Co-pros are no-go

This week, instead of virtual reality, some cold hard reality: there’s no pot of gold waiting for you at the end of the Chinese co-production rainbow.

Zhang Yimou’s The Great Wall, starring Matt Damon and co-produced by Universal, Legendary, LeVision and China Film Group, succeeded in eliciting a universal “Meh” from audiences around the world, earning roughly $172 million USD in China (a figure which once would have been astonishing but now is unimpressive) and around $35 million USD in North America. With combined production and marketing expenses in the neighborhood of $250 million USD, and global revenues expected to peter out at $320 million USD (prior to exhibitors taking their share), it’s safe to say that investors in “the biggest-ever U.S.-China co-production” are less than thrilled.

On the bright side, we’ll hopefully be spared a glut of formulaic Great White Hope films set against the backdrop of other historical Middle Kingdom marvels, pimped by puffy Chinese real estate companies with their eager Hollywood studio mascots in tow. Folks actually have to think now, and that’s a good thing. So, let’s elevate that thinking with some straight talk.

First, the unfortunate fact is that…(full post on AWN)

Changchun’s a-changin’

I spent an interesting 24 hours in the historical seat of China’s film industry this past weekend, participating in the Changchun Film Education & Culture Industry Forum on behalf of the Beijing Film Academy’s International Animation & Virtual Reality Research Center.

VR view:  http://vr8.tv:88/3F05D2

Following a tour of the vast site of Changchun’s future cultural industry zone, we provided local officials with recommendations on academic and industry development for the new content era, with my own contributions focused upon immersive media.

VR view:  http://vr8.tv:88/3F05D8

VR view:  http://vr8.tv:88/3F05CA

Chinese Cook-ing

Prior to the recent announcement of Dick Cook Studios’ $500 million dollar deal with China’s Film Carnival, I had the pleasure of attending the China-U.S. Motion Picture Summit on March 25th in Grand Epoch City (Beijing’s Hebei province neighbor), co-hosted by Dick Cook and showcasing an ensemble of Hollywood heavyweights.

The speakers were welcomed by Beijing Film Academy Vice Dean Sun Lijun during a pre-summit luncheon in the BFA’s “Movie Story” restaurant.

VR view:  http://vr8.tv:88/3F057A/

During lunch, I had the opportunity to catch up with my old friend and mentor, legendary Disney producer Don Hahn (THE LION KING, BEAUTY AND THE BEAST), and also to share observations on China with Bruce Hendricks, President of Production at Dick Cook Studios (and fellow Disney veteran).

Summit keynote speaker Cheryl Boone Isaacs, President of the Academy of Motion Picture Arts & Sciences, is a tireless advocate of opportunity and diversity in the motion picture industry… and very accommodating of her first 360-degree selfie.

VR view:  http://vr8.tv:88/3F057D/

The China-U.S. Motion Picture Summit was attended by a mostly Chinese audience of film industry professionals and students from the Beijing Film Academy, with a few laowai such as myself sprinkled in.  Following are some non-comprehensive notes and photos.

VR view:  http://vr8.tv:88/3F054D/

Dick Cook was gracious and affable as always, and kept things flowing smoothly.  Before I departed Disney (the first time) in 2007 to pursue my independent ventures, I embarked on a string of informative lunches with an array of Disney producers and executives.  Don Hahn was the first person to let me pick his brain over a meal, and Dick Cook was the last – so it was a kick to see them both in China on the same ticket a decade later.

Randall Wallace (BRAVEHEART, PEARL HARBOR) offered heartfelt advice during the “Art of Storytelling” panel, noting that his breakthrough came when he thought his career was over and he wrote something that he thought his descendants would want to see (BRAVEHEART).  My favorite comments from Randall were his observation that “a script that doesn’t surprise the writer will not surprise the viewer” and his opinion that “it’s easier to restrain a fanatic than to resurrect the dead”.

Don Hahn killed it (and earned the only standing ovation of the day) with an inspirational micro master class on the animation creative process.  Characteristic of Don (but unbeknown to most) is the fact that he reformatted his entire presentation the day before, once he got a load of the venue’s panoramic screen.

Patrick Frater (Asia Bureau Chief, Variety) did his level best to draw his panelists out during the “Cooperation” panel, but William Feng (VP of Asia Pacific, Motion Picture Association) and his fellows weren’t having it.  So, for those who may be wondering, the answer is “yes”:  China’s booming film industry is rife with problems (and opportunities), and foreign parties hoping to engage it must contend with significant (and shifting) hurdles.

Dick Cook had a chat with his new buddy, Beijing Film Academy Director-General Hou Guangming, during the “Education” panel.

Zhang Xun, former General Manager of the China Film Co-Production Company, had no advice on the “do’s”, but plenty to say on the “don’ts” of Chinese co-productions (memorably citing “82-year-old U.S. flight attendants” as an example of the profound cultural differences between East and West).

Even if you’re not an American screenwriter hoping to pitch your story of an 82-year-old Chinese flight attendant to Wanda, the viability of Chinese co-productions seems bleak, given only 12 in the last 5 years, with decidedly underwhelming results.  Thorny issues abound, creatively and economically.

No surprise to anyone, filmmaker Alfonso Cuaron was a big draw – especially on the heels of GRAVITY, a big hit in mainland China (due in no small part to Sandra Bullock being saved by a Chinese spacecraft).

Cuaron was charming and self-deprecating, noting that his primary motivation for making his next film is usually to pay his rent.

The summit concluded with the “Technology” panel, during which you could feel the disruptive impact that immersive media will have upon the motion picture industry.  Ray Kurzweil’s dictum was prominently cited:  “The greatest change in the history of humanity is the acceleration of change itself.”

An eye-opener for the foreign speakers was the fact that there are currently over 2,000 location-based virtual reality entertainment zones in mainland China, with a concurrent proliferation of low-cost consumer VR hardware. That most Chinese players are currently obsessed with manufacturing the bottles rather than cultivating the wine indicates an area of opportunity for immersive content creators.

IMAX stands to be hit particularly hard (IMHO), and needs to radically re-examine their business model instead of wishfully clinging to “large screens and lasers”.  What happens when home VR can replicate immersive, communal theatrical experiences – complete with an adjustable level of simulated audience response, from “sedate” to “raucous”?

(If anyone from IMAX is upset by this observation, hold a company retreat, write “IMAX goes under and nobody misses us.  Why?” on a board, use the subsequent discussion as the foundation for a revolutionary strategic plan, and thank me later.)

China goes Wilde for “Zootopia”

Disney’s ZOOTOPIA made box office history this weekend when it became the top-grossing animated film of all time in China with over one billion RMB (more than $174 million USD), surpassing the reigning champ, DreamWorks’ KUNG FU PANDA 3.

In doing so, the talented folks at Disney Animation Studios have engaged Chinese audiences in a way that their colleagues at Pixar still fail to. Despite being revered by Chinese animation students, and by mainland companies aspiring to be “the Chinese Pixar” (usually without any real comprehension of what that entails), Pixar has an ongoing relevance problem in China (demonstrating that “quality” alone is perhaps not the best business model). Forbes addressed this struggle in an article last October – charting Pixar’s inability to outperform middling flicks such as PENGUINS OF MADAGASCAR, MR. PEABODY & SHERMAN and THE SMURFS in mainland China – prior to the release of Pixar’s Academy Award-winning INSIDE OUT.

In addition to being a great film by a brilliant director, INSIDE OUT was also a business success by all reasonable accounts: grossing $856.8 million USD worldwide, with $356.46 million USD of that in North America and $500.35 million USD in international receipts. Yet in mainland China, INSIDE OUT only grossed $15.32 million USD: just 3.1% of its international total and a mere 1.8% of its worldwide gross. Only poor BRAVE checks in lower with 0.8% of its worldwide gross coming from China. With Disney’s second-largest theme park about to open in the world’s second largest film market, you can be sure that this resonance gap is a topic of conversation in the Disney board room.

So, what makes China go “Wilde” for ZOOTOPIA? Western studios hoping to appeal to Chinese audiences with the inclusion of superficial “Chinese elements” should note that ZOOTOPIA contains none whatsoever. Based on my observation in Chinese theaters, scrolling through WeChat posts, and conversations with Chinese colleagues, the appeal of ZOOTOPIA in China (and specifically, to China’s young adult females) appears to be: that it is funny but “real” (anyone who has sat all day in a Chinese bank or bureau gets the sloths); Judy is a relatable heroine (particularly with her parents’ pseudo-supportive encouragement to stifle her dreams); and Nick Wilde is a rakishly charming anti-hero (with a wounded heart in need of redemption, no less).

It’s been interesting to see the recent spate of fan art popping up online, depicting a love interest between Judy and Nick (all G-rated, of course – this is China). Nick Wilde appears to have usurped BIG HERO SIX’s Baymax as the ideal Chinese women hope their boyfriends would aspire to. And just as well. Despite earlier online buzz about Baymax being the “perfect boyfriend”, all the ladies in the house should know that Baymax would drive you batty after just a few hours (if that long). Nick Wilde is quicker on the uptake and a lot more fun to hang out with.

Has Disney cracked “the China Code” with ZOOTOPIA? Time will tell. Like most box office successes, the true driving factors are almost always a surprise (if even recognized) and rarely repeatable. In any event, foreign interests will only be allowed a certain amount of success in mainland China. Ever since Chinese media authorities were embarrassed in 2012 by foreign films taking more than 50% of mainland box office receipts, control over global fare has been exerted in increasingly unpredictable and effective ways. Foreign film fortunes will be pegged as a minority percentage of China’s domestic box office for the foreseeable future.

What IS happening is that studios such as Disney are training China’s “cinematic AI”. By way of analogy, Google co-founder Larry Page remarked in 2002 that rather than establishing a search engine, Google was really building an artificial intelligence – one that became “smarter” with your every click and query. Flash forward to 2016, when Google’s “AlphaGo” AI is trouncing human Go master Lee Sedol after being “crowd-trained” via its analysis of 30 million moves from games played by Go experts.

The true beneficiary of ZOOTOPIA’s success is China, who controls the board, controls the players, supports its local teams, and continues to learn and improve with every move. The house always wins.

Big fish

Investors hoping for big returns from China’s volatile stock market should turn instead to China’s film industry, where Stephen Chow’s THE MERMAID has become the biggest box office hit in Chinese history, with more than $382 million USD since its release date of February 8th, beating the previous record holder, Raman Hui’s formidable MONSTER HUNT.

Likewise, multi-national corporations hoping for big returns from their foreign films should take note of the clear preference of Chinese audiences (and officials) for high-quality local content, in an industry which is truly undergoing revolutionary growth.

 

China FX quad core

The intrepid Chris Colman has recently posted a set of four illuminating pieces on the trials and tribulations of China’s current visual effects industry.

On AWN:

Chris Bremble: Leading the Base FX Juggernaut – Part 1

Chris Bremble: Leading the Base FX Juggernaut – Part 2

On SHP+:

Commercial Postproduction in China – Part One: Landscape

Commercial Postproduction in China – Part Two: Clients

Must-reads for anyone doing business with China, doing business in China, or considering either.

The long game

Justin Feldman, a film executive with experience in production and development for companies including CJ E&M, Wanda Entertainment Group and Base Media, has published an insightful three-part op/ed piece on doing entertainment business in China entitled Hollywood Bull in the China Shop: Insights into Entering the Chinese Film Market.

In Part One of the series (Insights into Entering the Chinese Film Market), Justin notes the importance of developing local content for the Chinese entertainment market, and addresses the time and patience required for success in China.

Chinese audiences love HARRY POTTER, STAR WARS and the MARVEL heroes just as much as us, but they’re not going to respond to something slapped together in an attempt to curry favor with either them or the government regulators. This plays into one of my later points, but Hollywood shouldn’t be half-­assing their efforts. Smart executives should see the advantage of doubling down on local language fare. Using Hollywood’s superior skills to set up ambitious, local projects which can stand on their own reflects the kind of long term strategy that the industry should be pursuing.

In Part Two of the series (Finding Money in the Land of Opportunity), Justin covers Chinese project delays and budget overruns, the mainland money hunt and the China’s Everest-sized entertainment market learning curve.  Part Three of the series (How China’s Organizational Structures Impact Filmmaking) provides final observations on the Chinese film industry for anyone serious about doing business in this rapidly-evolving landscape.

Across the series, Justin makes the following key points:

1. China doesn’t need you.
2. You aren’t a local, but that shouldn’t stop you from trying to think like one.
3. Go long with the ball.
4. Every project you do will be delayed and go over budget.
5. There’s lots of money around, but no one seems to know where.
6. The learning curve here is the equivalent to ascending Everest without oxygen.
7. Don’t go half-­ass.
8. China’s problems are inherently generational, not necessarily perceptual.

Check out SSN Insider for Justin’s complete three-part op/ed series.  And be sure to loop back to Your Man In China’s August op/ed piece – So, you want to make a Chinese movie… – for two key pieces of advice to individual creators aspiring to the China market.