Why China's Huge Theatrical Recovery Doesn't Mean Big Business in Berlin

DETECTIVE CHINATOWN 3 Still - Everett - EMBED 2020
Warner Bros/Courtesy Everett Collection

'Detective Chinatown 3'

China's theatrical market soared over Chinese New Year, with two blockbusters earning more than $650 million, but the country's importers of indie films are facing myriad challenges, including financial difficulties, changing local tastes and a sharp uptick in censorship.

Exactly one year ago, Chinese film buyers were almost entirely absent from Berlin's European Film Market as broad swaths of the world's second-biggest economy remained in a state of total shutdown. Business in the U.S. and European industries, meanwhile, was blithely humming along as usual.

Today, the situation is almost exactly reversed. Many Western film industry players will have a haunted look in their eyes as they switch on Zoom meetings to attempt to do business amid the persistent COVID-19 cinema shutdowns in their home territories. But China's theatrical film market is agog with blockbuster good news.

During China's recent week-long Lunar New Year holiday cinemas generated a record $1.2 billion in sales. Since then, a collection of blockbusters have continued pulling in enormous earnings. Leading the way is comedy drama Hi, Mom with $750 million and counting, followed by Detective Chinatown 3 with $670 million and A Writer's Odyssey at $140 million. During the same period, the biggest film in North America was Warner Bros.' Tom & Jerry, considered a bright spot with an opening of just $13.7 million.

Naturally, many international industry players in Berlin might be looking to China's revived market for a lift this week — or for an opportunity to sell a title or two for a premium sum in at least one territory. But Beijing buyers engaged in China's indie distribution business say such hopes would be misplaced.

Much the way the soaring stock market in the U.S. seems to have disconnected from the real economy, Chinese distributors say the enormous Chinese New Year earnings have belied the persistent damage being felt through the rest of their industry.

"It's a K-shaped recovery," says Cindy Mi Lin, CEO of distributor Infotainment China Media, which last year released FilmNation's The Aeronauts, starring Eddie Redmayne. "A few of the biggest companies have become stronger, and everyone else is much weaker." Worse still for Berlin business prospects, the pain is particularly acute for Chinese companies involved in importing international indie films. "My personal estimate is that the theatrical market for foreign indies will be only one third of its previous value this year," Lin adds.

Chinese buyers point to a host of factors weighing on their business. To begin with, there will be far fewer Chinese companies returning to Berlin post-pandemic, simply because many of the smaller operators are facing financial challenges or were washed out of the market entirely over the lengthy shutdown of the past year.

Most worrying for everyone, however, insiders say, is the noticeable shift in the Chinese audience's tastes away from all forms of foreign storytelling and towards nationalistic Chinese filmmaking. Even prior to the pandemic, the films that were connecting and resonating at China's box office had become increasingly patriotic — projects like My People, My Country and The Bravest — with less attention paid to diverse international voices, even in niche segments of the market. The pattern has continued throughout the pandemic — see the rare blockbuster success of WWII epic The Eight Hundred last summer — and it's even been on evidence in China's streaming business, which was boosted rather than constrained by COVID lockdowns. "Even the platforms aren't valuing foreign indie movies at the moment," Lin says.

The market downturn in China's film import business also will be exacerbated by a steep uptick in regulatory control in 2021. The racial sensitivity scandal that engulfed video game adaptation Monster Hunter last year, buyers say, has prompted China's Film Administration to significantly tighten the censorship process for all imported films.

Directed by Paul W. S. Anderson (Resident Evil) and produced by  Germany’s Constantin Films, Japan’s Toho and China's own tech giant Tencent, Monster Hunter was yanked from Chinese cinemas one day after its release last December after a brief scene caught the attention of filmgoers and exploded on social media. The 10-second sequence that sparked the outcry features an Asian-American character (played by rapper/actor MC Jin) saying to a fellow character, “Look at my knees." "What kind of knees are these?" replies his white companion. "Chi-nese,” Jin quips. Many interpreted the pun as a reference to the once common racist playground rhyme used to insult people of Asian origin — and Chinese social media ignited with criticism of the country's censors for not "catching" the perceived slight.

"That one line ruined the whole film's release, and now the censors are being much more careful with all imported films, carefully checking every line of dialog," says a veteran Chinese distributor of imported films (who asked not to be named because of the sensitivity of discussing censorship). Since the censorship process for imported titles has become "much more time consuming," buyers worry that it will be difficult to arrange local release dates for indie titles close to films' openings in their country of origin, which will up marketing costs while also increasing the risks of piracy — and that's assuming that the movies can even get approved at all. The fact that cast are unlikely to be able to travel to China anytime soon for local marketing campaigns also adds to buyers' worries about their ability to successfully open a foreign indie title, even if it's a larger release with stars.

Says Yoyo Qu, CEO of Sweet Charm Pictures, which last year released Japanese crime hit Masquerade Hotel in China: "A lot of foreign sellers have reached out to me saying, 'look at the performance of Detective Chinatown 3 or Hi, Mom, we should be able to sell to you for a higher price.' I have to explain to them that this is really not the case. We are participating in Berlin but we are very cautious."