Category Archives: Analysis

China’s Theaters Rev Up For Holiday Bonanza; ‘Iron Man 3′ Blasts Off

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A giant standee outside a Wanda theater promotes Iron Man 3‘s May 1 debut.

By Robert Cain for China Film Biz

April 30, 2013

Because the PRC is currently in the middle of its Labor Day holiday, official box office reporting is delayed, so I’ve cobbled together numbers from my own sources to provide a snapshot of what’s been happening in China. Please bear in mind that the numbers that follow are subject to adjustment when the official figures are released.

Nationwide box office last week totaled $56.6 million, 16 percent more than the same week last year, which was boosted by Titanic 3D. The year-to-date total for 2013 is now running 35 percent ahead of last year, with most of the year’s biggest movies still to come.

Youth romance So Young led the week with its exceptional 3-day opening weekend total of $22 million. Including its Monday and Tuesday grosses So Young has reached $43 million in just its first 5 days, which points to a likely $100+ million run. Lost in Thailand grossed $47 million in its first 5 days and went on to a $201 million total, though So Young faces a more competitive market so I don’t expect it will hit that lofty mark.

G.I. Joe: Retaliation took second place with $10.9 million, a 67 percent drop from its $33.4 million debut week. G.I. Joe will fade fast now that it has been knocked off most of its screens by Iron Man 3 (which opened with a massive midnight screening campaign in the wee hours of May 1st), but will finish up its China run with a respectable fifty-plus million total, second best among American films so far this year and fifth best overall.

Dreamworks Animation’s The Croods has enjoyed strong word of mouth and picked up nearly $10 million in its second week of release for a $16.6 million cume. Because it will continue to hold many of its screens—roughly 1,500 or so—through the end of this week, Croods should continue to draw well and finish with over $25 million.

Films winding down their runs this week include romantic comedy Finding Mr. Right, which rang up roughly $84 million, and war comedy The Chef, the Actor, the Scoundrel, with $44 million. Box office week ending April 28, 2013

The biggest story today is Iron Man 3, which after a confusing series of release date announcements by China’s film authorities finally kicked off its midnight screenings on May 1st. The film’s producers were concerned that with all the conflicting news, moviegoers might not have been aware of the actual opening times, but they needn’t have worried. Nearly every single one of the 1,500 midnight screenings that were originally scheduled was completely sold out. To meet audience demand, theaters added another 500 midnight screenings, plus untold additional 2:30am and even 5:00am screenings.

It’s still too early to call, but initial reports are indicating very good things ahead for Iron Man 3. With all of those sold out auditoriums it has a good shot at beating Titanic 3D’s midnight screenings total of RMB 10 million ($1.62mm), and possibly even Transformers 3’s all-time midnight record of RMB 12 million ($1.95mm). And with a record 30,000 screenings set for May 1st, fully 40 percent of China’s total screen capacity, Iron Man should draw a very large first-day total.

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.

Lovers vs. Fighters in China, ‘So Young’ vs. ‘Iron Man 3’; and the Winner Is…

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By Robert Cain for China Film Biz

April 26, 2013

The PRC movie showdown between So Young and Iron Man 3 is now at hand. And what a showdown it is! The two movies combined couldn’t possibly generate as much drama, tension, and emotional angst as has the behind-the-scenes battle over IM3’s release date.

Although So Young has only just opened, and Iron Man 3 has yet to unspool in China, So Young has already won the battle, thanks to a relentless campaign by that film’s Chinese distributor Enlight to derail the Disney/Marvel/DMG machine. The story of the two films’ jockeying for position offers interesting (and somewhat damning) insight into how SARFT favors domestic movies over foreign ones.

Back in March it was announced that the romantic melodrama So Young and the Hollywood action tent-pole Iron Man 3 would open head-to-head on April 26th. This is an excellent date, just ahead of the three-day Labor Day/May Day holiday, when business is expected to be brisk.

As a local film, So Young’s debut on April 26th was locked. As a perceived foreign film, albeit one with a domestic Chinese investor and partner in DMG, Iron Man 3 was on shaky ground, subject to the indignities that several Hollywood movies have recently faced in China (see this article for a taste of how Hollywood movies have fared lately at the hands of SARFT).

After much lobbying by the producers of both films, and a confusing string of announcements by various parties about where Iron Man 3 would land, it now appears that the Robert Downey Jr.-starring action extravaganza has been granted a release at 12:01am on May 1st.

For So Young, this is great news. The low-budget romantic melodrama gets the holiday to itself, and five full days to rake in its spoils before the big budget Hollywood movie enters the scene. Indeed, early reports are saying that So Young has opened to an excellent $8 million Friday debut, and that it has a good shot at earning at least $100 million.

For Iron Man 3, the May 1st date has to be disappointing, but it’s much better than the May 3rd date that had been widely reported a few days ago. Never mind the rather silly assertion from “Deadline” that May 3rd was the date Disney and Marvel were “eyeing all along.” Why would anyone be happy to open just after a major box office holiday? That was pure face-saving spin, presumably from Disney’s PR folks. Credit DMG with fighting a nearly unwinnable fight and preserving at least one day of the holiday to bolster its debut.

Whether Iron Man 3 can overtake So Young and become the first Hollywood film in over a year to reach $100 million is an open question, but missing the first two days of the three-day holiday will certainly hurt its prospects.

According to ‘Firedeep’, my unfailingly reliable “deep throat” in China, Iron Man 3 was buffeted by a series of unexpected delays, which began with some late reshoots of its Chinese scenes. According to Firedeep, the locked print of the film wasn’t sent to the Film Bureau for technical censorship until the night of April 12th, which made the April 26th debut a rather iffy, although still perfectly possible, proposition.

Meanwhile, the translation and dubbing of the film ran into late hour delays when Marvel decided to replace the original translator.

But the biggest obstacle for Iron Man 3 emerged when So Young’s distributor, Enlight Films, decided to play the ‘local film protection’ card, putting up major resistance to its competitor’s holiday release date by appealing to China’s Film Bureau. It’s rumored that So Young’s celebrity director, Vicky Zhao, showed up at the Bureau and literally cried her way to sympathy and ultimate victory. The film authorities dithered and vacillated before finally announcing their ‘final’ decision about IM3 on Friday, causing great confusion amongst moviegoers and provoking howls of protest from Marvel’s Chinese fanboys.

As one sharp-tongued Chinese observer put it on a PRC film website, “Back and forth. This whole thing is a fucking mess. Fuck Enlight Pictures and fuck SARFT like every time.”

And as if to underscore the point, SARFT continued to torture Django Unchained by repeatedly approving and then un-approving that film’s re-release. On Thursday one announcement pegged Django’s theatrical revival for May 9th, and a day later it was supposedly pushed to May 12th.  It’s death by a thousand cuts. Meanwhile many frustrated Tarantino fans have undoubtedly downloaded the uncensored BD-rip from pirate sites, leaving one to wonder whether any among them will still be waiting to buy theater tickets if and when the movie finally goes back up on the big screen.

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.

Qing Ming Brings Bling to China’s Theater Owners

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By Robert Cain for China FIlm Biz

April 9, 2013

Last week’s arrival of The Qing Ming Festival—a 2,500 year old Chinese holiday when celebrants honor their ancestors by sweeping their gravesites—also brought a big boost in movie going. The holiday ranks as one of China’s top five or six movie revenue periods of the year, along with such holidays as western New Year, Chinese New Year, Valentines Day and National Day. This past week’s national ticket sales totalled $73 million, good enough for the fourth biggest week of the year and an 88 percent increase over the same period in 2012.Box office week ending April 7 2013

Leading the box office once again was the sleeper rom-com hit Finding Mr. Right, which was down a mere 12 percent from last week, and which has only just started to show signs of slowing. I grossly underestimated this picture’s potential at $40 million; it’s now a sure thing to go over $75 million.

Also holding up well was the WWII action comedy The Chef, the Actor, the Scoundrel, which tallied $18.4 million to extend its total to nearly $31 million.

New openers didn’t fare quite as well. Action/thriller Drug War scored a $12.9 million total in its first six days of release, a bit of a bust relative to expectations but still director Johnnie To’s best debut to date. And the Ronny Yu-directed costume action/war drama Saving General Yang  fizzled at just $5 million, perhaps putting the final nail in the coffin of that moribund genre.

The Qing Ming week capped off a surprisingly potent 8-week period during which China’s theatrical film business nearly doubled the revenues of the same period last year. The 95 percent boost over 2012 was driven mainly by such local language comedy hits as Journey to the West and The Chef the Actor the Scoundrel, and romances Finding Mr. Right and Say Yes. These four films have collectively grossed over $320 million, accounting for more than a third of China’s total box office in 2013.

Hollywood films also contributed, but not at anywhere near the level they did last year. The four biggest non-Chinese films of the past eight weeks were The Hobbit, A Good Day to Die Hard, Resident Evil and Jack Reacher, which collectively pumped $114 million into China’s exhibition coffers.

The 8-week run of hugely favorable year-on-year comparisons will come to an end this week because last April’s enormous $74 million opening of Titanic will be impossible to beat.  I won’t hazard a guess as to how Django Unchained (opening Thursday) and two new Chinese romance pics will do this week, but it’s a safe bet that they won’t pose any threat to Titanic’s record. Look for comps that will be significantly down from last year’s numbers for at least this week and probably next week as well, unless G.I. Joe 2 catches fire.

I’m hard pressed to say whether Hollywood’s relative malaise in China this year is specific to the films that have been imported or is reflective of a larger shift in the market. It’s been suggested to me that market manipulation or fraud are major factors in Hollywood’s rapid decline in China, but I’ve only seen sparse and rather anecdotal evidence of this (I’ll publish an article on this topic in the next few days).

Hollywood hasn’t done very well this year in Japan, Korea, and other parts of Asia either, and Chinese manipulation can hardly be blamed in those territories. I’m inclined to credit the rapid rise of Chinese films (at the expense of Hollywood’s movies) to improving stories, good production values, and growing awareness among China’s movie goers that at least some local films are worth the price of admission.

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.

The Increasingly Astonishing Rise of China’s Film Business

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Rocket liftoff

By Robert Cain for China Film Biz

April 6, 2013

Year after year I keep telling myself that China’s box office growth has to eventually slow down. An industry that has been rising at a pace 4 or 5 times faster than its country’s GDP for over a decade can’t continue at that rate for long. But year after year I’m amazed that growth just keeps accelerating. From 2001 to 2007, theatrical revenue increased at a 34 percent compound annual rate (as measured in US dollars); from 2008 to 2012 the pace quickened to 43 percent per year. So far in 2013 China’s movie revenue has increased 51 percent, and there’s no sign of a slowdown.

This year, China’s theatrical movie business is growing more than 6 times faster than its GDP. North America’s theatrical business, in contrast, has been growing slower even than its recession-worn economy, at an annual rate of just over 1 percent since 2002

China vs N. America box office growth 2002-13

Over the past few days China enjoyed a national holiday, the Qing Ming Festival (清明节), and again moviegoers turned out in huge numbers, roughly doubling last year’s holiday box office total with over $31 million in revenue on Thursday and Friday.

There are three main factors driving this incredible growth:

  1. China is undergoing the largest and most rapid development of a middle class in human history. Hundreds of millions of people are moving up from subsistence to affluence before our eyes.
  2. Cinema construction is booming. Thousands of new screens are opening each year, affording millions of potential customers the opportunity—many of them for the first time ever—to enjoy the moviegoing experience in modern multiplexes.
  3. The Chinese population has embraced movies, both foreign and increasingly domestically made Chinese movies, with exuberance. High ticket prices and generally mediocre films haven’t deterred them from filling up theaters to capacity.

Things will eventually have to cool off, but with so many big cities still lacking multiplexes, it will be many years before China reaches a saturation point. The biggest factor constraining growth is the shortage of screens. There are currently about 15,000 movie screens in 3,700 theaters across the country, the second largest national total in the world, but with its 1.3 billion population China is still woefully under-screened, with just one per every 90,000 people. The U.S. has almost 40,000 screens, or roughly one per every 8,000 people, according to the MPAA. To reach the U.S. level of screen density per capita, China would have to build an additional 150,000 screens.

Even if we assume China never gets anywhere near that massive screen count, and even if we assume that the growth trend slows down, it’s inevitable that China will soon have a much, much larger movie business than North America. For the sake of illustration let’s make a few conservative assumptions:

1. Box office growth in China slows down to 30 percent for the next 3 years, then 20 percent for the following 4 years, then 10 percent for the following 5 years until 2025.

2. Growth in North America maintains its 1.5 percent historical annual growth.

What we wind up with is a picture like this:Projected b.o. China vs N. Am thru 2025

Under conservative assumptions, we’ll see China’s gross box office surpassing that of  North America by 2018, and going on to double North America by the middle of the next decade. No other territory will come close even to North America, except possibly India. Hollywood’s century of hegemony over the global movie business will clearly soon come to an end.

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 Box Office Still Blazing: Weekly Gross Up 163% Over Same Frame in 2012

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By Robert Cain for China Film Biz

February 26, 2013

Although business at China’s movie theaters cooled off a bit last week compared to the prior week’s scorching, record-crushing $135 million gross, attendance was still hot enough to make it the second best week in Chinese cinema history. The $95 million cume for week 8 was 163 percent higher than the total for the same session in 2012.

Journey to the West led the way with $54 million, the second best second-week showing ever for a Chinese film, after Lost in Thailand’s Christmas week bonanza. At $160+ million and going strong as of this writing, Journey to the West looks certain to knock Lost in Thailand off its throne as the highest grossing Chinese film ever.

The Hobbit: An Unexpected Journey, took second place with an $18.5 million 3-day weekend. Some have suggested to me that The Hobbit’s underperformance in China is attributable to the fact that few there have read J.R.R Tolkien’s classic Middle Earth novels, but this explanation ignores the fact that The Lord of the Rings was a big hit in China back in 2004, placing fourth among all theatrical releases and first among foreign films that year.

The romance Say Yes came in third with a so-so $8.4 million, off by 56 percent from its first week’s tally. Jack Reacher was just behind with a tad under $8.3 million, bumping its 9-day cume to a modest $13.3 million.

Box office week ending Feb 24, 2013

Cloud Atlas finished the week with $26.3 million , just shy of its final North American gross of $27 million. With just a few more days before its run ends, it will be a close call as to whether the film will gross more in China than stateside. Either way, Cloud Atlas will wind up earning a remarkable 20 percent of its worldwide total in Chinese multiplexes.

Year-to-date, PRC box office receipts are up a scorching 43 percent over the same period last year. U.S. films account for just 16 percent of the total, compared to 47 percent during the same period in 2012. Even more worrisome is Hollywood’s market share tumble from 70 percent in the month of February, 2012, to 15 percent during February of this year. Whereas SARFT and the Chinese film authorities reacted to Hollywood’s dominance last year by imposing an extended summer blackout, they now appear to be loosening their grip a little, reportedly granting a coveted day-and-date release slot in late March to GI Joe: Retaliation.

The next U.S. film to release in China will be multiple Oscar winner Les Miserables, on Thursday the 28th..Musicals don’t usually attract much business in China–so I doubt Universal will be expecting much business here.

The next two major releases after Les Miz, A Good Day to Die Hard and Oz: The Great and Powerful, both set to release in mid-March, will serve as revealing litmus tests. Die Hard would normally be expected to attract China’s huge action fan audience, but as we’ve seen, American action tent-poles have underperformed of late in the Middle Kingdom. As a 3D fantasy, Sam Raimi’s Oz is also of a genre that traditionally excels in China, Hobbit notwithstanding. The classic 1939 MGM favorite is well-known and well-liked there. If any one movie can turn things around for Hollywood, I’m betting Oz will be it.

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.

No Golden Ring For ‘Hobbit’ in China

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By Robert Cain for China Film Biz

February 24, 2013

With its $5.6 million opening day and projected $18 million 3-day weekend gross in China, The Hobbit: An Unexpected Journey has become the third major Hollywood film in a row—after Skyfall and Jack Reacher—to fall short of expectations in its mainland theatrical release. In its first two days Hobbit managed only a distant second place finish behind the Chinese language hit Journey to the West, which has been in release for two weeks, and its attendance pattern over the course of the weekend suggests a relatively soft theatrical run ahead.

To be sure, an $18 million weekend in China is not in and of itself a bad result. Not many pictures, Chinese or foreign, reach that level in their first three days in the PRC. But for a global phenomenon like the Hobbit, which has grossed nearly $1 billion in the rest of the world, this result comes as a surprise to the downside. As the following chart illustrates, several much smaller territories will generate bigger total grosses for the film.Hobbit Gross by Intl TerritoryEven given the context of the picture’s long-delayed opening and marginal post-holiday release slot, one could have reasonably expected Hobbit to at least match Skyfall’s total China gross of $60 million, but this now appears highly unlikely. Hobbit’s Friday-to-Saturday revenue bump was just 26 percent, among the smallest increases I’ve ever seen for a wide release in the PRC. A total gross in the low 40 millions is looking more probable, a figure that won’t even place the film in the top 20 releases in China this year. That number would be on par with the PRC performance of last year’s John Carter, a picture that grossed barely a fourth of what Hobbit did worldwide.

What is particularly troubling about China’s cool reception to The Hobbit is that it is a 3D fantasy film, a genre format that has consistently performed handsomely with Chinese audiences.  Painted Skin 2, a poorly reviewed Chinese fantasy, earned $115 million in its 2012 China release, and Journey to the West has just reached $160 million and could well surpass Avatar‘s record $209 million China gross. Harry Potter and the Deathly Hallows: Part II earned $63 million two years ago, when China’s market was barely half the size that it is now. Journey 2: The Mysterious Island took in $60 million early last year, and Life of Pi grossed $91 million just a few months ago.

What’s impeding the success of The Hobbit may have less to do with the film itself and more to do with the current mood of Chinese moviegoers. During the past few seasons they’ve demonstrated an increasing preference for Chinese faces in Chinese stories, and a growing impatience with Hollywood blockbusters which, rightly or wrongly, have been criticized for being too much alike.

While it is far too early to sound the alarm for Hollywood’s movies in China, the recent trend ought to be cause for concern at the major studios. China will account for 10 percent of the global box office this year, and given that only those select few Hollywood films with the best perceived commercial prospects are allowed to release there, such releases ought to earn around 12 percent or more of their worldwide grosses in China.  But Skyfall earned barely 5 percent of its worldwide gross in the People’s Republic, and The Hobbit will probably wind up at around 4 percent.

If the next three U.S. releases—Les Miserables, A Good Day to Die Hard, and Oz: The Great and Powerful—turn in sub-par performances, then it may be time for the studios to heed the advice I’ve been freely offering for a long time: focus on what Chinese audiences want, and give it to them. Otherwise, the world’s fastest growing and soon to be biggest movie market will get along just fine without them.

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 Box Office Bests Previous Weekly Record by 61 Percent With Scant Help From Hollywood

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By Robert Cain for China Film Biz

February 22, 2013

What a difference a year makes. Last February, Hollywood action pictures like Mission Impossible: Ghost Protocol and Journey 2: The Mysterious Island dominated China’s multiplexes, seizing a 70 percent share of the market and leaving only crumbs for local Chinese films. Tom Cruise reigned as box office king with his Mission Impossible hitting $100 million, only the fourth film to reach that plateau in Chinese history. Hollywood’s long-term hegemony over the Chinese movie landscape seemed secure.

A year later, the situation could scarcely be more different. So far this month Hollywood’s share of Chinese theatrical revenue is barely 10 percent. Tom Cruise, whose new action flick Jack Reacher debuted to a tepid $5 million last weekend, has been supplanted by a Chinese star named Bo Huang, who has notched three successive breakout hits: Lost in Thailand, Journey to the West, and now the China-Japan co-pro (!) romance Say Yes. Chinese action-comedies are routinely cracking the $100 million threshold, while Hollywood action movies are underperforming to a troubling degree.

One non-Chinese player that has fared exceptionally well in China of late is Village Roadshow Pictures Asia, which nabbed the number one and number two box office rankings last week with its co-pro entries Journey to the West and Say Yes.Box office week ending Feb 17, 2013

Journey to the West broke numerous records, including the biggest single-day gross with nearly $20 million on Valentine’s Day, the biggest weekly gross ever ($93 million) and the fastest arrival at the $100 million mark (8 days). As of Tuesday, its tenth day in release, the film’s cume stood at $122 million. I don’t think I’m going too far out on a limb here in predicting that Journey will break Lost in Thailand‘s all-time record Chinese language film gross of $201 million.

Say Yes, a Chinese-language remake of the hit 1991 Fuji Television drama “101st Marriage Proposal,” debuted to an impressive $19 million. Journey and Say Yes combined gave Village Roadshow and its partners an 83 percent share of the week’s $135 million nationwide gross, also an all-time record. The previous weekly record gross was $84 million.

Year-to-date, China’s aggregate box office is up by 30 percent, while U.S. films are down by 59 percent. Some might blame the U.S. films’ decline on long release delays or on the individual films themselves (Skyfall, Gone and Jack Reacher), and they may be right, but I believe the most important factor is that Chinese audience tastes have shifted.Weekly box office 2012 vs 2013

Not only have several Chinese language films caught on with audiences, but the non-Chinese films that are indexing well now are different than the ones that indexed well a year ago. During the past several months the foreign pictures that have over-indexed in China have been more offbeat or intellectual movies like Life of Pi, Looper, and Cloud Atlas, or the more quirky action films like Bait and Expendables 2.

The trend could turn again in favor of Hollywood’s tent-poles, with upcoming releases that include The Hobbit on February 22nd, Les Miserables on February 28th, and Oz: The Great and Powerful and a Good Day to Die Hard in mid-March (I had previously been advised that the latter two films might open on the same day, but I’m now told it’s more likely they’ll be spaced at least a few days apart). The only certainty in China is change, and for the moment, anyway, it is trending in favor of China’s local producers and those foreign producers who have committed to serving the Chinese 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.

Valentine’s Day Treats Chinese Exhibitors with Love; “Journey” Obliterates Single-Day Record

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By Robert Cain for China Film Biz

February 16, 2013

Love was in the air for Chinese exhibitors on Valentine’s Day as date night sweethearts showered local movies with unprecedented affection. Admissions reached a record 4.5 million for the day, resulting in a 190 million RMB ($30.5 million) nationwide gross, a new single-day PRC record that surpassed the previous record of 140 million RMB by 36 percent.

Journey to the West: Conquering the Demons was also red-hot, shattering Transformer 3’s nearly 18 month-old single-day record of 112 million RMB with a 122 million RMB ($19.6 million) tally.

Journey’s 6-day total stands at approximately $80 million (the 7-day cume will be about $92 million), which means it has sunk Titanic 3D’s single-week record opening gross of $74.7 million. If its momentum continues Journey could conceivably surpass the Chinese language film record of $201 million set recently by Lost in Thailand, and even the all-time record of $209 million that has been held by Avatar since early 2010.

The resurgence of Chinese language films at PRC multiplexes is a trend that warrants close scrutiny. In the past two months three Chinese films have exceeded $100 million in revenue, but it has been nearly a year since a Hollywood film did so. During the past six months the top of the box office chart has been dominated by local films.

Top 10, Aug 12 - Feb 13

*Estimate as of Feb 15, 2013; total projected gross to exceed $175 mm

Compare this to the chart for the first six months of 2012:Top 10 First Half 2012

*Still in release as of July 1, 2012; final gross was $115 mm

Chinese audiences have clearly shifted their attention—and their RMB—toward locally made films, and they have become more selective about the foreign films they attend. It’s not that Hollywood movies aren’t performing well in China, it’s just that the billion dollar global blockbusters that dominated China’s cineplexes last year have been underperforming of late.

I’ll explore this topic in more detail next week, after we see how well Jack Reacher performs over the weekend.

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.

“Journey to the West” Smashes China Box Office Records

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JTTW poster

 

By Robert Cain for China Film Biz

February 13, 2013

With its $12.8 million Chinese New Year’s day debut, Stephen Chow’s Journey to the West: Conquering the Demons set a new record last week for the biggest opening day gross ever for a local Chinese film. The Huayi Brothers/Village Roadshow Pictures fantasy-action-comedy ranks second only to Transformers 3 for the all-time biggest opening day in Chinese box office history.

Journey blew past holdovers Cloud Atlas and Skyfall to take first place for the week of February 4-10 even though it had only one day, Sunday, to beat all its competitors for the weekly box office crown. I believe this is the first time such a feat has ever been accomplished in China.

Box office week ending February 10, 2013

Including its results through February 13th the film has now cumed a massive $50 million in its first four days. On Thursday Journey can look forward to a robust Valentine’s Day, a major date night holiday in China, when it could well set a record for the biggest single-day gross ever. If word of mouth doesn’t slow down attendance the picture will match or even surpass Titanic 3D’s $74 million single-week record. A $150 million total cume now looks increasingly likely, and there’s a reasonably good chance at this point that Journey will even surpass Lost in Thailand‘s all-time record gross of $201 million.

At $45 million, aggregate box office for all films last week was down about 8 percent from the same period last year, when Mission Impossible 4 and Journey: The Mysterious Island led the way to a $49 million weekly cume.

Cloud Atlas boosted its cume to a healthy $21.6 million after 11 days, which now puts it in the rare company of only a handful of non-Chinese films that have earned 20 percent or more of their global box office revenue in China. Skyfall notched another $6.4 million to extend its cume to $58 million.

The next Hollywood films to open in China will be Paramount’s Jack Reacher on February 16th and New Line/MGM’s The Hobbit: An Unexpected Journey, which will bow on February 22nd. It will be an interesting test to see how well both films stand up to the Journey in the West juggernaut. Although Hobbit has had an extraordinary global run and is nearing a $1 billion worldwide gross, it is by no means a certainty that it will enjoy equally robust business in the PRC.

Special mention must be made that an international production company, Village Roadshow Pictures Asia, played a key role in investing in and supporting Journey to the West‘s success. This kind of strategic engagement in Chinese language feature films is precisely what Hollywood and other foreign players must pursue if they hope to remain relevant in China.

For the past few years I’ve suggested that English language Hollywood films would soon be eclipsed in China by local language productions. That moment has arrived. With relatively few exceptions, Chinese movies will increasingly rule at China’s multiplexes. For those studios that haven’t made a commitment like Village Roadshow and Fox have to local language Chinese productions, the window is closing on their ability to participate meaningfully in China’s rise to its inevitable position of global primacy in the movie business. For those who still wish to enter the Middle Kingdom in a strategic and sustainably competitive manner, my colleagues and I at Pacific Bridge Pictures stand ready to assist.

[Correction: In a previous version of this story I mistakenly attributed the international co-financing and co-producing role in Journey to the West to the wrong company. I had misinterpreted a conversation I had with Fox International Pictures (FIP)--my mistake, not theirs--and cited that company as a financing and producing partner in the film when I should have properly cited Village Roadshow Pictures Asia instead. FIP's role with the picture is as a distributor in Taiwan and Malaysia. Thanks to Village Roadshow for kindly pointing out my error. It was an honest mistake; rest assured that I have reprimanded my entire research and fact-checking staff, and I am flagellating myself as I write this. Humble apologies all around.]

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.

Are Hollywood Action Films Losing Their Punch in China?

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By Robert Cain for China Film Biz

February 2, 2013

Over the years one of the most reliable truths of China’s film business has been that Hollywood action films sell. Bond films Casino Royale and Quantum of Solace, the Transformers movies, Avatar, Men in Black and other Hollywood action tent-poles have been the rock upon which China’s booming multiplex business was built. Even North American duds like Battleship, John Carter and The Mechanic could count on China to shore up their grosses and give them a measure of international respectability.

But during the past year Chinese audience tastes have broadened, and U.S. action films have experienced a lull in popularity that just might be the beginning of a decline.

Since January, 2012, three Chinese language action pictures have crossed the $90 million mark in the PRC, as have two dramas and a comedy, but only one American action film, Mission Impossible 4, has managed the same feat. And that was a year ago.

Since then, Sherlock Holmes 2, Spy Kids 4D, Wrath of the Titans, Ghost Rider 2, The Avengers, The Grey, The Hunger Games, The Amazing Spider-Man, The Dark Knight Rises, and Prometheus have all under-indexed in China. And the first Hollywood action release of 2013, Skyfall, has joined the club.Studio Action film indexing

The trend is clear: since May, 2012, more than two-thirds of U.S.-made action films released in China have under-indexed. Chinese audiences have increasingly turned toward comedies like Lost in Thailand, to Chinese action films like CZ12, and to effects-driven fantasies like Life of Pi and Painted Skin: Resurrection.

The trend could turn back this month, with Tom Cruise’s Jack Reacher and The Hobbit set to open in a few weeks, but I expect another Chinese film, Stephen Chow’s action comedy Journey to the West, will out-earn both of them. And meanwhile Cloud Atlas, a decidedly non-action film, looks likely to strongly over-index in China and perhaps surpass its U.S. total of $27 million.

The challenges for Hollywood action tent-poles are threefold:

1. Oversaturation. In 2011 there were 14 Hollywood action films released in China. In 2012 there were 23. Audiences may simply be tiring of these movies, with the trend away from action tent-poles signaling a broadening in their tastes. Ice Age: Continental Drift and Life of Pi outgrossed all but two of these 23 films. In a year when China’s box office revenue rose 30 percent and the average U.S. film’s China revenue was up 27 percent, the average U.S. action film’s take rose by only 14 percent.Average Action gross 2011-2012

2. Market Manipulation. In its efforts to manage the market and maintain a face-saving 50 percent share for domestic films, SARFT’s ‘domestic film protection’ efforts seem to be targeting U.S. action flicks more than other foreign pictures. SARFT slotted The Dark Knight Rises and The Amazing Spider-Man  for release on the same day, and Oz: The Great and Powerful and A Good Day to Die Hard appear to be headed for the same fate. While China isn’t exactly turning these movies away, it does seem to be more ambivalent about them than, say, family-friendly fare.

3. Piracy. Virtually all movies are affected by theft and illicit distribution in China, but Hollywood action tent-poles seem to be targeted more than others. Franchise films like the Bond, Mission Impossible, Transformers and other pictures tend to be highly valuable to pirates because they have widespread pre-release awareness, and in many cases SARFT delays these films for censorship or ideological reasons, allowing pirates a head start for getting illegal DVDs, Blu-ray discs, and online copies of the films into general circulation.

For these reasons, Hollywood studios looking to maximize their revenues in the increasingly important Chinese market would do well to broaden their offerings so they’re not overly action heavy. Fox, by far the best performing studio in China last year, had the most genre-balanced slate, with Titanic 3D, Life of Pi, and Ice Age ranking as its top three performers. The studios that fell behind in China were far more action-oriented in their China releases. These distributors ought to consider following Twentieth’s example.

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.