China is currently the second largest global cinema market, and Hollywood films have both relied on and profited by the Chinese box office, even if they have failed at domestically. As China comes to wield more power over the global film market, Chinese moviegoers are raising their demands and expectations on the cinematic experience.

The box office potential for 3D tech provides highly desirable products, and ticket prices accordingly are higher than conventional 2D releases, especially since Chinese audiences have welcomed 3D in recent years.

Of the top 25 films at the Chinese box office so far this year, 20 have been released in 3D.

Moving forward, Hollywood’s producers must understand and respect the audience’s demands, and truly hope that every customer in the market is able to choose a film format that corresponds to their viewing preferences. Hollywood films have gained a large degree of access to China, but conversely, China needs to be represented better in Hollywood as well.

Previously, audiences used to be excited by the presence of Chinese product placement in Hollywood blockbusters, such as the Yili low-lactose milk and China Construction Bank advertisements in the latest installments of the Transformers films series, which was a massive success in the Chinese box office.

Now, however, audiences are beginning to suspect that Hollywood broadly sees Chinese actors as stepping stones into the country’s vast and ever-expanding market. This claim is given weight by the fleeting cameos given to Chinese stars: Fan Bingbing, for example, appears only in the Chinese release of Iron Man 3, while Yang Ying’s role in Independence Day: Resurgence bears no relevance to the story.

The Chinese film industry is still considered a growing recently tapped market, with sights growing past the 100 Billion RMB mark, but the development of the Chinese audience is beginning to slow down. The Chinese film market is expected to be the number one film market by 2020, and Hollywood producers must now transition from Chinese releases with the intent of commercial gain to releases with artistic merit if they wish to keep their audiences enthused.

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2 Nov
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As of late Chinese outward investment (COI) has brought on excitement and concern across the globe.
It’s no different with respect to COI in the United States amongst the public and congress, who has been receiving COI for many years but remains anxious about future Chinese relations.

Of late, much of the focus has been on COI in the entertainment and leisure sectors.
Apprehensions range from Chinese “theft” of IP and American media companies have edited the content of films to suit Chinese preferences. As the Chinese audiences come to wield more power over the global development of the movie market, they are raising their demands on the cinematic experience. Earlier this year, for example, cinema-goers reacted with fury over the release of so-called fake 3-D movies. It is a pressing problem in the US, with Xenophobia rising as a hot topic amongst the 2016 US presidential debates.

Transparency is needed, and maybe America needs to worry more about strenghening ties and international relations than their content being slightly altered. A shift in mindset could be healthy to the American public, as we continue to open up to COI. It can greatly benefit the US by buying into the second largest movie market in the US as Hollywood films have profited in China in recent years, even when they have failed domestically.

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China’s box office has a greater power over Hollywood than ever before. Most of Hollywood’s biggest pictures are reworked for Chinese mass-appeal. Hollywood’s biggest writers are now beginning to write with the intention of flexibility in their scripts for US and Chinese alternate versions. In 2017, it is speculated that China will surpass the U.S. as the highest income generating box office worldwide.

 

Below show some of the major players in Hollywood’s mass movement towards maintaining relations with China in 2016.

Pixar Animations/Walt Disney Animation, had massive success in China with The Jungle Book, Zootoptia, and Finding Dory in 2016. Disney seized the animation medium to seamlessly overdub all of the animation in Mandarin and Cantonese. These three films collectively made $1.18B in the U.S. B.O., and $423.7M in China.

The idea that a Warcraft film was greenlit is a statement in and of itself that China has put a chokehold on Hollywood’s recent output. Of the 6.5 million worldwide World of Warcraft players, over half are located in mainland China. Warcraft, like Pixar and Disney, had purposefully made Warcraft in CGI to redub for Chinese audiences. Warcraft, in both english and mandarin, stars Daniel Wu, who’s fame in China far surpasses his presence in the U.S. Warcraft was released Worldwide during the Dragon Boat Festival weekend in China, where most were off of work and free to enjoy the cinema during the national holiday. This release date strategy was very successful and we should expect to see more Hollywood releases during Chinese national holiday weekends. Warcraft made $47.2M in the US B.O., and $220.8M in the Chinese B.O.

Now You See Me, the 2013 Magician Heist flick was an okay at best U.S. box office return with $117M, but it more than doubled this with $234.8M and was considered a massive hit with China. For this reason alone, a sequel was greenlit with the intentions of catering towards Chinese audiences. Now You See Me 2 made $64.6M in the U.S., but far surpassed that with $97.2M in China.

In the future we should expect more Hollywood studios to join the bandwagon and produce films with the intentions of that generating Chinese revenues.

 

 

 

 

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Wang Jianlin, China’s richest man, is doing everything in his power to incorporate Chinese traditions, worldviews, culture, and business practices into the Hollywood vocabulary. Fresh off purchasing a majority stake in Legendary Entertainment, the LA based film studio, Jianlin has decided to further invest in another studio, Sony Pictures Entertainment. The 61-year old billionaire has stated his ultimate goal is to purchase all of Hollywood’s “big-six” studios through “aggressive acquisitions.”

With hopes of featuring “the China Element” into a greater number of Hollywood big-budget studio productions, Jianlin readily signed a deal with Sony Pictures through his own company, The Dalian Wanda Group.

Sony Pictures Entertainment can expect expect a significantly larger distribution and promotion platform in China and the US, as Jianlin also owns AMC Cinemas, a global chain of movie theaters. For Jianlin and Wanda, it’s an additional boost of Chinese influence in the worldwide film and entertainment industry, as well as a direct deal between a major studio, marketing group, and retail cinema chain.

The agreement will have Chinese conglomerate The Dalian Wanda Group marketing Sony Pictures’ films and co-financing some of its upcoming movie releases in China. The partnership will also further forward Wang’s goal of making his company an international entertainment powerhouse.

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Now that the Summer Blockbuster season has ended, it’s important to analyze the greatest successes in the Chinese Box Office in 2016 to recognize emerging trends in what sells, what doesn’t, and what to look out for.
2016 was a massive year for the Chinese Box Office. We are only three-quarter’s into the fiscal year, and The Chinese B.O. is already populated with 12 of the top 40 highest grossing Chinese B.O. Grosses from 2016 alone. This means 37.5% of the top 40 highest grossing films in China were released in 2016. This number is only expected to rise in forthcoming years, with Hollywood seeking more and more interest in providing content to Chinese audiences.
These films include:
- #1 – The Mermaid ($3.391 Billion)
- #7 – Zootopia ($1.53 Billion)
- #8 – Warcraft ($1.472 Billion)
- #15 – Captain America: Civil War ($1.25 Billion)
- #16 – The Monkey King 2 ($1.2 Billion)
- #22 – Time Raiders ($1 Billion)
- #23 – Kung Fu Panda 3 ($1 Billion)
- #24 – The Jungle Book ($979 Million)
- #29 – Skiptrace ($889 Million)
- #35 – X:Men Apocaly[se ($803 Million)
- #36 – Book of Love ($787 Million)
Six of these films, including The Mermaid, The Monkey King 2, Kung Fu Panda 3, Time Raiders, Skiptrace, and Book of Love, were Chinese domestic productions associated with US-based studios via co-production treaties and agreements. The rise in Chinese/US co-productions increasing financial returns in the Chinese Box office provides the forecast for this trend to continue in the positive direction.

Why did some of these films succeed in China more than others?
- The Mermaid – The largest release in Chinese History, Hong-Kong comedy legend Stephen Chow purposefuly catered this action-comedy towards Chinese audiences
- Zootopia – Zootopia has maintained the highest overall viewer rating on Chinese Movie Rating website, Mtime, in 2016
- Warcraft – Released by Chinese conglomerate the Dalian Wanda Group, owners of Legendary Entertainment, Warcraft appealed to Asian video-game enthused audiences, where is grossed five times that of it’s US counterpart release
- Captain America: Civil War – The Russo Brothers are no strangers to Chinese audiences desired, and clearly recognize the mass appeal of the Marvel cinematic universe in China. They have even launched their own Chinese film Studio in 2016. When directing CA:CW, the Russo’s applied their knowledge of what Chinese audiences are desiring in the ever-popular Marvel film series.
- The Monkey King 2 – Considering it opened the same weekend as The Mermaid, The Monkey King 2’s Chinese Box Office Gross should be considered an overwhelming success. The Monkey King 2 is based on a Chinese classic, Journey to the West by Wu Cheng’en, casting an enormous net for Chinese audiences to see a popular local story adapted on film
- Kung Fu Panda 3 – Don’t be confused, this is not the same Kung Fu Panda 3 that released in the US. That’s right. Dreamworks made two very different versions of the film. One by Dreamworks Animations for English Audiences, and another by Shanghai-based joint venture studio Oriental Dreamworks. An unconventional experiment by Dreamworks, but it paid off in spades.

Clearly, filmmakers are becoming more keen to what Chinese audiences crave, and what sells in the box office. Although 2016 is far from over, the trends of what works and what doesn’t are beginning to unfold before us, and now is the time for production studios to capitalize on this newly tapped market.

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Reel China: U.S. Film Producers are engaging the Chinese [Distribution 175] – The Hollywood entertainment industry is seizing the opportunity of the untapped Chinese market to subsidize once reliable (but now collapsing) forms of revenue such as U.S. DVD sales. U.S. producers are now forming partnerships with Chinese production companies to bypass import restrictions on foreign films.
‘Big Bang Theory,’ other U.S. shows vanish from Chinese internet [Economics 87] – Online consumption of U.S. content has surged 41.9% amongst Chinese viewers through streaming services, drawing people away from Chinese government-controlled TV. To combat this, Chinese government unexplainably removed online programming such as ‘The Big Bang Theory’ with hopes of reclaiming traditional TV viewers. As a result, Chinese internet portals and U.S. studios fear the potential revenue loss from such government behavior.
Hollywood takes global view [Digital Media Marketing 252] – Despite U.S. box office fluctuation, the international box office continues to grow steadily. This shift caused a widespread perspective change in the fundamentals of Hollywood filmmaking and deal making. This newfound globality has caused Hollywood executives to rethink former marketing, co-production, development, casting, shooting, and 3D strategies.
The Cost of Movie Piracy [Economics 102] – China and Russia have the highest piracy rates at 90% and 79% respectively, compared to the U.S. at 7%, leading to an international motion picture industry loss of $18.2 billion in 2005. It is suspected that these towering piracy rates are due to local government restrictions on the number of foreign films released, leaving consumers to pirate content that is otherwise unobtainable.
Reel China: Film and Culture [Distribution 162] –Due to the strong performance of Hollywood films in the Chinese market, China has instated month-long blackout periods in which foreign films cannot be screened. U.S. films are pitted against each other for the Chinese box office’s available (non-blackout) dates remaining.
How China’s Homegrown Biz is Threatening Hollywood’s Payday [Attached] – Due to foreign film blackout periods, the growing popularity of internet content, and changing tastes of Chinese audiences, U.S. film studios must adapt to keep up with the booming local Chinese productions. U.S. studios have reacted to by establishing Chinese production/distribution partnerships to continue marketing films to Chinese audiences.
China Box Office Worth $5 Billion to Studios by 2017 [Attached] – The Chinese box office is estimated to be worth $5 billion by 2017, compared to today’s $2.2 billion. As the Chinese government promotes the creation of high-quality indigenous films, the regulation of foreign films is predicted to loosen. As regulation policies become more liberal, U.S. studios can further contribute to the skyrocketing Chinese marketplace.
‘Transformers’ Earning More in China than U.S. [Attached] – Paramount Pictures has collaborated with China Movie Media Group, China’s largest film distributor, in the release of ‘Transformers: Age of Extinction’ after intentionally adding Chinese elements to the film. Due to the Paramount/CMMG partnership ‘Transformers’ in China surpassed U.S. box office revenue in the first five days of release by $13.5 million.
China’s Alibaba, Youku Tudou Pact on Video Marketing [Attached] – Alibaba will provide big data and technology to Youku Tudou to support online video marketing techniques. The partnership’s goal is to sell merchandising that is featured in online videos by clicking on them without compromising video playback.
China to Require Permits for Foreign TV Shows Streamed Online [Attached] – The Chinese State Administration of Press, Publication, Radio, Film, and Television has announced that foreign TV programming must now acquire permits to be broadcast on Chinese internet portals. This is suspected to be due to the Chinese crackdown on the broadcasting of immoral internet content (closely related to the recent ban of content with stars associated with sexual behavior). To counteract delayed releases due to the new policy, foreign content marketers plan to release full episodes for review by the SAPPRFT far in advance from intended release dates

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Sitting here in Los Angeles, California, I often find myself fixated on one single deliberate thought of my role here at METAN – how to get into China. My usual Monday morning rants start off with a “what if we did this…” or “we need to do that…”, but never do my thoughts deviate far from what needs to be done in China (as evident in nearly all my past newsletters). However, China is a two-way street. And as much as we see this golden opportunity to and make a splash, Chinese companies see us nearly the same – how to get into the US market. Sure, Chinese brands have made their way outside of China to their Asian neighbors or even further west to pockets of Europe. But the United States – this is the major leagues for these companies. This is where they can make a real name for themselves outside of their four walls in China. Whether through an acquisition or just creating a better global marketing presence, Chinese brands making the leap to the US should not take anybody by surprise. The sagging US economy is struggling to pull itself out of this current recession while the booming China market is clearly on the uptick. Think of this as the ‘perfect storm’ for Chinese brands to enter the US market while the price is right. Still, there will inevitably be hurdles with Chinese brands entering the US market and expecting immediate (or any) results. In a recent article by the China Market Research Group, it reports several issues Chinese brands will face when entering the US market.

 

BRANDING It’s no mystery that Chinese companies have traditionally not been great at branding / marketing. Part of this can be attributed to China’s disconcerting view of brand value as a whole. Take a stroll in Beijing’s silk road market and the streets are lined with fake luxury bags, watches, and wallets. A $5,000 designer hand bag can be conveniently yours for a mere price of $5 if you haggle enough with the street merchant. Fundamentally, China business has operated under one rule of thumb – you compete on price. And when costs become the main driver in the business model, the idea of building value in a brand becomes low on the priority list. To succeed in the US, Chinese brands need to recognize (and quickly) that the long-term requires brand value and not just growing revenues at marginal profits.

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One cultural difference I have grown to appreciate most about China is its attitude and focuses in the service sector. The premiums that typically come at a cost regarding service industries in the US are traditionally complimentary in China, and the consumer experience is a stark difference of night and day as a result. Many experts beleive it is due to the difference in population size, benefiting Chinese employers with a greater pool of candidates to select from when hiring for consumer-centric service industries. I can rattle off an endless list of examples, but here are just a few that come to mind to illustrate my point. When I go to a barber shop in the US, I miss the complimentary head and shoulder massage I’ve become so accustomed to at any similar location in China. I miss the complimentary hair wash, shampoo, and conditioning, that is fully included as a part of your experience. In the US, these bonus premium services would certainly come with a price tag, and most likely, a less than enthused employee. Going to a restaurant in the US? Good luck finding six beautiful greeters at the door like you would in China. Not to mention, the time restaurants spend to prepare a meal in China is remarkably faster than most regions of the US. In China, you rarely have to wait more than 10 minutes for your meal to be served after the waiter has taken your order. How about mandatory tips and sales tax? Don’t think so. Sure, you can, and should, tip based on your conscience like anywhere else, but a tip is perceived as a reward for a job well done, not an expectation. In comparison to the US, Chinese services have notably prioritized their clientele’s best interest and experiences, opposed to profitability. If Hollywood were to adopt these philosophies, the movie-goers experience in the US and China is limitless!

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Western media coverage of China is typically biased towards the negative, and rarely portrays the country for what it really is. As someone who sees both sides of it on a regular basis, I’m stunned by how convoluted the Western portrayal is of Chinese life and culture can be. Sure, some of the topics the news reports about ARE very real… Pollution in Beijing is a legitimate public health concern, and the overt displays of materialism from China’s wealthy and social elite are nothing short of a vapid reality, But despite these negative aspects which pollute western airwaves, there is so much good in China that is unfortunately spun the wrong way (or neglected entirely) by Western media.
To begin, the communist party is NOT monolithic, it is in fact very divided via factions (liberals, conservatives, etc.), who fight for their ideas to be represented and implemented. The governing body is really communist only by name and title, and crises are handled cautiously and effectively.
Additionally, political correctness as the West knows it, is nonexistent in China. Many foreigners mistake this particular cultural aspect as racism, but it is not rooted in hatred of others, but being truthful about one’s feelings.
Also, Western media always overlooks China’s incredible social diversity. There is so much more to China than Beijing, Shanghai, and their respective populi. Western media has a tendency to put the spotlight on China’s wealthy elite with western cultural affinities, while leaving the rest of the population in the shadows. A significant amount of people live in rural China, which is rarely a topic of interest to western platforms. When rural China is in the news, it is almost always a negative story about the region’s uncomfortable living conditions. Although sanitation is an obvious concern, it is not littered with starvation and poverty the way the Western media portrays, and is filled with an immensely diverse population from all walks of life.

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Without further ado, here is my third and final list of tips and tricks for people emigrating from the USA to Beijing. I hope it was of great help, and your travels are seamless.

 

- When commuting via Subway, avoid LINE 1 during rush hour, unless you wish to be packed like a can of sardines
- Rent, Internet, Cable, etc. bills are not paid in monthly installments in China. They are most commonly paid for three months at a time in advance, which can be a nasty surprise if you planned your finances on the monthly billing system popular in the U.S.
- Learn how to pronounce some popular Chinese dishes so you know what you’re ordering. Americanized Chinese food and Authentic Chinese food are worlds apart. Being familiar with a handful of – Chinese cuisine dishes will make eating much less stressful.
- If you are a regular coffee drinker, import it yourself. Premium coffee is not popular in China the way it is in the western world, and may be hard to find.
- If you’re a regular smoker, welcome to heaven. If you aren’t, prepare to constantly second-hand smoke. Smoking is legal almost everywhere here, including bars, restaurants, gyms, hotels, elevators, etc.
- If you miss your peers in the U.S., invest in a proper VPN Client to log into Facebook.
- Pollution masks with an authentic HEPA filter are invaluable, but a major hassle to travel with. The medical filter masks you see most people wearing are mostly ineffective.

http://www.myhealthbeijing.com/children/pollution-masks-which-are-best

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