No U.S.-China venture could have had a more auspicious start than Oriental DreamWorks. On a state visit to the U.S. in February 2012, then-Chinese Vice President Xi Jinping had lunch and watched a Los Angeles Lakers game with Jeffrey Katzenberg. That same day, Katzenberg’s DreamWorks Animation announced the launch of Oriental DreamWorks, a $330 million joint venture with three Chinese partners, including China Media Capital. Katzenberg said later that the new company had the personal blessing of Xi, who is now China’s president and its most powerful leader since Mao Zedong.

The ambition was to create a Chinese animation studio in the mold of DreamWorks, churning out a film a year by 2016, then two a year after 2018. Oriental DreamWorks also announced its intention to branch out into animated television production, mobile and internet content, live-action films, live-action TV and even a $3.1 billion cultural and entertainment district in Shanghai that Katzenberg said would rival Broadway. “Our plans [for China] are as big as the country is,” he boasted in a 2014 speech.

Seven years after its celebrated birth, ODW no longer exists. NBCUniversal, DreamWorks’ new owner, dumped its 45% stake in February 2018. ODW now belongs to a CMC-led consortium of Chinese firms. It has shed scores of staff and rebranded itself as Pearl Studio. 

Despite its shrunken size, the company is a key player in China’s fledgling animation industry. But it has shifted its focus from being a production factory to becoming a creative hub, developing movies with global potential. Its first film since 2016, “Abominable,” a yeti adventure story set in China, is scheduled for release later this year, and a dozen other projects are underway, including a collaboration with Netflix called “Over the Moon,” directed by Oscar-nominated Disney illustrator Glen Keane.

The goal remains the same: to make content that not only appeals to Chinese moviegoers, who mostly still see animation as a niche, kids-only category, but that can travel as well. “Why would we make anything just local?” says chief creative officer Peilin Chou, who spoke with Variety at Pearl’s headquarters in Shanghai. (The company also has offices in Los Angeles and New York, where Chou is based.) “It’s animation. If we’ve gone through all the trouble of making it, we can dub it into any language. I don’t think we should be limited to Chinese stories or just films with Chinese people, because I think that the audience here is definitely interested in things beyond just seeing themselves.”

Chou cites Pixar’s “Coco,” which did well in China thanks to the positive family values it depicted, despite being set in Mexico and full of ghosts, which are technically banned from appearing in films by China’s censors.

But no one has yet found the magic formula for consistently producing hits that perform as well abroad as in China, or vice versa. Some say the cultural gap is simply too great. “Anyone who believes they can create a character that reads as authentic in both China and the West is wrong,” says Joe Aguilar, a DreamWorks veteran and ODW’s former chief creative officer. Even Po from “Kung Fu Panda,” beloved by Chinese viewers, comes across to them as a distinctly American panda, he argues. “I think you just have to choose,” says Aguilar, who now leads rival studio Wink Animation, a division of Huayi Brothers focused on the Chinese market.

The choice of which audience to target appears to have been a point of contention within Oriental DreamWorks. In 2017, before NBCUniversal decided to pull out, CMC head Li Ruigang mentioned disagreements over strategy. “I am focused more on China and less globally, while they want to make films in China for the world,” he said.

At its peak, ODW employed about 250 production artists, who worked on 2016’s “Kung Fu Panda 3,” a co-production with DreamWorks and ODW’s only completed project. Now, Pearl has just 30 in-house production-side employees and is operating more along the lines of Universal’s Illumination, outsourcing production while keeping story development and front-end design internal.

Achieving the quality Pearl wants remains difficult in China, where there is a lack of experience both on the technical side and in storytelling. ODW tried to deal with the technical gaps through a long-term (and expensive) commitment to training local staff. It brought in Aguilar, who had previously set up a studio for DreamWorks in Bangalore, India, and acquired a Shanghai animation studio with 120 employees, rapidly hiring more.

“There is a big, huge learning curve on how to develop movies and animation from scratch,” Aguilar says. Oriental DreamWorks wound up contributing about 30% of the manpower on the production side to “Kung Fu Panda 3.” Though it didn’t do any full sequences, it produced many of the character effects — the rendering of details such as hair, fur and clothing — and lip-syncing, redoing characters’ lips to match the Mandarin version’s script.

Oscar-nominated Disney illustrator Glen Keane directs Pearl Studio’s “Over the Moon,” for which he has also created original character concept art.
Courtesy of Pearl Studio

Pearl has moved away from the in-house production model, eliminating the need for enormous staffing and overhead. In 2012, there was still a wide gap between the levels of expertise at a place like DreamWorks and an outsource production facility, but the landscape of animation has changed, Chou says. As more studios outsource, those offshore establishments have improved. Even DreamWorks has gotten in on the game: 2017’s “Captain Underpants” was the first film it didn’t do in-house, and was also its cheapest.  

“The way we’re operating now just gives us so much more freedom to develop the projects that we feel really speak to us and our brand, and we can partner with anyone,” Chou says. Working under DreamWorks “impacted how we went about developing projects, as we’d have to clear the bar of ‘Would DreamWorks ever make this movie?’ Now, that’s not a filter anymore.”

Pearl’s slate includes a “Monkey King” movie with superstar Stephen Chow; “Illumikitty,” a comedy about cats plotting to take over the world, penned by “Sex and the City” writer Jenny Bicks; and an untitled Chinatown project exec-produced by Alan Yang of “Master of None” fame. In June, the studio announced “Tiger Empress,” the tale of a cub who outgrows the clutches of her tiger mom to become a leader; the script is set to be written by Tony Award winner David Henry Hwang. 

The project with Netflix, “Over the Moon,” will be Pearl’s first feature developed post-ODW and is scheduled for delivery in 2020. How that film turns out will be “our true report card,” Chou says — more so than “Abominable,” which began under ODW and was produced mostly at DreamWorks in Glendale, Calif. “Over the Moon” is a musical adventure about a girl who builds a rocket in hopes of meeting Chang’e, a goddess in Chinese mythology who lives on the moon. Sony Pictures Imageworks is making the movie in Vancouver.

The idea was pitched by producer Janet Yang in 2015, at the first of what has become an annual brainstorming event. A significant part of Pearl’s creative process involves flying in creative luminaries from the U.S., most of them of Asian descent, for its Brain Trust Summit, a three-day story-generating workshop. Last December, it brought comedian Margaret Cho, YA author Jenny Han (“To All the Boys I’ve Loved Before”) and “Lost” actor Daniel Dae Kim, among others, to Shanghai to come up with movie ideas. Past participants have included “Crazy Rich Asians” screenwriter Adele Lim and author Junot Díaz.

“We’re trying to make global films. Once a native Chinese has made 10, perhaps they’ll know how to do it. We need Glen Keane because someone at his level doesn’t exist in China — yet.”
Peilin Chou

For all Pearl’s emphasis on being a Chinese-owned company, Chou concedes that so far there isn’t a way to make an internationally successful feature in China without American creative involvement. “We’re trying to make global films, so I think it’s really important to have all those perspectives in the room. Once a native Chinese has made 10 of these, perhaps one day they’ll know how to do it,” she says. “We need Glen Keane because someone at his level doesn’t exist in China — yet.”

Chou defends the idea that a film like “Over the Moon” that’s pitched by an American, directed by an American and produced in Canada can still be called Chinese — at least in the eyes of the Chinese authorities determining co-production status, which is what really matters. “When you own the IP, then the standards appear to be more open because the core of it comes from a Chinese company,” she says.

Oscar-nominated screenwriter Richard LaGravenese came to Shanghai for December’s brainstorming workshop, his first trip to China. He admitted to feeling like a fish out of water, but was confident that developing a script there was no different from doing so anywhere else. “Ultimately, the same things apply: narrative arc, character development,” he says. “These things are universal.”