Pixar’s Persistent China Drought


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by Robert Cain for China Film Biz

July 3, 2012

Pixar’s newest release, Brave, the tale of a rebellious princess who turns her mother into a bear, had a bear of a time at the Chinese box office last week, clawing out just $3.1 million during its first 6 days of release ending June 24th.

While other studios’ animated feature films have prospered in China’s theaters, Pixar’s films have consistently underperformed there. Brave earned 60 percent less in its first week than Madagascar 3 did in its third, and the Pixar film also trailed far behind a poorly reviewed Taiwanese action film, Black and White Episode I, that opened against it last week.

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While non-Pixar animated films during the past 2 years have taken in an average of about 7 percent of their worldwide box office grosses from China, Pixar’s films have earned less than 2 percent of their worldwide grosses there during the same period. Every one of Pixar’s recent releases has lagged far behind other U.S. animated films.

 

Pixar’s poor performance cannot be explained by inferior distribution or marketing, since virtually all major Hollywood animated films are handled in China by the same two companies, China Film Group and Huaxia, often working together. Rather, there seems to be something about the Pixar stories, and the way audiences perceive them, that leaves Chinese audiences cold. Whatever the reasons, the performance gap is so striking, and so consistent, that Pixar and Disney will want to address their shortcomings in China if they are to compete effectively against their rivals.

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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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.