×
You will be redirected back to your article in seconds

China’s Film Industry Looking for New Models After Market Shakeup

Capital controls and an unexpected box-office slowdown in the past year have sent industry players in China scrambling to find new ways to exploit the world’s second-largest film market, experts said Tuesday.

“This has been a pivotal year for Chinese film,” said Joe Austin, Beijing-based representative of talent agency WME | IMG China. “China is a huge experiment at the moment.”

Producer Janet Yang said the uncertainty of the past year had pushed companies into different, sometimes conflicting directions.

“The 2013-2015 period saw exponential growth box office growth. In 2016, that was not so. Now there is a question about how big this market will become,” Yang said. “Some companies are betting on the Tier 4, 5 and 6 cities. Others are punting on the higher quality end of the market. Some are betting on the streaming market.”

China and Hollywood are increasingly counting on each other to shore up their positions, Yang said.

“Chinese companies want investments in global films, to hedge their bets. Hollywood studios are going into local production in China,” she said. “Both are trying to become more complete.”

Yang and Austin spoke Tuesday at the Winston Baker-organized Film Finance Forum, one of the events at the Shanghai International Film Festival.

The capital controls introduced by the Chinese government in November 2016 have had a partial slowing effect, said Bennet Pozil of East West Bank. The capital controls “were not about punishing the entertainment industry, but about protecting the Chinese currency. They have acted like a time-out for the industry,” Pozil said. “I thought we’d see more onshore deal making, but actually we are not not seeing that.”

Austin said that Chinese companies are eager “to be more involved at the creative stage now and are not content to just be investors. They are more interested in finished and packaged film sales. And the quality of Chinese films is improving quickly. Actors are making a ton a money in China at the moment.”

The rapid evolution of the industry has also encouraged some sectors within it to forge ahead with their own models, different from what’s seen in the West, Austin said. That is most true in the distribution and exhibition sector, where online is the dominant marketing medium, unlike in the U.S., where television and traditional advertising remain paramount.

“In North America, we don’t have WeChat or the same [online] ticketing systems as in China,” Austin said. “China has such brilliant technology these days. I don’t carry cash any more.”

But Jeffrey Chan, COO of Bona Film Group, said that more money remaining in the domestic Chinese market does not necessarily translate into higher quality of product. “There is too much capital chasing too few assets,” Bona said. “Everything has become pricier, but with same elements. And some products are not performing as well as expected this year.”

More Biz

  • Davan Maharaj Mel Gibson

    L.A. Times Publisher's Lawyer Was Accused of Extorting Mel Gibson

    The attorney who negotiated a $2.5 million exit package for L.A. Times publisher Davan Maharaj was previously accused of using secret recordings to extort actor Mel Gibson. Surreptitious recordings also figure in the Maharaj case. NPR reported on Wednesday that Maharaj taped Tronc chairman Michael Ferro. According to the report, Ferro was heard on the [...]

  • 'Blurred Lines' Suit Ends With $5

    'Blurred Lines' Suit Ends With $5 Million Judgement Against Robin Thicke, Pharrell Williams

    After five years, the legal battle over the copyright of the Robin Thicke’s 2013 hit “Blurred Lines” has ended, with Marvin Gaye’s family being awarded a final judgment of nearly $5 million against the song’s primary writers, Robin Thicke and Pharrell Williams, according to CNN and other reports. The pair were accused of copyright infringement [...]

  • WME Veteran Ari Greenburg Promoted to

    WME Veteran Ari Greenburg Promoted to President of Talent Agency

    WME veteran Ari Greenburg, one of the original Endeavor staffers who helped build the talent agency that became an industry powerhouse, has been promoted to president. Greenburg will oversee all daily operations across WME and its offices in Beverly Hills, New York, Nashville, London and Sydney. The promotion recognizes the role that Greenburg has played [...]

  • Alison Wenham Steps Down as CEO

    Alison Wenham Steps Down as CEO of WIN

    After 12 years at the helm of the Worldwide Independent Network, a global trade organization for the independent music industry, Alison Wenham is stepping down as Chief Executive, it was announced today. Prior to joining WIN full time in 2016 Alison was CEO of The Association of Independent Music (AIM), which she started in 1999. [...]

  • Leslie Moonves

    Leslie Moonves Quietly Exits AFI and Paley Center Boards

    Leslie Moonves, the ousted CEO of CBS Corp. who has been accused of sexual misconduct by several women, is no longer serving on the boards of trustees of the American Film Institute and the Paley Center for Media. For now, Moonves retains his seat on the board of gaming company ZeniMax Media. The appointments on [...]

  • DOJ Indicts Five in Piracy Ring

    Department of Justice Indicts Five in International Piracy Ring

    Five men were indicted Wednesday on charges that they hacked into the servers of production companies, and stole hundreds of films and TV shows, including “50 Shades of Grey” and “The Walking Dead.” The men are based in four countries — the United Kingdom, the United Arab Emirates, Malaysia, and India. Only one has been [...]

More From Our Brands

Access exclusive content