Hollywood East: Why American Movie Companies Are Rushing to Find Big-Screen Partners in China

How the movie industry followed business trends with joint Chinese ventures

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Oriental DreamWorks/DreamWorks

The Oriental DreamWorks logo, left, and the DreamWorks logo, right.

The logo of  the Chinese iteration of DreamWorks Animation looks like a parody. There is no getting around the fact that replacing a boy’s silhouette with a panda seems somewhat satirical. But for Hollywood, this is no joke. With the announcement that Steven Spielberg’s DreamWorks Animation will be tacking towards China in the coming year to create the Shanghai Oriental DreamWorks Film & Television Technology Company, Hollywood signaled that it is beginning to move beyond the era of simply selling to the Chinese market from the outside. Some of America’s biggest studios already cater to the international box-office, a significant proportion of which is driven by Chinese ticket sales, by tweaking plot-points and content. Now many are moving away from the idea of a ‘domestic’ box office all together by creating long-term joint enterprises across borders.

In some regards, the move was inevitable. As virtually every American industry has shifted to the role of multinational global enterprise, it’s about time that the movie business followed suit. Since the February DreamWorks announcement, four other Hollywood companies went public with the development of joint Chinese ventures: Walt Disney and Marvel Studios will be producing the next Iron Man movie in conjunction with Beijing-based DMG Entertainment; James Cameron’s 3-D technology company Cameron Pace Group will partner with both Tianjin North Film Group and Tianjin Binhai Hi-Tech Development Group; comic-book legend Stan Lee’s POW! Entertainment signed up to create the next generation of superhero with Beijing’s National Film Capital. Even News Corp. is getting in on the Chinese film industry. In May, it agreed to a stake in Beijing’s Bona Film Group. Meanwhile, the state-run China Media Capital already holds a controlling stake in News Corp.’s Chinese television offerings.

(MORE: Avengers Creator Crafting ‘Perfect’ Chinese Superhero)

Each of these American companies is teaming up with at least one Chinese firm, and every one of these foreign partners is state-owned. For Oriental DreamWorks, the California-based parent company will only control a 45 percent stake in the joint venture, while the government-owned China Media Capital, Shanghai Media Group and Shanghai Alliance Investment will combine to hold the other 55 percent. China has a long history of censoring or banning American films: Martin Scorsese’s The Departed is forbidden because it suggests Beijing wants to buy advanced military computer hardware, parts of Pirates of the Caribbean: At World’s End featuring Hong Kong actor Chow Yun-fat were cut from the Chinese version and Brad Pitt was allegedly banned from entering the country for his work in Seven Years in Tibet. Some topics are off-limits for Chinese movies all together; the Hollywood Reporter wrote in 2011 that references to time travel are strictly forbidden from Chinese films and television programs.

The U.S. domestic film industry is unlikely to contract as a result of transnational projects like Oriental Dreamworks. When Chinese Vice President Xi Jinping visited the United States in February, he helped develop a proposal to allow more foreign movies to play in Chinese theaters — extending the 20-film annual quota by 14. This increased market entry is good news for the U.S. film studios: while the international and the domestic box offices were essentially equal in 2003, foreign ticket stubs now account for 58.4 percent of all movie revenues, according to an April 2012 report by Information Handling Services Inc. In 2011, China was the second largest international market with $2 billion in sales, just behind Japan’s $2.3 billion.

American companies are not the only ones who will gain from joint ventures with Chinese companies. Beijing has long sought the soft power treasure-trove of a booming international film presence, and it has only occasionally struck gold in the past (in writing of Xi’s visit to Hollywood, the Christian Science Monitor identifies the Beijing-backed 2011 Christian Bale vehicle Flowers of War as a particularly expensive failure to break into the international market). This desire for international success was reaffirmed by Pimin Zhang, the deputy director-general of the State Administration of Radio Film and Television of China, in an August press release announcing the development of Oriental DreamWorks’s new headquarters in Shanghai.”Oriental DreamWorks is a creative exploration of Chinese and foreign cultural exchanges,” Zhang said. “Our shared dream is to make full use of precious cultural resources, develop a world-class production team, create world-class animated films, and thus contribute to the exchange of Chinese culture throughout the world.”

MORE: China’s New Parochialism

1 comments
MrTemecula
MrTemecula

Hollywood fights for freedom of expression, but not if China is involved. This is disgraceful. Movies are tailor made for the international market that are so dumb-downed with computer graphics and comic book heroes that the number of tickets in the US sold has gone down because adults don't go see them.  However, production companies don't care because the money rolls in overseas. I have probably seen only 3 movies in three years. Two of them were foreign films. I know it's show business, but Hollywood should know the difference between censorship and money.