Patience Key To Success in China, Say Milken Panelists

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A panel of Hollywood filmmakers who have gained a foothold in China said the key to doing business — and winning audiences —  is to treat the Chinese as partners, rather than a market to be exploited.

Executives from Lionsgate, STX Entertainment, IM Global and Relativity Media told an audience Monday at the Milken Global Conference in Beverly Hills that doing business in China required patience, sensitivity and nimble strategies.

The filmmakers agreed that American and Chinese entertainment companies are yet to make truly seemless co-productions, something they said would only happened with increased engagement.

The “Can Hollywood Speak Chinese?” panel at the Beverly Hilton Hotel came on the second day of the conference and in the wake of a wave of deals between Chinese financiers and companies and Hollywood filmmakers.

Former Disney executive Dick Cook announced last week that he had formed a partnership with CITIC Guoan — the TV, publishing, sports and tourism giant – to make films, starting with a $150 million bankroll.

Earlier, Hunan TV had agreed to put $375 million into a three-year slate of films with Lionsgate. Fosun real estate group ponied up $200 million for Jeff Robinov’s Studio 8 and the Huayi Brothers in March  announced they would back an 18-film slate for STX Entertainment. That all came after Chinese power Dalian Wanda’s 2012 purchase of AMC Theaters for $2.6 billion.

Bob Simonds, chief executive of STX Entertainment, said he had talked to one American studio head frustrated by repeated meetings with potential Chinese partners that did not lead to a deal.

“In America we show up and we want to make a deal and then you get to know them afterward,” Simonds said. “In China, it’s just the opposite.” Chinese financiers and executives insist on building a solid relationship, developing “connections and insights” before doing a business, Simonds said.

Ryan Kavanaugh, founder and chief exec of Relativity Media, said his experience had been similar – including two-hour lunches and bouts of alcohol-fueled toasts that might have one “tripping out of the room.” He advised newcomers to Chinese business to “bring a big team” to help with the multiple toasts but, more importantly, to not try to force American culture on their hosts.

“They are very proud of their culture and they are very proud of displaying that culture,” said Kavanaugh. “And you never want to do anything that says you are trying to impact that or change that or take over that culture.”

Kavanaugh said there were other quirks of working with Chinese partners. He said he had found an aversion to films about ghosts, or ones with too much blood-letting. He quipped, nonetheless,  that the 2011 film “Immortals” got a China release and “I don’t know how we did it, because it had both ghosts and blood.”

Brian Goldsmith, Co-Chief Operating Officer of Lionsgate, agreed with the need for patience but said that, with the right partners, business can sometimes move quickly in China.

Lionsgate joined with the conglomerate Alibaba last year and suggested the two create a streaming service. Within 45 days, paperwork for the deal had been drawn up. The service was up and running within five or six months, Goldsmith said.

Stuart Ford, chief executive of IM Global, said the Chinese film business is less dependent on structured financing than industries in other countries. Most of the money comes from big studios like the Huayi Brothers, from wealthy individuals or companies backed by the government.

Kavanaugh cautioned about the government-backed firms, saying that their  bureaucracy was hard to penetrate and painfully slow. He complimented STX’s Simonds as “brilliant” for forming a partnership with the non-government-run Huayi.

All four of the executives said the film industry has to find a better way to produce films jointly with the Chinese, so that the finished product appeals in the two countries and the rest of the world.  Goldsmith of Lionsgate said the studio’s creative team has increased the frequency of meetings with their Chinese counterparts. “As creative exchange grows,” he said, “we think we can create stories that are for China and have worldwide appeal.”

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