Capital fleeing Hollywood?

The future of blockbusters made in China?

“Disney to buy DC merged into the Marvel universe!”

These two days, when the foreign network because OnSmash this explosive news stirred up a thousand waves, the domestic DC Marvel two fans inside but no ripples, sure that it is false news. Hard Candy can understand why our side is immune to this kind of news, because the source of this OnSmash report comes from “according to a close friend of AT&T” – which is too much like the common douban group to “a little bit of people The story is from “according to a close friend at AT&T” – too much like the fake melons that start with “some contacts” that are common in Douban groups.

Capital fleeing Hollywood?

But in fact, a little understanding of the current state of Hollywood under the continued impact of the new crown epidemic, you will know that the wind may not be without reason. Godzilla vs King Kong” set the best North American box office since the epidemic, the actual 96.88 million dollars; the current top box office champion in North America “Saw 9”, the release of two weeks only sold more than 10 million dollars; so “Fast and Furious 9” decided to choose early release in China, can only count on China-based overseas box office to return to the capital.

This time it is also rumored that the American telecom operator giant AT&T officially acquired Warner less than three years ago and is ready to sell again. In fact, almost every Hollywood studio other than Disney has been caught up in rumors of being acquired. Streaming giants Netflix, Amazon, and newcomers to the streaming war, Apple and Disney, are among the rumored buyers.

Capital fleeing Hollywood?

In the latest news, MGM, the 100-year-old owner of the “James Bond” IP series, has announced that it has sold itself for $8.45 billion, and Amazon is set to buy MGM for $8.45 billion. Wang Jianlin, who was once a big “buyer” in the U.S., divested Legendary Pictures, which he bought for $3.5 billion three years ago, and now sold his last asset in North America, the world’s largest theater chain AMC, returning $1.476 billion (about RMB 9.496 billion). 9.496 billion yuan), and has wisely announced that Wanda will focus on the domestic market in the future.

Looking back five years ago, Chinese capital set off a wave of dreaming of Hollywood, and what ambition, between the top and bottom, has become a thing of the past. And now under the gloom of the epidemic, Hollywood, and where will it go.

Chinese capital in the past, now indifferent and cautious
Seven years ago, Fosun International fired the first salvo of Chinese capital to Hollywood, smashing hundreds of millions of dollars to take over Studio 8, founded by the former president of Warner, becoming its first major shareholder. Huayi Brothers, which failed to bid for Studio 8 with Fosun, turned around and reached an agreement with STX, another company founded by a former Hollywood executive, to invest in 18 of its films over three years.

A chain reaction ensued immediately afterwards in 2015. Bona Film announced a $235 million partnership with 20th Century Fox for six blockbusters through Hollywood finance company TSG; Chinese Culture set up a joint venture with Warner to set up its flagship studio; Ali acquired Spielberg’s Amblin Partners; and Perfect World reached a five-year partnership with Universal Pictures, investing $500 million to take a number of core projects.

Capital fleeing Hollywood?

State-owned background capital also poured in. China Film reached a partnership with Universal Pictures, accounting for nearly 10% of Fast and Furious 7; Hunan TVC Media found a partnership with Lionsgate, saying $1.5 billion to make 50 films; and Shanghai Film Group joined with Huahua Media to invest $1 billion in Paramount’s slate.

In 2016, Wanda acquired Legendary Pictures for $3.5 billion, helping to push this Chinese-funded dream Hollywood boom to its peak.

But in 2017, the situation took a steep turn for the worse. Foreign exchange controls tightened, all of Wanda’s overseas acquisitions were called off, and Chinese enthusiasm for Hollywood quickly cooled down. Fosun only made one film, “Billy Lynn’s Middlemarch,” directed by Ang Lee, after acquiring Studio 8, and rumors of a divestment sale of Studio 8 continued in 2017.

Capital fleeing Hollywood?

Perfect World and Universal Pictures 5 years of cooperation expired to complete the number of film list, how much to lose how much to earn also did not end; Electric Media in cooperation with Lionsgate after the expiration of the failure to face losses, responding to investors did not invest in the film plan; Huayi Brothers in the difficult 2019 timely stop losses, terminated the cooperation with STX.

During this period of Chinese capital dreaming of Hollywood, there were also many cases of domestic companies being cheated by foreign companies and international brokers. Kirin Film, Xiyi Film about the “Bloodbath Hacksaw Ridge” “Sun and Moon Mermaid” bad debt, fighting a circle of domestic and international lawsuits, now is all long time to hear the movement.

The real money and huge market to cooperate with the shrewd Hollywood businessmen, but can not learn the core creativity, and learn only the lesson of more losses and less profits. The Hollywood Reporter published the 14 most profitable projects of 2016, with Chinese capital accounting for as many as nine of them. Wanda behind The Great Wall, Fosun and Bona behind Billy Lynn, AoFei behind Assassin’s Creed, and DGC behind the trifecta of Deep Impact, Gods at War: Eye of Power and Divergent 3.

In 2018, Chinese capital finally turned the corner after paying tuition in Hollywood for several years. Chinese culture gambled back the power of the main cast and control in the co-production “Jaws”, which eventually won a good result and sold $530 million at the box office worldwide. In the same year, Internet companies also figured out the model of replacing upstream investment with platform promotion advantages. Ali successfully invested in the promotion of “Green Book” not only won the Oscar for best film, but also received $473 million at the domestic box office; Tencent Pictures hitched a ride with Sony to produce “Venom” which won $855 million at the global box office.

Capital fleeing Hollywood?

Unfortunately, just as Chinese capital began to figure out the rules, taste the sweetness, ready to make a big splash, and then caught up with the epidemic. The dismal box office in North America, which has lasted for over a year, is upending the Hollywood landscape.

Hollywood’s next battleground is streaming?
At the beginning of the resumption of cinema work after the epidemic last year, when we were ignited by “Ya Bai” market and restarted confidence, the North American market was also expecting “Creed” “Mulan” to be such a savior. But Warner, Disney two big brothers in Hollywood, stall withdrawn and withdrawn, and finally Disney prodigal, ruthlessly 200 million dollars cost of “Mulan” on Disney +, to support the pull new their own streaming platform.

Capital fleeing Hollywood?

Nolan did insist that “Creed” hit theaters, but the final cost of $200 million only returned $350 million in global box office, Warner may face a loss of nearly 100 million. So at the end of last year, AT&T woke up from a big dream to follow in Disney’s footsteps, announcing that Warner’s next 17 blockbusters, including “Wonder Woman 1984,” would cancel the theatrical window and all synchronize with streaming HBO Max.

But this decision, inevitably angered a number of Warner head directors led by Nolan. Nolan sarcastically said that the industry’s greatest producers and most important movie stars went to bed thinking they were working for the best studio, only to wake up and find they turned out to be working for the worst streamer. The 180 directors, actors and agents involved in these 17 films have come through their lawyers to negotiate with Warner over the elimination of back-end box office share revenue from traditional theaters.

Worst of all, HBO Max, the streaming media that AT&T has spent a big bet on at the expense of offending a host of creators, added just 2.8 million subscribers in the U.S. in the first quarter of 2021, and a total of 63.9 million worldwide. Compare this to the same period Disney’s Disney + users have reached 146 million, successfully closing the gap with streaming giant Netflix 208 million paying users. And another first-class media giant Amazon’s Prime Video, users also reached 175 million. Obviously, Warner has clearly fallen behind.

Capital fleeing Hollywood?

AT&T recently put together a merger between Discovery and Warner, nominally integrating the streaming businesses of both. But in reality, AT&T was able to get $43 billion in cash out of it, easing the pressure on its own debt. Five years ago, AT&T made a desperate announcement to buy Warner for $85.4 billion along with debt, and also fought a two-year antitrust lawsuit, thus taking on a cumulative debt of up to $180 billion.

Now the epidemic is delaying Warner’s profitability, and the streaming media rollover is defeated again. Even if AT&T really intends to sell Warner and return to its old business, as rumored, it would be justifiable. In short, this AT&T operation has put enormous pressure on the other three major Hollywood studios. Rich Greenfield, an analyst at a North American research firm, thought that Universal’s next step would be to buy MGM and Lionsgate. But unexpectedly, MGM was acquired by Amazon before anyone else.

Paramount parent company Viacom joined the streaming war last year with the launch of Paramount+, and this year it announced a shortened theatrical window from 90 days to 45 days. According to Bloomberg, which has also created the same creator conflict as Warner, “Silent Land 2,” which just opened in theaters domestically, stars Emily Blunt and director husband John Krasinski, who are having a falling out with Paramount. This is because the streaming plan after the shortened window will affect the box office share earnings of the star couple. Paramount, which fully supports the development of streaming Paramount+, rejected the couple’s claim for compensation.

Capital fleeing Hollywood?

It seems that in the face of the disaster of the North American epidemic that has lasted for a year, there are only two ways left for the big Hollywood studios to live: either transform themselves into streaming media or be streaming media’s wage earners.

The epidemic changes the movie ecology
The future of blockbusters made in China?
Hard candy Jun combed through the top ten North American box office rankings in 2020 and found that none of the blockbusters with a budget of more than $100 million made any money. The 5 movies with a budget of less than $100 million, only 2 of them are sure to make money.

One is Sony’s Columbia’s “Jedi: The Fast and the Furious”, the Will Smith-starring action film budget but $90 million, but took $426 million at the global box office, sitting at the top of the North American box office. But if you add the cost of publicity and distribution, may end up earning and “Invisible Man” almost. And Universal last year from the “Iron Man” starring Robert Downey Jr. “The Amazing Adventures of Dorit” lost money, may rely on a low-budget horror film “Invisible Man” to earn back.

In 2020, the North American box office seems to be telling Hollywood the hard truth: the era of the heavyweight bomb is over.

Capital fleeing Hollywood?

Previously Hollywood was criticized for the lack of original movies, and the creative ecology is becoming increasingly polarized. Hollywood majors are increasingly inclined to make heavy bombs that cost $200 million at every turn, with superhero films as the representative IP movies. The other pole of the market is left with a group of low-budget films represented by A24 and Winkler’s horror films. The most creative medium-budget films are gradually disappearing, like more than a decade ago, the classic films represented by David Fincher’s “Fight Club” are hard to see again.

Then, this group of most creative directors was cut off by streaming. netflix invited David Fincher, Martin Scorsese, Alfonso Cuaron and other most prestigious directors of this era to work for it with medium budget.

Now, the epidemic has completely extinguished the golden dream of Hollywood’s “IP bomb”. Shrewd Hollywood businessmen should also understand that today’s situation can only be profitable if costs are brought down. Next, the major studios that support streaming are bound to adjust their production strategies to provide more low-budget productions in line with the streaming trend. After all, Netflix’s content approach is never to rely on heavy bombs to briefly attract traffic, but to rely on the number of wins. When the volume goes up, there are naturally good works running out, the probability is.

In the past decade, Netflix, hulu as the representative of the streaming media platform to provide the number of films, pulling away from the gap between the five largest Hollywood. 2017 streaming media beyond the number of films of the five largest Hollywood, has reached nearly five times as much.

Capital fleeing Hollywood?

Note: TVshow includes shows produced for Netflix and Hulu; Studiomovies includes Disney, Warner Bros, Universal, Paramount, Fox and Sony releasing movies
The domestic market has now returned to the level of previous years, and the signs of changing production ecology due to the impact of the epidemic are not obvious. In particular, previously, from “Operation Red Sea” to “Wandering Earth”, domestic heavy blockbusters have shown an increasing maturity and strong market appeal. I wonder if fans of heavy blockbusters will have to shift from watching “American blockbusters” to watching “Chinese blockbusters” in the future.

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