China’s flirtation with Hollywood
The Chinese are coming, the Chinese are coming….to Hollywood
In 1966, when the Cold War was in full swing, Hollywood made a delightful comedy film The Russians are coming, the Russians are coming, a film that was both a critical and a commercial success. Today, Hollywood could make a film called The Chinese are coming, the Chinese are coming that would document reality—specifically for those interested in contemporary economics and business .
A few days ago, Wang Jianlin, China’s richest businessman, who runs the $44.7 billion Chinese conglomerate called Dalian Wanda bought the Hollywood firm Dick Clark Productions for $1 billion. Dick Clark Productions is the company that produces the high profile Golden Globes awards and several other entertainment award shows including the American Music Awards, Billboard Music Awards, Miss America and So you think you can dance. By acquiring Dick Clark Productions, the Chinese Dalian Wanda company now has indirectly entered the TV show business not merely cinema. The Dalian Wanda company is now the world’s largest movie theatre owning company.
In the Eighties, Japanese business houses had acquired prime US properties and businesses that ranged from the Rockefeller Center in New York to one of Hollywood’s top six studios–Columbia Pictures. The iconic torch lady figure of Columbia was gradually replaced by the bland words Sony Pictures Entertainment, a subsidiary of the Japanese conglomerate Sony. At that time there was considerable concern that the Japanese were going to control Hollywood but that concern petered out. Mitsubishi Group of Japan owned the Rockefeller only from 1989 up to 1996, when it was re-sold to an American consortium.
Three decades later, the Chinese have followed the Japanese interest in acquiring American business icons. In 2014, the Chinese company Lenovo acquired Motorola Mobility and re-named the company’s products as Moto. In 2016, China’s Haier bought the US General Electric’s appliances division. Just as the Japanese bought the Rockefeller Center decades before, the Chinese insurance company Anbang acquired New York’s iconic hotel Waldorf –Astoria and the Starwood chain of hotels including the luxury W Hotel in Hollywood.
Before buying Hollywood’s influential Dick Clark Productions, Mr Wang Jianlin had already set his eyes on the Hollywood centred entertainment businesses in USA. First, in 2012, he strategically acquired the AMC theatre chain that screened Hollywood’s products over 5000 screens in some 350 theatre complexes across USA and Canada. Under the Chinese ownership, AMC has bought other significant cinema theatre chains in USA (Carmike), Europe (Odeon) and Australia (Hoyts). As the next step, Wang Jianlin acquired a medium-sized Hollywood studio called Legendary Pictures that had co-produced the commercially successful Batman superhero film The Dark Knight and special effects monster films Jurassic World and Pacific Rim.
With these three major business acquisitions Wang Jianlin has arrived in Hollywood with a bang. His eyes are now set on owning one of the the big six surviving studios of Hollywood—Warner Brothers, 20th Century Fox, Paramount, Universal, Sony (the erstwhile Columbia) and Disney. (The other big studios MGM, United Artists and RKO have withered following mergers, hive offs, and accumulated debt in the past decades.)
Wang Jianlin’s Dalian Wanda company is not the only Chinese entity making inroads into Hollywood. The Chinese firm Alibaba has linked up with Steven Spielberg’s company Amblin Partners infusing significant monetary sustenance.
The flip side of these acquisitions by Chinese entities is interesting as it is surprisingly a win-win situation for both USA and China.
The Dalian Wanda company, originally a real estate company, has tied up with Sony Pictures (the former Columbia studios) to build a film production studio in Quindao city in China which will be double the size of the biggest Hollywood studio lot.
Gone are the days when Hollywood movies survived on domestic ticket sales. China is predicted to soon surpass USA as the world’s largest cinema-going nation. One amazing statistic is that 22 new screens are being added each day in China and there is no official age bar for cinema viewership in that country. All this bodes well for not-so-great Hollywood films that have been very successful in China rather than the US. An example is Warcraft, based on the strategy game of the same name. It raked in 5 times more in ticket sales in China than in the US. Films such as Gods of Egypt have done better in China than elsewhere. Sci-fi films and action films and critically poorly received films (e.g., Need for Speed and Brick Mansions) have made amazing box office returns in China compared to USA. What’s more Hollywood’s Dr Strange released a week ago made a staggering $44 million in the opening week in China, despite Hollywood deciding to change a key Tibetan character in the story to a Celtic one (played by actress Tilda Swinton).
It is well known that the Chinese are sitting on a growing dollar trade surplus. Investments like these help improve the global image of the Chinese Communist Party which knows the power of popular media only too well. Hollywood has the expertise to improve the Chinese film industry and create new jobs within China. The US should not mind this as long as the greenbacks flow back to the US and improve an industry that increasingly cannot be dependent on its domestic market. China which presently limits import of foreign films (mostly US) to 34 a year may open up further to Hollywood if it is in its own economic interest.
The moot question is if it’s Hollywood today, will Bollywood be next?