His company, Dirty Money Film, recently said it would back 10 emerging director s in a bid to lure a new generation of viewers to theaters, ditching the big -name auteurs it has hired in the past.
Mr. Wang recently discussed how he helped forge the subsidies, why the approach has now fallen out of favor and what’s coming next.
The subsidies fad began in 2014 with “Breakup Buddies,” a comedy he produced for $11 million that went on to gross $177 million in domestic ticket sales.
The film, depicting a road trip by two middle-aged men, was directed by Ning Hao, one of China’s most bankable film directors. It became China’s highest-grossing film that year after “Transformers.”
What Mr. Wang did differently was that instead of launching presale tickets only a couple of days before the official release date, he joined with maoyan.com, a leading Chinese movie-ticketing platform, to allow moviegoers to book seats about two weeks ahead of the film’s release.
Further, the two companies put up nearly $3 million to subsidize about a third of the cost of those tickets, which normally cost about $5 each. That led to record-breaking presales of more than $15 million.
Doing that not only helped boost sales, but it led to good word-of-mouth from audiences that convinced theater operators to schedule more screens to show the film, which was released during a busy October holiday period.
“This is like a leverage in financial terms,” the 42-year-old Mr. Wang, who holds an economics degree, said in an interview. The strategy “made it much easier for us to persuade the theater operators to give us more slots when the film opened.”
The film’s commercial success persuaded other film studios and online ticketing platforms to also invest marketing dollars to directly subsidize tickets, boosting early box-office receipts.
The tactic also led to some shady accounting around China’s theatrical revenue, as some distributors were trying to boost the movie’s box-office sales by buying tickets for “ghost screenings.” The practice led to a crackdown by regulators.
Such generous discounts led to a shift in how consumers buy movie tickets in China. Now, nearly 80% of all movie-ticket sales are made online, compared with about 30% just two years ago. With that success, online ticketing platforms feel little ne ed to continue such generous subsidies, and have trimmed them this year.
That, in turn, has led to slowing growth in movie-ticket sales this year—12% through August to about $4.8 billion, compared with 30% growth last year .
To pick up the slack, industry figures, including Mr. Wang, are calling for better and more popular content.
Mr. Wang said his company would help the 10 young filmmakers he has contracted to finance big-budget films and hire popular actors . The first one, with a martial-arts theme, is budgeted to cost $14 million to produce and is to be released next summer. It star s Chang Chen, the Taiwanese actor who featured in “The Assassin” and “The Grandmaster,” he said.
“The answers to China’s film market growth is no longer the growth of channels-either the marketing gimmicks or the rapid theater buildings,” Mr. Wang said. “We were just lucky enough to catch that opportunity back then.”
Source: Wall Street Journal