The eighth installment of the Vin Diesel powered Universal’s Fast & Furious franchise is on route to gross over a billion dollars worldwide. Outpacing its competition by a fair margin the visual effects laden and personality driven film is running to full houses across China taking three out of every four show slots. At just over half way point the film grossed $319 million in the Chinese market alone and is likely to be the biggest import in that market.
In Hollywood over the last few years, the Chinese real estate giant Wanda with its assets pegged at $115 billion, acquired Legendary Entertainment for $3.5 billion in cash. This was in addition to owning the theater-chain AMC Entertainment and a deal to finance films with Sony Pictures. Wanda owned AMC’s then when on to acquire Carmike, British exhibitor Odeon-UCI and the NordicCinema Group last year making it the biggest exhibitor in the world.
Close to Wanda’s heels, China's tech titan Alibaba announced a minority stake in Hollywood director Steven Spielberg's Amblin Partners to produce, distribute and finance films globally. It’s chairman Jack Ma said that his company will invest $7.2 billion over the next three years in Hollywood pictures. In addition Tencent invested in movie studio start-up STX Entertainment. Lionsgate and Regency Enterprises too have Chinese funding for a slate of films. IM Global is owned by Tang Media and China’s Fundamental Films owns 28% of EuropaCorp.
European, Japanese, Middle Eastern and Indian companies have spent big in Hollywood. But China is different.
Over two decades ago in 1994 in an effort to boost its ailing cinema theatres the completely closed Chinese market agreed to import a Hollywood film, ‘The Fugitive’ in an unprecedented revenue-sharing deal. This was the first time in 45 years that Hollywood had been let into China. The film grossed an impressive $3 million and opened the door for future business deals.
After a landmark 2012 deal signed by vice-president Joe Biden and premier Xi Jinping, and urged on by the dictates of the World Trade Organization, China now imports 34 foreign films a year through similar deals. The allure for Hollywood is the billion potential ticket sales. For China, home to 41,179 cinema screens, is widely predicted in the next few years to surpass even the US as the largest film market on the planet. Last year, growing at a fast pace the Chinese box-office takings at $6.6 billion were second only to a relatively flat US box office of $11.4 billion.
Foreign grosses contribute to 42 per cent of China’s total 2016 box office takings, despite the Chinese movie quota system that only allowed 20 per cent of annual releases to comprise imports. The quota is intended to fend off competition for domestic filmmakers. The 89 co-productions approved in 2016 are treated as domestic films and enjoy greater flexibility in marketing and distribution including better revenue split for the foreign studio. Wanda's billionaire chairman Wang Jianlin created a stir in Los Angeles last October by announcing a 40 percent subsidy for Hollywood to come to China to create films at its state-of-art $8.2 billion movie production facility housing 30 soundstages, in the coastal Chinese city of Qingdao.
Clearly the Chinese government doesn’t want more Hollywood films; it wants more and better films at home. In most industries China has learned to make a great product and market it overseas. Now it’s time to turn to it’s chief cultural export - film.
Above it all hangs the question whether Chinese-Hollywood marriage is going to bebuilt on cash or creativity or both. Only time will tell but the infatuation between China and Hollywood probably won't fade soon.
Guest Author
The author is the Chairman of Lall Entertainment
