“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.

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“Skyfall” in China: Good, Bad or Ugly?


Follow me on Twitter @robcain or Sina Weibo @robcain, or connect with me on LinkedIn.50 years of James Bond

By Robert Cain for China Film Biz

January 31, 2013

Skyfall finished its opening week in China last Sunday with a $35 million 6-day gross, a figure that only a handful of films have matched or exceeded in their PRC debuts.

So does that mean Skyfall can be considered a hit?

I wouldn’t say so.Box office week ending 1-27-13

Given the China results of prior Bond films Casino Royale and Quantum of Solace, given Skyfall‘s massive success outside of China, and especially given the $102 million total mainland gross of last January’s comparable action film Mission Impossible 4, I believe Skyfall would need to reach $130 million in its China run to be considered a success there.

But given its current trajectory after 10 days in release, with a second week drop so far of nearly fifty percent, it seems likely the film will wind up with only about half that $130 million benchmark number.

So if my projection is accurate, Skyfall will earn less than 6 percent of its worldwide box office receipts in China. The average Hollywood film released in the PRC this year will earn about 11 or 12 percent of its worldwide revenue in that market.

Consider Casino Royale and Quantum of Solace. When those films played in China, both were solid hits that ranked among the top 7 or 8 grossers in their respective years. Quantum of Solace grossed a then-impressive $20 million back in 2008, at a time when China’s total annual box office was only a fifth the size that it will reach in 2013. By that metric, Skyfall ought to gross at least $100 million.Skyfall vs comps

For reasons I expressed in an article last week, Mission Impossible 4 is a reasonable and logical comp for Skyfall, and because the Chinese market has grown 30 percent since last January, Skyfall ought to be running 30 percent ahead of Mission Impossible‘s 2012 numbers. But in fact Skyfall is now running about 30 percent behind.

So I don’t think Skyfall can rightly be termed a hit in China. Not “ugly,” not “bad,” but not very good either.

In other box office news, the latest installment of the “Pleasant Goat” serties, The Mythical Ark, opened with $10 million, about 15 percent off from last January’s installment. The franchise is showing its age, but since the films only cost a reported $3 million each to produce and they consistently gross at least $20 million, it’s likely that Toonmax will continue to churn them out.

Another underperforming opener was Mysterious Island 2, the sequel to the 2011 hit horror flick. The prior film wound up with a $14 million PRC gross, but the sequel scared up just $920,000 in its 2-day weekend debut.

The smash hit Lost in Thailand finally ended its run on Sunday with just over $200 million. The $3-4 million budgeted comedy became only the second film in Chinese box office history after Avatar to exceed $200 million, and only the second non-U.S. film (after Japan’s Spirited Away) ever to gross over $200 million in its home territory.

All told, cumulative box office for the week was $60 million, a ten percent shortfall from the same week last year.

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.

Superhero Movies’ Powers Are Strong—But Not Yet Super—in China


by Robert Cain for China Film Biz

May 9, 2012

China joined the rest of the world last weekend in the Avengers phenomenon, pouring $19 million into the ocean of cash that the film has collected around the world.  That’s a big opening weekend for the movie, third only behind its premier weekends in the U.S. ($200 million) and the U.K. ($25.4 million). In its first two days Avengers’ China run exceeded the entire runs of prior Marvel superhero movies Thor and Captain America, which each earned a total of $14 million in China.

As I pointed out back in December, Thor and Captain America under-indexed in China because the country has no tradition of superhero stories, and apparently not as much interest in these types of films as there is in other markets. “Green Hornet” fared better with $21 million, mainly because it featured a popular Chinese actor, Jay Chou, as the co-star.

So does the Avengers opening signal the start of a new era for superhero movies in China? Should the team at Marvel be popping champagne corks and swinging from the rafters (or whatever superhero movie execs do) to celebrate their ascendance to China’s box office throne?

Not yet. Not hardly.

While a $19 million opening is very good for China, it’s not super-sized; two other Hollywood films—Titanic 3D and Mission Impossible 4—have opened to bigger numbers so far this year.

And compared to its spectacular reception in the rest of the world, Avengers’ start in China can only be termed as “very good,” but not “great.”

In fact, when measured on a relative indexing basis against those other movies, Avengers will likely wind up as an under-performer in China.

Let’s take a look at the numbers. Last year, American films overall earned 5 percent of their total global box office revenue in China. Marvel’s superhero movies under-indexed there, with Captain America earning 3.8 percent of its global box office figure in China, and Thor earning 3.2 percent. Green Hornet was the only superhero movie to over-index, with 9.2 percent of its global take coming from Chinese ticket sales.

It appears a safe bet that Avengers will wind up with at least $50 million in box office receipts in China, which would qualify it as a hit movie there. But as we saw in a recent ChinaFilmBiz analysis, this year Hollywood movies have been earning more than 10 percent of their global revenue in China. Assuming Avengers goes over $1.5 billion globally, and that it takes in $50 or $60 million in China, its China share of the worldwide total would barely exceed 3 percent, a rather disappointing performance.

Were Avengers to index at the average level achieved by other films Hollywood in China this year, it would sell $150 million or more in tickets in China. That’s not going to happen.

But Marvel clearly has China on its mind, with its plans to co-produce Iron Man 3 together with Chinese production company DMG. No doubt they’ll cast a  Chinese lead or two, perhaps even Jay Chou. Others looking to capitalize in China on the superhero genre would do well to consider doing the same, or perhaps even creating new Chinese superhero characters with global appeal.

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’s Box Office Surges Ahead; On Pace to Nearly Double Japan This Year


By Robert Cain for China Film Biz

February 28, 2012

Several weeks ago I published an article asserting that China has surpassed Japan in box office revenue and is now, on a week-to-week and month-to-month basis, the 2nd largest theatrical market in the world after the United States. I forwarded this article to friends and acquaintances at several publications, including “The Los Angeles Times,” “The Wall Street Journal,” “The Wrap” and “The Atlantic Monthly.” To my disappointment and dismay not one of them picked up the story. I suspected that they and others doubted my figures were correct.

Over lunch in early February an acquaintance who runs international production for a major Hollywood studio confirmed my suspicion. He said he’d spoken with several of his executives and they told him that the numbers I was relying upon were wrong.

So I went back and double-checked my figures, and during the past few weeks while traveling in China I conducted further investigation. Having carefully studied the data and having interviewed a handful of experts in China, I must report that the studio executives were right, that my numbers were off. But not in the way they think.

My numbers for China, it turns out, were low; China is ahead of Japan by an even wider margin than I had thought, and it has been ahead for quite some time.

One major reason for the discrepancy is that I had failed to take into account China’s massive box office skimming. As I reported last week, according to most of the experts I consulted, as much as 40 percent of movie ticket revenue in China never makes it back to its rightful recipients, the distributors. If the ticket sales don’t get reported then they’re not captured in SARFT’s official figures, and so SARFT’s figures are too low.

But even if we disregard the skimming and rely on official figures—after all, the number that distributors care about is the amount that goes into their coffers—China still easily beats Japan by virtually every measure.

Comparing officially reported weekly box office results, China beat Japan in 7 of the first 8 weeks of 2012 (it also beat Japan in each of the last 3 weeks of 2011).  All told, China’s total gross for 2012 so far is 64 percent higher than Japan’s, at US $426 million vs. US $259 million.

2012 Weekly Box Office Results, China vs. Japan

Source: Pacific Bridge Pictures research

If skimming was indeed equal to 40 percent of gross receipts last year, then China’s real box office total for 2011 would have been close to US $3 billion, far ahead of Japan’s reported $2.2 billion.  While there may be some under-reporting in Japan, it is almost certainly modest compared to China’s, and there is little doubt that China has been out-grossing Japan for several quarters and possibly longer.

And why shouldn’t it? China now has more than 10,000 movie screens, with the number increasing daily. Japan, on the other hand, has only 3,400 screens and virtually zero growth. China’s box office for the first 8 weeks of 2012 was up by 49 percent relative to the same period in 2011; Japan’s was down by 3 percent .

Most important to those Hollywood studio executives I mentioned is how their own films fare in each market. And by this measure there’s no contest: China beats Japan hands-down. Each of the last ten Hollywood films to play in both markets earned more in China than in Japan, in most cases a lot more. The aggregate gross for the ten films in China was US $330 million versus $175 million in Japan.

Source: Pacific Bridge Pictures research (Note: Mission Impossible 4 ultimate China gross estimated at $107mm)

Assuming that Japan continues at its zero-growth pace for the rest of this year, and that China reaches $2.8 billion in officially reported revenues, the actual, unreported totals for 2012 would put China at $3.9 billion (2.8 billion plus 40 percent) and Japan at $2.2 billion.

So the question of whether China is bigger than Japan has been long settled. The real question now is how long it will take China to catch up with the U.S. It will happen faster than most realize, and when it does it will be too late for many to do much about it.

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’s Box Office: Hollywood Films Regain Dominance


[Note: If you’re looking for the article “China’s Film Investors Flex Their Financial Muscles in Hollywood” you may have been directed to the wrong link. Please click here for that article]

By Albert Wang for China Film Biz

February 8, 2012

For the second week in a row, Mission: Impossible 4 Ghost Protocol reigned at the Chinese box office, grossing a reported $39.4 million and bringing the film’s cumulative 9 day gross in mainland China to just under $56 million.

Out of the $24.3 million that MI:4 grossed over the weekend in the foreign theatrical circuit, $19.8 million came from China. To put the numbers in context, MI:4 grossed a mere $7.4 million in its opening weekend in Japan in December of 2011. Until recently, Japan was the world’s 2nd largest movie market. It took MI:4 film little over a week in China to gross as much as it did in a full month in Japan.

In second place was Sherlock Holmes: A Game of Shadows, which continues its decent showing in China with a gross of $3.56 million over the week, bringing the film’s 22 day total to $27.7 million.  Meanwhile, both The Viral Factor and All’s Well, Ends Well 2012 held on to the number three and four spots, grossing $2.9 million and $2.4 million, respectively.

The lone newcomer into the top five was Jonnie To’s Life Without Principle, which earned a rather mild $2.3 million over three days to claim the number five spot.

With the exception of To’s Life Without Principle, there was relatively little movement in the box office top 10.  And so this week it is worth noting the complete dominance Hollywood films have had in the Chinese market, with M:I 4 and Sherlock Holmes together accounting for a cool 75% of the mainland Chinese box office this week.

This dominance by a pair of Hollywood films comes at a time when it seems that just about anyone and everyone with deep pockets in China is looking to develop a film fund.  This week saw the announcement of Bruno Wu’s $800 million Harvest Seven Stars Media Private Equity Fund, as well as the announcement of a Chinese government-backed film fund to be overseen by China Mainstream Media National Film Capital Hollywood Inc. (HSSMPEF and CMMNFCHI, respectively; good luck remembering those acronyms), the U.S. division of China National Film Capital Co. Ltd.  Even retired NBA star Yao Ming has been reported to be looking into developing a film fund in recent weeks.

The purported goal of most if not all of these film funds is to produce Chinese films with a more global appeal.  And yet as we see from the Chinese box office this week, Chinese films have yet to find a way to effectively compete with Hollywood films on their own turf.   This is due to a wide range of issues, from overly restrictive government regulations, to a lack of quality source material being developed in China for the big screen, to Chinese audience’s demonstrated preference for Hollywood’s film offerings.  However, I’d like to posit another problem a globally appealing Chinese cinema faces.

China, in spite of all the capital being thrown at film funds of late, lacks the necessary star power to promote its films globally.   M:I 4 had Tom Cruise, Holmes had Robert Downey, Jr.  Without those stars headlining their respective films, it’s difficult to imagine either film performing as well as it has on the foreign theatrical circuit.

And so in spite of all the promises the various film funds have made regarding a future global Chinese cinema in the making, a big question remains:  Who will be the Chinese Tom Cruise?  The Chinese Robert Downey, Jr.?  Or the Chinese Shia Lebouf?

Albert Wang is an aspiring producer of US-China film co-productions who joined the Pacific Bridge Pictures team in December, 2011. His previous blog on US-China films can be seen at hollymu.com.

China’s Box Office: Bird Soars with ‘Mission 4’


By Albert Wang with Robert Cain for China Film Biz

February 3, 2012

In mainland China, the seven-day-long Spring Festival is a holiday break to commemorate the Lunar New Year, and it is also the time when many make the long and arduous trip back home to celebrate with their families and relatives.  For about a hundred million  Chinese migrant workers this holiday break is one of the few times during the year they ever have a chance to visit home.  And so as one might expect, the Spring Holiday is an incredibly difficult travel season, regardless of whether one is traveling by plane or train.

If the week’s box office numbers are anything to go by, mainland Chinese are also increasingly taking time out of this hectic annual holiday break to enjoy movies at their local cinemas.  Weekly box office was up by about 25 percent (in US dollar terms) over the comparable holiday week last year, with a total of $62 million. The month of January was very strong, running 43 percent of January, 2011, though it should be noted that this is not a direct comp, since last year’s Spring Festival didn’t occur until the beginning of February.

The big winner for this week was the Brad Bird directed action picture Mission: Impossible 4 – Ghost Protocol, which in a span of only two days took in an estimated $15.8 million at the Chinese box office, or well over half of M:I 4’s $25 million weekend total on the foreign theatrical circuit.

Paramount claims that Mission: Impossible 4 took in a haul in China that was five times greater than that of 2006’s Mission: Impossible 3 opening weekend in China.  But this feat may not seem quite so impressive when one realizes that China’s box office has grown by more than six-fold during that period.

Rounding out the top 5 for last week were Sherlock Holmes: A Game of Shadows, The Viral Factor, All’s Well Ends Well 2012, and The Great Magician.

During the week-long holiday, the mainland Chinese box office totaled 390 million yuan (roughly $US 62 million), significantly higher than the Spring Holiday Week numbers from 2011 and 2010 (320 million yuan and 340 million yuan, respectively).

What makes this year noteworthy is the fact that non-domestic films dominated what has traditionally been a solid week for domestic Chinese films.

Typically, the Lunar New Year ushers in a selection of ensemble Chinese films headlined by big Chinese stars.  The All’s Well Ends Well series, for instance, is an example of this distinct genre; the franchise dates all the way back to 1992, when the original All’s Well Ends Well featured a massive Hong Kong cast that included Stephen Chow, Maggie Cheung, Leslie Cheung, Raymond Wong, Sandra Ng, and Teresa Mo.

Just last year, the Spring Holiday week (Feb. 2-Feb.8, 2011) saw three Chinese films – All’s Well Ends Well 2011, My Own Swordsman, and What Women Want – take the top spots at the Chinese box office.

This year’s Spring Festival Holiday, however, saw fewer big domestic films in this genre.  The week’s top grossing Chinese language film, for instance, was the Hong Kong-produced The Viral Factor, which released a week prior to the Spring Holidays and had no thematic connection to the Lunar New Year celebrations.  The only newly opening non-Hollywood films to crack the top 10  last week—the Taiwan-made Perfect Two and the Shangjing-directed Fan Ju Ye Feng Kuang—opened to less than $5 million each.  The latter was in fact a Chinese New Year film directed by the director of My Own Swordsman, a comedy that played to big opening numbers last year.

It remains to be seen whether 2012 marked a fundamental shift in box office behavior over the Chinese New Year Holidays. It may be that the Chinese government prefers to see domestic films dominate this culturally important holiday week, and would thus implement policies to favor domestic films.  This could have been the reason that M:I 4’s release came at the tail end of the holiday. Then again, with so much money being spread around during the Spring Holidays, party officials may not mind sharing in the profits that a Hollywood blockbuster like M:I 4 or Sherlock Holmes can rake in.

Albert Wang is an aspiring producer of US-China film co-productions who joined the Pacific Bridge Pictures team in December, 2011. His previous blog on US-China films can be seen at hollymu.com.

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.