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Ni Ni covers fashion magazine
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Katzenberg to relinquish DreamWorks Animation CEO role after Comcast deal
After the deal closes, Katzenberg will become chairman of DreamWorks New Media, made up of the company’s stakes in Awesomeness TV and NOVA, NBCUniversal said Thursday. In addition, Katzenberg will serve as a consultant to NBCUniversal.
The proposed sale of DreamWorks Animation to Comcast for $3.8 billion would not only signal further consolidation in Hollywood, it probably also would mark the end of Katzenberg's long tenure as head of the studio he built into a powerhouse with such hits as "Shrek" and "Kung Fu Panda."
Selling the studio to Comcast's NBCUniversal would provide a stable and secure home for DreamWorks Animation, especially since the studio has stumbled at the box office in recent years.
“I am proud to say that NBCUniversal is the perfect home for our company," Katzenberg said in a statement. "As for my role, I am incredibly excited to continue exploring the potential of AwesomenessTV, NOVA and other new media opportunities, and can’t wait to get started."
But Katzenberg, 65, would no longer be in charge of the studio he has run for more than two decades. The Times reported earlier Thursday that he may take on an unspecified role at the company, according to two people familiar with the matter not authorized to speak publicly.
Katzenberg has spent years trying to secure a future for his studio. Though previous attempts to sell to Japanese telecommunications giant SoftBank and Pawtucket, R.I., toy maker Hasbro both fizzled, analysts were more optimistic that a deal with Comcast might materialize, citing potential benefits to both companies.
"It represents a ferocious dedication on the part of Jeffrey to keep the company afloat," said Los Angeles entertainment industry attorney Ken Kleinberg. "Jeffrey is maybe ready to step down and not have these burdens anymore.... He'll be exiting on a high note."
Comcast, which is based in Philadelphia, runs a huge cable business, broadcaster NBC, movie studio Universal Pictures and theme parks. It had been unclear where Katzenberg would fit in the new corporate machine if he were to stay.
Universal already has a successful animation business in Illumination Entertainment, whose chief executive, Chris Meledandri, has developed a reputation for making hit movies at lower costs than the typical computerized films.
Illumination had a big hit last year with "Minions," which cost $74 million to make. DreamWorks films regularly cost more than $100 million to produce.
"He's run his own show for years now," Eric Handler, an entertainment analyst at MKM Partners, said about Katzenberg. "I can't imagine he'd want to have a boss at this point in his life."
Some analysts, however, said Katzenberg could hold value for Comcast because of his creative vision in leading DreamWorks and the relationships he has forged in businesses that have become increasingly important to the film industry — namely digital services and the burgeoning Chinese film market.
"There's a lot of things he can bring based on his vision and relationships that are hard to quantify in monetary terms," said Tuna Amobi, an analyst at S&P Global Market Intelligence. "My instinct would be that they might want to keep him around in some capacity. He's been more of a visionary in the animation space."
Jason Schloetzer, a Georgetown University accounting professor and corporate governance expert, said Comcast may want to hold onto Katzenberg for several years as his company adjusts to new ownership.
"He's one of the creative forces behind DreamWorks, and he's a key portion of the generation of future content," Schloetzer said.
It remains to be seen what his role will look like. Jeff Shell was named head of Universal Pictures in 2013 and is riding high after a record year at the box office. NBCUniversal Vice Chairman Ron Meyer has nearly two years left on his contract.
And Katzenberg, worth more than $1 billion according to the Los Angeles Business Journal, stands to reap a substantial sum from the proposed sale. Additionally, he would receive about $21.9 million if he leaves the company after a change in control, according to a regulatory filing. He controls 60% of the firm's voting shares.
The former Disney executive founded the DreamWorks studio with director Steven Spielberg and music mogul David Geffen in 1994. While DreamWorks never reached the ranks of the major Hollywood studios, the animation division, spun off in 2004, became a main rival of Disney by launching such franchises as "Shrek" and "Madagascar." In recent years, DreamWorks has struggled to consistently deliver hits in the animated family genre it once dominated, suffering from duds such as "Turbo" and "Mr. Peabody & Sherman."
But it has partly regained its footing with hits such as 2015's "Home" and this year's "Kung Fu Panda 3," which did particularly well in China. Katzenberg has also worked to diversify the business by making inroads in digital media through DreamWorks' output deal with Netflix and its stake in the YouTube network AwesomenessTV. That has helped calm investor concerns, driving its stock price up 25% in the last 12 months. The shares soared 19% to $32.20 on Wednesday.
In February, Katzenberg said on a call with analysts that the company was "taking the right steps to best position the company for long-term success."
As for life after DreamWorks, Katzenberg would have plenty of options. The New York native is known for throwing his weight around in philanthropy and politics, for example. The longtime Democratic supporter has raised funds for candidates including President Obama and Hillary Clinton, and is known to corral fellow industry heavyweights during election season.
Katzenberg last year made a $1-million donation to Priorities USA Action, a group that supports Clinton in the presidential race.
Source: Los Angeles Times by Ryan Raughnder
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Why Captain America's keepers, the Russo brothers, are turning to China for inspiration
Joe and Anthony Russo’s latest installment in the Marvel franchise will charge into mainland theaters May 6 – a simultaneous release with its U.S. opening. Joe Russo was in China last week to promote the tentpole and work on finding new projects for Anthem Pictures, the brothers’ new venture dedicated to creating Chinese-language films for release in China. Hero Complex caught up with co-director Russo to talk about the six-week-old company, his obsession with Chinese food, and growing interest in the Middle Kingdom. Following is an edited transcript.
Why China?
Joe Russo: The U.S. market is becoming stagnant. It’s very hermetic. It’s about tentpole films, and there’s no independent scene anymore. Anything that was independent is now in television. So TV has really do-si-do’ed with the movies and I think the most interesting content being made is in television -- the more adventurous, character- driven content. As filmmakers we are interested in unique voices.
When we came here to promote “Winter Soldier” [in 2014] we fell in love with the country. Because I’m Italian, I have a real love affair with food, and the way I relate to a culture is through the food.
And I fell in love with the food here. I think Beijing is incredibly dynamic, a very unique city.
We just started watching Chinese films and there were some directors that we loved, like Jiang Wen (“Let the Bullets Fly”), Ning Hao, who did a movie called “Breakup Buddies,” and Wuershan (“Painted Skin: The Resurrection”), who’s doing these big visual spectacles. There’s so much happening here and it’s such an interesting market.
We grew up near a cinematheque in Cleveland, so we were very influenced by international cinema, the French New Wave, Italian neo-realists. It’s been a long time since there’s been an emerging market that can challenge the U.S. market. So I think this is a really exciting time, because the more diversity we have in cinema, the more interesting it becomes. So I think anything we can do to help cultivate the market here or try to inspire with our level of experience or be inspired by the market, we’re willing to do.
You’re bored?
The U.S. is a predictable market. I love what we do, I love the Marvel films, I think we’re telling stories on a grand scale. So as directors we’re very happy with what we’re doing.
As producers, we look for diversity. I like to be inspired -- it has to be about what gets you out of bed in the morning. It’s not an easy job. It’s a physical job, the hours are long and it takes you away from your kids. I want to be inspired. I think investing ourselves into a new culture and a new market is important. It dimensionalizes you as a human being. Being a global citizen makes you a more interesting person.
Which Chinese directors have you met, and whom are you looking to work with?
We’re seeking out relationships with established directors whose work we like, but we’re also looking for young directors and trying to give them an opportunity to get their stories told.
I’ve met Jiang Wen twice. I'm obsessed with Jiang Wen. I’m putting a lot of effort into finding a project [with him]. He’s very particular; he’s only made five movies in his career as a director, so it’s not easy to convince him to make a film together. But we’re slowly building a relationship with him and I think he’s immensely talented as an actor, as a writer and a creator. So whatever intersection we can find, we will.
Wuershan just came over to the U.S. and we set up a bunch of meetings with him with some of the top-tier visual effects houses in the U.S., just the relationships that we have, trying to facilitate on his next movie because he really wants to find the absolute top people in the world to work on his films because visual effects are so important to him.
And Ning Hao, we had a conversation with two months ago about a really interesting idea he has for a science fiction film, so we’re slowly working or pushing forward to see what comes of it.
Sci-fi is really a burgeoning genre in China.
It is. We’ve been approached with a lot of science fiction concepts. We found a young filmmaker that we’re working with who brought us a superhero origin film that’s really interesting. It has a realistic interpretation, which I found very cool; it’s a very grounded interpretation of a telekinetic. So we’re working on getting that film produced. It will probably go into production in the fall; its budget is about $30 million. … The release will be in late 2017, early 2018.
The character is Chinese. He can control things with his mind. And it’s an origin story, it’s a little bit of a through-the-looking-glass concept; he’s a normal person with a normal life and one day he happens upon the fact that he has these abilities and it opens up a whole world to him that he didn’t know existed.
What else have you started on?
We’re helping Wu Jing out on “Wolf Warriors 2.” We introduced him to some of our relationships in the business, like a stunt team that’s going to come in and work hard with him to elevate the action on the film because the second time out he really wants to up his game and outperform the first movie, which did incredibly well.
The last thing that we’re working on is a Journey to the West concept that’s very unique, a very different take. I can’t really say more because we’re still developing it. It’s purely a development project; it’s a great idea someone brought us, one of the most famous science fiction writers in the country.
We’ve literally been a company for six weeks and this is everything we’ve got going on already.
There’s a lot happening. It’s a very explosive market. And it’s good because it feeds you creatively.
Are you looking to take these films global?
Our intent is not to make movies that are geared toward the international market. These are movies geared toward the Chinese market, working with Chinese filmmakers. So I think our approach is: how can we assist with our experience? We’re not interested in any way in imposing a Hollywood style of storytelling on these movies. We’re trying just to assist on a creative level and with some infrastructure.
I'm not interested in homogenizing the Chinese market. I’m interested in finding out what’s unique about the Chinese market and endorsing it. I’m more compelled as an artist to see diversification than I am to keep watching an Anglo point of view in storytelling.
But there’s so much talk about "can a Chinese film go global…"
Well I guess you can say “Crouching Tiger, Hidden Dragon” did…. [The world] is an Anglo [centric] market but I don’t think for long. I think part of that has to do with training people to accept different kinds of storytelling and that’s part of the reason we are here, I think the younger generation is more accepting of that concept. The Internet has changed the way people are educated. They can connect on a video game with someone in Czechoslovakia in real time, or someone in India. So I think they are used to the world being globally accessible. They will be more open to different kinds of storytelling. That’s why I think something will hit. But I think if you chase that, then you’re chasing a homogenized version of a broadly accessible story but it’s in Chinese rather than in English. That’s not our agenda.
What are some of your favorite Chinese movies?
Jiang Wen’s “Gone With the Bullets” or “Let the Bullets Fly” -- I can say I’ve probably stolen a few shots from them. I really love Ning Hao. I thought “Breakup Buddies” was great; I thought it had a really human, emotional component to it. He really knows where to put the camera, he’s very inventive with his characterizations and his characters are very flawed but there’s a level of absurdism to what he does. I think that’s what really attracted us to him -- we have a very similar sense of humor.
“Arrested Development” is a more stylized version of what he does; he examines individuals in existential crisis and finds comedy in it. [The Russos directed “Arrested Development” in its early seasons.]
I thought [Han Yan’s] “Go Away, Mr. Tumor,” was a really interesting film; it’s a daring concept and it had a tone that reminded me of “Amelie.” So it was very expressionistic. I think Bai Baihe is a really talented actress and if you look at the work she did in “Monster Hunt” or “Mr. Tumor,” she really loses herself in the role; she’s a very diverse actress.
All of Wuershan’s films. I think he’s the most visually gifted director in China right now. I think he’s as elegant as any visual storyteller in the world right now. I like that he’s pushing himself to access an ILM or Weta, because I think there could be some interesting advances in his style with those companies.
Have you been surprised by Chinese fans’ enthusiasm for Captain America?
It’s a very passionate fan base. One of the reasons I love working in China and why we started Anthem is … audiences here are very passionate about storytelling and mythology. … When you go to the fan event here, it’s very energetic. They’re pushing against the barricades and it’s like the Beatles.
Captain America is of course a very American character and you never know how that’s going to translate. Our interpretation of the character is to examine what that means. We’re not interested in a blindly patriotic interpretation of the character. We’re much more interested in a deconstructed, subversive interpretation of the character. You can’t have a character called Captain America without examining what that means.
He’s certainly a character with strong moral fortitude and that’s translatable on a human level; anyone can understand Captain America, he’s a guy with a strong code and he adheres to it and he’s got the greater good at heart.
What we find fascinating about the character is constantly banging against him, to challenge whether that is really his agenda or really that is at the heart of what he is. This third film is a very complex movie on an emotional level because it pits him against his new family, which is the Avengers, and his old family, which is this character Bucky Barnes. And it’s life-or-death stakes, he has to pick one and protect them. It puts him in a precarious and complicated emotional place for a guy that wants to have a simple code.
Did you have to make any changes for China? Is censorship something you think about in the Chinese market?
No, no changes. I don’t think about it. You just try to tell stories. If it’s a good story you figure out how to tell it.
What are you still puzzling out about China?
I’m still exploring the food. I get obsessed. I’ve got to eat dumplings and I eat dumplings the whole trip. Or I eat hot pot and I’ve got to find the next hot pot place that I love.
What’s the weirdest thing you’ve eaten?
Duck feet and duck tongue. I love duck.
Where do you go for Chinese food in L.A.?
I like to go to Arcadia and Monterey Park. You have to go with Chinese friends though, because most of the menus are in Chinese.
Who are your Chinese partners?
We are in very close partnership with Beijing Culture. We are working on opening an office here in Beijing. So they’re facilitating for us while we’re still setting things up. But there are projects that come to Beijing Culture, and if they think we might be a good fit for, they’ll move it over to us. ... It’s not an exclusive deal but they are our film partners. They’re taking care of our overhead but we also have $100 million per annum for financing or co-financing.
Do you have a number of films per year in mind?
I don’t want to be slave to a slate. That’s a way to make bad movies. When we find projects we’re interested in we’ll get them up and running. ... In the case of the superhero film, it was pre-financed when they came to us. They came to us and when we said we’d get involved the financing was set up immediately. So it’s not a market where financing is a difficult issue. It’s a cash-rich market.
Source: Los Angeles Times by Julie Makinen
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Gao Yuanyuan in Shanghai for brand event
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Street shots of Qi Xi
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Jia Qing poses for photo shoot
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'White Deer Plain' writer dies at 73
Chen was born in June 1942 in Xi'an. He started writing prose in 1965 and finished his magnum opus "White Deer Plain" in 1992, for which he won the Mao Dun Literature Prize in 1997, one of most prestigious literature prizes in China. With the novel’s publication in 1993, Chen shot to fame almost overnight. Critics described his works as a "realistic reflection of Chinese contemporary history."
"White Deer Plain," which has sold 1.6 million copies thus far, has been adapted into various art forms including Shaanxi Opera, stage drama, dance drama, comic strips and sculptures. The story tells of the hardships and spiritual pursuits of several generations living on White Deer Plain, mirroring the radical changes that took place in the Chinese countryside over a near-half-century.
"If this novel can arouse the interest of readers and help them to gain a real sense of the history it relates and of the background against which contemporary China walks, I will feel totally satisfied," he once said.
In 2010, this novel was adapted into a film of the same name directed by Wang Quan'an and starring Zhang Fengyi, Zhang Yuqi and Duan Yihong. The film competed in competition for the Golden Bear at the 62nd Berlin International Film Festival, where Lutz Reitemeier won the Silver Bear for Outstanding Artistic Achievement in photography.
The book was also listed in a must-read selection by China's Ministry of Education for university students.
In 1979, he became a member of the Chinese Writers Association and then served as the association's vice chairman between 2001 and 2006.
Source: china.org by zhang rui
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China's Domestic Animated Films See 78.6 Pct Box-office Surge
That's a growth rate of 78.6 percent, year on year.
"Monkey King: Hero is Back," topped China's domestic film box office chart.
Fourteen foreign animations were screened in China last year, a quarter of the total number.
However, they took more than half of box office revenue for animated movies.
Box office revenue is expected to surpass 6 billion yuan this year.
Source: CRI
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Comcast buy of 'Kung Fu Panda' producer aids Asia strategy
DreamWorks, producer of the "Kung Fu Panda" and "Shrek" franchises, was one of the first Hollywood studios to open a production studio in China. It formed a joint venture with local companies in 2012 called Oriental DreamWorks.
The $3.8 billion purchase of the company founded by movie mogul Jeffrey Katzenberg is expected to help drive traffic to Comcast theme parks in the region, Wall Street analysts said. The animation studio's relationships also could make it easier for Comcast to distribute content in China.
DreamWorks has aggressively courted audiences in that country, which is the world's second-largest film market and home to a growing population of city dwellers ready to spend on entertainment.
This year's hit "Kung Fu Panda 3," for example, was the first movie animated in both English and Mandarin. When it opened in February, it set a record for the biggest animated film opening in China.
"DreamWorks has done a very good job in building a team in China and learning the market," said Larry Namer, president and CEO of Metan Global Entertainment Group, which produces entertainment content for Chinese audiences. "As far as the Hollywood entities go, I think they seem to understand the nuances of the market better than most."
Comcast's plan to purchase DreamWorks was announced on Thursday and requires approval from regulators.
From January through March, 37 percent of Comcast’s total revenue came from its content and theme park unit, NBCUniversal. Tapping into Asian markets could help that grow further, analysts said.
But banking on Asia right now is no guarantee. China, the region’s growth juggernaut for the last decade, has seen its economic expansion slow dramatically over the last two years, and its first-quarter gross domestic product increase of 6.7 percent on an annualized basis was its smallest since 2009.
Larger rival Walt Disney Co, however, is busy ramping up its presence in China. The company will open a $5.5 billion Disney theme park in Shanghai in June. And its animated film "Zootopia," released in March, has grossed more at Chinese box offices over its theatrical run than "Kung Fu Panda 3."
NBCUniversal is building its own $3.3 billion theme park in Beijing. DreamWorks is a partner in an entertainment district planned for Shanghai. Universal Pictures opened an office in Beijing in 2014 and has consumer products staff in China.
"I want to make sure that we're doing everything we can to grow that market as aggressively as possible," NBCU Chief Executive Steve Burke said Wednesday on the company's quarterly earnings call, a day before the DreamWorks deal was announced.
With DreamWorks in the fold, Universal's parks could add movie characters like Shrek and Kung Fu Panda alongside Harry Potter and the yellow minions from "Despicable Me."
"They are borrowing a page from the Disney playbook," MoffettNathanson analyst Craig Moffett said. "They will use these brands to drive traffic at their theme parks."
DreamWorks' ties in China also may ease the way for more NBCUniversal content into the country, analysts said. Chinese regulations limit the number of films imported into the country each year, and the government's censors often object to foreign entertainment content.
NBCUniversal's strategy includes building its presence in other Asian countries and around the world. In September, it acquired a stake in Universal Studios Japan, which helped drive theme park sales in the first quarter of 2016.
DreamWorks also provides original TV content to streaming service Netflix, which is now available in more than 130 countries, but not yet China. The DreamWorks TV business is expected to generate $1 billion in revenue from 2016 to 2018, Macquarie Securities analyst Amy Yong said.
(Source: Reuters; Reporting by Lisa Richwine; Editing by Anna Driver and Lisa Girion)
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Fan Bingbing with her little kitty
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Star Tracks in April
Actress Shu Qi poses during a promotional event by Jimmy Choo in Hong Kong, April 28.
Actress Gao Yuanyuan attends a commercial event in Shanghai on April 24.
Actress Vivian Hsu attends a commercial event in Taipei on April 12.
Actress Liu Meihan poses during a photo shoot in Beijing on April 5.
Actress Tiffany Hsu attends a fan meeting event in Taiwan on April 3.
Actress Karena Lam poses for a photo in Hong Kong on March 31.
Source: China Daily
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New photos of Ruby Lin
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Angelababy releases new fashion photos
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Lin Yun poses for photo shoot
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Sun Yi 'all smiles'
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Tian Hairong poses for ‘Elle Men'
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China’s Movies Are a Hit With Investors
The film sector is one of few boom industries in China, with an annual growth rate of more than 30%. As a result, movies have become a top draw for high-risk financial instruments.
The flood of cash has been a boon for actors, directors and others tied to the industry; salaries of movie stars just below the top tier doubled in the past few years to more than 10 million yuan ($1.5 million) per film, according to talent agencies and producers.
Much of the money has been attracted by the success of movies such as “The Mermaid,” a comedy about a romance between a business tycoon and a mermaid, directed by Hong Kong hit maker Stephen Chow. Before it opened in February, Hehe Pictures, a film company affiliated with state-run China Minmetals Group, set up a private-equity fund to secure the distribution rights. Together with two studios, they bet the movie would gross at least 1.5 billion yuan, say executives among the sponsors.
It was a daring bet. At the time, only two films in China had grossed more than 2 billion yuan. But it paid off: The film broke all Chinese box-office records and still is in theaters after regulators granted it an extended screening period. It has grossed nearly 3.4 billion yuan so far.
On the one hand, more money enables Chinese filmmakers to make further gains on Hollywood. China is the world’s fastest-growing and second-largest movie market, with a 49% increase in box-office takes last year to $6.8 billion, according to the Motion Picture Association of America, or MPAA. That compares with $11.1 billion in the U.S., a rise of 8%.
On the other hand, ample funding means more movies get made than there is a market for. According to Beijing-based film-research company EntGroup, only 372 of 686 domestic films made last year were able to get theatrical releases, in a market where the profit on a movie comes almost entirely from box-office receipts.
Last year, 166 film-focused private-equity funds were set up; 10 years earlier, there were only five such funds, according to Beijing-based Zero2IPO Research, which researches financial institutions.
Cash for movies also is flowing in from other industries, like real estate and energy firms, which had long invested in them to get access to perks such as dinners with movie stars. Now as their main businesses feel the effects of China’s slowdown, they are looking more seriously at film projects.
The investment bonanza is having significant ripple effects in an industry whose revenue didn’t reach 10 billion yuan until 2010.
“For someone who has been in the industry for over two decades, it is rare to see so much new money and so many people who are eager to get into this industry,” said Ben Ji, managing director of Beijing marketing firm Reach Glory. He sees an upside: “All the attention could help the industry become more resilient.”
However, much of the fundraising is from online-lending platforms subject to little transparency and with practices that are strictly banned in other sectors, such as using the same collateral for more than one loan.
Zhao ChunXia, founder of online-lending platform itouzi.com, said it isn’t unusual for a movie-focused wealth-management project aiming to raise more than 10 million yuan and offering an 8% to 12% annual yield to be closed in just a few minutes after being released.
A scandal in March involving “Ip Man 3,” a Chinese-made martial-arts movie featuring Mike Tyson, shows how such financing has exacerbated murky practices in the industry. The movie’s main distributor, Dayinmu Film Distribution, was part of a network of companies affiliated with “shadow bank” lender Shanghai Kuailu Group that financed “Ip Man 3” largely with money raised on online platforms. Some of that was used to buy tickets in bulk to raise box-office numbers, which drove up stock prices of the listed Kuailu affiliates with stakes in the movie.
After Dayinmu admitted to spending nearly $9 million on tickets and “ghost screenings,” regulators suspended its operations for a month and the shares slid. Shanghai Kuailu has since halted redemptions on wealth-management products for a quarter-million clients.
By contrast, Hollywood has resisted nontraditional fundraisingfor movies. In 2010, the MPAA objected to plans by two Wall Street firms to launch an exchange based on film futures, saying it could open the door to financial irresponsibility. There is no comparable trade group in China to shield the industry from disruption.
“The current Chinese film-industry organizations were founded by the government, and they don’t really represent stakeholders, unlike MPAA,” said Liu Haodong, former director of industry research center of the state-backed China Film Association. “It’s everyone for themselves.”
Regulators say they have had trouble keeping up with developments in the sector. “When we spot problems, we are not able to apply regulations one by one to punish [perpetrators] accordingly,” said Li Dong, deputy director of a department under China’s top media regulator—the State Administration of Press, Publication, Radio, Film and Television—at a recent industry seminar.
Some in the industry also worry the ramped-up financial resources are creating bubbles.
“Right now I see more harm than good from these so-called financial innovations, because they are not what the movie industry really needs,” said Ann An, president of Desen International Media, a major Chinese film studio. “They just use films for a quick profit.”
Bill Borden, co-executive producer of “The Mermaid” and a veteran Hollywood producer, said the new money is driving up the prices in a way that hurts Chinese filmmakers.
“In Hollywood, you’re worth this money because that is how much we think we can sell you for,” he said. “China is wide open,” with money that used to “build bridges and dams for billions.”
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'Kung Fu Panda' Coup? How DreamWorks Could Benefit NBCUniversal in China
DreamWorks Animation's outgoing CEO Jeffrey Katzenberg was among the first in Hollywood to read the tea leaves, planting his flag in the surging Chinese entertainment market back in 2012.
Shortly after DWA's Kung Fu Panda 2 smashed local box office records in 2011, Katzenberg partnered with a consortium of state-backed companies to launch Oriental DreamWorks, a joint venture animation studio based in Shanghai.
Since then, the Chinese box office has tripled in size and it is expected to top North America as the largest theatrical market next year. Kung Fu Panda 3, meanwhile, was jointly produced by DWA's U.S. and Chinese studios as the first film fully animated in both English and Mandarin. When it came out in February — with considerable marketing and merchandising support from the ODW team — KFP3 set a record as China's biggest animated picture ever, grossing $154.3 million.
If Comcast's deal successfully closes, the Chinese staff and relationships DWA has built at Oriental DreamWorks in Shanghai are expected to be retained and transferred to Universal Filmed Entertainment Group.
Given that Universal had a relatively small presence on the ground in China prior to the agreement, regulatory issues from the Chinese side aren't expected to pose a challenge.
Likewise from the U.S. side, says Peter Schloss, managing partner of CastleHill Partners, a Beijing-based merchant bank specializing in the media and sports industries. "Given that Oriental DreamWorks still represents a very small portion of the parent's overall business, the Chinese subsidiary shouldn't attract much notice from U.S. regulators," Schloss says.
"That said," he adds, "China is a very important market for any foreign studio that's in the children's entertainment space — and that's where a lot of interest must have been for Comcast and NBC Universal here."
Over the past year, animation has emerged as one of the hottest categories at the Chinese box office.
According to a report published in China's state press Friday, theatrical revenue from local animations grew 78.6 percent in 2015. Imported animated fare from Hollywood also has been hitting new heights: last month, Zootopia grossed $236 million, topping Avengers: Age of Ultron as Disney's biggest title in China to date.
"China's children's entertainment market is going to see the same growth trajectory as the live-action feature film market has," says Schloss, adding, "But the real money will come from derivatives."
Over 80 percent of China's film-related revenue comes from box office. In North America, the theatrical slice is estimated to represent just 30 percent, with the rest made up by derivatives such as merchandising, TV deals, digital and OTT sales, IP licensing to theme parks and other attractions.
China's state-backed film colossus China Film Group, along with state regulators, have set the development of the derivatives market as one of the local industry's top priorities. Owning a localized children's content provider like ODW will only give Universal a leg up when this sector begins to take flight, observers say.
The acquisition could also give Universal a strategic boost on the latest battlefront in its ongoing rivalry with Disney: Chinese theme parks. Walt Disney Co.'s $5.5 billion Shanghai Disney Resort is set to open in June. Universal is building its own $8 billion theme park in eastern Beijing to debut in 2020.
As Jeff Shell, chairman of Universal Filmed Entertainment, told THR in an interview yesterday: "You can't think about a Kung Fu Panda attraction at a Beijing theme park when it opens up and not get excited."
Universal already had a formidable team and track record in China. In 2014, the company hired Jo Yan, who had spent two decades overseeing Disney's theatrical ops in China, to head up its Beijing office. The next year, Universal had the best 2015 of any Hollywood studio in the Middle Kingdom, with Furious 7 ($390.9 million) and Jurassic World ($228.7 million) finishing first and third among all imported movies. Universal also has a fresh $500 million financing deal with Beijing-based
Perfect World Pictures, which is expected to be a strategic partner as well as a financier.
A group a Chinese companies, lead by the influential state-backed investment firm China Media Capital (CMC), own 55 percent of ODW, with DreamWorks Animation holding the minority 45 percent share. Acquiring that piece puts NBC Universal into bed with some well-connected local operators.
"Universal has several irons in the fire here," says Stanley Rosen, a professor of political science at the University of Southern California who specializes in China’s film industry. "They'll need a lot of support for the theme park and it's hard to predict what the political dynamics will be by 2020."
"CMCs good relationships with the government makes this a nice step for NBC Universal and Comcast in terms of enhancing their footprint in China," adds Schloss.
Source: The Hollywood Reporter by Patrick Brzeski
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Black and white photos of Tang Yixin
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Sun Yaoqi poses for photo shoot
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