for $3.5 billion. That company, originally founded in 2000, has produced such major franchise offerings as The Dark Knight (Batman series), Man of Steel and the Hangover film trilogy.
Locally, Dalian Wanda also has an arrangement with China Film Co., the largest film company in China, to co-produce movies.
China Media Capital
Although Dalian Wanda certainly has made major moves, China Media Capital has been charting its own course in getting involved in the entertainment industry. Just a little over a year ago, in March 2016, it purchased a minority interest in Brian
Grazer and Ron Howard’s Imagine Entertainment for an undisclosed sum.
Tencent, the Chinese social media giant behind the widely, globally used Wechat and QQ messaging services and online video games, is expanding into movies and television entertainment.
One means of doing that is via Tencent Movie Plus, a division of Tencent that is finding ways to create movies based on Tencent’s video game franchises. A first major entry into the field that was based on one of those games, Roco Kingdom, pulled in $24.4 million at the box office in 2013.
Tencent also signed an exclusive arrangement to stream HBO’S exclusive TV dramas and made-forcable movies online in China. Even more recently, it also landed rights to stream some of the Star Wars movies.
The search engine giant Baidu has also entered the international-film market. Like Google with Youtube, Baidu owns iqiyi, currently the largest online video site in China. Using that as the foundation and branding for its new offerings, Baidu plans to make 7+ Chinese films and at least one Hollywood international film every year.
Last in this coverage of what could include far more film entertainment enterprises is Alibaba Pictures, a wholly-owned part of China’s Alibaba Group Holding Limited. Alibaba Group is the parent of China’s e-commerce powerhouse Alibaba.com and has a total market capitalization worldwide of over $200 billion.
Alibaba Pictures is relatively young as a film entertainment offering. It launched via the acquisition of small filmmaker player China Vision Media for $805 million in March 2014. Once under Alibaba Group, it was first restructured as an inhouse offering. In 2015 it moved out from under its corporate parent as a stand-alone entity via a capital raise of ~$1.6 billion in cash to back its operations.
Since that time, it has made several tactical and strategic moves as it feels out the best long-term strategy for the enterprise.
One role it has played is as a co-investor and Chinese distributor in successful films such as Tom Cruise’s Mission: Impossible – Rogue Nation (2015), Teenage Mutant Ninja Turtles: Out of the Shadows (2016) and Star Trek Beyond (2016). In all, it has backed over 20 movies and one television series so far.
It has moved into online streaming in an intriguing way by partnering with Lionsgate Pictures to create Lionsgate Entertainment World, an online streaming service. That service is available exclusively on Alibaba’s set top boxes for cable television distribution.
In 2016 the company also bought a minority share in Steven Spielberg’s blockbuster movie and television production company, Amblin Entertainment. The amount was not disclosed, but the terms are interesting: They include the rights to distribute Amblin’s movies within China and the ability to invest in future films produced by Amblin.
Alibaba Pictures has also established a formal presence in Southern California, the headquarters for the U.S. film industry. It is currently leasing space on Pasadena’s Colorado Boulevard, a location it is expected to expand from for everything from investment deal making to possible film production.
Even if it were just having the largest movie theater chain in the world that was under Chinese corporate direction, China’s ability to influence the international-film industry and audiences would already be well in hand. But with the added impact of all of the above players to control movie production, distribution and online video streaming, China now has a power platform to cause potentially major long-term shakeups in the world of movie and TV entertainment and spread Chinese culture and soft-power.