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.

Can China Save ‘Earth’?


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By Robert Cain for China Film Biz

July 12, 2013

The Will Smith-M. Night Shyamalan sci-fi /adventure After Earth arrives in Chinese theaters today with high hopes for a ‘do-over’ after its weak opening in the U.S., Europe, and the rest of the world. With its reported $135 million production budget and $100 million more in marketing costs, the Relativity Media/Overbrook Entertainment flop needs big China numbers if it is to recover from the financial crater it has dug for its investors.

A China box office recovery scenario has its precedents, as Chinese audiences often go against the global tide. Some stateside under-performers enjoy surprisingly big results in China; Battleship and John Carter, for example, ginned up China grosses of $50 million and $42 million respectively, accounting for 15 percent and more of their worldwide theatrical totals. The reverse is often true as well, as recent releases like Django Unchained, The Artist, and Les Miserables have left Chinese audiences cold and earned 2 percent or less of their worldwide revenues there.Image

Early reports have After Earth winning the PRC box office race on Friday, beating The Rooftop, the romantic musical starring, written and directed by, and featuring the music of Taiwanese multi-talent Jay Chou (The Viral Factor, The Green Hornet). Rooftop opened to an excellent $2.6 million total on Thursday, but suffered on Friday due to competition from After Earth, which took in a projected $4.1 million, including Thursday’s midnight grosses.

The week ending July 7th was a decent, if somewhat uneventful one at the theaters. Tiny Times continued to dominate the field, taking another $24.4 million out of the nationwide total of $65.3 million. As of today the youth-oriented romance has extended its gross to $75 million, which, believe it or not, is considered a disappointment by its producers and distributor Le Vision. The film has been blasted by some of the worst reviews and most scathing weibo criticism in recent memory. Le Vision has responded by moving up the sequel, Tiny Times 2, from December to August 9th, perhaps, in the words of my Chinese correspondent Firedeep, to “cook another meal while the pot is still hot.” The August date will be a competitive one, but December will be even more so, and Le Vision may have lost its nerve about facing the tough December field with such a critically panned franchise.

Last week also saw the opening of Andy Lau’s Blind Detective with a $13.7 million bow, and the winding down of Man of Steel, which has surpassed Skyfall to become the third highest-grossing American film in China this year. Man of Steel has collected just over $62 million to date and will end up around $63 million. And as we previously noted, the U.S.-China co-pro Man of Tai Chi fell flat with just $2.9 million in its opening weekend. That picture has cumed $4.1 million through its first 7 days and will probably fall short of $10 million over its PRC run.

Image

Looking ahead to next week, on Thursday July 18th Huayi Brothers will release the family comedy Mr. Go, a South Korea-China co-production about a Chinese teenaged girl who inherits a baseball playing gorilla and takes him to Korea where he becomes a star major league slugger. Silly? Perhaps. I expect it will do big business. Tune in here next week and let’s see what happens.

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 Climbing, No Dabbling in China’s Movie Biz


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By Robert Cain for China Film Biz

May 8, 2013

I spotted the sign shown above as I was exiting Shanghai’s Pudong airport last week, and although the signmaker’s translation skills are sorely lacking (the bottom sentence should read “Please don’t play in the water.”), the message stuck with me as an appropriate one for those looking to earn their fame and fortune in China’s movie business.

No climbing, no dabbling. Precisely! Understand the hierarchy, especially the government culture, don’t try to overstep your bounds, and don’t dabble because things are moving so fast here that if you fail to move and adapt quickly you’ll get left behind. It’s a culture that Hollywood’s studios generally abhor, and for that reason they’re mostly opting out of the China boom, leaving the money and opportunity to entrepreneurs and risk-takers.

And there’s so much money and opportunity, even (perhaps especially) for foreigners who respect the rules. From small private startups to the biggest state-owned enterprises, China’s film industry is awash in cash, hungry for success, and eager to partner with people who possess know-how and international access.

In my recent China travels I’ve met a 30ish entrepreneur who has poured at least $25 million of his own money into a state-of-the-art post facility; a former government employee who controls an enormous production facility and sizable production fund; and countless others who are prepared to fund movies and entertainment ventures if they can only find investable projects.

Recognizing that commercial filmmaking skills and business savvy are in short supply in China, most of these folks are happy to collaborate with–and in many cases finance–foreign professionals. Even the huge and stodgy China Film Group, the supposed dinosaur of China’s film industry, has aggressively embraced foreign talent, reportedly placing more than two-thirds of its upcoming film projects with international directors. One of the biggest budget films in China’s history, Beijing Forbidden City Film Company’s Wolf Totem, is in the hands of French director Jean-Jacques Annaud. It’s a sign of the heady times in the PRC that Annaud was granted approval to direct Wolf Totem even though he’d been previously banned for making the anti-PRC film Seven Years in Tibet.

One major way that foreign influences have seeped into China is the increasing prevalence and success of Hollywood-style storytelling in locally made films. Pictures like Lost in Thailand, Finding Mr. Right, So Young, Drug War and American Dreams in China have attracted giant Chinese audiences by co-opting western storytelling techniques, and in some cases adapting Hollywood hits to the local culture. This an encouraging trend, one that bodes well for skilled western writers and filmmakers who are willing to give China a go.

Of course there’s a catch to all of this. To play in China one must be willing to play by the rules. Here are a few to keep in mind:

1. Meet them more than halfway. Chinese investors tend to be more likely to place their capital at home than overseas. Co-productions are fine, whether in Mandarin or English, but don’t expect them to finance your quirky indie comedy or heartfelt drama unless it can shoot in China with Chinese elements. Chinese movie investors neither understand nor trust the foreign marketplace; most will only invest if they’re confident they can make their money back in China.

2. Brand name drop. If you want to get a Chinese investor’s attention, there’s no better way than to trot out some brand names with which you can claim some association. Can you get a major movie star involved? Are you or have you ever worked for one of the major Hollywood studios? Did you get a masters degree at Yale (or better yet, at Beijing University)? Can you work the words “Goldman” and “Sachs” into the conversation? Few PRC investors have the ability, or even the interest, to assess the quality of your screenplay, but a strong brand name they recognize will help you to swiftly cut through the clutter.

3. Be sensitive to the culture.  Just as in Hollywood, there are many cultural, social, and business rules that must be obeyed if you’re to have a reasonable shot at success. Too many foreigners show up with little understanding of how things work in China and reveal themselves as ‘barbarians’ who are best avoided.

4. Bring protection. China can be a rough-and-tumble place, and foreigners are often treated as targets for exploitation (and sometimes amusement). It’s best to have a local partner or ‘sherpa’ to guide you through the minefield. A great source of information and advice is the Harris Moure law firm’s China Law Blog.

Several friends recently asked me if I’d be attending Cannes this year, and I felt compelled to reply “What for?” The action is all in the East these days. Of my scores of Chinese film business contacts I’m only aware of two who bothered to attend the Cannes festival this year. Better to spend your time at the Shanghai Film Festival in mid-June, where you can participate in a relevant and rapidly growing scene. So don’t dabble, book your ticket and hotel room before everyone else squeezes you out.

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.

‘Oz’ Blahs, or Why China is NOT Going to Save Hollywood (But Might Buy It)


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By Robert Cain for China Film Biz

March 31, 2013

Oz the Great and Powerful debuted to a distressingly low $9 million in China this weekend, becoming the tenth straight U.S.-made film this year to falter in PRC theaters. Every major studio has now had at least one disappointing release in China in the past three months, and none has had a breakout success.

The huge box office bonanza that Hollywood movies enjoyed a year ago in China is now looking more and more like a cruel head fake.  For 23 straight weeks in 2012 Hollywood films reigned at the top of China’s box office. But their longest streak this year is 2 weeks on top, and they’ve placed first in only 3 of the past 16 weeks.

Meanwhile, Chinese language films are hot. Scorching hot. In those same 16 weeks two Chinese films have broken $200 million at the box office, another went over $135 million, and a fourth—the low-budget Finding Mr. Right—will soon become the highest grossing Chinese romantic comedy of all time.

I’ve written many times in this space that Hollywood’s movies will eventually be marginalized in China. I thought this would take at least several more years, but it’s happening before our eyes.  In the first quarter of 2013, U.S. films’ cumulative grosses in China are down by 22 percent, while Chinese language films are up by 128 percent. China’s tastes have shifted decisively toward local product, with the result that American films are now performing at about the same level they did back in 2010, when China’s market was half the size that it is now.Chinese B.O. 1Q12 v 1Q13

This turn of events comes at an unfortunate time for Hollywood. With box office revenue down by 13 percent in North America, the studios have been looking to China to help fill the gap.  But that’s not going to happen, at least not with any consistency. Sure, the next Avatar or Transformers or Iron Man movie will do fine in China. But the days of $50 million grosses for movies like Battleship and John Carter are fading. Oz won’t likely get past $35 million, and Jack the Giant Slayer will be lucky to break $15 million. Chinese audiences would rather spend their money to see local stories with Chinese faces.

With North America flat at best, and limited prospects in the industry’s biggest international growth territory, one wonders how much patience the major media conglomerates have left for their film divisions. According to a recent Economist article, pre-tax profits at Hollywood movie studios fell by around 40% over the past five years, and they now account for less than 10% of their parent companies’ profits. According to Benjamin Swinburne of Morgan Stanley, by 2020 the studios will contribute just 5% of the media conglomerates’ profits. The day will soon come when at least one of these conglomerates decides to unload its studio operations.

And who better to buy that studio than a Chinese distributor? China will soon be the world’s biggest movie territory, with a more profitable business model than Hollywood’s. And it has major international ambitions, but completely lacks the ability to serve the global market. The right strategy for a globally minded Chinese movie mogul will be to acquire a major U.S. studio at a bargain basement price. The only thing they need now is a willing seller.

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.

Behind the Scenes of the Beijing International Screenwriting Competition


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By Robert Cain for China Film Biz

March 28, 2013

In a world that is absolutely brimming with screenwriting competitions, you’d think there wouldn’t be much need for another one. But the new Beijing International Screenwriting Competition has emerged so dramatically on the scene and from such a seemingly unlikely place that I decided to make a few calls and check it out.

It turns out that the competition, the first of its kind, has quite an interesting back story of its own.

The competition’s founder and Chairman is Kevin Niu, an energetic Chinese-Canadian with a background both in film producing and in technology. Recognizing the Chinese film industry’s acute need for quality, professionally written screenplays, and the fact that western writers are the ones whose scripts result in globally successful movies, he set out to attract those writers to consider China as a setting for their stories. Niu’s purpose is completely apolitical; his goal for the competition is to “foster artistic collaboration and an ongoing creative dialogue between China and the U.S.”

Niu has secured support and sponsorship from a range of institutions that includes Harvard and its alumni entertainment group, Harvardwood, from talent agencies WME and UTA, and from the Beijing Cultural Asset Office (BCAO), which has provided financial support. The BCAO’s party secretary, Huiguang Zhang, is serving as President of the competition.

Niu and his colleagues arranged for the competition to be announced to U.S.-based writers in a blitz of publicity over the past few weeks, with the aim of attracting short film and feature length stories that are set at least partially in Beijing. There are no entry fees, and awards include cash prizes of $1,000 with all-expense paid trips to Beijing. The Grand Prizes include a monetary cash award of $15,000 for the feature film winner and seven Production Grand prizes for the short film winners who will be fully sponsored to produce their productions in Beijing.

The Grand Judges of the competition are Tracey Trench and Mark Jonathan Harris. Trench is a former studio executive at Fox, a producer of such films as the Drew Barrymore starrer Ever After, and the 2006 comedy The Pink Panther; she is currently  consulting to Dreamworks Animation and its China joint-venture, Oriental Dreamworks. Mark Jonathan Harris is an Oscar-winning documentarian (Into the Arms of Strangers: Stories of the Kindertransport). Working behind the scenes is Ann Chao, a second-year Harvard Business School student who brought the Beijing competition to my attention.

For information about the competition and to submit an entry, go to this link.

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.

‘Die Hard 5’ Quells U.S. Film Slump in China


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By Robert Cain for China Film Biz

March 19, 2013

The months long stretch of American movies’ subordination to local films in China came to an end last week with the release of A Good Day to Die Hard, which earned $15.8 million in its four-day PRC debut. That was good enough for a solid first-place finish and contributed to a 73 percent weekly share for non-Chinese films, by far the best showing for foreign pics in China this year.Box office week ending 3-17-13

To be sure, Die Hard’s opening was solid but it wasn’t exactly a barnburner.  It ranked as only the third best opening weekend for an American film in China this year, and wouldn’t have rated among the top ten openings of 2012. But relative to its performance in the U.S. and other major territories, Die Hard’s $15+ million Chinese debut can be viewed as a true success. Its projected China tally of $38 to $45 million will easily trump its grosses in every other international territory, and will represent at least 12 percent of the picture’s worldwide total. Compare that figure to the 4 to 6 percent China indexes achieved by Skyfall, The Hobbit, and Jack Reacher, and the 2 percent index of Les Miserables. It’s the first time this year that a studio quota film will play at least as well in China as it does in the rest of the world.

Action remains the dominant genre at China’s multiplexes, with a 40 percent share year-to-date. The fantasy genre holds 28 percent share, due almost entirely to the success of one film, Journey to the West. Animation and romantic comedies have been especially weak so far in 2013, with just 5 percent and less than 1 percent, respectively.

China’s box office continues to blaze at a spectacular growth trajectory, with a year to-date total that is 45 percent ahead of the first 11 weeks of 2012. A $3.5 billion year-end total appears to be a reasonably safe bet, and even $4 billion is not entirely out of the question.

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 Q1 Release Update: “Oz” and “Die Hard 5″ to Go Head-to-Head


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By Robert Cain for China Film Biz

January 31, 2013

My Chinese colleague Firedeep has just given me an update on upcoming theatrical release dates.

Here’s the schedule for revenue-share films to be released in the next six weeks:Q1 China release schedule

Yes, you read correctly: current word is that Oz and Die Hard will be pitted against each other on the same release date. How and why SARFT makes decisions like this is a mystery to anyone outside SARFT’s inner circles. I should point out that I’m still awaiting confirmation from a second source in China and/or from the MPAA, and It is still possible that one of the films may be moved off this date.

Release dates for notable buyout films include:Q1 Buyout release dates

Another interesting development was the announcement by Enlight Pictures—the power indie behind smash hit Lost in Thailand—that their upcoming film So Young, an adaptation from the youth fiction novel to be directed by star actress Vicki Zhao, will debut on April 26, the same date that DMG is targeting for Iron Man 3.

I’ll furnish more updates as I receive 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.

How China’s Three Stooges Out-Grossed “Titanic”; “Lost in Thailand” Reaches 1 Billion RMB Box Office in 19 Days


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Lost in Thailand money

by Robert Cain with Firedeep for China Film Biz

January 2, 2013

During my first 15 or so years working across the Hollywood-China divide, I heard countless times that China would never be a major cinema-going country. That going out to the movies simply wasn’t part of the culture. More than conventional wisdom, China’s aversion to the movie-going experience was widely regarded as fact.

I plugged away for years in the Chinese entertainment market because I was a contrarian. I didn’t believe that Chinese people weren’t like people everywhere else; I was sure they’d enjoy going out to the cinema for a good comedy, a good drama, or a good action spectacle just as much as Americans, Germans, French, Koreans, and Brazilians do.

Of course the conventional wisdom was wrong. The thing that had held Chinese audiences back was that they lacked movie theaters. And now, with 13,000 screens in the PRC and an average of 7 new ones being added every day, they have proven China to be a powerhouse, the fastest growing and soon to be the most important movie-going nation in history. Attendance and revenue records are dropping faster than eggs drop into soup.

Until just a few weeks ago the records belonged to Hollywood films like Titanic and Avatar. And new conventional wisdom formed; that Chinese audiences loved movies, just so long as they were American blockbusters.

And then came Lost in Thailand. On December 12, this little Chinese slapstick comedy with a budget barely one one-hundredth the size of Avatar’s has sunk Titanic’s re-release record in China, and shattered Avatar’s all-time China attendance record. In another ten days or so it could break Avatar’s long-standing record as China’s highest grossing release ever.  And in doing so it proved that Chinese audiences love Chinese movies at least as much as American ones.

Anyone who makes a living anywhere in the film business should be asking themselves, “how did this happen?” Because sooner or later it will happen again. And again. And before we know it China will be the world’s movie kingmaker, the land of the billion dollar blockbuster. And many of those blockbuster movies will be Chinese.

Lost in Thailand wasn’t supposed to be December’s big hit. That title was expected to go to Jackie Chan’s CZ12, or to Feng Xiaogang’s Back to 1942. Produced and distributed by indie studio Beijing Enlight, Lost in Thailand was the sequel to 2010’s Lost in Journey, a comedy that barely grossed $7 million. With the same cast–well regarded comedians Huang Bo, Wang Baoqiang and Zheng Xu—and with star turned first-time director Zheng Xu at the helm, the movie would reasonably have been expected to gross maybe $10 million or $15 million. Factoring in Fan Bingbing’s brief cameo appearance one might have generously estimated a $25 million tally.

But Lost in Thailand grossed nearly $50 million in its first 5 days, and it has powered on to cross the $160 million mark in 19 days—more than Titanic 3D grossed during its entire 55 day run. It now appears a lock to beat Avatar’s 2009-2010 PRC record of $209 million. Along the way it has broken many of China’s records for attendance and revenue.

So what happened?

More than anything, Lost in Thailand stood out simply by being a well-made and well-regarded movie. In a market where most locally-made films are viewed by moviegoers as ranging from bad to awful, Lost in Thailand is a truly funny and engaging comedy. Set in Thailand, the film tells the story of two Chinese businessmen who go searching for their boss in the north, and then link up with a tourist eager to fulfill his ‘bucket list’ by exploring the country. Along the way they cause a maelstrom of comic trouble. It’s not exactly a critical darling, but a solid crowd-pleaser.

Timing was also critical to Lost in Thailand‘s success. December is the most important season for local language films, as it is a time of both heavy attendance and a blackout period for Hollywood films. Many of the year’s biggest tent-poles open in December. In 2009 Chinese audiences got Avatar; in 2010 it was romantic comedy If You Are the One 2 and crowd pleasing action-comedy Let the Bullets Fly. But last year was a different story. There were no comedies, only the heavy and depressing drama Flowers of War and costume martial arts film Flying Swords of Dragon Gate. No comedy, no escapist fantasy. And throughout 2012 the only big local hit was the action fantasy Painted Skin 2. Despite its $115 million gross, Painted Skin 2 was generally considered a mediocre cash grab, a much-reviled movie that many regretted having spent their money to see.

So by December Chinese audiences were clearly looking to have some fun. Opening against he unrelentingly sad Back in 1942, almost any properly marketed comedy would have succeeded. As Enlight’s Chelsea Tan put it, “Besides Lost in Thailand’s quality, I think its success is mostly due to its having a good releasing date, its lack of genre competition, and our vibrant use of social networks to interact with the audience. And Lost in Thailand delivers jokes and scenes that make for good word-of-mouth discussion.”

Lost in Thailand‘s breakout success can be viewed as a populist reaction to an overabundance of big budgeted historical dramas and Wuxia/martial arts flicks. These kinds of movies have become tired, with fewer and fewer ticket buyers showing up. The commercial failures of Back to 1942 and of recently released costume dramas The Last Supper and The Flying Guillotines should signal the end of the current cycle for these genres.

In its own way, Lost in Thailand proves that Chinese audiences care about local films. They want to see Chinese faces in contemporary Chinese situations, films that reflect their own culture, their own sense of humor. Sure, they will continue to attend the mega-budget, effects-driven Hollywood spectacles. But when they go for a local movie, they don’t care about scale, budget or effects. They just want to see stories that they can connect to, stories that reflect their modern day circumstances, stories that are uniquely Chinese.

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.

Sleeper Hits Put China Box Office Growth Back On the Fast Track


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Lost in Thailand poster

By Robert Cain for China Film Biz

December 18, 2012

China’s December box office rally is shaping up to be the biggest story of the year in the global movie biz. After the fall’s SARFT-induced coma threatened to dampen theatrical revenues for the rest of the year, a pair of films that barely anyone saw coming has electrified PRC audiences and kept theaters filled and queues brimming for over a month.

Back in the summer and fall SARFT crushed Chinese exhibitors’ hopes for a $3 billion aggregate 2012 box office when it set extended “domestic film protection periods” that kept Hollywood movies out of local theaters. Audiences mostly stayed away from the bland domestic product that was on view, and I revised my estimate of total year box office revenue down to $2.5 billion.

Hopes were raised in December, when many box office watchers anticipated that a trio of Chinese language films—Feng Xiaogang’s Back to 1942, Wong Kar Wai’s The Grandmasters, and Jackie Chan’s Chinese Zodiac 12 (now known as CZ12)—would dominate theaters. December did in fact bring good tidings, but not exactly as expected.

Firstly, Ang Lee’s Life of Pi confounded almost everyone’s expectations by taking the Chinese box office by storm, so to speak. What many had projected would be at most a $20 million or $25 million run instead became a blockbuster hit, with $86 million to date, making it the fourth biggest grosser in China this so far year. Not only did Life of Pi spank down Back to 1942 in China, it also handily beat its own $70 million (so far) tally in the U.S., only the third time in history that a foreign film has grossed more in China than in North America.

While Grandmasters was pushed to next year and CZ12 will open this week, it was a tiny, low-budget comedy that solidified December as one of China’s best months ever. The Hangover 2 knock-off Lost in Thailand, a sequel to the 2010 film Lost on Journey, charmed audiences out of a massive $48 million in its first 5 days, setting scads of records along the way, including:

• Best all-time Wednesday opening for any film

• Best opening day in December

• Biggest single day in December

• Biggest opening week in December

• Best opening week for a locally made film

• Best opening week for any 2D movie

The reportedly $4 million budgeted Lost in Thailand looks likely at this point to surpass Painted Skin 2 to become China’s biggest local language film ever, and the PRC’s 2nd highest grossing film overall in 2012.

Lost in Thailand and Life of Pi paced China’s overall box office to its best-ever week as measured by admissions, with over 15 million tickets sold.

Box office week ending December 16, 2012

These recent events have given me the confidence to raise my year-end estimate to $2.65 billion for 2012, which would make for China’s 9th year in a row of 30% or greater theatrical revenue growth and an aggregate 2,200% increase since 2004. To put that figure into perspective, had the North American box office grown by an equivalent amount, it would now be a $200 billion movie industry, rather than the $11 billion business that it is.

For several years now I’ve been predicting that China will surpass North America to become the world’s biggest box office territory by 2020. I’m now going on record and moving the date up by a year to 2019.

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.

Chinese Rules of Behavior For the Uninitiated


Follow me on Twitter @robcain or Sina Weibo @robcain, or connect with me on LinkedIn.Subway shoving pic

By Sally Yeh and Robert Cain for China Film Biz

December 12, 2012

Back in October I received a mixed response to an article I published here on CFB titled “Sucking Up and Flattering Your Way to Success in China.” One American sent me a rather huffy letter of disapproval, accusing me of insulting Chinese people. But many of my Chinese friends and acquaintances sent me notes of congratulations for accurately pegging the way things work. I’ve consistently found that the people I deal with in China’s film business are far more inclined to be self-effacing than sanctimonious, and most greatly appreciate a good joke that pokes fun at Chinese manners.

One such friend, Beijing based film producer Sally Yeh, was so tickled by the article that she sent me her list of 10 rules for Chinese behavior, which I have published below with her permission. Get familiar with these rules and you’ll greatly improve your ability to understand what’s going on.

Sally’s 10 Rules of Chinese Behavior

1.  Never say “no.”
Due to matters of ‘face’, no one can say no if they want to maintain a relationship. For Chinese and foreigners alike, the trick is to figure out when “yes” means “no” and when it actually means “yes.” And hopefully to avoid assuming a “yes” means “no” when it really means “yes.”  This sort of confusion occurs all the time and sometimes leads to ridiculous results.

2.  Don’t plan ahead
People in China live by Nike’s slogan and see no value in planning ahead. Because things are changing so fast, it makes no sense to plan, forecast and execute.  Cultivating a plan for the next five to ten years is almost completely unheard of.

3.  Only trust your ‘homies’
China’s a big country and home is very near and dear to the heart, so if you’re from my province then we’re somehow ‘related’. There’s a kindred spirit in knowing that ‘family’ exists outside of one’s province.  Foreigners?  They’re foreign – they’ll never even try to figure you out.

4.  Cut corners  
The PRC is so autocratic, people will break rules whenever they can. You can’t make an eggroll without breaking some eggs. And you can’t get anything done in China without breaking a few rules.

5.  Push, shove and kick your way to where you’re going
Just look at how people cut lines at the hospitals, airports, train stations and bus stops!  Pushing people and giving no personal space to others are quite common in China. When those subway doors open don’t let the people inside get out, just shove your way onboard. Never mind the rules of etiquette (or physics).

6.  Never own up
Whatever went wrong, don’t confess.  You can always come up with an excuse at the spur of the moment without showing any wrongdoing or guilt.  That’s why actors are easy to find in China, because everyone’s “acting” when they need to.

7.  Be obedient and never speak up to the boss

From kindergarten onward, Chinese are always rewarded for their obedience.  Hence, many who have graduated from the best Chinese universities cannot think outside-the-box, because they never learned anything else to do aside from getting top grades by taking orders, instructions, and absolutes.  This leaves very little room for creativity.

8.  Always negotiate the price

In China, sometimes the final price isn’t locked until the whole project is over.  Thus, the best estimated budget is a thumbnail approximation and if your relationship was good, it can be less than expected.  If your relationship was bad, it can cost you.

9.  Always buy foreign products, even people

Chinese consumers have completely lost faith in their homemade products.  They will go as far as to have baby milk powder shipped from Germany to China than to buy a locally made milk powder.  This is also trending with people – investors seem to think there are no creative people in China even worth fostering or training. Instead, it’s better to just find out how much Spielberg costs.

10. Numbers rule

Rarely does a Chinese conversation go by without some mention of price, salary, grade point average, sales figures, age  – any number that puts a benchmark on the separation of ‘haves’ and ‘have nots’; affordable and unaffordable; comparisons that always emphasize measurements of  numerical value.  The Chinese are the best mathematicians in the world.

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. Sally Yeh is a Beijing-based film producer whose credits include “Bean Sprouts and Salted Fish” and “Chandni Chowk to China.”