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By Robert Cain for China Film Biz

March 7, 2013

Two thoughts on all the media speculation about whether Iron Man 3 will get official co-production approval from SARFT for its China release this spring:

1. It won’t, in my opinion.
2. I doubt that Disney, Marvel and DMG—the film’s backers—really care.

A while back Disney, Marvel and DMG had to decide whether to comply with the strict SARFT co-production rules, or to sacrifice some of the benefits of official co-pro status and instead optimize Iron Man 3’s potential for the global market. Not surprisingly (as was revealed by a flood of press coverage that included some untimely revelations at last summer’s Comic-Con), they decided on the latter approach, making a film broadly aimed at the global audience.

Although they shot scenes in China last December with local actors—most notably the venerable Wang Xueqi and even a rumored appearance by movie diva Fan Bingbing—the partners’ overall creative and business approach precluded full adherence to the co-production rulebook. Namely, their strategy made it impractical to hire enough Chinese citizens to comply with the rule requiring that one-third of “major actors” be Chinese nationals, and they didn’t incorporate the requisite level of Chinese cultural content to qualify the film as an official co-pro under the Chinese guidelines.

But by working closely with the Chinese government, the co-producing partners have already secured many of the benefits they would have received with official co-pro status. These include:

1. Iron Man 3 will almost certainly enjoy a rare day-and-date release, perhaps even a pre-U.S. release date. Current chatter on China’s movie blogs and chat sites has speculated that the film will release in China in April, before its May 3^rd U.S. debut.
2. The Chinese government has allowed the parties to promote the film since April of last year, whereas most U.S. imports only get a 2-3 week marketing window prior to release.
3. IM3 has enjoyed a high degree of media access in China, at a level usually reserved only for high-profile local films. This has included various web and digital promotional activations; uncensored “leaks” of photos and news items to the national press; and an unprecedented promotional segment on the most watched TV program of the year, CCTV’s annual Chinese New Year Gala.

They managed to work in a smart show of goodwill toward China on the Gala program by presenting the “Iron Man Hero Award” to a young Chinese boy who committed a heroic act worthy of Iron Man’s approval, as pictured below.Though no one at Marvel, Disney or DMG are talking publicly about their plans for IM3 in China, I’ve confirmed through other sources that they’re planning a major worldwide premiere for the film in Beijing, something that has rarely if ever happened before for a major U.S. studio.

The one major thing that these three companies presumably won’t get is the full 43 percent rental fee that comes with co-production status. But with all the other promotional consideration and support they’re receiving, by my estimation they’ve positioned the film to very likely become one of the top 3 U.S. films in China this year. Given the way things have been going for U.S. action films in China lately, that’s a very big advantage indeed.

In any case, for Disney and Marvel theatrical revenue is only a small part of a bigger picture that includes their interests in the Shanghai theme park and their consumer products business in China, both of which I expect will benefit nicely from the exposure and interest they’ve generated in the Iron Man franchise.This is exactly the sort of hustle and outside-the-box thinking that are required to ride the China wave. If Disney keeps up this level of focus and commitment to the market, this could be the year they win bragging rights as the top-grossing U.S. studio in China.

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.