‘Terminator Genisys’ Release in China Will be a Litmus Test For Hollywood


‘Terminator Genisys’ Release in China Will be a Litmus Test For Hollywood

by Robert Cain for China Film Biz

If ‘Terminator Genisys’ fails in China it will mark a major shift in audience tastes.

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Justin Lin’s Latest More Slow and Somber Than Fast and Furious in China Debut


Justin Lin’s Latest More Slow and Somber Than Fast and Furious in China Debut

The star-studded Hollywood Adventures opened far below estimates with a $9 million opening day and $26-$27 million weekend, only 9th best 2015 debut among Chinese films.

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China’s Entertainment Billionaires: China’s ‘Disney,’ Cai Dongqing


How many of China’s entertainment billionaires can you name? Here’s the first of a series of articles to introduce you to them.

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Announcement of China’s ‘Netflix’ May Be the Death Blow for Netflix in China


Several major Chinese government owned companies have teamed up with Alibaba to form a streaming video service that may force an early end to Netflix’ China ambitions.

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It’s a Bollywood-Hollywood David vs. Goliath Showdown at China’s Cinemas


It’s a Bollywood-Hollywood David vs. Goliath Showdown at China’s Cinemas

Rock photo

There is something new that has occurred in China this week: two of the top four ranks at the box office have been claimed by non-Hollywood, non-English language pictures.

http://www.forbes.com/sites/robcain/2015/06/07/low-budget-indian-and-japanese-films-vy-against-100-million-hollywood-blockbuster-in-china/

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Why is China So ‘Furious’?


Paul Walker

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By Robert Cain for China Film Biz

April 22, 2015

In the weeks leading up to its April 12th opening day in China, the consensus among box office watchers was that Furious 7 would wind up with a final gross of around $125 million for its PRC run, and that its distributors would be ecstatic about that.

After all, only four Hollywood releases—Transformers 3, Transformers 4, Avatar and the 2012 Titanic re-release—have ever reached that rarefied level in China. The previous Fast & Furious installment had topped out at $68 million in Chinese receipts in 2013, a strong but not spectacular showing.

But from its earliest midnight screenings it was clear that Furious 7 wasn’t going to stick to the driver’s manual. Now, 11 days into its scorching China run, Furious 7 has amassed an incredible total of $280 million in China, and will likely finish up at about $375 million. With a May Day holiday boost and a bit of luck it could even approach $400 million. China is absolutely mad for Furious.

What was unthinkable just a few weeks ago is now a certainty: Furious 7 will not only beat the previous PRC record holder, Transformers 4, by a wide margin, but is also certain to top its own North American total. While it’s not unprecedented for films that do moderately well in North America to perform better in China than in their home territory (e.g., Pacific Rim), never before has a bona fide American smash hit exceeded its own domestic gross in a foreign territory. This is truly uncharted territory.

First 11 days comp F7Source: Pacific Bridge Pictures research

What happened? Let’s break it down.

Furious 7’s success in the Middle Kingdom can be explained partly by the same factors that made it a winner everywhere: quality marketing, high ‘want-to-see’ factor, and strong word of mouth. But several factors worked especially well in China to drive the film to its world-beating grosses:

  1. Advantageous release date. What first appeared to be a so-so Sunday release slot proved not to be a problem, mainly because Furious faced no Hollywood competition in its opening week, and it has flattened the Chinese films unfortunate enough to stand in its way. Even Chinese megastar Fan BingBing proved no match for Diesel, Walker and company, as her romance Ever Since We Love scored only $11 million this past weekend against nearly $90 million for F7.
  2. Massive release pattern. With an allocation of more than 70 percent of China’s screens, and more than 90,000 showtimes per day, this undoubtedly ranks as one of the widest releases ever seen. It’s only on the film’s third weekend that Furious will control less than half of all PRC screens as DWA’s Home and Arnold Schwarzenegger’s Sabotage arrive in mainland theaters.
  3. First-class promotion. With the two-year gap since Fast and Furious 6, Universal had plenty of lead time to work with SARFT and China Film Group–an investor in the film–to arrange a smooth release and mount a stellar marketing campaign. With CFG’s clout behind it and with its new China executive team in Beijing, the studio was able to support Furious 7 with more on-the-ground resources than with any past release.
  4. Strong word of mouth. Furious notched a very high 8.5 rating on audience review site Douban.com as word spread like wildfire that Furious 7 is FUN.
  5. The Paul Walker factor. Curiosity to see the final ride into the sunset of the well-liked actor who was in many ways the heart of this franchise drew numerous Fast and Furious newbies to Chinese multiplexes. Granted, this was an important factor in most of the world, but probably more so in China, where social media can instantly make or break a movie. According to a charming Chinese banker friend of mine, Paul Walker was THE trending topic of conversation on WeChat as the film rolled out.
  6. The right movie at the right time. Furious 7 is precisely the sort of big budget, effects-driven, Hollywood action spectacular that Chinese audiences love best. Sure, superhero movies are nice, but as the Transformers franchise has amply demonstrated, what the PRC really wants is machine porn: movies featuring monster machines that race and fly and do gravity defying stunts to save the world. It had been nearly a year since the last such film in this genre, Transformers 4, had graced China’s screens, so there was lots of pent-up demand for a film like F7 when it arrived.

There’s talk around the industry that Universal hasn’t yet decided whether to produce another installment of what is now the 8th highest grossing movie franchise in Hollywood history. That the ensemble of actors may not wish to come back for another film. To this I say, “If you believe that, there’s a Wall in China that I’d like to sell you.”

With all respect to the individuals involved, there is absolutely no way that Universal is going to put this golden goose down.

There are so many options Universal has now that Furious 7 has established its status as a juggernaut franchise in mainland China. They can produce the next installment of Fast and Furious as a co-production there and be reasonably assured of recouping their entire budget in the PRC alone, with the rest of the world, including North America, as gravy. If the cast doesn’t want to come back, re-boot it with a brand new cast. Or do a China spin-off with an all-Chinese cast. Do it with talking cars if necessary, for goodness’ sake! Or call me, I’ve got a script outline and treatment ready to go. But don’t think for a second about trying to stop this mean, green, driving machine.

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

Fox scores with “Museum” while Sony strikes out with “Annie” in China


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NATM3

By Robert Cain for China Film Biz
January 14, 2015

The first full box office week of 2015 saw two studio film releases that spanned the spectrum of rankings from top to bottom: Fox’s Night at the Museum: Secret of the Tomb snagged the top spot with $26.5 million, while Sony’s Annie came in last among new releases with a hair-curling $355,000, possibly the poorest opening ever for a major Hollywood studio film in China.

Both Museum and Miss Granny, the Chinese remake of the Korean comedy hit of the same name (수상한 그녀) knocked Tsui Hark’s The Taking of Tiger Mountain out of the number one spot, which it had occupied for the previous two weeks. With its $132 million total as of this writing, Tiger Mountain is now the 6th highest grossing Chinese language film of all time, and the 3rd biggest 2014 release after Breakup Buddies and The Monkey King.

Box office for week ending Jan 11, 2015

 

Night at the Museum’s take is especially impressive considering that this is the first installment of that franchise to enjoy a PRC theatrical release. Its opening week numbers indicate a projected final gross north of $60 million, which should put it around the average for studio releases this year.

Annie, on the other hand, comes as a big surprise to the downside. Even taking into account its relatively modest release by China Film Group and Huaxia, with just 14,700 screenings during its first 3 days, the numbers are still mysteriously low, at just $23 per screening. By comparison, Khumba, a South African family animated film in its second week of release, earned more than double Annie’s average with $51 per screening. One wonders why Sony chose to use up a valuable release slot for the film, and even more, whether CFG and Huaxia put any effort into opening the picture.

Overall box office was strong at $80.4 million up 45 percent over the same frame in 2014. 2015 is off to a strong start after the blackout neutered December, with the first two weeks of this year running 46 percent ahead of last year.

Coming this week are the Jeff Bridges-Julianne Moore adventure vehicle The Seventh Son and the 3D reissue of Stephen Chow’s Kung Fu Hustle on January 16th, followed by The Hobbit: There and Back Again, which should clear at least $100 million if prior trends hold.

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 http://www.pacificbridgepics.com.

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.

 

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.

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.