Just six years ago, Beijing Culture was a little-known tourism company with no involvement in film. It had a history of investing in bricks and mortar — literally — and managed a handful of cultural attractions, including two ancient temples, on the outskirts of the Chinese capital.
But after a change in focus to entertainment and an acquisition spree, the company has emerged as possibly the most influential studio in the country. It vaulted into the public eye in 2016 when it put down a RMB 800 million ($119 million) minimum guarantee to launch “Wolf Warrior II,” the nationalistic action movie that became the most profitable picture in Chinese history, with a global haul of $879 million. Under the leadership of former Wanda executive Song Ge, Beijing Culture has gone on to back a string of winners, including two more of China’s top 10 highest-grossing titles, and it dominated the box office during February’s competitive lunar New Year period with Frant Gwo’s sci-fi blockbuster “The Wandering Earth,” which earned $700 million, second only to “Wolf Warrior II.”
“They’re one of the major players, and they’ve catapulted to that position extremely quickly,” says Max Michael, head of Asian business development at UTA. The agency recently added Beijing Culture to its internal list of major Chinese studios and financiers.
The Shenzhen-listed firm acts in a mix of roles — investor, marketer, talent manager, distributor and, increasingly, producer. Last year, it netted $48.6 million in profits, up 5% from the year before, and backed hits such as “Dying to Survive” and “A Cool Fish.” Its performance is all the more impressive amid regulatory changes and a government tax crackdown that have spooked investors and put entertainment projects across the country on hold.
But the Chinese film business remains unpredictable, and for all its sudden success, Beijing Culture still has to prove that it has staying power. “We have yet to truly industrialize, so successful companies and projects here are extremely random,” former Wanda executive Jack Gao cautions. “Today this person is successful, but tomorrow it’s someone else. There’s no one who can consistently perform.”
Though focused thus far on the domestic market, Beijing Culture harbors global ambitions, aiming for its films to travel and “spread Chinese culture,” the company told Variety in a statement. Rather than engage in the slate deals or co-productions that have burned Chinese players in the past, it has adopted a more limber approach to working with Hollywood, primarily by bringing in top foreign talent to assist in its productions. It has also begun looking for international titles to import.
Despite its growing interest in the West, the press-shy firm speaks carefully in Communist Party-tinged official-ese, attributing its success to its ability to “spread mainstream values” and “emphasize social responsibility through film as a product of ideological output.”
The company employs about 700 people on its sparkling new campus in eastern Beijing, 200 of whom work on the film side. Song, the chairman and president, is a respected industry veteran who keeps a low-enough profile that he’s likely better known to the public for a cameo in “Wolf Warrior II” than for flipping a languishing tourism company into a film powerhouse. Song (who was not available for comment) served as chairman of Perfect World from 2008 to 2010, became director of Wanda Films in 2011, then left to focus on his own company, Skywheel Ent., in 2013, which Beijing Culture bought later that year. “If Wanda Films ever had good projects, it was all from him,” Gao says, describing Song as “one of the few leaders in the industry who has a broader vision and is willing to try something new.”
Song has divided Beijing Culture’s operations into seven major sections, including film, TV, variety shows, talent management, new media and IP rights. (The seventh section, tourism, accounted for just 7% of net profits last year and seems likely to diminish further, as the contract to manage its primary Beijing cultural sites expires in June.)
“He’s taking a studio approach,” says Dede Nickerson, an American producer who has been based in China for 25 years. “Unlike at Huayi Bros. or Bona, Beijing Culture is not based on one person. He’s really creating verticals, developing people, establishing department heads and a management structure.”
The company’s biggest gamble is in the works: mononymic director Wuershan’s “Fengshen Trilogy.” The three films, adapted from a Ming dynasty epic fantasy novel, are being shot back to back at the Qingdao Movie Metropolis and are scheduled for release in 2020, 2021 and 2022. Produced by Bill Kong (“Crouching Tiger, Hidden Dragon”) and Beijing Culture vice president Du Yang (“Breakup Buddies”), the trilogy has been five years in the making, involving China’s largest-ever crew of more than 2,000 and a planned $445 million in investment so far. “The Lord of the Rings” producer Barrie Osborne is a consultant, as are screenwriters James Schamus (“Crouching Tiger”) and Lu Wei (“Farewell My Concubine”). Tim Yip (“Crouching Tiger”) leads production and costume design; Douglas Hans Smith (the original “Star Wars,” “Independence Day: Resurgence”) is directing visual effects.
Beijing Culture’s bet on such a lavish production comes even as its financial position has yet to stabilize. In the past two summers, its share value has roller-coastered, soaring alongside the box office figures of its hit films, then plunging as shareholders rushed to cash out. Within two weeks of the July 2017 opening day of “Wolf Warrior II,” the stock price rose by more than 40%. The day it peaked in early August, top Beijing Culture executives announced they would collectively sell up to 1.4 million shares, sparking a trading frenzy in which about a fifth of the company — around $258 million worth of shares — exchanged hands, according to a publicly posted report by a Chinese analyst. A similar rise-and-fall stock pattern occurred around the 2018 release of “Dying to Survive.”
The shares are trading slightly lower than they were before “Wolf Warrior II.” Gao says that Beijing Culture is “one of the better companies in the midst of the Wild, Wild West” of the country’s film business, but “no Chinese company can be all that healthy” in such a volatile environment.
Not all of Beijing Culture’s pictures have struck gold. The fantasy comedy “Hanson and the Beast” was an expensive flop. Surprisingly, the film division made less money last year than the TV side, according to the company’s annual report. Beijing Culture is investing in 21 films, nine of which are scheduled for release in 2019; and 23 TV shows, five of which will air this year, the report says. Notable pending titles include Lu Chuan’s next feature, sci-fi movie “Bureau 749”; the upcoming “Fengshen Trilogy”; and three more works by Wuershan, who helmed “Mojin: The Lost Legend.”
The company was founded as Beijing Tourism in 1997 by a state-owned enterprise in a rural, forested part of the city, where it managed two temples, three parks and various hotels. It went public in 1998 and made questionable investments in building materials such as brick and cement, a sightseeing park and a ski slope.
When the Chinese government began urging companies at the beginning of this decade to enter the cultural sector, the company turned its sights on film. It acquired Song’s Skywheel, officially rebranded itself as Beijing Culture and began acquiring companies such as production house Beijing Century Partner Culture & Media and talent management firm Zhejiang Galaxy Artiste.
Song helped cinch the company’s shift to entertainment in 2014 with its first two films: Gwo’s debut, the lighthearted rom-com “My Old Classmate”; and Ning Hao’s “Breakup Buddies,” which Song secured with a $74.2 million minimum guarantee — the first time such a practice had been used in China.
Since then, Beijing Culture has put out nine TV shows, seven variety shows, three online dramas and 29 art-house and commercial films, including Mei Feng’s stylish black-and-white “Mr. No Problem” and Feng Xiaogang’s “I Am Not Madame Bovary” and “Youth.” “They’ve got a very diversified portfolio of projects,” Nickerson says. “I would say that they’re the most impressive company out there in terms of content creation and distribution.”
The firm maintains strong ties with most of the top talent in China’s film industry. Big local names such as directors Wu Jing (“Wolf Warrior II”), Wen Muye (“Dying to Survive”) and Ning Hao are listed in its annual report as collaborating partners.
It remains to be seen how long Beijing Culture can continue operating at such a high level in an unstable market. In “The Wandering Earth,” a Chinese astronaut saves the planet by propelling it into another galaxy. At Beijing Culture, Song and his team have achieved liftoff. The challenge now is to keep hitting greater heights.