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From Hollywood To Chollywood

China is now officially the world’s second largest film market and is predicted to overtake Hollywood by the end of the decade. With box office receipts rocketing by 30% in 2012 to US $3.3 billion, there are currently ten new film screens opening every day in China.

The Far Eastern superpower boasts the largest film studio worldwide, covering 35.5 millionsquare feet, in Hengdian, three hours south of Beijing. The former farming village is greater than Universal and Paramount Studios combined, complete with a full-size recreation of Beijing’s Forbidden City and can host 40 separate productions at any one time.

However, The Communist Party’s State Administration of Radio, Film and Television is responsible for subjecting all films produced to the censors for approval, deeming anything remotely political entirely off limits. Any footage seen acting as a negative portrayal of contemporary politics or with potential to trigger social unrest is strictly banned.

This explains the plethora of clichéd plots, often relating to war, criticising Japan and Ming Dynasty period dramas. It highlights the reason why less than 5% of Chinese films broke even in the first half of 2012.

This censorship also effects western production houses attempting to penetrate the Chinese markets, as all films shown, whether produced in China or not, are assessed by the same criteria.
The 2012 Bond film, Skyfall, only premiered in China in January 2013, following a scrupulous editing process to remove one scene, filmed in Shanghai, featuring a Chinese security guard being shot dead. In another scene, subtitles were manipulated from the original script to remove any reference to Chinese torture and prostitution.

Despite these censorship issues and in the face of an annual cap of 34 releases, up from 20 prior to 2012 – in comparison to the 893 films produced by Chinese filmmakers in 2012 – foreign productions still account for 60% of the Chinese box office market.
The appeal of the Chinese market, to investors, arises from the culture surrounding the concept of the cinematic experience. Viewing films at a cinema, far from a luxury open to all, is a pleasure for the middle and upper classes, with average ticket prices around US $15.

The attraction of this market led premier Chinese property group, Wanda, to acquire US company AMC for US $2.6 billion in May 2012, on the way to becoming the world’s biggest cinema owner. The deal uniting the United States’ second-largest theatre operator with China’s leading chain signifies the biggest investment by a Chinese company in the U.S. entertainment industry to date.

North America’s revenue is currently estimated at over US $10 billion, but this figure has fallen twice in consecutive years since 2010. In comparison, the rapidly increasing revenue of the Chinese film market is estimated to reach US $5 billion by 2015 and outgrow it’s western counterpart within as little as five years time.

From a mere 1,500 screens in 2009, there are 10,000 screens at present, with the Chinese government suggesting this figure will double by 2015 and reach 40,000 by 2040.

Brand name and status are possible motives behind Wanda’s purchase of AMC, given the benefits of instant credibility as witnessed in previous deals involving Chinese acquisitions of American firms. In 2004, Lenovo bought IBM Corporation’s personal computing unit for US $1.25 billion, whilst Chinese car manufacturer Geely Holding Group purchased Ford Motor Company’s Volvo subsidiary in 2010 for US $1.5 billion.

Parallels can be drawn to the late 1980’s, when Japanese firms captured a number of prized U.S. assets, including Hollywood based studios Columbia Pictures and MCA-Universal, California’s Pebble Beach Golf Course and New York’s Rockefeller Center.

There has been no greater indication of the shift in power, towards the east, than the impact made by 2012 phenomenon, Life of Pi. Directed by Taiwanese artist Ang Lee, the film grossed approximately US $400 million worldwide. Amassing US $90 million, China accounted for almost 25% of all worldwide income, becoming only the second U.S. film, behind Titanic 3D, to gross more than in North America.

Filmed largely in Taiwan, the premier was also screened in Lee’s native land and the release of Life of Pi was Asia-dominated with China, Hong Kong, India (home of actor Irrfan Khan, where Bollywood grossed US $13 million), Singapore, Malaysia, Indonesia, Cambodia and Pakistan all premiering within the opening two weeks.

Ang Lee is now officially regarded amongst the world’s most elite filmmakers and as a hero, not just in his homeland, Taiwan (Republic of China), but throughout the Asian community as a whole. Lee’s recent achievement of outshining iconic Lincoln director, Steven Spielberg, for the award of Best Director at the 85th Academy Awards ceremony, is his most notable to date, with Life of Pi scooping a further 3 awards for cinematography, visual effects and original score. But, this was far from his first victory at the notorious star-studded event. In 1995, Sense and Sensibility gave Lee’s work its first Oscar, with Crouching Tiger, Hidden Dragon claiming four more in 2000. In 2003, Brokeback Mountain collected three gongs, including Lee’s first award for Best Director. In total, films directed by Lee have received a staggering 12 Oscars, 14 BAFTAs and 9 Golden Globes.

Life of Pi, winner of more Academy Awards than any other film made in 2012, has truly imprinted itself in cinematic history, but more than this, it has given great momentum to the Asian film industry and left a legacy behind to inspire the next generation of Ang Lee’s in Taiwan. The majority of filming was shot at a disused airport in Taichung City, where a US $5.1 million artificial pool, measuring 75 metres by 30 metres, complete with 12 wave machines, constructed specifically for this film, has been donated as a centrepiece for a film park, incorporating backlots, soundstages and post-production facilities.

The euphoric, abstracted beauty of Life of Pi is reminiscent of traditional Chinese cinema aesthetics, though the westernised verbalisation of emotions captures the influence of Lee’s years studying in the U.S. This adaptability and global awareness has achieved worldwide recognition and if Asia continues to produce films of this calibre, using homegrown talent, techniques and technology available to them, it may well trigger the start of a new revolution in the film industry.

Whether conglomerate Dalian Wanda Group’s spectacular purchase of AMC acts as a catalyst for further Chinese businesses to acquire major U.S. theatre chains and entertainment properties remains to be seen. But, if the agenda of Chinese investors concerns raising their profile through diversification and enhancing reputations, they have certainly made a bold entrance onto the global stage of the film industry.

Enter Chollywood…

Dominic Wallace