Warner Bros’ Stellar Year in China


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By Robert Cain for China Film Biz

November 21, 2013

Having already clinched bragging rights as the top-grossing Hollywood studio in China this year, Warner Bros further cemented its lead with the excellent rollout of Gravity on Tuesday.  With nearly $10 million in ticket sales in its first two days of PRC release, and what I’m estimating will be at least a $70 million final tally, Gravity should push Warners’ 2013 total in China to around $325 million.

This will mark the first time I can remember when Warners will have won the China box office crown. It will also reflect an impressive 80 percent revenue boost over Warners’ respectable, albeit distant second-place finish to Fox in 2012. With such box office hits as Pacific Rim, Man of Steel, The Hobbit: An Unexpected Journey and now Gravity, Warners will average about $54 million in ticket sales per picture.

Second place in the studio derby this year will go to Disney, whose Marvel superhero offerings Iron Man 3 and Thor 2 will account for around $175 million of that studio’s $250 million annual take.

Sony and Fox will finish third and fourth, respectively, with Fox falling off precipitously from its record-holding $376 million China gross in 2012. Sony had only one strong release with Skyfall back in January, but it was able to get more films into China than any other studio and in aggregate managed to cobble together more than $200 million in gross revenue. Although Fox got solid results in 2013 from The Croods (a Dreamworks animated picture) and Wolverine, it couldn’t match the huge numbers of last year’s Titanic 3D, Life of Pi and Ice Age 3 and wound up with less than half of last year’s gross with around $176 million.

Universal and Paramount, the two studios with the least active presence in China, received the fewest import quota slots and grossed the least among the majors, with about $159 million and $129 million respectively.

At last week’s box office, U.S. films captured the top three slots, although two of these were buyout films. Thor: The Dark World and Escape Plan won the top two spots for their second week in a row with $24.9 million and $13.3 million, respectively. New entry Red 2 picked up $5.9 million in its first three days, enough to handily beat the $4.9 million that Red collected during its entire run in 2011. Total nationwide box office was $54 million for the week, a 57 percent increase over the same period last year.

Box Office week ending 11-17-13

U.S. films will see another week or two of relative prosperity before the year-end Chinese tent-poles move in and grab all the spoils in December and January. Look for big results from The White Storm, which releases on November 29th, followed by big December debuts from No Man’s Land, The Four 2, Firestorm, Personal Tailor and Police Story. By year’s end, Hollywood movies will land only 2 of the top 10 spots at China’s box office in 2013, down from 7 last year and 6 in 2011.

In aggregate, U.S. distributors will manage only a meager 5 to 6 percent increase in their China sales this year, a mere fraction of the 60 percent gain that Chinese language films have enjoyed. Hollywood has let yet another year go by doing little more than lobbing movies into China from across the Pacific, and it has paid the price with a precipitous drop in market share.

Meanwhile, aggressive non-Chinese players like Australia’s Village Roadshow and Korea’s CJ Entertainment have stepped into the breach with highly successful Mandarin language co-productions. And local Chinese players are rapidly growing in competitive strength, as exemplified by Huayi Brothers’ massive increase in its stock market capitalization to $5.2 billion from only $1 billion a year ago. Many of these companies have established beachheads in the U.S., and it won’t be long before their growing financial strength in China will enable them to compete effectively with the stodgy U.S. studios and further erode their diminishing dominance of the global film 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.

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Can China Save ‘Earth’?


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By Robert Cain for China Film Biz

July 12, 2013

The Will Smith-M. Night Shyamalan sci-fi /adventure After Earth arrives in Chinese theaters today with high hopes for a ‘do-over’ after its weak opening in the U.S., Europe, and the rest of the world. With its reported $135 million production budget and $100 million more in marketing costs, the Relativity Media/Overbrook Entertainment flop needs big China numbers if it is to recover from the financial crater it has dug for its investors.

A China box office recovery scenario has its precedents, as Chinese audiences often go against the global tide. Some stateside under-performers enjoy surprisingly big results in China; Battleship and John Carter, for example, ginned up China grosses of $50 million and $42 million respectively, accounting for 15 percent and more of their worldwide theatrical totals. The reverse is often true as well, as recent releases like Django Unchained, The Artist, and Les Miserables have left Chinese audiences cold and earned 2 percent or less of their worldwide revenues there.Image

Early reports have After Earth winning the PRC box office race on Friday, beating The Rooftop, the romantic musical starring, written and directed by, and featuring the music of Taiwanese multi-talent Jay Chou (The Viral Factor, The Green Hornet). Rooftop opened to an excellent $2.6 million total on Thursday, but suffered on Friday due to competition from After Earth, which took in a projected $4.1 million, including Thursday’s midnight grosses.

The week ending July 7th was a decent, if somewhat uneventful one at the theaters. Tiny Times continued to dominate the field, taking another $24.4 million out of the nationwide total of $65.3 million. As of today the youth-oriented romance has extended its gross to $75 million, which, believe it or not, is considered a disappointment by its producers and distributor Le Vision. The film has been blasted by some of the worst reviews and most scathing weibo criticism in recent memory. Le Vision has responded by moving up the sequel, Tiny Times 2, from December to August 9th, perhaps, in the words of my Chinese correspondent Firedeep, to “cook another meal while the pot is still hot.” The August date will be a competitive one, but December will be even more so, and Le Vision may have lost its nerve about facing the tough December field with such a critically panned franchise.

Last week also saw the opening of Andy Lau’s Blind Detective with a $13.7 million bow, and the winding down of Man of Steel, which has surpassed Skyfall to become the third highest-grossing American film in China this year. Man of Steel has collected just over $62 million to date and will end up around $63 million. And as we previously noted, the U.S.-China co-pro Man of Tai Chi fell flat with just $2.9 million in its opening weekend. That picture has cumed $4.1 million through its first 7 days and will probably fall short of $10 million over its PRC run.

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Looking ahead to next week, on Thursday July 18th Huayi Brothers will release the family comedy Mr. Go, a South Korea-China co-production about a Chinese teenaged girl who inherits a baseball playing gorilla and takes him to Korea where he becomes a star major league slugger. Silly? Perhaps. I expect it will do big business. Tune in here next week and let’s see what happens.

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.

 

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.

‘Tiny Times,’ Gargantuan Grosses


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by Robert Cain for China Film Biz

July 4, 2013

Happy 4th of July everyone, it’s America’s Independence Day. As a person who enjoys the uninfringed right to express my thoughts to readers around the world, I’m extremely grateful for the precious freedom America’s founders fought for and bequeathed to their descendants.

On another note, I’m dedicating this post to Dominic Ng, Bennett Pozil, and their superb team at East West Bank. They recently hosted me at two of their events and made invaluable introductions for me to their clients. Dominic was kind enough to publicly recognize my work in a room full of heavy hitters at his “U.S.-China Economic Relations“ summit at the Biltmore Hotel in downtown Los Angeles. And since Bennett has been after me to keep writing this blog, pleading that in its absence he’s been forced to read trade papers like the Hollywood something-or-other and another thing whose name I forget that starts with the letter “V”, I suppose anyone who gets some use out of this humble publication should thank Bennett for his persistent cajoling.

It has been an eventful month or so since I last wrote about China’s film biz. In recent weeks Iron Man 3 finished its run at $121 million, edging out local romantic drama So Young to become the second highest grossing film of the year so far behind Journey to the West. Dreamworks’ animated movie The Croods defied everyone’s expectations, including my own, running up a magnificent $63 million, which places it among the highest grossing animated films in Chinese history. Legendary East announced a partnership with China Film Group; local film American Dreams in China ran up an $86 million gross; Man of Steel opened on 6,500 screens, the biggest launch to date in China; and Paramount’s World War Z was barred by the censors, despite the producers having made pre-emptive changes to avoid offending them.

Also, the July release schedule was announced, and with four big Hollywood titles opening (After Earth, White House Down, Fast and Furious 6, and Pacific Rim) the U.S. studios might finally get a chance to make up some ground against their Chinese competitors. Finally, the release schedule for December 2013 has been set, and it looks to be a blockbuster holiday, with Tiny Times 1.5, Jackie Chan’s Police Story 2013, mega-director Feng Xiaogang’s Personal Tailor, and possibly Overheard 3 and the star-studded Monkey King (with Donnie Yen, Chow Yun-fat and Aaron Kwok) all set to open within a two-week period. My Chinese correspondent Firedeep predicts that four of these five films will wind up out-grossing Iron Man 3.

Which brings us up to the present. China’s exhibitors and producers are enjoying another stellar year so far, with almost $1.7 billion in grosses in the first half, nearly 40 percent ahead of the first half of 2012. Given the patterns of prior years, I expect a $3.7 billion final tally for the year. It’s worth noting that China is now routinely grossing more each month than it did in the entire year of 2006. At the current rate of growth the PRC market will surpass North America as the world’s largest territory in 2017, and even if growth slows considerably the succession will take place in 2018 or 2019 at the latest.

The week ending June 30th was the third biggest so far this year, at $87.5 million. Tiny Times set new records for the opening day of a local film at $12.4 million, and went even wider than Man of Steel, running on nearly 50 percent of China’s 15,000+ screens. Look for the teen female oriented Tiny Times to wind up at around $100 million when its run ends.Box office week ending 6-30-13

Man of Steel continued strong, with $21.1 million in its second week. Heavy competition from Tiny Times will curtail its grosses, and it will likely finish in the $55 million to $60 million range, which is where many recent U.S. blockbusters have settled.

Star Trek Into Darkness finished up its run right in that same range, with $57 million. To the surprise of many observers Star Trek outperformed in China, earning a healthy 13 percent of its worldwide gross in the PRC. Compare this to, say, Skyfall, Oz the Great and Powerful, and The Hobbit, each of which earned only 5 percent of their respective worldwide totals in China.

In the coming days I’ll write more about China’s first half results and the U.S. studios’  performance. Until then, happy independence 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.