China’s Looming Toon Boom


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Boonie Bears one sheetBy Robert Cain for China Film Biz

March 30, 2014

Back in the early 1990s, at the request of film critic Michael Medved, I researched and then published a strategic and statistical analysis demonstrating that Hollywood’s studios were distributing too few children’s, family, and animated feature films. My analysis was picked up by the industry trades and the national press, where it attracted quite a bit of attention and stirred up controversy.

In a matter of days I received calls from the heads of Disney, Fox, Sony Pictures, the MPAA and Blockbuster, and within mere months after that most of the major studios had established new family divisions and ramped up their production of animated features and PG-rated family films.  In the years since, these genres have consistently accounted for the studios’ very highest-grossing and most profitable films.

Recently, spurred by intuition, I decided to take a closer look at the situation in China’s film market. After delving into the numbers and the trends, it quickly became clear to me that China’s distributors would profit by distributing more quality films aimed at the family audience.

In fact, if my intuition is correct, family features, and animation in particular, ought to be among the fastest growing segments of the PRC’s film business over the next 3-5 years. Despite heavy investment and rhetorical support from China’s federal and provincial governments, these types of films currently capture a much smaller share of the market in the PRC than they do in North America. But I believe this is beginning to change as the Chinese audience broadens both geographically into the third and fourth tier cities, and demographically to families with children, and as marketing to these audiences improves.Animation Share of B.O. 2009-2013

Source: Pacific Bridge Pictures research

Animation is off to a rousing start in the first quarter of 2014, clearing $186 million in revenue in just three months, which puts it on pace to easily beat the previous full-year record of $261 million that was set last year. Given the line-up of animated features still to be released through December, I expect the cumulative gross for animation in 2014 will run to around $400 million. This would put animation’s share of China’s full-year gross at about 8.2 percent, up from 7.3 percent last year.

The first-quarter spoils have gone not just to imported big-budget Hollywood pictures, but increasingly to home-grown fare like The Boonie Bears, ranked third among animated films so far this year with a Chinese record-breaking $40 million gross, and Pleasant Goat: Meet the Pegasus, ranked fourth with $14 million in box office. It’s worth noting that both of these movies are spin-offs of popular Chinese children’s TV series.

Top Grossing Animation Q1 2014

Highlights for the rest of 2014 include the recently opened Dreamworks’ pic Mr. Peabody & Sherman, which is well on its way to a China gross of at least $24 million, Blue Sky and Fox’s Rio 2, opening on April 11, South Korea’s Koala Kid (aka The Outback) opening in early May, and Dreamworks’ How to Train Your Dragon 2, expected to open in August. Mr. Peabody‘s stronger-than-expected results will make it China’s third highest grossing non-sequel, non-spinoff animated release to date after The Croods and Frozen.Average BO per animated film 2009-2014

Source: Pacific Bridge Pictures research

Since China’s film authorities allow only 5 or 6 Hollywood animated films to be imported each year as revenue sharing “quota” films, it will fall to locally produced features to drive most of the family market’s future growth. And there are signs that China’s animation houses are getting ready to play their part. Although technical capabilities and story quality have been lacking in prior Chinese releases, the tide is turning with several new films in development based on screenplays by talented American writers, and funding and services from top Chinese animation houses.

Indeed, I’m so convinced of the scale of this opportunity that I have personally initiated two new animated film projects for China, one in partnership with a multiple Oscar winning animation producer and with a theatrical release commitment from a major Chinese distributor, and a second that has attracted Chinese investors even before the treatment is finished.

If, as I expect, animation’s share of the Chinese market rises to match that of North America, by the end of this decade the PRC will become the world’s biggest audience for animated feature films, with $1.5 billion and more in annual revenues. And that’s not kids stuff.

Robert Cain is a producer and entertainment industry consultant who has been doing business in China since 1987. He can be reached at rob@pacificbridgepics.com and at www.pacificbridgepics.com.

 

China’s Dismal December Gives Way to Jubilant January and Fantastic February


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By Robert Cain for China Film Biz

February 13, 2014

If you were keeping tabs on China’s box office activity back in December you might have concluded that something was seriously wrong. Expected blockbusters like Personal Tailor and Police Story 2013 did fine, but fell short of expectations. Many other pictures failed to click. It seemed that the inexorable rise of cinema-going in China was finally, inevitably, slowing down. Unlike December 2012, which smashed all previously monthly records to become China’s highest grossing month of all time, December 2013 saw a precipitous 12 percent year-on-year drop in ticket revenue, despite a 39 percent increase in operating cinema screens.

If you were following all of this as it happened you might have said to yourself “All good things must come to an end.” Right?

Oh ye of little faith!

Mainland moviegoers shrugged off the December doldrums like they never happened, and halfway through 2014’s first quarter they’ve set a ticket buying pace that’s galloping along like, well, a horse.  A Kentucky Derby winner, that is.

To wit: January 31st, the first day of Chinese New Year, set a new box office record  set as the biggest single day ever in Chinese history, at 258 million RMB ($43.7 million); The Monkey King 3D set a new single-film record for the biggest ever opening day in China at 122 million RMB (besting Iron Man 3’s 121 million), and the ultra low-budget Dad Where are We Going enjoyed the best opening day ever for a 2D film, at 87 million RMB.

For the full week, grosses totaled 1.41 billion RMB, 81 percent higher than last year’s prior New Year’s record. According to Rentrak, Monkey King and Dad ranked #1 and #2 at the worldwide box office during their opening weekend. Almost every day of the week notched a new high water mark in Chinese movie history.New Chinese Box Office Records

Over the first 6 weeks of 2013, Mainland receipts are now a sizzling 70 percent ahead of the same period in 2013, a rate of growth nearly 10 times faster than China’s GDP growth. Right now China’s movie industry is one of the world’s most dynamic businesses.Box office for week ending Feb 9, 2014

In addition to Monkey King and Dad Where Are We Going, other bright spots of the year so far include Despicable Me 2’s very respectable $53 million gross despite a 7 month release delay; The Boonie Bears’ impressive performance as China’s highest-grossing domestically made animated feature ever with a $40+ million tally; and Man From Macau’s extraordinary run, the PRC’s leggiest in recent memory.Macau's leggy run

Dad, Where Are We Going also merits special mention because it is such a surprise hit. Inspired by the popular Chinese reality TV series, which is in turn a format licensed from the hit South Korean TV show, the film is said to have shot for just 5 days in the beginning of December, 2013, with a budget of less than $1 million. Fewer than 8 weeks later it arrived on thousands of Chinese movie screens, to generally poor reviews and word-of-mouth. But never mind all that; in less than two weeks the movie has gone on to become one of China’s biggest grossing films ever.

The big grosses should keep rolling as a raft of new films hit the theaters on Valentine’s Day, including Beijing Love Story, which got off to a solid start in box office pre-sales. Given the tough comps set last week, Valentine’s Day 2014 may not set a new all-time record, but it’s likely that it will come close.

Robert Cain is a producer and entertainment industry consultant who has been doing business in China since 1987. He can be reached at rob@pacificbridgepics.com and at www.pacificbridgepics.com.

Who is La Peikang and How Did He Get Here?


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La Peikang

By Robert Cain for China Film Biz

February 11, 2013

There’s a new sheriff in town and his name is La.

OK, that didn’t quite have the gravitas I was going for. The point is that China’s New Year’s holiday week is over and the dominant organization of China’s film industry, China Film Group, has a new Chairman, La Peikang (喇培康).

La’s appointment to the PRC’s top film job signals a new direction and some interesting potential changes in the years ahead, both for Chinese filmmakers and distributors and their overseas counterparts. Namely, La’s extensive international experience overseas and in China’s co-production bureaucracy point to a likely increased focus by CFG on international cooperation and expansion.

Variously described by those who know him as “serious,” “educated and academic,” “quietly effective,” “well-liked” and “outward looking,” La could scarcely be more different than his predecessor, Han Sanping.

In the role he held for ten years, Han Sanping was a hustler, a mover-and-shaker who presided over the massive rise of China’s film industry from its status as a tiny backwater with a mere 0.7 percent share of the global box office in 2003 to its emergence as the world’s most dynamic movie territory, with a 10 percent (and rapidly rising) share of the worldwide pie in 2013.

I remember the early days of his tenure when Han Sanping would show up in Hollywood unknown and barely acknowledged, begging for meetings with studio execs, agents, movie stars, anyone who would pay attention. Most dismissed him in those days as unworthy of their time, because China was so negligible as a territory, let alone as a potential source of financing. But Han’s “Baqi” (覇气) loosely translated as “lord’s air” or “domineering spirit,” drove him to oversee the incredibly rapid modernization of the Chinese market, with the construction of 16,000 new cinema screens and a corresponding 2,700 percent increase in domestic box office receipts. Nowadays, thanks largely to Han’s contributions, China is on everyone’s mind, and it would be difficult to find a serious agent or executive who doesn’t know his name.

Given the legacy that Han created, La will find that the tables have turned and that studio heads and movie stars will eagerly, if not desperately, court his favor. Those who meet him will experience a completely different breed of Chinese movie czar. In contrast to Han’s bulldog approach, La is a more sophisticated executive, a fluent English and French speaker who is apparently viewed by China’s leaders as the right person to lead their country’s movie business to maturity and, they hope, to increasing global influence.

Before his appointment was announced, few anticipated that La would be the one to win the top job. It’s not that he lacked credentials—he was Deputy Chairman of the SARFT Film Bureau, and he had previously run an important CFG subsidiary, the internationally focused China Film Co-Production Company. But other candidates were more in the public eye, perhaps because they were more effective at outwardly promoting themselves.

When it came down to it though, it was La’s connections, his political skills, and his perceived loyalty to his Chinese Communist Party bosses that ultimately allowed him to prevail. He was chosen for the job by the Party’s ultra secretive, extraordinarily powerful Organization Department (中国共产党中央组织部), China’s political king-making office. Richard McGregor of The Financial Times described the Organization Department’s status thusly:

“To glean a sense of the dimensions of the Organization Department’s job, [imagine] a parallel body in Washington…that would oversee the appointments of every US state governor and their deputies; the mayors of big cities; heads of federal regulatory agencies; the chief executives of General Electric, ExxonMobil, Walmart and 50-odd of the remaining largest companies; justices on the Supreme Court; the editors of The New York Times, The Wall Street Journal and The Washington Post, the bosses of the television networks and cable stations, the presidents of Yale and Harvard and other big universities and the heads of think-tanks such as the Brookings Institution and the Heritage Foundation.”

This Organization Department controls more than 70 million party personnel assignments across the country, and it is no small matter to win their approval for senior party roles like La’s. Although, as McGregor wrote, “their vetting process takes place behind closed doors and appointments are announced without any explanation about why they have been made,” it’s not difficult to imagine intense lobbying, backbiting, mudslinging, and all manner of political fisticuffs. And La would have had to pass intense scrutiny– the Organization Department has access to dossiers and background checking capabilities that put the CIA and NSA to shame.

So don’t let La’s quiet, academic demeanor fool you; he’s undoubtedly as tough and effective as they come in China’s political bureaucracy. And that’s saying a lot.

Robert Cain is a producer and entertainment industry consultant who has been doing business in China since 1987. He can be reached at rob@pacificbridgepics.com and at www.pacificbridgepics.com.

‘Gravity’ defies ‘Storm’ and Staves Off ‘Hunger’ in China For Second Straight Weekly Win


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By Robert Cain for China Film Biz

December 3, 2013

Strong word of mouth helped Gravity to float to a modest 36 percent decline in its second week, enabling it to fend off newcomer The White Storm and land its second straight win at the Chinese box office. Still going strong in its third week, Gravity should have no problem surpassing $70 million, even in the face of heavy competition from new Chinese openers.

This total would lock Gravity’s place as the 3rd biggest foreign release in China this year, behind Iron Man 3 and Pacific Rim. But it probably won’t be enough for the film to score a top 10 slot overall, as so many local films have performed well in 2013.

The Benny Chan directed action-crime thriller White Storm debuted to good but not great numbers, eking out a slim lead over Gravity during the past 3-day weekend, when they competed head-to-head. Blue Sky Studios’ animated adventure Epic fell far behind, mustering just $3.65 million in its 3-day weekend debut. The 7-month delay in Epic’s PRC release was undoubtedly a factor in its modest showing.

Box office for week ending Dec 1, 2013

Escape Plan will finish up its PRC run with an impressive $41.5 million, nearly double its U.S. total. Considering all the love China has shown in recent years for Sylvester Stallone and Arnold Schwarzenegger, the movie’s sexagenarian stars, it will be a good idea for Hollywood to dust off its old two-hander action scripts and re-set them in China for this dynamic action duo.

For the first time since early September the weekly box office tally fell short of last year’s comps. Cumulative box office for the week ending December 1st saw a 7 percent decline to $58.5 million from the 63 million total in week 48 of 2012, when Life of Pi reigned.

Today saw the long-awaited debut of director Ning Hao’s No Man’s Land, an adventure thriller that has survived two major revisions and six aborted theatrical release dates over the past four years as DMG, CFG, Galloping Horse and the filmmaking team struggled to conform to the SARFT censors’ restrictions. Originally slated to release in 2010, the film stars the hugely popular Huang Bo and Xu Zheng, who co-starred in last year’s megahit Lost in Thailand.

With its excellent $3.5 million opening day, No Man’s Land should easily top Ning Hao’s prior personal record gross of $24.7 million for last year’s Guns ‘n Roses, though the director claims he doesn’t care how much the new film earns.

“If I wanted to make big money, I could have stayed at home (in coal-rich Shanxi province) and mined coal with my classmates, who are now all billionaires,” Mr. Ning said in a recent Wall Street Journal interview. I just want to do something that I like.”

Of course, what China’s theater operators would like is a big December for local Chinese pictures. With nearly 18,000 movie theater screens now in operation (35 percent more than at this time last year) and an average of 12 or 13 new ones opening every day, they are increasingly reliant on local films to help them pay off their investments.

November’s box office totaled $250 million, a 36 percent increase over 2012, and cumulative year-to-date box office now stands at $3.22 billion. If December’s revenue merely matches last December’s total—a distinct possibility given the tough comps established in 2012 by Lost in Thailand—then China’s total for 2013 will wind up just shy of $3.6 billion.

If, on the other hand, expected hits No Man’s Land, Personal Tailor and Police Story can each draw $80 million to $100 million in ticket revenue, then the year-end total could, just possibly, reach $3.7 billion.

Robert Cain is a producer and entertainment industry consultant who has been doing business in China since 1987. He can be reached at rob@pacificbridgepics.com and at www.pacificbridgepics.com.

‘Gravity’ Thrills, ‘Catching Fire’ Chills as China’s Box Office Tops $3 Billion


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By Robert Cain for China Film Biz

November 26, 2013

Alfonso Cuaron’s Gravity scored the PRC’s fifth best opening of the year with a nearly $36 million liftoff, as U.S.-made films grabbed the top four box office spots and six of the top seven in the week ending November 24th.

Gravity, which is performing nearly as well as surprise hit Life of Pi did at this time a year ago, also set records for IMAX, grossing almost $7.5 million, or more than 20 percent of the film’s opening 6-day total, on 123 screens. Gravity‘s marketing campaign benefited nicely from its liberal use of James Cameron’s quote calling it “The best space film ever.”

The fourth quarter has been a good one so far for Hollywood, with American movies capturing a 55 percent share of the market during the period from October 1st through November 24th.  U.S. films are now at their peak market share for 2013 with over 47 percent of all China box office revenue, though that figure will ebb back to about 42 percent as local Chinese releases dominate the calendar throughout December.Top 5 Opening Weeks 2013

One exception to this trend is Hunger Games: Catching Fire. Despite its rare day-and-date release and its huge reception in the U.S., Lionsgate’s sci-fi/action picture failed to stir up much interest in China. Its four-day total of $12.95 million makes it only the 31st best opener of the year, behind even such modestly performing titles as A Good Day to Die Hard and After Earth.  Although Catching Fire’s debut improved by about 16 percent over the opening week of its 2011 predecessor The Hunger Games, it did so in a market that has grown by more than 80 percent in the interim, so the sequel’s performance in the PRC has to be considered a letdown.

Another disappointment was the suspense-thriller Control, a China-Hong Kong-Taiwan co-production starring Daniel Wu that eked out only $3.5 million for the week. The California-born Wu has consistently been one of China’s most bankable stars, so his latest film’s weak opening must have surprised the film’s backers, who include Huayi Brothers, Media Asia and Celestial Pictures.

Box office week ending 11-24-13

Nationwide gross was $69 million, a 49 percent increase over the same period in 2012, and the biggest weekly total since early October, when Young Detective Dee reigned over a $101 million weekly theatrical total. Year-to-date gross has now eclipsed $3 billion, and if last year’s trend holds, the last five weeks of 2013 will generate a $500+ million haul for PRC theater operators, resulting in a final yearly gross of around $3.6 billion to $3.7 billion.

Robert Cain is a producer and entertainment industry consultant who has been doing business in China since 1987. He can be reached at rob@pacificbridgepics.com and at www.pacificbridgepics.com.

Warner Bros’ Stellar Year in China


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By Robert Cain for China Film Biz

November 21, 2013

Having already clinched bragging rights as the top-grossing Hollywood studio in China this year, Warner Bros further cemented its lead with the excellent rollout of Gravity on Tuesday.  With nearly $10 million in ticket sales in its first two days of PRC release, and what I’m estimating will be at least a $70 million final tally, Gravity should push Warners’ 2013 total in China to around $325 million.

This will mark the first time I can remember when Warners will have won the China box office crown. It will also reflect an impressive 80 percent revenue boost over Warners’ respectable, albeit distant second-place finish to Fox in 2012. With such box office hits as Pacific Rim, Man of Steel, The Hobbit: An Unexpected Journey and now Gravity, Warners will average about $54 million in ticket sales per picture.

Second place in the studio derby this year will go to Disney, whose Marvel superhero offerings Iron Man 3 and Thor 2 will account for around $175 million of that studio’s $250 million annual take.

Sony and Fox will finish third and fourth, respectively, with Fox falling off precipitously from its record-holding $376 million China gross in 2012. Sony had only one strong release with Skyfall back in January, but it was able to get more films into China than any other studio and in aggregate managed to cobble together more than $200 million in gross revenue. Although Fox got solid results in 2013 from The Croods (a Dreamworks animated picture) and Wolverine, it couldn’t match the huge numbers of last year’s Titanic 3D, Life of Pi and Ice Age 3 and wound up with less than half of last year’s gross with around $176 million.

Universal and Paramount, the two studios with the least active presence in China, received the fewest import quota slots and grossed the least among the majors, with about $159 million and $129 million respectively.

At last week’s box office, U.S. films captured the top three slots, although two of these were buyout films. Thor: The Dark World and Escape Plan won the top two spots for their second week in a row with $24.9 million and $13.3 million, respectively. New entry Red 2 picked up $5.9 million in its first three days, enough to handily beat the $4.9 million that Red collected during its entire run in 2011. Total nationwide box office was $54 million for the week, a 57 percent increase over the same period last year.

Box Office week ending 11-17-13

U.S. films will see another week or two of relative prosperity before the year-end Chinese tent-poles move in and grab all the spoils in December and January. Look for big results from The White Storm, which releases on November 29th, followed by big December debuts from No Man’s Land, The Four 2, Firestorm, Personal Tailor and Police Story. By year’s end, Hollywood movies will land only 2 of the top 10 spots at China’s box office in 2013, down from 7 last year and 6 in 2011.

In aggregate, U.S. distributors will manage only a meager 5 to 6 percent increase in their China sales this year, a mere fraction of the 60 percent gain that Chinese language films have enjoyed. Hollywood has let yet another year go by doing little more than lobbing movies into China from across the Pacific, and it has paid the price with a precipitous drop in market share.

Meanwhile, aggressive non-Chinese players like Australia’s Village Roadshow and Korea’s CJ Entertainment have stepped into the breach with highly successful Mandarin language co-productions. And local Chinese players are rapidly growing in competitive strength, as exemplified by Huayi Brothers’ massive increase in its stock market capitalization to $5.2 billion from only $1 billion a year ago. Many of these companies have established beachheads in the U.S., and it won’t be long before their growing financial strength in China will enable them to compete effectively with the stodgy U.S. studios and further erode their diminishing dominance of the global film market.

Robert Cain is a producer and entertainment industry consultant who has been doing business in China since 1987. He can be reached at rob@pacificbridgepics.com and at www.pacificbridgepics.com.

Sly and Arnold’s Career Re-birth in China


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By Robert Cain for China Film Biz (Bennett, Janet and Thomas, this one’s for you)

November 14, 2013

Long before they reach retirement age, most action movie stars naturally slide (or sometimes plummet) into box office obscurity. At 67 and 66 years of age, respectively, Sylvester Stallone and Arnold Schwarzenegger have valiantly fought this trend, but they are long past their peak box office years in most places around the world.

But not in China. PRC audiences have embraced these two senior citizens and breathed new life into their action movie careers. In a land where the young are taught to treat their elders with respect, Schwarzenegger and Stallone’s recent film offerings have gotten lots of love from China’s teenaged and twenty-something filmgoers.

Take the pair’s current action-thriller, Escape Plan. In its first 10 days of release the picture has already grossed more in China, with nearly $26 million, than it will earn in its entire North American run. It nearly won last week’s box office crown against the far costlier Thor: The Dark World, with a 128 million RMB total versus Thor’s 129 million, despite Thor’s huge advantages of a bigger screen count, higher 3D ticket prices, and a rare day-and-date PRC release. Escape Plan will wind up with around $35 million in China, making it the highest grossing buyout film this year.

In fact, between them Sly and Arnold have appeared in 5 films that have each grossed more than 100 million RMB at China’s theaters, an exceptional record that is matched by few Chinese stars.  Their core audience in China has no doubt grown up watching the pantheon of Rocky, Rambo and Terminator movies on TV and DVD, and is now finally getting their chance to see their movie heroes on the big screen.

With such a big, welcoming audience in China, Sly and Arnold are undoubtedly looking for more movie vehicles to propel their newly vibrant careers. So I offer a few ideas below, completely free of charge (just send me my participation checks when the profits roll in):

Not So Total Recall. This action flick kicks follows a geriatric man who goes for a virtual vacation but is tragically unable to enjoy the early-bird Chinese buffet because he’s forgotten to bring along his virtual dentures.

The Lost Action Hero. A young Chinese fanboy’s dream of teaming up with his favorite 80’s action movie hero turns sour when he finds the now enfeebled and amnesia-prone codger stuck on Beijing’s 3rd ring road, unable to find a way to exit and make his way back to the retirement village.

The Dependables – a team of elderly mercenaries are stymied in their attempt to eliminate a North Korean dictator when the dictator’s henchmen cruelly cut off their supply of adult diapers.

Stop or My Great Granddaughter Will Shoot – a once-tough detective’s life and work are disrupted by a Golden Week visit from his 6 year-old, pacifier sucking descendant, who embarrasses him by turning out to be a better crime-fighter than he is.

Rocky Rolls – 78 year-old Rocky Balboa comes back for one more title bout staged in the Forbidden City, fighting this time from his electric wheelchair. You’ll cry tears of nostalgia as you watch Rocky slowly glide up the steps of Beijing’s Temple of Heaven, arms raised in victory, in his wheelchair stair climber.

For the week ending November 10th, PRC box office totaled a solid $56 million, 43 percent better than the same frame last year. After the one-two finish of Thor and Escape Plan, Hotel Transylvania took in $3.5 million in its second week of release for a two-week cume of $9.3 million, quite respectable considering its status as a buyout film and its China release delay of more than a year.

Box office for week ending Nov 10, 2013

Russia’s Stalingrad crumbled against the Hollywood competition, dropping by nearly 70 percent in its second week. Although it debuted at number one in the prior week—making it the first non-Hollywood, non-Chinese movie to top the charts in China—the film has quickly faded and will fail to reach the 100 million RMB level.

The rest of November and December will witness a crush of new releases, more than in any previous year. On Singles Day (an unofficial holiday on 11-11) nine new domestic releases cannibalized each other, leaving nearly all of them with dismal results. November 15th will see Red 2 and Olympus Has Fallen open against each other, and early next week Gravity, Rush, and the Hunger Games sequel Catching Fire will all open within a few days of one other.

Although China’s box office results in November have so far fallen a little short of general expectations, the rest of the year should be flush with activity and the year-end tally should well exceed $3.5 billion.

Robert Cain is a producer and entertainment industry consultant who has been doing business in China since 1987. He can be reached at rob@pacificbridgepics.com and at www.pacificbridgepics.com.

L.A.’s Next Must-Attend Event: The U.S. China Film Summit, 11-5-13


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U.S.-China Summit

By Robert Cain for China Film Biz

October 22, 2013

Here’s an important heads-up: the U.S.-China Film Summit, North America’s biggest and best annual gathering of Hollywood and Chinese filmmakers and industry executives, will take place on November 5th at downtown L.A.’s Millenium Biltmore Hotel. Since its inception four years ago the Summit has grown bigger and more influential each year, and with the doubling of its size and scope this year it’s an absolute must for anyone participating in or planning to join the booming cross-Pacific movie trade.

I’m both on the planning committee for this year’s Summit and I’ll be a speaker as well, so I can tell you from an insider’s perspective that this is an unparalleled opportunity to hear from, and meet, many of the luminaries of the China film biz. Here’s a small sampling of the 30+ speakers who will attend:

Senator Christopher Dodd, Chairman and CEO, 
Motion Picture Association of America – Former United States Senator Chris Dodd is Chairman and CEO of the Motion Picture Association of America, Inc., which serves as the voice and advocate of the U.S. motion picture, home video and television industries around the world.

Dennie Gordon, Director, “My Lucky Star” – Director of the teen cult hit “Joe Dirt” starring David Spade, Christopher Walken and Dennis Miller, and “What a Girl Wants” starring Oscar winner Colin Firth and Amanda Bynes. Dennie’s latest film, the romantic comedy “My Lucky Star,” featured Chinese stars Zhang Ziyi and Wang Leehom, and was a bona fide hit at the Chinese box office.

Ellen Eliasoph,  President and CEO,
Village Roadshow Pictures Asia – Ms. Eliasoph leads the company in its business of identifying, developing, financing, producing, marketing and distributing feature films which are filmed principally in the Chinese language and designed for audiences in the Mainland China and other Greater China markets.

Li Bingbing, Actress, “Forbidden Kingdom,” “I Do” and the upcoming “Transformers 4” – One of China‘s biggest cinema and television stars, Bingbing has also had a successful crossover career in American film. She was most recently seen in Screen Gems’ “Resident Evil: Retribution,” directed by Paul W.S. Anderson.

Zhang Zhao, CEO,
 LeVision Pictures -
 In 2008, Mr. Zhang was named one of the top 10 most influential people in China Film and Entertainment Industry. Several films he produced and directed have won many international awards and have been recognized by the U.S. independent film committee.

The Summit will include luncheon keynote speeches from IMAX President Greg Foster and China Film Co-Production Corp’s Zhang Xun, and six panel discussions on topics ranging from digital media business opportunities in China to practical discussions on how to make films there.

The day will be capped off with a Gala Dinner and awards presented by the Asia Society to Senator Dodd and Ms. Li Bingbing.

For more information and to register for the event, please click on this link.  I look forward to seeing you there!

Robert Cain is a producer and entertainment industry consultant who has been doing business in China since 1987. He can be reached at rob@pacificbridgepics.com and at www.pacificbridgepics.com.

Why is Wanda Group Working So Hard to Win Hollywood’s Favor?


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By Robert Cain for China Film Biz

September 25, 2013

I’ve seen more than my share of Chinese movies over the years, but not one has been nearly so entertaining as the show that Wang Jianlin and his Wanda Group have been putting on recently for Hollywood’s benefit.

With its $20 million investment in the Motion Picture Academy museum and its star-studded publicity blitz for a new mega-studio complex in the Chinese city of Qingdao, Wanda is mounting a big, fascinating show to win favor in Hollywood.

And it’s perfectly reasonable to ask “why?”

Now reportedly China’s richest person, Wang has styled himself as the P.T. Barnum of his age, a billionaire grandstander and showman who has brought panache to an industry that—in Hollywood, anyway—has become as moribund as a funeral parlor. Like the great 19th century circus master who preceded him, Wang has seized the global entertainment industry’s center ring with a wink and a nod and a fervent belief that there’s an endless line of suckers ready to buy what he’s selling.

And if you bought all the press that came out of Wanda’s $50 million media circus in Qingdao the other day—the event where the company assembled Leonardo DiCaprio, John Travolta, Nicole Kidman, Jet Li, Zhang Ziyi and Christoph Waltz (the new cast of The Expendables 3, perhaps?) to announce an $8 billion studio investment in a city better known for beer than for entertainment—if you took this Barnum & Bailey style dog and pony show at face value, then you, my friend, have been suckered too.

Wanda has set the movie world’s tongues wagging over a plan that defies logic. This is a company that has invested in barely a dozen pictures, most of which have failed to crack $1 million at the Chinese box office, that now claims it will soon dominate the global film business.

It’s a company that has announced designs to build the world’s largest film production base in a country that’s already glutted with underutilized sound stages, post houses, and state-of-the-art production facilities. Again, why?

If Wanda were able to time travel back to, say, 1940, then sure, it might make sense to construct 20 new soundstages and 100,000 square feet of production space, but this is the age of digital, baby, of green screens and GoPro cameras and desktop video. An age where technology and economics have made location shooting preferable and giant stages an overpriced luxury for most. The last time an American production company considered building such a grand filmmaking campus was back in 1994, when DreamWorks penciled out the cost/benefit and wisely decided to forego a massive bricks-and-mortar capital outlay.

And why Qingdao? It’s a lovely city, often described as China’s most livable, but Qingdao offers virtually zero advantages in the highly specialized and skilled labor-dependent entertainment business. It’s as if Rupert Murdoch suddenly announced he was moving his Fox empire to Annapolis, Maryland or Little Rock, Arkansas.  Wanda will need a huge proportion of China’s entertainment industry to uproot itself and relocate to Qingdao in order for this new complex to achieve long-term economic success.

But maybe he doesn’t care about all that. Wang is a shrewd operator with a phenomenal record of business success, so it would be foolish to dismiss his schemes as pure hubris. I’ve become a fan of Wang’s larger-than-life theatrics, and I think there’s a brilliant method to his madness.  To fully grasp what’s going on here it’s helpful to understand how a conglomerate like Wanda makes money.

Real estate.

Real estate.

Real estate.

One of the surest ways to make a quick buck (or a billion) in China is to syndicate a massive real estate project. First, you persuade your government buddies to grant you a sweetheart deal on a few square miles of land. You come up with a plausible, marketable plan for using that land. Then you attract your investor buddies to provide seed financing for the project.  Market the project properly and billions more will follow. And for every brick that gets laid, for every bucket of concrete that gets poured, you and your buddies take a healthy percentage of the churn. It’s a way to transfer wealth without actually creating economic value.

This is why China has so many huge ghost cities with no residents, so many luxury shopping malls with no customers, and so many production facilities with no productions.

And it gets even better. Movies are an even more liquid way to skim cash. There’s no completion bond industry in China because there are no producers willing to tolerate auditors looking over their shoulders. Some of the budget makes its way up onto the screen, and some of it goes, well, elsewhere. On each movie that Wanda funnels through its “Qingdao Oriental Movie Metropolis” it will make money coming and going, regardless of box office performance.

Which brings us back to Wanda’s outreach to the U.S. film business. What better way to gain global attention and sex up a project than by leveraging the glamor of Hollywood? Wanda has created a halo effect for itself and its Qingdao venture by presenting a huge check to the Academy museum, by touting its barrels of cash and its thousands of movie screens, and by surrounding itself with movie stars and major studio executives. It’s all about curb appeal. It’s a smart, creative, and ultimately reliable way to make lots of money.

P.T. Barnum would undoubtedly approve. As he himself once put it, “Without promotion, something terrible happens… nothing!”  And then again, “Every crowd has a silver lining.”

Robert Cain is a producer and entertainment industry consultant who has been doing business in China since 1987. He can be reached at rob@pacificbridgepics.com and at www.pacificbridgepics.com.

China’s Monster Summer


Follow me on Twitter @robcain or Sina Weibo @robcain, or connect with me on LinkedIn.Pacific Rim 1

By Robert Cain for China Film Biz

August 22, 2013

The disturbing drought that plagued Hollywood’s movies in China through the first half of 2013 has been quenched, at least temporarily, by a string of box office successes that began in July. Chief among these has been Pacific Rim, a monsters-meet-robots spectacle that couldn’t have been more perfectly aimed at Chinese moviegoers. In its first three weeks of PRC release (as of Thursday August 22nd) the film has devoured $109 million in receipts, good enough for 2nd place this year among all Hollywood imports, and better by far than the $98.7 million the film has earned in North America.

While some might attribute Pacific Rim’s PRC success to its giant CG robots—the Transformers franchise is after all the highest grossing movie series in China’s history—I’d like to make the case that the film’s massive monsters are at least as responsible for scaring up Chinese ticket sales. Chinese audiences love a good monster movie as much as anyone, but the country’s strict censorship policies have restricted the homegrown monster movie quotient to practically zero. It’s a quirk of the Chinese film administration’s policies that monsters can invade China—or its theaters, anyway—from overseas, but they’re generally prohibited from breeding, hatching, or emerging from slimy lagoons onshore in the Middle Kingdom.

Further proof of my theory can be found in this week’s monster opening of Jurassic Park 3D, Universal’s reissue of the 20-year old Steven Spielberg dinosaurs-gone-wild classic. With almost $17 million in Chinese revenue in its first three days, the film ranks as the fourth biggest foreign opener of 2013 and is is well on its way to becoming the biggest grossing re-release of the past 12 months. Although the grosses for reissues tend to quickly fall off, the pattern so far suggests a final gross in the $30 million to $40 million range, which would make it China’s second highest grossing 3D re-release ever—albeit a far distant second—to 2012’s Titanic 3D.Top-grossing HW rel

The next ‘monster’ movie up is of a more kid-friendly variety, Pixar’s Monsters University, which is scheduled to open on Friday, August 23rd. China’s monster mania may help the film to break the Pixar curse, which has seen most of that animation studio’s films open poorly in the PRC and quickly fade away. With little family-fare competition I expect Monsters U to take at least $25 million in China, which would put it well above Toy Story 3’s $16.7 million gross in 2010, Cars 2’s $11.9 million in 2011, and Brave‘s dismal $4.7 million in 2012.

Last week’s box office saw Pacific Rim win its third week in a row, the first time that’s happened for a Hollywood film in 2013 (the China/Hong Kong co-pro Journey to the West won 5 straight weeks in February and March). Tiny Times 2, the sequel to July’s teen girl-oriented hit Tiny Times, ran up its total to $44 million with a $17 million second place finish. And Fan Bingbing’s romantic comedy One Night Surprise from writer-director Jin Yimeng (Sophie’s Revenge) took third with $15 million, proving the rom-com genre’s continuing strength with Chinese audiences.Box office for week ending Aug 18, 2013

Bona’s boxing flick Unbeatable took fourth place with $9 million on generally positive reviews. Rounding out the top 5 was Wanda Media’s disappointing release  The Palace, which managed just $7.4 million in its first 7 days despite the huge opening screen count allocated by its sister company, theatrical exhibitor Wanda Cinema Line. This marks Wanda’s second flop in a row after Man of Tai Chi. Wanda is new at the feature production game, and with its deep pockets the company presumably has the staying power to get enough at bats to eventually generate some homeruns.

Robert Cain is a producer and entertainment industry consultant who has been doing business in China since 1987. He can be reached at rob@pacificbridgepics.com and at www.pacificbridgepics.com.