China has been the buzzword among film financiers and producers for almost a decade. But a recent shift in strategy by Chinese investors may mean the hype finally could become reality.
A series of major deals revealed at AFM, which ran Nov. 4-11 in Santa Monica, show Chinese media companies moving from a Sino-focused approach — buying films for the Chinese market, doing Chinese-U.S. co-productions — to a global one by investing directly in English-language features, both studio-driven and independent.
Le Vision Pictures, the L.A.-based offshoot of the Chinese production giant, signed a six-picture development deal with Dark Horse Comics (Sin City, Hellboy) to adapt hit Chinese graphic novels into English books and features. Chinese studio Bona Film Group announced a $235 million investment in film financier The Seelig Group, a move that will make Bona an equity player on six live-action tentpoles from 20th Century Fox, including Matt Damon's hit The Martian. On Nov. 4, Beijing media mogul Bruno Wu unveiled a $1.6 billion fund for English-language, mainly Hollywood-based projects that will be run by Wu's Sun Seven Stars entertainment conglomerate and Chinese online financial service platform Yucheng Group.
"Chinese equity is now keen to be part of the global film play," Bona Film Group COO Jeffrey Chan tells THR. "The next few months and years will be interesting times."
China's home market is booming: Already the world's second-largest territory for box office, China is set to surpass the U.S. to become the largest within three years. But while Chinese blockbusters can be huge hits — CGI/live-action tentpole Monster Hunt earned more than $380 million in China this year to become the highest-grossing film ever there — Chinese movies don't travel. Chan notes that Chinese-language films typically earn less than 5 percent of their total gross outside the country. Investing in English-language productions is how to tap into the global market.
"Chinese is not, or let's say not yet, a global language," says Wu. "If you want to be a global content company, you have to produce content in the English language."
Previous Chinese investments in Hollywood productions typically involved putting up equity in exchange for Chinese rights — as Le Vision did for two Expendables movies. This new wave of Chinese cash, however, is less about buying U.S. movies for China than it is about being owners of original IP. According to Roy Salter, senior media advisor at FTI Consulting, that makes the Chinese film-financing boom "substantially different" from previous cycles of outside investment in Hollywood, like the German bubble of the late 1990s or the private-equity boom that fizzled with the crisis of 2008.
"China is substantially different," says Salter. "The Chinese government is interested in this being a sustainable market; they're watching carefully and will step in to stop it if they see problems like the ones that plagued the German market, where people were just looking to make a quick buck."