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EASTERN PROMISE - New Outreach To Hollywood - And The Opening Of A Mainland Super Studio - Smooth The Path For Co-Productions In China

Posted By Matt R. Lohr, Tuesday, December 13, 2016

With rising production and marketing costs keeping pace with globalization, international box office is an ever-more-decisive factor in determining a film’s success. In recent years China, home to the world’s largest ticket-buying population, has seen its position as a box-office driver increase dramatically. In 2014, Paramount’s Transformers: Age of Extinction crossed the $1 billion worldwide mark thanks in large part to a record-breaking $300-million-plus haul in China, and earlier this year, Legendary Entertainment’s Warcraft offset an underperforming U.S. take with over $200 million in Chinese earnings. Now China is set to further solidify its place in the global film firmament through a major endeavor designed to encourage and facilitate international co-production on the mainland.

PGA member and President Emeritus Hawk Koch first got a glimpse of China’s potential as a co-production hub in 2009, when he traveled to the country with producer/director Taylor Hackford to scout a then in-development production. “I spent 10 weeks there,” says Koch. “It was like the Wild West. Everybody for the first time was kind of figuring out, wow, we’re gonna make a whole movie in China, and you can’t just go in and say, ‘Well, we’re big Americans, we’re gonna walk in and show them how to make movies.’ That doesn’t work. You have to see and learn from them how they make movies, and hopefully there’s a common ground.”

The Hackford project never came to fruition, but Koch reconnected with China’s emergent co-production potential in 2013, when as president of the Academy of Motion Picture Arts and Sciences, he hosted a visit from Chairman Wang Jianlin, founder of Dalian Wanda Group, a multinational real estate and development conglomerate whose holdings include AMC Theaters and, as of last January, Legendary Entertainment, producers of Warcraft. Over lunch during his visit, Chairman Wang told Koch of his plans to build a major movie studio space in China with facilities and amenities capable of hosting multiple major productions. “I said, well, if you’re gonna build a movie studio in China, don’t build it for today,” Koch recalls. “Let me help you get the best production designers and FX supervisors and cinematographers and sound technicians, and build a studio for 2018, not for 2013.”

Later that August, Chairman Wang announced the $10 billion groundbreaking of the Qingdao Movie Metropolis (QMM), a massive development project in the temperate 9-million-strong port city of Qingdao, encompassing state-of-the-art business, residential and entertainment/recreational facilities, all surrounding the new and still-growing Wanda Studios. Koch, who since wrapping up his Academy presidency has joined Wanda as a special advisor to Chairman Wang, feels that the production facilities and amenities Wanda currently offers, and the additional tools forthcoming, are like nothing else available in the country. “We’ve got 15 stages up, with another 15 that’ll be ready at the end of next year. We’ll have both indoor and outdoor marine tanks and the largest soundstage anywhere in Asia—100,000 square feet.” Set construction is already underway on the facility’s existing soundstages for Legendary’s forthcoming sci-fi sequel Pacific Rim: Maelstrom, with more Legendary productions planned to shoot on site in the near future.

Koch’s longtime associate Sarah Platt, a fellow PGA member who is now Wanda’s director of international engagement and outreach, emphasizes that the studio represents just one aspect of the experience Wanda will offer producers. “The Qingdao Movie Metropolis is like an ecosystem that supports filmmakers,” Platt says. “Because five-star hotels and villas and condos will be just over the bridge, you don’t have to worry about turnaround much anymore. There will be international schools and an international hospital as well. As a filmmaker, being away from your family is tough. A lot of people don’t want to go out of town. If they do it, they do it grudgingly. But in this case, you can bring your family, you can enroll your children in school for the year or for six months, and it really provides a unique opportunity for your family to stay together and experience something totally different, while you make your state-of-the-art film.”

The formal international launch of Wanda Studios and the QMM took place on October 17 at the Los Angeles County Museum of Art, where Chairman Wang addressed an overflow crowd of Hollywood business notables. In addition to outlining the amenities and facilities available at the Qingdao complex, the Chairman also provided details about another important opportunity Wanda offers to producers looking for co-production possibilities: an incentive program, supporting filmmakers on a first-come, first-served basis, capitalized to provide up to $150 million per year over the next five years, with potential expanded funding to come in the future.

These incentive programs, notes Koch, can be utilized to support any of the three major types of international/Chinese co-productions. “A full co-production, which means Chinese financiers or producers put up some of the money for the film, guarantees your film can be released in China, as long as the Chinese censors have read and signed off on your script and you made the film the script said you were going to make.” (China’s current quota system restricts traditional international film releases to the country’s screens to 34 titles per year.) “If you do it as just an assisted production, with no set level of commitment from a Chinese partner, you’re not guaranteed Chinese release. A full co-production can take between 40% and 45% of the box office out of the country. If it’s an assisted production, you only get 25%.” (The third Chinese production model, an entrusted production, is for Chinese-language films produced with international funds; these films typically play only in Chinese theaters, although some will occasionally travel to countries with large Chinese-speaking populations.)

Koch says that since the announcement of the incentive program, “the phone has been ringing off the hook” with producers eager to pursue this unique-in-the-Chinese-marketplace opportunity. One company that will be utilizing the Wanda incentive program is Arclight Films, a US/Chinese/Australian operation whose past and upcoming titles include a broad range of films in both English and Chinese, released under the company’s Easternlight Films subsidiary. Arclight managing director Gary Hamilton was part of the launch event at LACMA and says Arclight plans to bring three productions to Wanda over the next two years. “I had the pleasure of going to the facility not too long ago,” says Hamilton, “and I was blown away. I’ve never seen anything like it.” He praises the relationship he has thus far enjoyed with the Wanda team. “I find them incredibly helpful. We were flying a director over recently, and it was immediately, ‘What flights do you need booked?’ ‘What hotels?’ They really want to please, they want to go out of their way to make sure it’s going to be very professional. Just about everybody I’ve dealt with at Wanda, they’ve either worked at the studios, or they’re very westernized, so communication is no problem. I think once the studio is fully up and running, it’ll be seamless going there.”

Koch and Platt have prided themselves on preparing Wanda to address any concerns international filmmakers and their productions may bring to the QMM. “I know the previous problems producers would have coming to China,” says Koch, “and I think we’ve solved most of them. We can deal with customs, visas, how to get your money out, and we have a great production services company that will help you.” Platt cites an in-the-works database of locally based non-Asian atmosphere extras, as well as a new short-term, multi-entry work visa known as “Type Z,” which Wanda arranged with the Qingdao government for international crews. “Before now,” explains Platt, “I think an international crew person would only have been able to get a working visa for something like 30 days, and then they have to leave the country and come back and try to renew it. [Type Z is] a 90-day work visa, with an option to extend for another 90 days. And my understanding is that you don’t have to leave to extend it.”

But even with Wanda’s up-to-the-nanosecond production facilities and the various bureaucratic and logistical efforts that have gone into easing the flow of international co-production into the Chinese filmmaking community, Hamilton still cites key intangibles which incoming international producers should be aware of before bringing a project to China. “Unlike a lot of people,” he says, “I’ve been going back and forth to China for many years. And I think some producers are still a little skeptical, because they’ve never been to China and have their preconceptions. But the Chinese, the way they want to absorb and learn about western culture and Hollywood movies, I think is a very positive thing. It’s a very open industry, and from a business standpoint, obviously we’ve seen the Chinese market grow. For an independent producer, it is the Holy Grail to get theatrical release in China, at the scale where you’re talking 3,000 to 5,000 screens. It’s hard to do that in the U.S. as an independent producer. You know, if you get 500 screens you’re doing well.”

Koch notes the quality of a producer’s relationships in China as another key factor for successful co-production. “The Chinese place a tremendous emphasis on trust,” he observes. “They really have to trust you in order for the relationship to work.” He also recounts a recent film viewing experience during his latest visit to the mainland as illustrative of a key point for producers interested in making a run at Chinese box office success. “I went and saw Ang Lee’s new film (Billy Lynn’s Long Halftime Walk) in a Chinese cinema, with the 120 frames per second and the IMAX 3D. And the place was packed with young people, and they applauded at the end. I think as Chairman Wang said at the LACMA event, of course we love all the tentpoles and the big action movies, but he also sees the reversion to really strong storytelling and strong characters. The Chinese audience, of course they’re gonna go see Fast and Furious whatever number it is. But the fact that they were going to see Billy Lynn as well, to me, that’s heartwarming.”

Koch and Hamilton each have one key piece of advice for any producer considering bringing a production to China and hoping to satisfy its viewing audience. And it’s the same piece of advice from both of them. “I think they have to go there first,” says Hamilton, “and really see it for their own eyes. It doesn’t take much to actually talk to a few Chinese people and listen carefully to what they want. The market is very young there. I think the average audience member is like, 23 years old. So when you start talking about going there, I think you really do need to do some homework and get to know the market.”

Koch reiterates Hamilton’s suggestion and reinforces the emerging central role Wanda Studios will play in China’s film future. “Come to Qingdao, and look at it firsthand. If you’ve never been to the moon, it might be a little scary,” he laughs. “But once you’re there you go, ‘Wow, this is amazing.’ I’ve made over 65 movies, in places like Durango, Mexico and Emporia, Kansas. I know what it’s like to go on location and be in someplace where the only thing you’re doing is working, and the rest of the time is really not very fruitful. There’s a lot of culture in Qingdao and in China, and so it’s exciting. We’re not just Hollywood anymore. The world is very small today, and you have a real chance to enjoy your life and make a really good film there.”

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