Is China Hollywood’s New Best Friend?

In the good old days a movie was judged a success or failure based purely on it’s domestic take, i.e. what numbers it did in the USA.
Over the past decade, foreign markets have become increasingly important to the studio’s bottom line, with overseas markets more often than not being the deciding factor on whether a movie is profitable or a nasty red mark in the studios ledger.
Looking at some of the more recent releases, the foreign market share of the total box office often outstrips the domestic take.

‘The Croods’ took a very reasonable $163m in the US, on a production budget of $135m, but it managed to take another $305m overseas,which must make the Dreamwork’s bean-counters happy. ‘G.I. Joe: Retaliation’ managed $116m domestically on a budget of $130m, but added another $232m through foreign markets.

With this is mind, news that an increasing amount of film productions are actively seeking the Chinese viewer’s cash should come as no surprise. Traditionally, China hasn’t been an important player in the world cinema market, due to strict censorship laws which limit the amount of American movies that get released, plus, it’s own movie industry has been catering happily to the population for decades. With China seemingly a little more relaxed about what it’s brow-beaten population may watch, Movie studio’s are now starting to see the light in appeasing the Chinese censors.

Iron Man 3 hit the headlines recently due to the version released in China being 4 minutes longer. These added scenes mainly revolve around some Chinese characters missing from the US version, but they sound like a rather unnecessary addition, rather than adding anything to the overall narrative. Michael Bay’s Transformers 4 is reportedly due to shoot some scenes in China in a bid to try and guarantee a release there.

Last year’s sci-fi hit ‘Looper’ was co-produced by Chinese distributor DMG and American media group End Game Entertainment, marking a high-profile collaboration between Hollywood and China. Shooting was also split between North America and Shanghai. Early reports of Looper’s Chinese opening weekend box office was widely optimistic – the web lit up with reports that it took $24m in 3 days, higher than the US take of $20m, until someone pointed out that it hadn’t been changed from yuan to dollars, which droped it to $4.2m. It still managed $20.2m in China over its run, which, put into context, Looper’s total foreign gross was $110m over 48 countries, with the Chinese share the highest at $20.2 (18%), the next highest was the UK at $16.5m (15%), then Australia at $12m (10.9%).

The Avengers also managed some decent figures in China, with 9.4% of the total foreign gross – the highest of any foreign country – the UK being 2nd with $80m (9%).

Although these figures aren’t a make or break amount at the moment (China’s Avengers take was just 5.5% of the total worldwide tally, Looper’s was 11.4%), it shows that the suits in Hollywood are thinking of the long game, slowly trying to make some in-roads, change a few opinions here and there and hopefully sit back and reap the rewards. If China does become the dominant player in the foreign markets, I would expect to see more and more movies acquiescing to China’s demands.