“Avengers: Age of Ultron” Clocks Second Best China Opening Ever With $156 Million

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Age of Ultron dominated China’s box office with a massive $156 million opening week, and the 3rd best PRC weekend ever at $85 million.

Starting today I’ll be publishing on Forbes’ website with the goal of reaching a wider audience. Please click here for access to my latest article, China’s Pivotal Role in Hollywood’s Billion Dollar Movie Club.

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By Robert Cain for China Film Biz

January 2, 2015

Happy New Year’s wishes from Pacific Bridge Pictures!

2014 was an extraordinarily busy year, a bit too hectic for me to offer my regular posts, so I’m taking advantage of the holiday lull to make up for my absence and offer you a handful of reports this week on the current state of the Chinese film business. And if you’re interested you can read on to the end of this missive for a brief overview of the events that kept me busy.

China was once again a major bright spot in an otherwise challenging year for the global movie business. While revenues for U.S.-made films declined in North America, Europe, Russia and other places in 2014, in China they rose by 33 percent to just over $2 billion. Most of the studios enjoyed the bounty, especially Paramount, which jumped from its last place ranking in 2013 to first among the majors, largely on the strength of the record smashing $320 million gross of Transformers: Age of Extinction.

Although no other film came close to reaching the Transformers haul, most performed well, with the average studio picture grossing $65 million, a huge leap from last year’s $40 million average. Interstellar, X-Men: Days of Future Past, Dawn of the Planet of the Apes, and Captain America: The Winter Solider all exceeded $115 million. Only two films—The Monuments Men and Ice Age: The Meltdown—failed to crack the $10 million threshold.

American sci-fi & fantasy titles drove nearly two-thirds of all the Hollywood majors’ ticket sales in the PRC, a giant shift from 2013 when they accounted for only 20 percent of the studios’ receipts. And U.S. animated films continued the impressive run that I noted back in March, nearly doubling their cumulative annual gross from 2013 to $273 million.

As the Middle Kingdom’s share of the worldwide entertainment pie continues to expand, Hollywood is becoming increasingly reliant on China’s moviegoers, financiers and government policymakers to sustain its business. China now accounts for 1 of every 8 box office dollars spent around the world each day, up from 1 of every 125 a decade ago. By 2020 China’s share will likely exceed 1 in 4. More and more the studios’ relevance and prosperity will depend on their skills in navigating the Chinese marketplace.

As I mentioned above, 2014 was an extremely busy year for Pacific Bridge as we aided a dozen great clients on both sides of the Pacific in finding business and financial partners, entering new markets, raising capital, developing creative projects, and generally catalyzing business opportunities between China and the rest of the world. We are grateful for the opportunity to serve you.

As for me, 2014 was an excellent year for deepening some great business partnerships ((you know who you are) and for some valued professional successes. A screenplay I wrote was chosen as a top 10 Finalist (from 7,511 entries) in the Academy of Motion Picture Arts and Science’s Nicholl Fellowship in Screenwriting competition, and with investors circling I expect we’ll get the movie into production this year. And together with partners I raised development funds and production financing from Chinese investors for three U.S.-based independent feature films, the first of which wrapped principal photography in November. More on those in a subsequent post.

As always, I welcome correspondence from China Film Biz readers, especially those seeking help in understanding and exploiting opportunities in either direction across the Pacific. Drop me a line if you’re ready to make 2015 the year you strike it big in the China entertainment trade.

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.

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

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 19^th 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.