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


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By Robert Cain for China Film Biz

November 26, 2013

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

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

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

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

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

Box office week ending 11-24-13

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

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

Warner Bros’ Stellar Year in China


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By Robert Cain for China Film Biz

November 21, 2013

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

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

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

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

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

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

Box Office week ending 11-17-13

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

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

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

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

Sly and Arnold’s Career Re-birth in China


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

November 14, 2013

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

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

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

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

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

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

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

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

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

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

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

Box office for week ending Nov 10, 2013

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

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

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

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

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


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U.S.-China Summit

By Robert Cain for China Film Biz

October 22, 2013

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

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

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

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

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

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

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

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

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

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

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

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


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By Robert Cain for China Film Biz

September 25, 2013

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

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

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

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

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

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

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

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

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

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

Real estate.

Real estate.

Real estate.

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

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

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

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

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

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

China’s Monster Summer


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By Robert Cain for China Film Biz

August 22, 2013

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

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

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

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

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

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

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

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.

 

Keanu’s Big Swing and a Miss in China


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By Robert Cain for China Film Biz

July 8, 2013

Nearly a decade in development and more than two years in production, Keanu Reeves’ directorial debut, Man of Tai Chi, was supposed to accomplish several ambitious goals:

  1. Enable Reeves to make the leap from actor to respected film director.
  2. Propel Reeves’ friend and Matrix kung fu mentor Tiger Chen to his own breakout as an action star.
  3. Establish a China beachhead for Reeves and enable him to make more movies there.
  4. Earn lots of money for the film’s investors, who include China Film Group, Wanda Media, Village Roadshow Pictures Asia, and Universal Pictures.

But the tepid audience response to Man of Tai Chi’s opening in China last weekend spells disappointment for everyone involved.  Although Reeves may still have a directing career ahead, his first film now appears more hindrance than help in advancing him toward that goal. I haven’t yet seen the movie so I can’t comment on Reeves’ directing capabilities, but the trailer has an odd direct-to-video feel to it and, according to Weibo chatter, lacks appeal for many in its targeted demographic.

At a reported $25 million budget, the picture will need to do a much better job drawing audiences in the U.S. and other territories if it is to turn a profit.  Wanda is said to have put up a substantial percentage of the negative cost in exchange for Chinese distribution rights, and turned over some 60 percent of its 1000+ screens to the picture. In hindsight that looks to have been a costly decision; given its $2.87 million nationwide total for the 3-day weekend, Man of Tai Chi will likely finish with less than $10 million in theatrical gross receipts over its entire China run. Wanda would have been better off allocating more of its screens to local hits Blind Detective and Tiny Times, or to the popular Warner Bros release Man of Steel.

Wanda and its partners in Man of Tai Chi  made a bet that audiences would turn out for Reeves because of his Chinese heritage and his track record as an action star with a genuine martial arts pedigree. My feeling is that the core moviegoing audience may simply be too young to know who Reeves is, and so he didn’t draw as well as had been hoped.

The U.S. market probably won’t offer much support, as the film still doesn’t have a scheduled release date there. According to The Hollywood Reporter, Weinstein Company’s Radius division picked up U.S. rights at Cannes with intentions for a fourth quarter U.S. release, but has not yet announced any firm plans. Universal’s decision not to handle the film despite having invested in it suggests they lack confidence in its North American prospects.

In Reeves’ and his backers’ defense, their task was not an easy one; few recent action or martial arts films have been successful both in China and abroad. Here’s hoping  Man of Tai Chi finds better luck in the global 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.

‘Tiny Times,’ Gargantuan Grosses


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by Robert Cain for China Film Biz

July 4, 2013

Happy 4th of July everyone, it’s America’s Independence Day. As a person who enjoys the uninfringed right to express my thoughts to readers around the world, I’m extremely grateful for the precious freedom America’s founders fought for and bequeathed to their descendants.

On another note, I’m dedicating this post to Dominic Ng, Bennett Pozil, and their superb team at East West Bank. They recently hosted me at two of their events and made invaluable introductions for me to their clients. Dominic was kind enough to publicly recognize my work in a room full of heavy hitters at his “U.S.-China Economic Relations“ summit at the Biltmore Hotel in downtown Los Angeles. And since Bennett has been after me to keep writing this blog, pleading that in its absence he’s been forced to read trade papers like the Hollywood something-or-other and another thing whose name I forget that starts with the letter “V”, I suppose anyone who gets some use out of this humble publication should thank Bennett for his persistent cajoling.

It has been an eventful month or so since I last wrote about China’s film biz. In recent weeks Iron Man 3 finished its run at $121 million, edging out local romantic drama So Young to become the second highest grossing film of the year so far behind Journey to the West. Dreamworks’ animated movie The Croods defied everyone’s expectations, including my own, running up a magnificent $63 million, which places it among the highest grossing animated films in Chinese history. Legendary East announced a partnership with China Film Group; local film American Dreams in China ran up an $86 million gross; Man of Steel opened on 6,500 screens, the biggest launch to date in China; and Paramount’s World War Z was barred by the censors, despite the producers having made pre-emptive changes to avoid offending them.

Also, the July release schedule was announced, and with four big Hollywood titles opening (After Earth, White House Down, Fast and Furious 6, and Pacific Rim) the U.S. studios might finally get a chance to make up some ground against their Chinese competitors. Finally, the release schedule for December 2013 has been set, and it looks to be a blockbuster holiday, with Tiny Times 1.5, Jackie Chan’s Police Story 2013, mega-director Feng Xiaogang’s Personal Tailor, and possibly Overheard 3 and the star-studded Monkey King (with Donnie Yen, Chow Yun-fat and Aaron Kwok) all set to open within a two-week period. My Chinese correspondent Firedeep predicts that four of these five films will wind up out-grossing Iron Man 3.

Which brings us up to the present. China’s exhibitors and producers are enjoying another stellar year so far, with almost $1.7 billion in grosses in the first half, nearly 40 percent ahead of the first half of 2012. Given the patterns of prior years, I expect a $3.7 billion final tally for the year. It’s worth noting that China is now routinely grossing more each month than it did in the entire year of 2006. At the current rate of growth the PRC market will surpass North America as the world’s largest territory in 2017, and even if growth slows considerably the succession will take place in 2018 or 2019 at the latest.

The week ending June 30th was the third biggest so far this year, at $87.5 million. Tiny Times set new records for the opening day of a local film at $12.4 million, and went even wider than Man of Steel, running on nearly 50 percent of China’s 15,000+ screens. Look for the teen female oriented Tiny Times to wind up at around $100 million when its run ends.Box office week ending 6-30-13

Man of Steel continued strong, with $21.1 million in its second week. Heavy competition from Tiny Times will curtail its grosses, and it will likely finish in the $55 million to $60 million range, which is where many recent U.S. blockbusters have settled.

Star Trek Into Darkness finished up its run right in that same range, with $57 million. To the surprise of many observers Star Trek outperformed in China, earning a healthy 13 percent of its worldwide gross in the PRC. Compare this to, say, Skyfall, Oz the Great and Powerful, and The Hobbit, each of which earned only 5 percent of their respective worldwide totals in China.

In the coming days I’ll write more about China’s first half results and the U.S. studios’  performance. Until then, happy independence day!

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.

Value Creation vs. Value Capture in China’s Entertainment Market


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NYT Room For Debate

by Robert Cain for China Film Biz

June 2, 2013

Over coffee in Hong Kong last week I received some sage advice from my friend Cole Sirucek, a former investment manager for Singapore’s Temasek fund and now a successful entrepreneur. “Mind the difference between value creation and value capture when you do business in China,” he advised.

It’s a distinction that many in Hollywood tend to overlook. It’s fairly easy to create value in China with American entertainment content and ideas. But capturing that value and repatriating it to one’s own bank account remains a difficult challenge.

When the New York Times’ Hilary Howland asked me to write an opinion piece on U.S.-China entertainment trade, I thought value capture would be an interesting topic to explore. The Times published my op-ed essay today, and I’ve provided below a slightly longer version of the same piece.

Capturing the Value of American Movies in China

Transnational trade and investment between America’s and China’s entertainment industries revolve around four fundamental sources of value.

  1. Access to American content, particularly (but certainly not limited to) globally commercial “tent-pole” films, popular television programs, and reality show formats.
  2. Access to American creative and managerial talent, with their proven abilities to generate content and profitably exploit it.
  3. Access to China’s very large, rapidly growing market, soon to be the world’s biggest source of entertainment revenue.
  4. Access to production capital, with America’s investment capacity in relative decline and China’s on the rise.

American legislators, investors and entertainment industry managers must recognize the difference between value creation and value capture. America’s entertainment sector is by far the world’s greatest creator of value for distributors and audiences around the world, and it has traditionally succeeded in capturing much of that value wherever it has operated. Roughly fifty percent of all global filmed entertainment revenue currently goes to American companies.

But whereas Americans have been extremely successful in creating value in China, capturing that value has proven a much tougher challenge. With its protectionist policies, its lack of business transparency, and its indifference to intellectual property rights, China returns to American content owners not more than twenty percent, and probably less than five percent of all the value U.S. content generates there.

This value loss has serious long-term implications for U.S.-based entertainment companies. Until recently Chinese exhibitors and distributors needed American content to build up their domestic industry. American movies brought in the ticket revenues that built China’s movie theaters, and ad dollars from American TV shows helped develop China’s digital distribution infrastructure. But the Americans have missed the opportunity to leverage the value they’ve created, ceding profits and market power to Chinese suppliers who have not only amassed huge amounts of investment capital, but who have also gotten better at creating their own successful content, dramatically reducing their need for American programming.

Unfortunately for the Americans, they need China now more than ever. As our domestic market matures we must increasingly look overseas for growth. And no market offers better growth potential than China: in the next four or five years China will surpass the U.S. in absolute revenue, and by the middle of the next decade it will dwarf the American market.

U.S. government regulators should bear in mind the principle of value capture as they evaluate cross-border transactions. China prohibits U.S. investors from owning entertainment distribution companies in the PRC, effectively neutering their ability to capture value there. U.S. rules present few such prohibitions to Chinese investors, so it is entirely conceivable—and even probable—that more and more of the U.S. entertainment production and distribution infrastructure will come under the control of Chinese owners.

China treats entertainment as a strategically critical industry, and the U.S. should too, by insisting upon more fair and balanced value capture policies.

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.