China's Hollywood romance sours

China's movie industry has been given a major boost with the launch of Qingdao Oriental Movie Metropolis.
A still from Wolf Warrior II. The movie about a Chinese hero beating Western mercenaries in Africa broke China's box-office record last year. Meanwhile, Hollywood blockbusters are losing steam in the country.
A still from Wolf Warrior II. The movie about a Chinese hero beating Western mercenaries in Africa broke China's box-office record last year. Meanwhile, Hollywood blockbusters are losing steam in the country.PHOTO: SHAW ORGANISATION

US producers face challenges in market, even as their films lose ground to local fare

QINGDAO • When Chinese conglomerate Dalian Wanda announced in 2013 that it would build a US$8 billion film studio in China to lure United States film producers, it did so with Hollywood flash.

Stars like Nicole Kidman and John Travolta were on hand, as the company chairman Wang Jianlin boldly announced that the new studio in the east coast city of Qingdao would help make China a "global cultural powerhouse".

Five years later, the Oriental Movie Metropolis is set to open its doors but the mutual courtship between China and Hollywood is looking less rosy. Walking the red carpet at the Qingdao studio launch today will be Chinese comic actor Huang Bo - a big name locally - while Hollywood A-listers are expected to stay away.

Mr Wang's own ambitions are also looking more modest. Wanda last year sold its interest in the studio to a Chinese rival, maintaining just a management role in the venture, whose fortunes look increasingly unclear as the American film industry sours in China.

A handful of US-China film ventures have fallen apart over cultural clashes, financing deals have collapsed, and Hollywood's share of the local market has lost ground to a surge of popular, and often patriotic-minded, local film productions.

Negotiations over improved market access for US producers via China's strict quota system and a larger slice of profits have stalled, according to industry insiders.

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I don't think the Communist Party and Chinese government are interested in having more American content in China.

MR ROBERT CAIN, president of Pacific Bridge Pictures, which provides financial and strategic services to the film industry.

A series of high-profile deals and financing agreements have also hit snags. Mr Wang last year saw his US$1 billion (S$1.3 billion) bid for US firm Dick Clark Productions fall though after its owner, Eldridge Industries, said the Chinese company failed to honour contractual obligations.

China's Huahua Media and the state-backed Shanghai Film Group in November scrapped a US$1 billion agreement to co-finance a slate of films from Paramount Pictures. In February, NBCUniversal sold out of Oriental DreamWorks, its much-hyped joint venture between China Media Capital and Universal's DreamWorks Animation.

Industry sources said Huahua had run into liquidity problems amid a Chinese crackdown on "irrational" overseas deals, and that its domestic partners had also pulled out of the deal.

US film-industry insiders said Chinese regulators were increasingly protecting local films. Foreign producers and distributors would sometimes get approvals shortly before release dates, limiting the time for marketing.

"I don't think the Communist Party and Chinese government are interested in having more American content in China," said Mr Robert Cain, president of Pacific Bridge Pictures, which provides financial and strategic services to the film industry. "I don't think the US has very much bargaining leverage right now."

Hollywood blockbusters are losing steam in China. North American movies have taken around a quarter of the box office in China so far this year, down from over 45 per cent in 2016, according to data from box-office tracker EntGroup.

The shift could hit Wanda's Qingdao studio, which had hoped to benefit from soaring demand from overseas producers looking to add China elements to their films to help boost box-office takings in China.

Last year, a movie about a Chinese hero beating Western mercenaries in Africa - Wolf Warrior II - broke China's box-office record, while Hollywood offerings such as Star Wars: The Last Jedi failed to ignite when released in China earlier this year.

Hollywood films that focus on action figures or superheroes no longer provide a magic formula in China, said US-based producer Kevin Niu. "Chinese audiences seem to enjoy content that has strong family and community value, or content that depicts themselves or their dream lifestyle."

With the aid of Hollywood know-how and bigger budgets, local movies, once ridiculed for weak special effects and storylines, are gaining traction as they find ways to play on these domestic themes and improve production quality.

"Made in China might not be entirely respected, but it's getting better every month," said Mr Chris Bremble, chief executive of China-based visual effects and animation firm Base FX.

REUTERS

A version of this article appeared in the print edition of The Straits Times on April 28, 2018, with the headline 'China's Hollywood romance sours'. Print Edition | Subscribe