Coming attractions: How long before most movies are translated from Chinese?

March 13, 2015
A boy and his father pose for a photo next to a model of the Transformers character Bumblebee in central Beijing

A boy and his father pose for a photo next to a model of the Transformers character Bumblebee in front of Qianmen Gate in central Beijing, June 20, 2014. The replica is part of a promotional campaign ahead of the world premiere of the movie “Transformers: Age of Extinction” on June 27 around the globe. REUTERS/Jason Lee

China’s fingerprints are everywhere in the global economy, and the movie business is no different. But the movies are a particularly hot ticket in China these days, and the Motion Picture Association of America confirmed that this week with its roundup of global box office revenues for 2014 that showed Chinese ticket sales rose by more than a third last year. Chinese moviegoers still only amount to half of the North American box office, but that’s changing fast. In February, Chinese monthly box office revenues surpassed those in the United States — for the first time ever

While this is far from spelling doom for Hollywood — after all, it was the major holiday season in China compared to just any old month in the United States — it does indicate a long-term trend that’s already having an impact on the Hollywood film industry: The rising importance of foreign audiences. Last year, some 70 percent of the $36.4 billion spent globally on going to the movies was outside the United States.

This growth in foreign markets is changing not only how Hollywood distributes its movies, it’s having an impact on which movies get made, who stars in them and how they get produced.

If the international business environment just got more competitive for Hollywood, making movies has always been a risky business. Six-out-of-10 movies don’t break even; most of the money comes from just a few blockbusters. The studios have tried every strategy to reduce the risks and increase the predictability of returns. Bigger budgets and bankable stars help. So does the reworking of recipes that have worked before, such as sequels and prequels. Repurposing of popular content from other media — books, TV shows, video games, comic books — also helps.

With an eye towards Chinese moviegoers, Hollywood has already seen a noticeable spike in big budget productions that repurpose well-worn plot lines using recognizable characters, such as the 2014 top-grosser Captain America based on the Marvel Comics brand, or the recent series reworking the 1968 classic, The Planet of the Apes.

But that’s just the beginning. Take, for example, the 2014 movie, Transformers: Age of ExtinctionParamount shot at many locations in China, hired popular Chinese stars, and worked with local companies including a subsidiary of the Chinese network CCTV as production and promotions partners. The strategy of catering to local audiences in China paid off and the movie was the all-time top grossing film in the Chinese market, earning $320 million at the box-office.

China’s growing interest in movies has been good for Hollywood so far, particularly at a time when domestic box office revenue is waning. Movie theaters are being built across China at lightning speed — 25,000 new cinemas are on the way over the next five years — to corral newly disposable income in the country, and more foreign films are being allowed on Chinese screens.

Hollywood’s success in China and elsewhere is part of its decades-long domination of the global trade in films and television programming. Hollywood’s glitzy, action-packed, big budget movies are the default option for weekend entertainment the world over. Even in markets with strong domestic film industries, such as France or Italy, American movies have always commanded a significant market share.

There are many popular theories for why the United States dominates the international film trade — better production values, the attractiveness of American youth-oriented culture, the appeal of American movie stars, the cartel-like distribution practices of the MPAA, the status of English as a world language, and so on. In my research with David Waterman at Indiana University, we tested an economic model of the international film trade and found, when production costs of films are similar, audiences prefer domestic movies, but imports can overcome this “cultural discount” with bigger budgets and better production values.

For years, Hollywood has been able to rely on its well-produced big-budget blockbusters. And it was able to produce those more than anyone else, in part, based on the peculiarities of its own domestic market. Hollywood’s initial advantage was the size and wealth of the American market was such that Hollywood studios had an incentive to increase production budgets for their films. Americans’ cultural insularity also helped. Historically, few Americans spoke a second language, and dubbed or subtitled foreign movies never gained much traction. With its home turf protected, Hollywood was able to venture out to conquer the world and has so far had an unchallenged run of international film markets.

The recent increases in international box-office revenues challenge this American dominance. In the short run, Hollywood is still likely to benefit the most, since its movies already dominate most markets. However, in the long run, local industries will begin to invest more in film production as they look to capitalize on local audiences’ preference for domestic fare and American movies will need to retool its strategies to continue to reach a global audience.

So far, Hollywood has faced little challenge to its cinematic ascendancy; Chinese films have not moved aggressively into international markets, yet. But when they do, that’s when Hollywood studios will have a real fight on their hands. So will Captain America.

6 comments

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Probably when China starts actually paying for the movies they watch instead of pirating them off the street for a quarter?

Posted by EndlessIke | Report as abusive

chinese movies have no chance in global markets? why ? culture bareer, humor principles,and lastely……Asians are not an object of beauty nor celebrity

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