Cannes: Huayi Brothers CEO Outlines How Hollywood Can Make Hit Films for China's Audiences

Jasper James
Jerry Ye

Beijing-based exec Jerry Ye tells THR of his partnership with STX and why the studios need more of "the Chinese dream."

Jerry Ye began his career in entertainment just as the Chinese box-office boom was beginning to go supernova. The 43-year-old executive joined Chinese property conglomerate Dalian Wanda Group in 2002. Under the tutelage of Wanda chairman Wang Jianlin, China’s richest man, Ye helped orchestrate the conglom’s diversification into the entertainment sector.

During Ye’s tenure as vp of Wanda’s Culture Industries Group, the subsidiary’s movie theater arm became China’s largest exhibitor, with more than 1,600 screens, accounting for as much as 14 percent of the country’s total annual box office. He also helped found Wanda’s production and distribution subsidiary, Wanda Pictures, in 2010.

After just five years, the cash-flush upstart studio co-produced and distributed China’s second and fourth highest-grossing movies of 2015, Mojin: The Lost Legend ($255.7 million) and Goodbye Mr. Loser ($226.1 million). Ye was a producer on both.

In March, Ye left Wanda to join Huayi Brothers, the influential Chinese studio established by Wang Zhongjun and Wang Zhonglei in 1994. Shortly before Cannes last year, Huayi Brothers signed an 18-film co-financing and distribution agreement with Robert Simonds’ STX Entertainment. As the new CEO of Huayi Brothers Pictures, Ye already has begun to deepen its international ties.

Ye invited THR to his Beijing office to discuss the rapid changes underway in the Chinese movie industry and why Hollywood will have to learn to tap “the Chinese dream” if it’s going to continue being successful there.

It’s been a little over a year since Huayi partnered with STX. What’s your take on how the partnership has progressed?

The cooperation has been great. Our strategy is to be an international entertainment company, and in my personal view, real cooperation between the States and China is exactly the future of this industry. The Chinese market has so much potential but we still lack the experience to make great global films. Hollywood has huge experience at doing this, because they have an industry that has been developing production and distribution mechanisms for many, many more years.

But, frankly, the U.S. market faces many challenges — from new media and changing behavior of young moviegoers. China is the engine of the future for world film, because our young people are crazy about watching big movies on the big screen. So, I have strong confidence in the future of our partnership. We will need each other.

Recently, some of your Chinese competitors have begun financing the big Hollywood studios. Bona Film Group invested $235 million in 20th Century Fox's slate, and Perfect World Pictures put $500 million into Universal. What was behind Huayi's strategy for partnering with a startup like STX instead of one of the big studios?
 
I've known Bob for a long time and he has a clear vision for his company and for their future, so STX is a good start because this company is also starting from scratch. It’s not so huge, like the studio guys. As we go international, we are starting from scratch, too. It's very important for Huayi to be able to engage in the whole process, from development to production to distribution, so that we can bring these mechanisms back to China. They also need direct and frank information about the China market at the start of that process, because this market is so important for them. It's a sincere, strong partnership. My team in L.A. is in direct contact with them on a daily basis.

Will you make other investments in Hollywood?

Of course, because as I said, this is how both sides will have a brighter future. We just have to find the right time and the right partner. But yes, we will. We are discussing many things. Huayi is a publicly traded company, so we have to wait to make announcements officially.

Tell us about the vision for your new animation division.

Last year, Monkey King: Hero Is Back broke the record for an animated film in China [$153 million]. This year, [DreamWorks Animation’s] Kung Fu Panda 3 set a new record [$154.3 million]. Then, [Disney’s] Zootopia broke the record again [$236 million]. So animation movies have had great success in China recently.

Do you know why?

I have some theories. … In China, “animation movie” means “family movie.” We have no rating system in China, so during holiday periods, animated movies are very important because parents know they are safe for young moviegoers. The whole family can go and have confidence that it’s a nice story. The Hollywood studios are doing very well with their animated movies here. We need to be doing this, too.

The second reason to invest in animation is, like I said, we want to be international. Animation is a very smart starting strategy. It’s very strange for American moviegoers to watch subtitles. Frankly, this is a huge challenge for us. With animation, this problem goes away. You just do a dub or reanimate in English. It’s a good starting point for introducing Chinese content to international audiences.

When you were at Wanda, you oversaw a massive expansion of its movie theater circuit across China. How are the demographics of smaller, provincial cities changing the theatrical market?

The fourth- and fifth-tier cities will keep the growth going for at least 10 more years. It’s a very positive resource for our industry. The age of most of our moviegoers is from 20 to 35 — very young. And they are very connected on social media, even though they live in smaller towns far from Beijing or Shanghai. You have to understand how fun and exciting going to the movies is for these guys. Their lives are changing very quickly. They want to feel connected to the cool, new things happening in the bigger cities. Going to the movies gives them this connection. A movie comes out at the same time everywhere, so they go on WeChat and join the conversation and discuss the movie, and they feel like they are part of it. It's a very big part of their lives.

Hollywood's box office share in China has been on the decline so far this year. It's been said that audiences in these increasingly important provincial regions of China strongly prefer local Chinese-language films over Hollywood imports.

Yes, that's exactly right. And they are the segment that is growing. 

So some of the studios, such as Warner Bros., have begun making bigger investments in developing and producing Chinese-language films. What do they need to do to reach this audience?

They will need to learn from the Chinese market. You need to get to know these young people in small Chinese cities — how they live, what they care about. My hometown is a very small town; it’s a tier-five city, maybe even a tier-six city. These young guys there, they want a bright future, an exciting life. They all work really hard but they face fierce competition and they are under a lot of pressure. It’s difficult to get a good job in China now. They need to find someone to marry. And they also want to have fun and be cool! They need entertainment that’s for them.

Hollywood stories feel very far from their lives. They need Chinese superhero stories. They need stories about a small-town nobody who, totally by his own hard work, realizes his dreams and gets the girl and finds that happy future. It sounds like the American dream, right? Well, this is the Chinese dream, too.

How do you unwind?

I watch films! I'm usually very busy, always occupied by different meetings. Last week, I had just one day off and I went to see four films in the cinema. I saw The Jungle Book — amazing visual effects, by the way; this is what we need to learn from Hollywood — and three Chinese films. I'm very happy spending my whole day in the cinema. 

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