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)

Co-pros are no-go

China goes Wilde for “Zootopia”

Zootopia China

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.

China goes Wilde for “Zootopia”

The long game

Go stones

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.

The long game

Warner Brothers to make Chinese movies

WB in China

As reported in China Daily, Warner Brothers is in talks with China Media Capital to produce & distribute Chinese movies for the China market, motivated by the mainland’s booming box office and the increasing demand from local Chinese audiences for high-quality homegrown films.

Homegrown hits such as MONSTER HUNT, which has grossed nearly $400 million USD in mainland China since its July release, are challenging the performance of Hollywood imports and are increasingly satisfying to Chinese audiences. Stan Rosen, a Chinese film expert at the University of Southern California US-China Institute, notes:

The China market is on track to surpass last year’s market by August this year and it’s going to be the biggest market in the world by about 2018-2019, so it makes sense to make Chinese films for the China market. You can’t lose.

Of course, you can lose. But the more important point is that it is now possible to win – and win BIG. Warner Brothers’ interest in Chinese films, financially motivated though it may be, is forward-thinking in a market which currently restricts foreign imports to 34 films a year while local filmmakers & audiences increasingly assert their cultural tastes. Studios that rely on an import strategy of foreign content may soon find themselves on the wrong end of the curve, even if China’s film quota restrictions are further relaxed or removed.

With Warner Brothers already in a joint venture with China Film Group, and their discussions with China Media Capital underway, they seem to have a handle on the ACCESS piece of the China puzzle. It remains to be seen whether WB’s pending Chinese film slate will achieve AFFINITY with Chinese audiences. Compelling characters, engaging stories and local resonance will be essential for success.

Exciting times!


Warner Brothers to make Chinese movies