Recap: Darkened Theaters: How will Global Crisis Change Hollywood and China? 7.16.20
China was on track to overtake the United States as the largest consumer of movies in the world, until Covid-19 hit the country and forced thousands of movie theaters to close. How will the pandemic affect China’s movie business and Chinese firms investing in Hollywood productions? Where is Hollywood heading now that the huge marketplace on the other side of the world faces uncertainties? And what will a U.S.-China decoupling mean to the booming U.S.-China cross boarder investment in movies?
A panel of experts including Porter Bibb (PB),managing partner at MediaTech Capital Partner, Robert Cain (RC), partner in film co-production company Pacific Bridge Pictures and Founder/Publisher of ChinaFilmBiz, and famed producer Daxing Zhang (DZ) explored this topic in a virtual program moderated by attorney Barry Sidelsky on July 16, 2020 called ‘Darkened Theaters: How will Global Crisis Change Hollywood and China?‘. Explore the event below.
Full Video of the Virtual Program
Quotes from the Virtual Program
PB: This is a transitional period, and film is not going to look anything like it has for the past 100 years. Streaming has radically changed the way people watch movies. In the meantime, in China, they are building thousands of theaters, and Imax is building 50-100 theaters too.
RC: Both industries are vitally important to each other. China has been a crucially important market for films from Hollywood. And China has also been the source of a substantial amount of capital for Hollywood. When Wall Street left the business, Chinese investors stepped in. That has changed now, too. All the major studios had Chinese funding, but that has all but dried up.
As China was building cinemas, they were relying on Hollywood films to fill the seats. The cinema business wouldn’t be what it is without that Hollywood support. But now China is developing a supply itself. Chinese audiences’ tastes have changed, too. Now they are interested in not only Hollywood, but also art house films, Indian and Spanish films, and much more.
DZ: The most important thing I would stress is that you have to know what your audience is and wants. If you think you are going to be able to satisfy all audiences – both Chinese and American – good luck. It’s not easy. But demand is definitely higher. If you do things right, then co-production is very very promising.
PB: On the theater side, there is disruption. AMC, the biggest cinema company in the US, is owned by Wanda, and they are approaching bankruptcy. The Chinese have a similar situation. They are building theaters, but the government says 30%-40% of them will never open. They are bankrupt, too. There will be consolidation, and a few companies will end up ruling the roost. Co-productions are few and far between, but they account for 65% of the revenue and a bigger percent of profits in China! Consolidation and co-production are the future. With globalization, we will see more and more co-productions, including co-production of content. And going forward…AI will be dictating what and how films are made.
RC: Animation is a big growing trend. Live action productions have been curtailed or shut down. A live action production is a set that requires close collaboration with usually at least 100 people or more. It can be a tricky and potentially dangerous environment, so everything was shut down. Fortunately it has been a good time because Netflix and Amazon have an enormous appetite for animations.
DZ: Co-productions get treated as domestic projects, so you can take more money out. (Plus, there is a quota for “foreign” films that will be allowed in each year.) That makes co-productions very attractive. Co-productions are a safer way to make larger pictures.
RC: Not many people have the depth of experience and knowledge to bring about successful collaborations. That will happen only if people with sensitivity and understanding have the desire to make it happen. The potential opportunity is just too large (for US-China tensions to stop it from happening.)
See more from our playlist of virtual and in-person programs from China Institute’s Center for Business