Category Archives: Opinion

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.

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.

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.

‘Iron Man 3’ – ‘So Young’ Duel Smashes Chinese Box Office Records. Are Hollywood’s Fortunes Turning?

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By Robert Cain for China Film Biz

May 8, 2013

It’s happening so often in China these days that it’s difficult not to sound clichéd, but it was another record-breaking week at the national box office in the 7-day period ending May 5th.

So many records toppled that to list them all would fill up an entire column. To avoid making this article an overly long list, I’ll mention just a few.

First, at $148 million, last week’s cumulative PRC gross easily beat the all-time weekly record of $136 million that was set during Valentine’s Day week less than three months ago.

Although Iron Man 3’s $64 million 5-day gross fell about $10 million short of the all-time single week record that was set by last year’s Titanic 3D at $74.7 million—it did set new records for biggest midnight screenings total with $2.1 million, and biggest opening day with $19 million.

So Young, the Vicky Zhao directed romance, notched the biggest second-place weekly gross ever, with $53 million.

And The Croods became the highest-grossing original (that is, non-sequel and non-pre-existing franchise) animated film in China’s box office history, with a $36 million total as of Sunday.Box office week ending 5-5-13

So all of this is good for China and good for Hollywood, right?

Good for China’s producers and distributors, yes. For Hollywood, it’s hard to get too enthused. This past week was a positive blip in what continues to be a confounding and rather distressing trend for American studio films in China.

There’s no debating that Iron Man 3 is a solid success. Its PRC gross will roughly double the $60 million gross of the year’s second-best Hollywood release so far, Skyfall, and it will become the first Hollywood film in 12 months to reach $100 million.

But it still may not beat So Young, a melodrama from a first-time Chinese director with a production budget that was probably less than 3 percent what Iron Man cost. And So Young won’t even be among China’s top 5 grossers this year.

When you consider that Iron Man 3 is the biggest and best that Hollywood has to offer, that it enjoys the backing of a strong local partner in DMG and an unprecedented level of government support, yet it still struggles to beat a low-budget B-level Chinese language movie, you know something’s not working. Iron Man didn’t break the downward trend for Hollywood in China, rather, it’s the exception that proves the rule.

Chinese audiences like Hollywood movies, but they love Chinese ones. And that’s a major problem for Hollywood.

China’s box office is now up 41 percent year-to-date (36 percent in RMB terms) while North America is down by 11 percent. Chinese movies are getting better, and with $50+ million grosses now routine, they’re becoming much more profitable. Capital is attracted to ventures that offer profits, and Chinese movies, though tricky investments in some ways, are looking increasingly attractive.

Because Hollywood action movies like Iron Man remain extraordinarily expensive to produce, they need growth from overseas to compensate for their shrinking domestic market. China was supposed to be the solution to Hollywood’s math problem, but China isn’t cooperating. In the global market for film financing, U.S.-based projects are going to find it increasingly difficult to compete, unless they radically change their strategies.

Two strategic approaches that offer promising future prospects for foreign producers are:

1. Provide animated films and family fare. These genres have repeatedly gotten special dispensations from SARFT, enjoying prime distribution slots even during holidays and blackout periods.

2. Make local Chinese language films for low to moderate budgets. This is not easy, but at least it’s permitted, and as we’ve seen, a well-made Chinese film can generate windfall profits.

A third strategy, U.S.-China co-productions, remains extremely challenging, and it may still be a few years, if ever, before such productions become common. As Jiang Wei, general manager of Edko (Beijing) Films Limited, puts it:

“The Chinese film industry needs to grow for greater cooperation to be achieved. There is no real in-depth cooperation, in which staff from both countries work together, like what the English and Australian filmmakers have been doing in Hollywood. When China’s film industry grows as an equal partner and the box office becomes big enough, the Hollywood community will have to think of real stories involving Chinese culture and people who are real characters. Only then will real co-productions be possible.”

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 Swoons With ‘Iron Man’ Fever

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By Robert Cain for China Film Biz

May 1, 2013

I didn’t dare say it until now as I’ve been holding my breath for my friends who handled the Chinese production and release of Iron Man 3, but “WOW!” Their picture has just set new PRC revenue and attendance records for midnight screenings with over $2 million, and initial reports indicate it has easily surpassed Transformers 3’s full opening day record of $15 million, with a nearly $20 million haul in its first-day plus midnight receipts.

And after so many disappointing PRC releases of Hollywood films in the first quarter, IM3 now appears likely to become the first U.S. film in 12 months, since Titanic 3D last April, to crack $100 million at Chinese multiplexes.

I’ve gone on record several times here with the opinion that So Young might beat Iron Man 3 in total China box office revenue. But now it’s a real horse race, and I may wind up eating my words.

Barely a year ago it was conventional wisdom that super hero films don’t play in China, because audiences didn’t grow up with the characters and weren’t familiar with their stories. And until recently this was true; the last Iron Man movie grossed only a fraction of what Avatar, Inception, and several Chinese language hits did back in 2010.

But Disney and Marvel have worked hard to edify the Chinese audience with films like Captain America, Thor, and especially The Avengers, and together with the invaluable efforts of their Chinese partner DMG they made Iron Man 3’s release into a major cultural event. Despite increasing their initial midnight screen count from 1,500 to over 2,300, there was scarcely a ticket to be had in most theaters, and commentary about the film has lit up China’s social media networks.China B.O. Perf of U.S. Films

The China-U.S. collaboration on Iron Man 3 faced numerous challenges and risks, and its success was far from a sure thing, but today’s box office results have vindicated the Disney/Marvel/DMG strategy. Congratulations to all involved for boldly and successfully pioneering new ground in the China-Hollywood relationship.

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.

‘So Young’ is So Rich in China

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So Young director Vicky Zhao is ‘crying’ all the way to the bank.

By Robert Cain for China Film Biz

April 28, 2013

Month after month, China’s movie industry has been making major leaps that spell trouble for Hollywood’s creaking business model.  China has repeatedly proved that massive profits can come from tiny investments, while Hollywood’s studios keep making enormous financial bets in the face of rapidly dwindling returns. Where China’s distributors are piling up cash with the new equivalent of a “My Big Fat Greek Wedding” nearly every month, Hollywood has increasingly churned out cash burning duds like Jack the Giant Slayer.

The latest Chinese jackpot winner is So Young, a low-budget youth romance that put its financiers well into the black in just its first two days of theatrical release. After its huge $22+ million three-day weekend debut, and with the major three-day Labor/May day holiday about to start, So Young is now assured of posting one of the biggest 7-day debuts in Chinese box office history.

Based on the wistfully titled Chinese young adult novel “To Our Eventually Lost Youth”  (致我们终将逝去的青春), So Young is the latest in a string of Mandarin language films to employ a formula first made successful by the blockbuster hit Love is Not Blind back in 2011: adapt a successful novel (or in some cases a TV show or even an old American movie) to a contemporary Chinese context; cast popular, young, inexpensive actors; keep the budget low; choose an optimal release date, preferably a major box office holiday; leverage social media like Sina Weibo and WeChat to promote mainly to young female moviegoers; and let the box office magic happen.

The novel centers on a young woman whose romantic flame, played by Mark Chao (Caught in the Web, Black & White Episode), leaves her without saying a word to her, to study at a university in America. Then she falls in love with another young man, played by Mando-pop star Han Geng of Super Junior fame, who also leaves her to study in America. This leads her to a fit of rage in which she climbs to the top of a hill, faces the Pacific and shouts “The United States is an evil capitalist country. I hate you! Return my men back to me!”

I’m not sure this climactic scene was included in the movie, but really, what filmmaker could resist the pathos, the dramatic power, of those lines?

Kidding aside, So Young has been getting some of the best reviews I’ve seen lately for a Chinese film, with a 9.1 rating on movie fan site Douban. And distributor Enlight’s marketing team has generated tremendous buzz. First-time director and popular Chinese actress Vicky Zhao has pulled out all the publicity stops, recruiting many of her celebrity friends to tweet about the movie.

Zhao also reportedly made the Machiavellian move of visiting China’s government distribution authorities and tearfully convincing them to delay Iron Man 3‘s release by five days to give her film a big market advantage during the Labor Day holiday. Her ploy worked, and although I doubt So Young needed the help, it looks likely that it will beat the Marvel/Disney blockbuster in total admissions and revenue.

Whatever happens, there will be plenty of RMB to go around this week for both movies. Last year’s Labor/May Day holiday saw a total national gross of about $36 million. If current trends continue, this year’s holiday could double that amount.

Other films are enjoying excellent results, with Finding Mr. Right winding down its extraordinary run at a cume of roughly $84 million. G.I. Joe: Retaliation will surpass $50 million, and The Croods has benefited from excellent word-of-mouth and will beat my earlier forecast by at least $5 million to finish at no less than $25 million, a decent total for a non-sequel animated feature.

The disparities in box office expectations are becoming more and more stark. $100+ million is becoming an increasingly reasonable target for local Chinese movies, and an increasingly distant dream for Hollywood movies releasing in the PRC. If they want to keep up with the times, Hollywood’s studios ought to start putting filmmakers like Vicky Zhao on speed dial.

To my friends and readers in China, 祝大家劳动节愉快（I wish you a happy Labor 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.

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

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By Robert Cain for China Film Biz

April 26, 2013

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Is $50 Million the New $100 Million for Hollywood Movies in China?

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By Robert Cain for China Film Biz

April 24, 2013

At this time a year ago American film producers and distributors had cause to be exuberant about China. The Chinese box office was booming, new theaters were opening at a rapid clip, and the grosses for Hollywood movies were going up, up, up. Whereas a $30 million gross would rank a film among the top 10 releases in China in 2010, in 2011 the top 10 threshold was $40 million, and in early 2012 $60 million became the new benchmark. American films were the primary drivers of this upward trend.

China had clearly fallen in love with Hollywood movies, and it seemed reasonable to expect that imported American tent-pole films would continue to ride the swelling box office wave.  Pictures like Mission Impossible: Ghost Protocol ($102 million gross) The Avengers ($91 million) and Titanic 3D ($154 million) began fueling the expectation that $100 million totals would soon become routine.

In 2013 the wave has continued to roll, but somewhere along the way Hollywood got stuck in the shallows. China’s box office is still booming, and nearly 5,000 new screens have opened in the past 12 months, yet as Chinese language films have leaped ahead to $80 million, $120 million, and even $200 million grosses, American movies have drifted back to 2011 levels, when the Chinese market was half the size it is now.

Blame shifting audience tastes, blame government interference if you like, but whatever the reason, Hollywood’s releases in China have had trouble cracking $50 million in 2013. Only two U.S. films have reached that level this year: Skyfall at $60 million, and The Hobbit at barely $50 million. Others will certainly get there—G.I. Joe: Retaliation is a current possible candidate—but few if any will reach the numbers the U.S. studios were aiming or hoping for when they submitted their import applications to SARFT.

It’s not entirely clear at this point what Hollywood can do to reverse the trend. Co-productions might be one possible method for Hollywood to recapture market share, but whether China wants co-pros with big U.S. companies anymore is becoming a real issue. Even while announcements of U.S.-China tie-ups were flooding out of last week’s Beijing Film Festival, SARFT was dithering about whether to allow the biggest U.S.-China film collaboration in history, Iron Man 3, a favorable release date during the upcoming Chinese Labor Day/May Day holiday. If such a major, high profile joint-venture can’t get equal treatment with local movies, then the whole idea of the value of U.S.-China co-productions must be called into question.Box office week ending April 21, 2013

For only the fourth week out of 16 this year, a Hollywood film carried the top spot in the Chinese box office rankings. G.I. Joe: Retaliation ran up $33 million in its 7-day opening week, a good showing given the above-mentioned lowered expectations for Hollywood films in general. G.I. Joe slowed down considerably on Monday and Tuesday of this week, with less than $4 million over those two days, so it’s still uncertain that it will reach the $50 million mark.

Dreamworks Animation’s The Croods opened soft with $6.2 million in its first two days, signaling a probable final gross of less than $20 million. This is consistent with China’s pattern of giving short shrift to original animated features. Mostly it’s the sequels and pre-sold animation franchises like The Smurfs that bring in the big bucks in the PRC.

As I had predicted, aggregate national revenue in Week 16 fell short of the total for the same week last year, but not by much, which bodes well for the weeks ahead.

Year-to-date box office sales in China surpassed the $1 billion mark last Saturday, more than a month earlier than it reached that milestone last year. It won’t be a surprise if the PRC posts another 40 percent annual increase in 2013.

Since Iron Man 3 now looks unlikely to bow on its originally intended April 26th release date, the youth romance So Young should open big on Friday without much competition to impede it. Although a few of my Chinese friends think the film’s melancholy tone will dampen its grosses, most believe the film’s star appeal and excellent early reviews will drive it to blockbuster numbers. Check in later this week for more about So Young.

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.

Standing Up to [CENSORED] in China

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By Robert Cain for China Film Biz

April 21, 2013

Last week one of China’s most prominent movie directors, Feng Xiaogang (Aftershock, Back to 1942), boldly seized the opportunity on national television to speak out against his country’s media censorship policies. It’s difficult for western filmmakers to imagine how painful it must be for their Chinese counterparts to contend with artistic repression, but Feng poignantly conveyed this pain in his words and his expressions.

In his heartfelt acceptance speech for the honor of “director of year” from the China Film Directors Guild, Feng grew teary-eyed when he referred to the “torment” that China’s filmmakers must bear. The torment he was referring to was censorship, but in the video of Feng’s acceptance speech the word “censorship” was bleeped out, as can be seen at the 3:51 minute mark

It is it forbidden not only to criticize the Communist Party’s iron-fisted censorship rules, but to even utter the word “censorship” in the wrong context is verboten.

Feng knows all of this, of course; his Film Directors Guild speech was just the latest in a string of public criticisms he’s levied at SARFT and its restrictions on artistic expression.  A lesser director would undoubtedly be prosecuted for such misbehavior, but Feng’s fame and international visibility make him ‘too big to jail.’

The heart of his message is encapsulated in this passage from his speech:

A lot of times when you receive the order [from the censors], it’s so ridiculous that you don’t know whether to laugh or cry, especially when you know something is good and you are forced to change it into something bad. Are Hollywood directors tormented the same way? … To get approval, I have to cut my films in a way that makes them bad. How do we all persist through it all? I think there is only one reason — that this bunch of fools like us love filmmaking — are entranced by filmmaking — too much. (translation excerpted from Rachel Lu’s Atlantic magazine article “Chinese Film Director’s Censorship is Torment“)

Last year the director Lou Ye (Summer Palace, Mystery) took his dissatisfaction a step further: when his dramatic film Mystery was subjected to the censors’ scissors, he tweeted the details of the censorship process to the public in a series of postings on his Sina Weibo account. After weeks of waiting for a decision as to whether his film could be exhibited, Lou tweeted:

I’m waiting for an answer: Can the film be released on time without any changes, yes or no? The answer is so simple but so difficult–[the process] makes me feel disappointed and sad, but I also feel a sense of understanding and support. China’s domestic film industry needs everyone to work together. I totally accept the fact that I’m a director in the age of film censorship. I just want a dialogue [with the authorities], and a dialogue is not a confrontation. There are no winners and losers in a dialogue. There are no enemies.

Both Feng’s and Lou’s pleas were met with widespread approval and support from China’s general public. The job of the censors is ostensibly to promote Confucian morality, political stability and social harmony, and these are noble aims, but in carrying out their edicts they sometimes risk defeating these purposes by offending the sensibilities of their fellow citizens.

As Rachel Lu put it in her Atlantic article, “Many exclaimed the decision to bleep out Feng’s mention of censorship was ‘painting the eyes on a dragon,’ a figure of speech which refers to the finishing touch necessary to bring something to life. In other words, the ironic result may only have rendered Feng’s message more poignant.

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.

Romance is in the Air For Chinese Moviegoers

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Follow me on Twitter @robcain or Sina Weibo @robcain, or connect with me on LinkedInA Wedding Invitation poster

By Robert Cain for China Film Biz

April 16, 2013

When spring arrives in China, romance blossoms not only between lovers, but also at the multiplex.

In 2011 it was Eternal Moment and Don’t Go Breaking My Heart that enticed moviegoers to heart-warming grosses of $31 million (2011’s 8th biggest Chinese language release) and $15 million, respectively.

Last year audiences were smitten with Titanic 3D, which seduced them into a hearty $74 million opening week and a lusty ultimate $154 million gross.

And this spring, romance has been in bloom for a full month, with Finding Mr. Right leading the box office for three straight weeks (grossing $77 million so far as of Tuesday) before it handed off the torch to A Wedding Invitation (分手合约), which led all comers with a $9.8 million score over the weekend.

The Chinese-Korean co-production A Wedding Invitation was directed by Korean comedy master Oh Ki Hwan and stars Eddie Peng (Cold War, Taichi 0) and Bai Baihe (Love is Not Blind) as a pair of star-crossed lovers who, after five years of pursuing divergent lives and careers, finally reunite. Look for Wedding Invitation to gross in the low- to mid-20 millions over the next ten days, until Iron Man 3 grabs many of China’s available screens.

In the mean time there’s lots more romance on the way, with four new Chinese language romances and romantic comedies set to open on the mainland in the next week and a half. These include the youth romance Sweet Eighteen, the romantic comedy Lemon, the China/Taiwan co-pro Ripples of Desire, and most significantly, So Young, the highly anticipated directorial debut of actress and pop singer Vicky Zhao. I expect So Young to give Iron Man 3 some stiff competition when the two films open against each other on April 26th.

Although action remains China’s most popular film genre, romance has been a steady second best in recent years, holding a 17 percent market share in 2012 and roughly the same so far in 2013. Domestic Chinese romances and romantic comedies have been especially potent this year, and because these films are inexpensive and logistically easier to produce than action movies, and because films like Finding Mr. Right are making enormous profits, we can look for many more such pictures to come.Box office week ending 4-14-13

Chinese language titles once again dominated the box office, taking the top four spots in the rankings and nabbing an 89 percent market share for the week. American movies now hold a mere 23 percent share of mainland ticket revenues for the year, a disastrous drop from the 57 percent share they held at this point last year.

Weekly box office nationwide totaled $48 million, down by 43 percent compared to the same week last year, when the juggernaut Titanic 3D swept through China’s cinemas. The week ahead will also be down compared with last year, and then after the massive Titanic comps are out of the way, China’s upward year-on-year trend should continue. China’s year-to-date aggregate box office revenue in 2013 is 44 percent ahead of 2012.

Hollywood’s studios can only hope that their upcoming releases perform better than their films that are currently playing. The only U.S. picture to index well so far this year is A Good Day to Die Hard, which will end its run with $31 million, a total that is impressive only when compared to its weak results in the rest of the world. Oz the Great and Powerful will probably wind up at less than $30 million, and Jack the Giant Slayer will finish up at around $9 million. Whereas U.S. distributors must have been hoping for several $100+ million releases in China this year, the way things are going most of their pictures will be lucky to reach even half that amount.

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.