8 Reasons Why A China Economic Slowdown Won’t Crash Its Movie Business
by Robert Cain for China Film Biz
China’s economy may be slowing down, but its movie business keeps steamrolling ahead.
http://www.forbes.com/sites/robcain/2015/07/27/8-reasons-why-a-china-economic-slowdown-wont-crash-its-movie-business/
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by Robert Cain for China Film Biz
China’s movie import slots can be golden tickets to windfall profits.
http://www.forbes.com/sites/robcain/2015/07/25/which-15-movies-will-get-chinas-remaining-2015-import-slots/
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by Robert Cain for China Film Biz
If ‘Terminator Genisys’ fails in China it will mark a major shift in audience tastes.
China has become a sort of haven of second chances for films that disappoint in North America and Europe. Will it give Tomorrowland the ‘do-over’ that it needs?
http://www.forbes.com/sites/robcain/2015/05/26/can-china-save-tomorrowland/
Follow me on Twitter @robcain or Sina Weibo @robcain, or connect with me on LinkedIn.
Follow me on Twitter @robcain or Sina Weibo @robcain, or connect with me on LinkedIn.
China hold the key to Avengers: Age of Ultron’s global box office fate
Follow me on Twitter @robcain or Sina Weibo @robcain, or connect with me on LinkedIn. 
By Robert Cain for China Film Biz
April 8, 2015
A Formula One race car. A California redwood tree. Superman. China’s box office.
Which one of these is not like the other?
A Formula One car can accelerate to 220 mph but it will eventually run out of gas. A redwood can grow tall and mighty but it will eventually reach its limit and topple to the ground. And Superman can’t keep flying forever—even he needs to take a break once in a while.
But the Chinese box office, like the Energizer Bunny, just keeps going and going and going. Two years ago I wrote in astonishment about the gravity-defying growth of the PRC’s movie business, and two years on the story just keeps getting bigger and better.
Fueled by a record-breaking February 2015 revenue haul which exceeded that of the U.S., and a March 2015 total that was 73 percent higher than the same period in 2014, aggregate PRC box office receipts for the first quarter of 2015 reached the unprecedented total of $1.54 billion. This is nearly 40 percent higher than the Q1 total in 2014, and more than China’s entire annual box office revenue of 2010.
If the trends of previous years hold, Q1 will account for about 22 to 24 percent of the year’s total gross. This would mean a year-end total somewhere between $6.4 billion and $7 billion. From there it will be just a few short years before China surpasses North America to become the world’s top box office territory.
Projected Annual Box Office, China vs. N. America, 2014-2020
Even by China’s extraordinary standards of economic growth, the rise of the movie business has been nothing short of astounding. Just ten years ago China’s moviegoers accounted for barely one in one hundred of all the world’s ticket sales. By 2020 they will purchase more than one in three. 
The impact of this massive growth is already being felt in the rest of the film world, with China becoming an increasingly important source of capital for films made in North America, Europe, and Asia. The global movie industry’s center of gravity is rapidly shifting across the Pacific from Hollywood to Beijing, and the key decisions about the types of films that are made, how and where they’re made, and who they’re made for are inevitably going to be heavily influenced by the Chinese Communist Party.
Of the 70 films released during China’s first quarter this year, 23 grossed at least 100 million RMB (US $16 million), and four crossed the $100 million threshold. The revenue leader for the year so far is the Chow Yun-fat starring action-comedy The Man From Macau II, which collected $154 million for Bona Film Group. March’s box office winner was Disney’s animated hit Big Hero 6, which moved into the #2 spot among China’s all-time highest grossing animated features at $85 million, just behind Dreamworks Animation’s Kung Fu Panda 2, which scored $92 million back in 2011. 
U.S.-made films captured a modest 29.5% of the market in the quarter, the lowest share in several years, though they will begin to make up ground this weekend when Universal’s Furious 7 rolls into PRC multiplexes. Still, given the growing ability of Chinese films to compete on their home turf with Hollywood fare—not to mention SARFT’s careful management of the market—it’s unlikely that American films will ever come close again to taking 50 percent of China’s ticket sales as they did in 2012.
A look at film performance by genre reveals a few noteworthy trends. While action-adventure remains the PRC’s most popular genre, it has given up ground to family and animation films, which have continued to expand their market base over the past several years. As the bulk of China’s new cinema construction shifts away from tier 1 and 2 cities to the hinterlands, and as the market starts to mature, audience tastes will continue to broaden. 
Coming soon: a look at China’s biggest male stars.
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
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.
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.
Follow me on Twitter @robcain or Sina Weibo @robcain, or connect with me on LinkedIn.
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.
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.
Follow me on Twitter @robcain or Sina Weibo @robcain, or connect with me on LinkedIn.
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.
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