Thursday, August 23, 2018

CHINA: BOX OFFICE HEAVYWEIGHT CHAMP?

 


by Philip J Cunningham
China is on track to be the world’s box-office heavyweight champ. Another superlative in a country of superlatives, but what does it really mean? For a country the size of China to become the world’s biggest market for movies does not signify excellence, creativity, free expression or ingenious advertising, but statistical proportionality. Even if the films are mediocre, and many of them are, and even if they enjoy only a middling fan base, the statistics are still impressive.
Box office is a popular metric in China because it conflates commercial success with artistic success, though rarely the twain do meet. The most astonishing example of where the twain do meet can be found in the work of U.S. director James Cameron, whose remarkable films “Avatar” and “Titanic” hold place number one and two respectively as all-time box office champs, including critical acclaim and strong revenues in China.
Of China’s top-five box-office hits, two are war action flicks: “Wolf Warrior 2” (2017) and “Operation Red Sea” (2018), and three are comedies with strong slapstick overtones: “Mermaid” (2016), “Chinatown Detective 2” (2018), and “Dying to Survive” (2018).
Box office has long been the tail that wagged the dog in film circles, but with instant feedback now possible through online ticket sales and statistics calculated daily or even hourly, a film can take off or tank in short order due to fickle attendance figures. The looming wreck of “Asura” (2018) is a cautionary tale. The fantasy film cost over a hundred million dollars to make but was yanked after two days. Despite drawing on Hollywood expertise in visual effects and costumes, a foreign crew of 200 and a slate of Hong Kong stars, the film only pulled in $7 million before being dropped – some say by the theatres, others say by the flummoxed producers. Word of the anemic opening got out quickly, spelling serious trouble in today’s information age. The question of whether the film got “fired” or “quit” is a quibble, for it was all over in a matter of 48 hours.
China’s already fickle box office is further complicated by state intervention. Quentin Tarantino’s film “Django Unchained” (2012) was yanked from theatres “minutes into its release” and Feng Xiaogang’s “Youth” was postponed in 2017 by censors without cogent explanation, though both films went on to play at later dates after requested cuts were made.
Despite setbacks caused by a byzantine regulatory bureaucracy, censorship and unsophisticated viewer tastes, films keep getting made and the money keeps rolling in. Sina.com reported that the first seven months of 2018 saw a staggering ¥40 billion in ticket sales, breaking all previous records.
One film emblematic of China’s market complexities is “Hello, Mr. Billionaire” (2018). Inspired by a tried and tested American prototype, it is a crowd-pleaser that has provoked soul-searching about China’s income disparities. Inspired by “Brewster’s Millions” (1985) starring Richard Pryor and John Candy, which itself was one of about a dozen remakes of a 1902 George McCutcheon novel by the same name, the ever-fascinating tale of instant wealth is one of the top hits of the summer. The canny Mahua FunAge comedy team of Yan Fei, Peng Damo and Shen Teng successfully translated the old classic into something biting and contemporary, as China today has 800 real billionaires. Speculation, gold-digging, scheming and material greed are all on display, though care was taken not to offend censors with gambling, drugs and other proscribed high-rolling activities, as related by Karen Chu at the Hollywood Reporter.
However, the film’s vivacious Taiwanese star Vivian Sung provoked a roiling storm of controversy, first alienating nationalistic mainland viewers with what were perceived as pro-Taiwan views, and then alienating Taiwan’s viewers with exculpatory pro-mainland statements. Though this turned out to be nothing more than a teapot tempest, there was also the more general ideological complaint that “Hello, Mr. Billionaire” serving up “spiritual opium.”
Alibaba, which has been aggressively investing in film and promoting online ticket sales through Tao Piao Piao, has enjoyed a dynamic summer season. Its big marquee slate includes two local darlings, “Dying to Survive” and “Hello, Mr. Billionaire,” one giant import “Mission: Impossible-Fallout,” and the epic mega-flop, “Asura.” What this adds up to, or doesn’t, won’t be clear until stats are in for the entire year, because film investing remains a high-stakes gamble, even in the best of times. A tremendous amount of money, work, craft, and high hopes go into a film – good, bad, inspired or insipid – long before it ever hits the screen, and no one knows how it will perform until word of mouth gets out, but it gets out fast on the internet these days. It’s a risky business, but few business endeavors evoke the bragging rights and hullabaloo of film, because the box office is where money meets fame, stars meet starlets, fancy shoes meet red carpets, and glitter meets glamor.
Veteran actor and director Jiang Wen’s “Hidden Man” made a nice splash with this year’s summer release, and it has garnered good reviews, but the domestic box office seems to be the sole criterion by which films live or die. Jiang Wen knows a thing or two about the box office blues, since his directorial debut “Devil’s on the Doorstep” (2000) was banned and remains banned in China, despite critical acclaim. According to the state-run China Daily, “Jiang Wen's latest epic Hidden Man may have proved a hit with domestic audiences, but it has still failed to knock off Dying to Survive from the top of China's box office charts.”
The “battle of the box office” language used by the staid China Daily is telling: “raked in billions” “box office haul” “grossing XXX yuan” “second slot in box office charts.” It’s a Chinese newspaper talking about a Chinese film in the Chinese market, but every turn of phrase is straight from the trade magazines – a testament to how universal the slang of the Hollywood back office has become.
Ticket sales reflect many things tangential to the quality of the product itself, such as distribution muscle, marketable stars, corporate connections, effective advertising (sometimes as costly as the picture itself), and exploiting populist themes.
To say something is an “art film” or “cult film” is a slightly derisive way of describing a film that didn’t make it big at the box office, thought it might have won critical acclaim and a dedicated fan base. In the case of China, to say something is an “art film” can also mean a film that somehow displeased the censors and never got a proper release.
Keith Collea, a film business insider who worked with Jiang Wen on “Gone with the Bullets” (2014) considers China’s follow-the-money fever to be an obstacle to building a truly great film business. As quoted in The Beijinger, he says, “How can you build the largest market in the world if the people that control it have no idea what 'good' is, refuse to take a chance on development, can only tell if something is good if someone else put money into it already?”
The “bean-counting” begins long before a film is made but it reaches its highest expression in box office stats when the film hits the screen. To put today’s box-office obsession in perspective, consider some of the Hollywood classics, such as “Casablanca,” which was made on the cheap and on the fly during World War II but took a brave stance against fascism while moving audiences to tears. It also left us with memorable phrases such as the Humphrey Bogart line, “It ain’t worth a hill of beans.”
If beans have become the measure of success (and what is box office, if not bean-counting taken to the max?) then what you risk ending up with if you lose sight of telling a good story is a hill of beans.




Wednesday, August 1, 2018

TALE OF TWO HORSES: JACK MA AND PONY MA

 
Alibaba has a stake in Steven Spielberg’s Amblin and successfully marketed the movie Ready Player One in China

 

Tale of Two Horses: 

Pony Ma and Jack Ma

Jul 27 , 2018




One of the biggest business rivalries anywhere ever can be described as the “tale of two horses.” That’s because Alibaba founder, Jack Ma, (Ma Yun) and Tencent founder, Pony Ma, (Ma Huateng) both share the surname written with the ideogram for “horse.” The legendary wealth created by these two unusually focused, hard-working, and lucky (if not visionary) entrepreneurs not only has them gobbling up smaller companies and independent apps to provide ever-more comprehensive online services, but now sees them duplicating one another’s range of services. Where they once specialized and sought out niches of their own, they now compete face-to-face in almost every arena, if only to check – if not match and exceed – the formidable influence of the other.

Alibaba built its business empire on e-commerce and an early internet pay system called Alipay. Tencent owes its fast rise to popular, easy to use internet messaging services (WeChat, QQ) and extensive support for online gaming. Yet more and more, the two companies converge. Tencent is catching up in e-commerce due to its dominance in mobile, with WeChat offering an effective and popular platform for everything from messaging to shopping and e-payment, while Alibaba is getting into gaming.

Tencent remains dominant in social messaging and “mobile lifestyle” apps, but it creditably vies for influence with Alibaba in film, news and music, both in content acquisition and streaming rights.

Throwing down the gauntlet at Alibaba in its e-commerce arena of strength, Tencent invested in 2014 a 15% stake in ecommerce giant JD.com, and has recently invested heavily in Pinduoduo, a group discounter seen as having huge e-commerce potential. This represents a challenge to Alibaba in its own backyard.

Tencent has long enjoyed a strong lead in online gaming. Pony Ma’s early investments in that field have proved efficacious, resulting in lucrative gaming revenue for Tencent. At first, Jack Ma became self-righteous about the difference, stating that he would “not invest a penny in games” out of his “concern” for China’s youth. That boast proved idle however, and now he’s also actively looking into gaming. Jack Ma’s big war-chest has in the past few years gobbled up successful online gaming firms, allowing Alibaba to create its own giant gaming division.
In a similar clash of corporate values to be later papered over in the name of competition, Tencent’s Pony Ma famously refused to get involved in retail, only to reconsider his stance as rival Alibaba took an early lead in a potentially gargantuan market. Pony Ma continues to eschew “retail” – which is to say, “old retail” – but his company is investing heavily in “new retail” which uses Tencent technology to make retail more efficient and subject to more lucrative data analysis. WeChat’s dominance in mobile puts Tencent in a good position to rope in traditional retail outlets such as department stores, convenience stores, and even vending machines with its WeChat wallet, cloud services, big data and customer profile services.

Alibaba, currently the leader in the retail battle, has opened a chain of supermarkets under the brand name Hema, which is a homophone for hippo — a curious invocation of the “horse” metaphor, since a hippo is called “river horse” in Chinese. Although Hema is written “box horse” to stress the food delivery side of things, its mascot is a fat, friendly-looking “river horse.”
While the “two horses” dominating the Chinese internet are running neck-to-neck, they are changing the future of the internet, demonstrating that a cashless society is within grasp. Jack and Pony’s domination of online payment is so effective that cash transactions have been dropped in favor of electronic payment in many walks of Chinese life, especially for young people shopping, buying tickets and hailing rides.

Film and video production and streaming is another realm where competition will have a significant cultural impact. Each giant has invested in roughly 50 entertainment firms, many rooted in Hollywood. Alibaba has a stake in Steven Spielberg’s Amblin and successfully marketed the movie Ready Player One in China. Tencent Pictures and Penguin Pictures also buy into ready-made content, though they are increasingly investing in original productions for increased profitability. Both internet giants bought out huge portions of high-flying media tycoon Wang Jianlin’s struggling Wanda business empire. Variety sees Tencent following the Disney model, while Alibaba follows the Amazon model.
WeChat and QQ boast a monumental billion users, while Alibaba continues to dominate e-commerce.

One of the few areas of compromise, if not cooperation, emerged in the shakeout of ride-hailing apps. Ride-sharing giant Didi Chuxing now represents the combined force of Alibaba-backed Kuaidi Dache and Tencent-backed Didi Dache, which clashed and merged in 2015 before taking on Uber. The two giants, perhaps piqued by nationalist interests, pooled their resources to drive Uber out of China, leaving their joint investment, Didi Chuxing, the last giant standing. Money was being splashed around from all directions, with contributions from Alibaba, Tencent, Softbank and Apple. Uber made plenty of money for its effort, but the battle left Didi on top.

But such joint drives are rare, as Alibaba and Tencent duel for the China market. The competition is so intense, and takes place on so many levels, that a recent spat saw Alibaba accusing Tencent of flooding its e-ticket sales website with critical reviews of Alibaba’s $100 million-dollar fantasy film Asura — the biggest and most expensive flop to date in the dynamic China market.

Alibaba has otherwise done reasonably well with film. It sponsored Xu Zheng’s 2018 runaway hit Dying to Survive (wobushiyaoshen) which is not only a critic’s darling but a box office champ. The Wen Muye-directed drama is melodramatic and so convincingly acted that it led Alibaba to distribute tissues as a marketing ploy for customers who might find themselves weeping during the fast-paced drama. Tencent likes franchises; it invested in Wonder Woman and the latest King Kong film. It also develops new properties, including those with gaming themes, through its e-book division, China Literature.

The two giants have drawn on cultural practices, new and old, to promote sales, with Tencent digitizing tradition by making hongbao (red envelopes) available online. 800 million such gifts were sent over the New Year holiday, bolstered by its association with the analogue red envelopes cherished by Chinese children since time immemorial. Meanwhile, Alibaba broke all Black Friday single day commerce records with its promotion of “Single’s Day” (guangun jie) on November 11, a novel “anti-Valentine’s” day that celebrates consumerism for those who cherish being single.

The tale of two horses would not be complete without a quick look at their respective “stables.” Both men have shown an admirable loyalty to the place where they grew up and went to school. Alibaba’s glistening HQ is situated in Jack Ma’s hometown of Hangzhou, while Tencent’s gleaming new HQ is a skyscraper in his hometown of Shenzhen. Less predictably, both men have chosen to make their mark in Hong Kong. Jack Ma purchased a former diplomatic residence in Hong Kong’s mid-levels with stunning views of Victoria Harbour, where the peripatetic English-practicer can sip coffee and read the South China Morning Post, an Alibaba-owned newspaper. Pony Ma, in keeping with his more reclusive image, chose to invest on the quiet side of Hong Kong island, with a home in toney Repulse Bay, and a bespoke mansion on Big Wave Road nestled in between the golf course of Shek O’s country club and Dragon’s Back ridge.

Will there come a day when the two brightest binary stars stop orbiting and begin to devour one another? For now, the future looks bright, if not entirely stable, as the two giants appraise and emulate one another.