‘Upside Down’ Flips the Script at China’s Theaters


Follow me on Twitter @robcain or Sina Weibo @robcain, or connect with me on LinkedIn. For info on China Pooch email info@chinapooch.comUpside Down one-sheet

By Robert Cain for China Film Biz

March 12, 2013

Although China’s distributors release roughly as many ‘buyout’ films—that is, foreign films acquired under flat fee purchase arrangements—as they do revenue sharing ‘quota’ films, it’s unusual for a buyout film to lead the box office. This is because quota films are mostly big-budget studio tent-pole pictures with major stars, while buyouts are most often independent ‘B’ level movies with less ambitious commercial aspirations. The numbers are pretty stark: last year the 31 foreign buyout films took only a 5.4 percent share of China’s total box office revenue, while the 34 foreign quota films earned 45.6 percent.

So it came as quite a surprise last week when a buyout, Millenium Films’ romantic fantasy Upside Down, became the first film in nearly a month to outgross box office behemoth Journey to the West: Conquering the Demons. The $60 million Kirsten Dunst-Jim Sturgess starrer, about a sort of interstellar Romeo and Juliet who are separated not only by family but also by the physics of the cosmos, was shot way back in 2010 and had earned only $8 million worldwide when it debuted last Thursday in the PRC.

In its first four days in China Upside Down nearly doubled its worldwide gross, and it also out-earned Journey by a slight margin. Despite its wide availability on pirated BD, DVD and online, it is now primed to become one of China’s highest earning buyout films ever. Top Grossing Foreign Buyouts

WIth the advantage of a full week of screenings versus Upside Down‘s four days, Journey to the West won the weekly box office crown for its fifth week in a row, a feat last achieved by Avatar back in 2010. Aggregate weekly box office was $42 million, a 38 percent improvement over the same week in 2012. Year-to-date, China’s box office revenue is running 46 percent ahead compared to the first 10 weeks of last year.

Although they continue to underperform, American films are at least beginning to gain market share, capturing 44 percent last week thanks mainly to Journey‘s slowing momentum. The Hobbit: An Unexpected Journey stretched its cume to $45 million, and will end its China run next week at around $50 million. Box office week ending March 10, 2013

On March 14th A Good Day to Die Hard will open wide with hopes that it can turn the tide and become the first studio film to over-index in China this year. Resident Evil: Resurrection is set to open on March 17th, presumably in a heavily edited version. Oz the Great and Powerful has been pushed back to April, so the next studio release will be Jack the Giant Slayer on March 25th.

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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No Golden Ring For ‘Hobbit’ in China


Follow me on Twitter @robcain or Sina Weibo @robcain, or connect with me on LinkedIn. For info on China Pooch email info@chinapooch.comHobbit poster

By Robert Cain for China Film Biz

February 24, 2013

With its $5.6 million opening day and projected $18 million 3-day weekend gross in China, The Hobbit: An Unexpected Journey has become the third major Hollywood film in a row—after Skyfall and Jack Reacher—to fall short of expectations in its mainland theatrical release. In its first two days Hobbit managed only a distant second place finish behind the Chinese language hit Journey to the West, which has been in release for two weeks, and its attendance pattern over the course of the weekend suggests a relatively soft theatrical run ahead.

To be sure, an $18 million weekend in China is not in and of itself a bad result. Not many pictures, Chinese or foreign, reach that level in their first three days in the PRC. But for a global phenomenon like the Hobbit, which has grossed nearly $1 billion in the rest of the world, this result comes as a surprise to the downside. As the following chart illustrates, several much smaller territories will generate bigger total grosses for the film.Hobbit Gross by Intl TerritoryEven given the context of the picture’s long-delayed opening and marginal post-holiday release slot, one could have reasonably expected Hobbit to at least match Skyfall’s total China gross of $60 million, but this now appears highly unlikely. Hobbit’s Friday-to-Saturday revenue bump was just 26 percent, among the smallest increases I’ve ever seen for a wide release in the PRC. A total gross in the low 40 millions is looking more probable, a figure that won’t even place the film in the top 20 releases in China this year. That number would be on par with the PRC performance of last year’s John Carter, a picture that grossed barely a fourth of what Hobbit did worldwide.

What is particularly troubling about China’s cool reception to The Hobbit is that it is a 3D fantasy film, a genre format that has consistently performed handsomely with Chinese audiences.  Painted Skin 2, a poorly reviewed Chinese fantasy, earned $115 million in its 2012 China release, and Journey to the West has just reached $160 million and could well surpass Avatar‘s record $209 million China gross. Harry Potter and the Deathly Hallows: Part II earned $63 million two years ago, when China’s market was barely half the size that it is now. Journey 2: The Mysterious Island took in $60 million early last year, and Life of Pi grossed $91 million just a few months ago.

What’s impeding the success of The Hobbit may have less to do with the film itself and more to do with the current mood of Chinese moviegoers. During the past few seasons they’ve demonstrated an increasing preference for Chinese faces in Chinese stories, and a growing impatience with Hollywood blockbusters which, rightly or wrongly, have been criticized for being too much alike.

While it is far too early to sound the alarm for Hollywood’s movies in China, the recent trend ought to be cause for concern at the major studios. China will account for 10 percent of the global box office this year, and given that only those select few Hollywood films with the best perceived commercial prospects are allowed to release there, such releases ought to earn around 12 percent or more of their worldwide grosses in China.  But Skyfall earned barely 5 percent of its worldwide gross in the People’s Republic, and The Hobbit will probably wind up at around 4 percent.

If the next three U.S. releases—Les Miserables, A Good Day to Die Hard, and Oz: The Great and Powerful—turn in sub-par performances, then it may be time for the studios to heed the advice I’ve been freely offering for a long time: focus on what Chinese audiences want, and give it to them. Otherwise, the world’s fastest growing and soon to be biggest movie market will get along just fine without them.

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.

Valentine’s Day Treats Chinese Exhibitors with Love; “Journey” Obliterates Single-Day Record


Follow me on Twitter @robcain or Sina Weibo @robcain, or connect with me on LinkedIn. For China Pooch email info@chinapooch.comKissing Qixi

By Robert Cain for China Film Biz

February 16, 2013

Love was in the air for Chinese exhibitors on Valentine’s Day as date night sweethearts showered local movies with unprecedented affection. Admissions reached a record 4.5 million for the day, resulting in a 190 million RMB ($30.5 million) nationwide gross, a new single-day PRC record that surpassed the previous record of 140 million RMB by 36 percent.

Journey to the West: Conquering the Demons was also red-hot, shattering Transformer 3’s nearly 18 month-old single-day record of 112 million RMB with a 122 million RMB ($19.6 million) tally.

Journey’s 6-day total stands at approximately $80 million (the 7-day cume will be about $92 million), which means it has sunk Titanic 3D’s single-week record opening gross of $74.7 million. If its momentum continues Journey could conceivably surpass the Chinese language film record of $201 million set recently by Lost in Thailand, and even the all-time record of $209 million that has been held by Avatar since early 2010.

The resurgence of Chinese language films at PRC multiplexes is a trend that warrants close scrutiny. In the past two months three Chinese films have exceeded $100 million in revenue, but it has been nearly a year since a Hollywood film did so. During the past six months the top of the box office chart has been dominated by local films.

Top 10, Aug 12 - Feb 13

*Estimate as of Feb 15, 2013; total projected gross to exceed $175 mm

Compare this to the chart for the first six months of 2012:Top 10 First Half 2012

*Still in release as of July 1, 2012; final gross was $115 mm

Chinese audiences have clearly shifted their attention—and their RMB—toward locally made films, and they have become more selective about the foreign films they attend. It’s not that Hollywood movies aren’t performing well in China, it’s just that the billion dollar global blockbusters that dominated China’s cineplexes last year have been underperforming of late.

I’ll explore this topic in more detail next week, after we see how well Jack Reacher performs over the weekend.

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.

“Journey to the West” Smashes China Box Office Records


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JTTW poster

 

By Robert Cain for China Film Biz

February 13, 2013

With its $12.8 million Chinese New Year’s day debut, Stephen Chow’s Journey to the West: Conquering the Demons set a new record last week for the biggest opening day gross ever for a local Chinese film. The Huayi Brothers/Village Roadshow Pictures fantasy-action-comedy ranks second only to Transformers 3 for the all-time biggest opening day in Chinese box office history.

Journey blew past holdovers Cloud Atlas and Skyfall to take first place for the week of February 4-10 even though it had only one day, Sunday, to beat all its competitors for the weekly box office crown. I believe this is the first time such a feat has ever been accomplished in China.

Box office week ending February 10, 2013

Including its results through February 13th the film has now cumed a massive $50 million in its first four days. On Thursday Journey can look forward to a robust Valentine’s Day, a major date night holiday in China, when it could well set a record for the biggest single-day gross ever. If word of mouth doesn’t slow down attendance the picture will match or even surpass Titanic 3D’s $74 million single-week record. A $150 million total cume now looks increasingly likely, and there’s a reasonably good chance at this point that Journey will even surpass Lost in Thailand‘s all-time record gross of $201 million.

At $45 million, aggregate box office for all films last week was down about 8 percent from the same period last year, when Mission Impossible 4 and Journey: The Mysterious Island led the way to a $49 million weekly cume.

Cloud Atlas boosted its cume to a healthy $21.6 million after 11 days, which now puts it in the rare company of only a handful of non-Chinese films that have earned 20 percent or more of their global box office revenue in China. Skyfall notched another $6.4 million to extend its cume to $58 million.

The next Hollywood films to open in China will be Paramount’s Jack Reacher on February 16th and New Line/MGM’s The Hobbit: An Unexpected Journey, which will bow on February 22nd. It will be an interesting test to see how well both films stand up to the Journey in the West juggernaut. Although Hobbit has had an extraordinary global run and is nearing a $1 billion worldwide gross, it is by no means a certainty that it will enjoy equally robust business in the PRC.

Special mention must be made that an international production company, Village Roadshow Pictures Asia, played a key role in investing in and supporting Journey to the West‘s success. This kind of strategic engagement in Chinese language feature films is precisely what Hollywood and other foreign players must pursue if they hope to remain relevant in China.

For the past few years I’ve suggested that English language Hollywood films would soon be eclipsed in China by local language productions. That moment has arrived. With relatively few exceptions, Chinese movies will increasingly rule at China’s multiplexes. For those studios that haven’t made a commitment like Village Roadshow and Fox have to local language Chinese productions, the window is closing on their ability to participate meaningfully in China’s rise to its inevitable position of global primacy in the movie business. For those who still wish to enter the Middle Kingdom in a strategic and sustainably competitive manner, my colleagues and I at Pacific Bridge Pictures stand ready to assist.

[Correction: In a previous version of this story I mistakenly attributed the international co-financing and co-producing role in Journey to the West to the wrong company. I had misinterpreted a conversation I had with Fox International Pictures (FIP)–my mistake, not theirs–and cited that company as a financing and producing partner in the film when I should have properly cited Village Roadshow Pictures Asia instead. FIP’s role with the picture is as a distributor in Taiwan and Malaysia. Thanks to Village Roadshow for kindly pointing out my error. It was an honest mistake; rest assured that I have reprimanded my entire research and fact-checking staff, and I am flagellating myself as I write this. Humble apologies all around.]

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.

“Cloud Atlas” Crosses $20 million in China; Stephen Chow’s “Journey” Will Go Big


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

By Robert Cain for China Film Biz

February 9, 2013

Happy New Year, dear reader! May the Year of the Snake bring you much prosperity and happiness.

Theaters went dark for much of the day on Saturday as China’s population turned its attention to New Year’s fireworks and lion dances.

The multiplexes reopened on Sunday with high expectations—and a massive screen count—for the release of Stephen Chow’s new action comedy, Journey to the West: Conquering the Demons. Based on the Ming dynasty literary classic commonly known as “Monkey” in the west, the film is a silly, slapstick parody with director Chow’s usual collection of rapid-fire gags.

Chow’s prior films Kung Fu Hustle and Shaolin Soccer were major hits both in Greater China and abroad, due largely to Chow’s zany energy as a leading man. This time, however, Chow will be absent from the on-screen action, leaving a hole that will be difficult to fill. Whether this picture works in pleasing audiences—reviews so far have been mixed—it is sure to open big, as it has reportedly racked up very strong presales.  Early word is that it cracked the $10 million mark on its opening day. Don’t be surprised if it goes well over $100 million in the next few weeks.

To accommodate the opening of Journey and four additional films on Sunday, Cloud Atlas and Skyfall will have to relinquish most of their screens, which will effectively slow the remainder of their China runs down to a trickle. Skyfall, as I previously noted, will wind up with $60 million or a bit more. Cloud Atlas, which crossed the $21 million mark on Saturday, could still possibly surpass its U.S. total of $27 million. While $27 million is only a middling tally for a foreign film in China these days, this would nevertheless represent some 25 percent of the movie’s worldwide gross, which would set a new record for a foreign film release in the PRC. The previous record-holder, The Mechanic, earned roughly 22 percent of its worldwide revenue in China in 2012.

Expect these percentages to keep climbing as China accounts for an ever-increasing share of the global box office. Chinese moviegoers’ tastes, which are proving to be very different than those of American audiences, will exert a steadily increasing influence over what movies get made and whom they target.

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.