US-Asia Business

US-China Entertainment: Top Industry Trends

Stay up-to-date on what’s happening with Hollywood and China.

In the last 12 years, China’s box office has seen enormous growth—from $140 million, to more than $6 billion today—presenting exciting opportunities for the U.S. film industry. The rise of Chinese investments in Hollywood, slate financing, and growing number of U.S.-China co-productions are evidence that Chinese companies want to expand overseas and that their American counterparts can profit—but only if they know how to navigate China’s unique film market. To get an idea of what it takes for U.S. film companies to succeed in the "Land of the Red Dragon," here are a few Reach Further stories to get you started.

Film financing is increasingly fragmented. While the traditional methods of procuring money—such as equity-based financing, bridge loans and tax credits—remain popular tools for filmmakers, foreign investment and crowdfunding are the next best options for low-cost productions and digital streaming platforms seeking entertainment financing. With the influx of capital from East to West, more and more U.S. film studios are partnering with Chinese companies to increase cash flow. Learn more about how the entertainment industry is changing and how companies can secure film financing at Entertainment Finance: Where Will the Money Come From?

China’s new film law, which came into effect on March 1, 2017, contains rules—some of which are quite broad and open to interpretation—that present both challenges and opportunities for Chinese and foreign films. From one side, China’s new film law streamlines co-production processes and creates a larger pool of potential Chinese partners for foreign studios to work with; from the other side, it emphasizes greater censorship on films. Learn more about what this new piece of Chinese legislature means for movie makers at Lights, Camera, Approval – China’s New Film Law.

Chinese presence in Hollywood is growing rapidly. As of 2014, Chinese investments in the U.S. film industry reached over $5 billion. Dominic Ng, chairman and CEO of East West Bank, says that the increase of Chinese investments in the U.S. and the desire of Chinese companies to participate in the global entertainment industry provide unique opportunities for both the film industry and the U.S. economy. Find out how Hollywood can seize these opportunities at Chinese Investment in Hollywood: Focus on Opportunity, not Fear.

David Hutkin, CFO of The Weinstein Company, says that, in order to turn a profit, film companies need to closely watch the changing market and audience behavior, and view content and costs differently. The time value of money is key, and time is a risk premium that many companies forget about. Decisions based on solid data points and market movements are not options but necessary strategies for anyone wanting to make a profit in the film industry. Learn from the Weinstein Company’s successful example at David Hutkin: Turning a Profit in the Film Industry.

According to Zhou Yuan, co-founder and executive vice president of Linmon Pictures, television in China not only has bigger potential for American production companies than movies, but it is also the future of Hollywood-China co-productions. The absence of streaming channels such as HBO or Netflix in China means that people tune in to major TV networks to watch shows, thus creating a demand for quality TV content. Learn how U.S. production companies can meet this demand and leverage opportunities in China’s TV industry at Zhou Yuan: Growing Prospects for U.S.-China TV Co-Productions.

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