How China is changing Hollywood

In the fourth Transformers movie, there’s
a scene where a random guy in an elevator helps Stanley Tucci beat someone up. That guy? Turns out he’s a Chinese boxer,
Zou Shiming – a world champion & gold medalist. Elsewhere in the movie, you’ll see a Chinese
milk box, and even a Chinese bank ATM in Texas of all places. If you didn’t recognize these references,
that’s because they weren’t meant for you. The growth of China’s middle class has created
a massive new market for the entertainment industry. Next year China’s box office revenue will
likely surpass the US, making it the largest movie market in the world. China has built 27 new cinema screens per
day on average this year, and as of November 2016, the country has more screens in total
than the 40,475 in the US. Obviously, the movie makers in Hollywood want
to reach those customers. Transformers 4, a movie criticized for making literally no
sense at all, was the only film in 2014 to collect over 1 billion dollars worldwide at
the box office, thanks to Chinese viewers. The problem is the Chinese government only
allows a certain number of foreign films into the country each year. And each one has to pass through the government’s
censorship agency. There’s kind of contradictory impulses. On
the one hand, China wants to be the best at everything. They want to succeed. On the other
hand, they want to promote what the leader is promoting. Chinese propaganda and socialist
core values. Before the 1990s, very few Hollywood movies
made it to Chinese audiences. The Chinese government had its own film industry
to distribute propaganda, but it was failing. In 1979 $23.9 billion tickets were purchased
in 1993 that dropped to $9.5 billion. In 1994 things started to change. The Fugitive
became the first new American film set for a general release to the Chinese public. It was so popular that scalpers outside theaters
were getting double the price of the ticket. One dollar and twenty-five cents.
Ten foreign movies were allowed in 1994. Since then, Hollywood has pushed the U.S. government
to continually negotiate for higher quotas. These days, a U.S. film typically makes it
into a Chinese movie theater in one of three ways. Through revenue-sharing, co-producing with
a Chinese company, or through a flat fee. The most common is the revenue-sharing model
where the studio gets 25% of the revenue. But only 34 foreign films per year are allowed. Over the last 10 years American films have
strategically incorporated positive Chinese story elements to bolster their chances of
being one of the films selected. In Red Dawn, the enemy was originally China
but was changed to North Korea in post production. In the film 2012 Oliver Platt says praising China for building arks in advance. World War Z the book had the virus start in
china due to illegal organ trade that’s not the case in the movie. In the Martian, the Chinese space industry
saves the day. The Chinese based Bona Film Group invested millions in the film. It’s important to note though that studios
don’t have to do this. Harry Potter is great example. If you look at the regulations in a very strict
sense, theoretically something like a Harry Potter film should not be shown because you’re
not supposed to have superstition and wizards and things like that. But it’s very hard to
deny the Chinese audience Harry Potter. There are two ways to get around the 34-film
limit. The least popular among big Hollywood studios
today is the flat-fee model because they’re selling the film at fraction of the cost and
China gets 100% of the ticket sales. The other option is co-producing the movie
with a Chinese company so that it’s not technically a foreign film. But co-productions
are the most tightly regulated, with strict guidelines on things like the film’s shooting
location and its finances. It has to also have at least ⅓ Chinese actors in the cast.
In short, China somehow has to play a significant role in the film, and it can’t be as the
villain! Drop your weapons! Or I kill the man! Before Looper was released its director and
studio partnered with DMG, a Chinese based entertainment company to help adapt the film
to a Chinese audience. DMG invested 40% in the film too. The script was re-written to
take place in Shanghai rather than its original location, Paris. But ultimately, separate American and Chinese
versions of Looper were released because the Chinese scenes in the film didn’t resonate
with U.S. and other international markets audiences. That’s always the issue when you’re dealing
with China and deciding on a co-production. As important as the China market is, it’s
not the only market. Ultimately China wants their own films to
outnumber and outplay their foreign competitors so they’re building their own Hollywood. It’s an $8.2 billion dollar investment slated
to open it’s doors in April 2017 from the same company that bought AMC in 2012 and subsequently
doubled their ticket sales. Sure, China will share their facilities with
U.S. studios but their doors are still only half open. That film quota that has held the
US at bay for the last two decades will also apply to Hollywood studios vying to book the
state of the art facilities.

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