Looking at the Chinese film market, you might be tempted to think the plethora of underperforming Hollywood tentpoles paints a picture of a flailing Chinese motion picture business.
However, China may still be the most misunderstood player in global film and television.
In the mid to late 2000s, it was a bit of a running joke: “I have a Chinese investor who wants to put $50 million into a fund.” Sure, you do. Such deals were often rigorously negotiated before fizzling out abruptly. It took some time for actual agreements to take shape, but once they were locked down, it was quite the cornucopia, from Wanda Group’s 2012 acquisition of AMC Theatres and 2016 purchase of Legendary Entertainment to consistent film investments by Huayi Brothers and Tencent.
But the mixed success coupled with political headwinds meant the party wouldn’t last forever. While franchises such as “Fast & Furious” and the Marvel Cinematic Universe thrived, others were not so fortunate. Chinese consumer appetite is not the whole story, as several key considerations define the level of access foreign productions receive in the region. So understanding the landscape is of critical importance.
First, know it is absolutely at the whim and will of the Chinese government that these deals happen — or happened — at all. That is not to say one is dealing with a government representative when partnering with Chinese media. In fact, it’s quite the opposite. Chinese capitalism is alive and well and has been for some time. I won’t get into the issues of taxation, blocker corporations, foreign tax havens and the like, but I will say that Chinese investors are in media to profit as much as anyone.
It’s just that the rules are different.