Tiny Times 1.0 is perhaps the most talked-about movie this year in China. Its director Guo Jingming, a popular teen novel author, is a rich topic himself. The movie’s moral invoked intensive debate in the country, but how about the controversial marketing strategy behind its box office success?
Complaints first appeared on the internet when some moviegoers went to their local theater and discovered that there was nothing available to see other than Tiny Times 1.0. Some accuse the theater managers to be misers who merely follow money and publicity. Others believe that the distributor is manipulating the cinemas and trying to monopolize the market.
In order to verify the validity of these accusations and more importantly, understand how the Chinese film market works, we need to scrutinize the daily operations of the cinemas and their interest chains with distributors. We hope this could serve as a beginners’ guide to commercial film distribution in the Chinese market.
Theatrical release
Movie theaters are standing at the front-most end of the market, they must cater to public interests to be profitable. Their number one priority is to make sure that the screening timetable they come up with is in chord with the audience’s preference. One might ask, how do they know which movies are going to sell so they can arrange more screens and time slots for that movie? Publicity is the word here. Theater managers are vulnerable to marketing campaigns just like ordinary audiences, maybe even more, because distributors send posters, trailers and news clippings to them directly. Some professionals in the industry go so far as to say that the real target of marketing is the manager, not the general public. In China, the theater manager would be able to figure out the performance ball park of a movie before it is in the theater based on the frequency it appears on mass media. This ball park narrows down after the manager sees the full feature in an advanced screening organized by the distributor. The cinema line then signs a contract with the distributor, specifying details like the least number of screenings each day and how many times it should be played during prime hours.
Usually the clauses above only bind the theater for the first three days of a movie’s theatrical life cycle. The managers can add or decrease screenings based on its daily performance. A common life cycle is between 10 days to 2 weeks. The exception Lost in Thailand stayed on for long because everybody liked it a lot. In contrast, Tiny Times 1.0 had received too many negative film reviews so it naturally died down after its teenager fans’ craze pacified.
The total length of a movie’s theatrical stay is heavily dependent on what is coming next. A decent movie will stay as long as there is no better film to replace it.
The movies are ranked with respect to their pre-premiere popularity and later on theatrical performance. Then they will be arranged in two ways. The sequential way: packing the biggest halls and prime time with the most promising films; or to make do: when there are no movies to highlight, just put mediocre movies in all smaller rooms first and leave the relatively better looking ones to the big screening rooms.
Deputy Manager Wang Ning of a movie theater owned by Huayi Brothers named a few key factors that affect a certain movie’s rank: director, cast, marketing, genre, target audience and word-of-mouth. “I did not have very high hopes for Tiny Times 1.0 actually,” Ning said, “because its target audience is limited. I gave it four screens because of all the fuss the media made.” With so many ingredients in the pot, it seems that nobody reasonable would leave all eggs in the same basket. Deputy manager Liu Hui at UME Huaxing Cineplex also told us her concerns: “Most of us were not sure about the film: it’s kind of a new genre that the Chinese market is not familiar with. And we were not sure about the unconventional target audience either. We got hopeful only because there was no publicity more aggressive than Tiny Times 1.0. If Tiny Times 1.0 did occupy some cinema completely, there must have been some kind of a deal between the distributor and the theater manager.”
Some cinemas are able to offer a wide range of movies for the audience to choose from, while others focus only on blockbusters. Wang Ning said 40 to 50% of the audiences come to the cinema not knowing what to see, they will go with whatever is hot or convenient. This portion of customer is higher in cinemas located in fancy shopping malls. His cinema, on the other hand, is a community one, so more people come with a decision already made. The size of the Cineplex is another issue: the more screens, the more freedom the audience get when it comes to edgy films, but of course a focus on the big shots is relatively prevalent.
The case with Tiny Times 1.0 is not what one would call strange, but definitely unprecedented. 43% occupancy used to be exclusive to costly Hollywood imports and major Chinese end-of-the-year blockbusters. Managers put them on all fronts because they need to present a good revenue statement, but this time, Tiny Times 1.0 pulled a marketing stunt that worked.
In Liu Hui’s opinion, the distributor would approach cinema management avidly only when they are not confident enough about the prospect of their release. A major film doesn’t care about a screen or two as they can make big money elsewhere, anywhere. “Only the mid-budget films would come to us other than they routinely would, because they want to even the production cost and they are not too sure whether they could achieve it or not.”
Splitting the pie
Unlike America where movies make a fortune licensing their products to toy makers and cable TV, theatrical release is almost the only source of income for distributors and production companies in China. So how well does a movie have to do in cinemas to be profitable?
Having a box office sum that is higher than its total production and marketing cost is far from enough, because multiple parties take their shares from this creamy pie. First of all, the government takes 3% into a national film support fund and another 5.5% as tax. Next, the cinema line and individual theaters step in and get about half of what is left, that is nearly 45% of the whole. Distributor and production company get the rest 47% of theatrical income plus some small amount from other channels of release. The distributor takes around 10% as commission, so only a little over 30% of the box office money goes back to production. What is noteworthy is that the production company pays for the prints and advertisements. That means a feature film must make over three times of its production and publicity cost just to make ends meet.
Complications and Conveniences
The Chinese film market is rapidly expanding, but its immaturity is a breeding bed for anomalies and gamblers. The supply chain has not stabilized between production and release. There are hundreds of companies in the business, a large number of them make one or two movies annually, some come up with one in a few years. So the cinemas cannot establish a long-term partnership with them, leaving the space for likes of Tiny Times 1.0 to take hold of the market when there is no competition. This will not happen in the U.S. where there are always fist fights between major films, and the cinemas can barely risk biasing toward either side.
This lack of mutual trust also eliminated the possibilities for small budget films to thrive in theaters. Artistic films in the U.S. often choose to do a platform release. That is to release sparsely in the beginning and add the number of screens later on when the film has built up a huge audience with its outstanding aesthetic standards. For example, Fruitvale Station opened quietly in July with merely $386,000 during first weekend; however, it made into the U.S. box office top ten by the end of the month. All the theaters believed in it because Weinstein is behind it. So far, no company in China has that kind of credit and resource to push a platform release. Most films that tried got kicked out of the theater after a single day because apparently it will never sell.
Nevertheless, miracle has a bigger chance of happening here if you cater to the needs of this huge audience. Lost in Thailand hit the gold mine because it was precisely tailored for the new-year holidays; Avatar made 7% of its gross in Chinese mainland for its spectacular IMAX 3D experience. Movie fans in China tend to follow the trend and worship visual excitement. Therefore, it is much more viable here to exploit the market and grow a massive snowball out of it.