China 2013 in Review: Box Office Swells, Hollywood Slips

Nicole Kidman at the announcement of Wanda's $8.2 billion movie studio in China

Hollywood finally caught on to the irrepressible rise of China, as Leonardo DiCaprio, Nicole Kidman, Kathleen Kennedy, Harvey Weinstein and many others made trips to the country to drum up business.

China's box office total breached the $3 billion barrier in late November, hitting $3.17 billion by the end of the month, and it looks certain to crack the $3.5 threshold for the full year.

But Hollywood's fortunes were mixed in 2013 in China -- just four of the top 10 movies were U.S. fare, accounting for a smaller share of box office at around 45 percent. But it's a much bigger pie, so the studios won't be too upset.

For a large portion of the year, the studios weren't paid for their product, after a tax dispute with China Film Group held up payments of box office revenues to the U.S. companies, until MPAA chairman Chris Dodd intervened and everyone was friends again.

Here is THR's closer look at the big media and entertainment industry stories of 2013 in China:

Hollywood Went to China...
Hollywood power players came to China en masse this year. Lucasfilm head Kathleen Kennedy, DreamWorks' Jeffrey Katzenberg, stars such as Leonardo DiCaprio and Nicole Kidman, and nearly all the studio heads came to China to drum up business. And it was a big year for Hollywood blockbusters, although local films still took around 55 percent of the box office this year. Nicolas Cage made a particular impression, telling the people of China "wo ai ni" ("I love you") at an event in Macau.

…and China Came to Hollywood
Executives from China's top distributors and producers -- China Film Group, Enlight Media, Bona, Huayi Brothers, Beijing Galloping Horse and Wanda Group -- descended on American Film Market in November. The visit was low on formal deals, but there were plenty of promises about a wave of co-productions next year.

People are looking forward to The Weinstein Company's long-anticipated sequel to Crouching Tiger, Hidden Dragon, slated to start shooting in June, and John Woo, the Hong Kong action director who, with Ang Lee, is one of the few directors from the Chinese-language industry to successfully cross over, is expected to be busy next year with the $40 million two-parter The Crossing, while Dasym Investment Strategies B.V. and Exclusive Media are collaborating with China Film Group on Woo's Flying Tigers.

China Kept Building Theaters
The real estate boom in China has seen shopping malls go up all over, in smaller third- and fourth-tier cities, as well as the big cities. And in every mall: a shiny new digital cinema. More than 4,500 screens were built in China's cinemas in 2013, with the total number of screens across the country surpassing 17,600 -- catching up fast on the U.S.

China and Hollywood Had a Fight, Then Made Up
China and Hollywood had a stand-off over box office payments, after China Film Group tried to pass on a 2 percent luxury tax to the major studios. Eventually Hollywood got paid after MPAA chairman and CEO Christopher Dodd announced that the China Film Group will pay the studios in full for money owed to them for more than a year. But what a learning curve.

Piracy Battle Picked Up Speed
With more of a focus on legitimate content, online platforms emerged as possible real contenders, though it's still a long way off from being commercially viable. Hollywood became even more interested in the online content distribution market in China, as it worked to build on the opportunities offered by the booming online video market, and it wants a platform and a revenue stream for legitimate content online in the face of rampant piracy. China is the world's largest Internet market, with 591 million users. And in the last year, the number of people who surf the web from smartphones and tablets rose by 20 percent.

Support Grew for a Ratings System
A survey showed that more than 90 percent of Chinese audiences support a movie classification system, and this could be higher on the agenda in 2014. As it stands, only films deemed suitable for all ages are released in China; part of the rigorous censorship process is aimed at supporting this notion, and the Film Bureau makes the necessary cuts. However, many in the local business believe that if there were a reliable ratings system, it would allow more leeway on the censorship front, giving filmmakers more scope to make better movies.

Wanda Became a Global Player
With a series of announcements spending billions on studios and theme parks in places such as Qingdao and Wuxi, the bedding down of its AMC acquisition and even giving the Academy $20 million for the museum, this was the year that the real estate giant Dalian Wanda Group blasted onto the world stage as a major player in the film market.

Tony Stark Does Hollywood Proud
Although it failed to get formal co-production status, there was a heavy Chinese element to Iron Man 3. It was the second-highest grossing movie in China in 2013 and the biggest Hollywood film, taking in $124.06 million (753.22 million yuan). Disney and Chinese co-producers DMG shot special scenes unique to the local market.

Pacific Rim Did Better in China Than in the U.S.
Guillermo del Toro's Pacific Rim earned more box office in China than it did in the U.S., as the Warner Bros and Legendary Pictures machines versus monsters tentpole took $114.32 million in China, compared to just over $100 million in the U.S.

Django's Blood Spatter Proved Too Much for the Censors
While many were baffled as to how it ever made it onto a big screen in China in the first place, Django Unchained was yanked midpremiere over its blood spatter and various other elements deemed undesirable by Chinese censors. The movie was edited to meet the censor's requirements, and director Quentin Tarantino was said to be happy to make the cuts. However, Django bombed when it was finally rereleased in China weeks after the initial imbroglio.

Regulators Merged Into Unwieldy Acronym
China merged the powerful State Administration of Radio, Film and Television (SARFT) and the General Administration of Press and Publication (GAPP) to streamline the censorship process and give copy editors a headache as they try to deal with the less-than-snappy acronym SGAPPRFT for the State General Administration of Press, Publication, Radio, Film and Television.

Tiny Times Took Everyone by Surprise
Tiny Times, a tale of four wealthy Chinese girls, created by Guo Jingming from his novel of the same name, took $79.57 million at the box office, despite a critical panning. A sequel was released just months after the first film and a third is now in the works.

Zhang Yimou and the One Child Policy
There was an obsession this year with director Zhang Yimou's baby issues: How many children, by how many different women and how much would he have to pay for the privilege of breaching Chinese population controls. Still ongoing …

Michael Bay Got Attacked by a Man Wielding an Air Conditioner in Hong Kong (For Real)
What a saga this turned out to be. Director Michael Bay described an attack by a possibly deranged man wielding an air conditioning unit on the Hong Kong set of Transformers: Age of Extinction as "kind of scary" but insisted he would be back to shoot in the territory again.