China Box Office Thread | Deadpool & Wolverine- July 26

[zackzack]

In most major territories the studios distribute their own films, and thus keep all of the distributor's gross revenue.

 

What is the percentage like? 90% of gross revenue? How do theaters in foreign territories earn with that kind of % when US theaters are complaining about not earning when studios take a lion share of the revenue at 50%??

So bizarre....

[A Marvel Fanboy]

The box office sharing is complicated. Differs across different distributors and movies and has changed a lot in the past years.

 

At the moment, a close pattern appears to be:

100% box office

5% for Special Funds (for all movies, no exception)

3.3% tax (sales) (for all movies, no exception)

52.27% for theaters and chains (chains get 1~7%, depends; there are now 45 different chains, big or small)

39.43% for distributors and producers (distributors get 5~15% fees, depending on agreements between D/P).

 

As you can see, theaters/chains and distributors/producers are sharing with the ratio of 57/43, after 8.3% funds and taxes.

52.27% = 57% x (1 - 5% - 3.3%)

39.43% = 43% x (1 - 5% - 3.3%)

 

If a distributor happens to be the producer, they get 39.43% of the movie box office. Excludes other expenses, a movie generally needs to make 3x its total budget at the box office to break even, under current Chinese film market situation.

 

Some local distributors/producers ask for lower shares, which can be as low 30%, to encourage theaters give their movies more shows. For example, Huayi lowed their share from 43% to 30% on Young Detective Dee after 4 weeks run.

 

Since the new tax rules national wide that begun on August 1 2013, some theaters need to pay 6.6% taxes, some still 3.3%, depending on their business size. Similar to producers.

 

Above is for local films. for foreign box office sharing films:

100% box office

5% for Special Funds (for all movies, no exception)

3.3% tax (sales) (for all movies, no exception)

52.27% for theaters and chains (chains get 1~7%, depends; there are now 45 different chains, big or small)

25% for producers  (IE. foreign studios, mostly Hollywood big six)

14.43% for distributors (IE, China Film, Huaxia)

 

Co-productions are anothe thing.

 

Money is paid through China Film Import & Export. 

 

See ? The only possible improvement for foreign studios shares comes from CFGC and HXDC, otherwise there is little room to grow. Though both are state-owned distributors, Huaxia is pretty much controlled by CFGC. So eventually it comes to CFGC VS Foreign studios.

 

Question is, are CFGC taking a too high share ? 

 

The 2% proportion dispute between CFGC and Hollywood studios happened earlier this year was due to the new tax rule, which mentioned above.

 

Before the 218 agreement (the one signed by Xi and Biden on 2012, Feb 18), CFGC took share as high as 21~26% from foreign revenue sharing releases. Now they only get 14.43%. Exclude distribution fees, ads expenses, taxes and other enpenses, literally they make no money for distributing foreign box office sharing movies. Under some condictions, they even lose money for doing the distibutions (they can blame their rough operations). That's why earlier CFGC very much wanted Hollywood (foreign) studios to take the 2% taxes caused by China's tax rules in Aug. Of course, they didnt successed since that was considered against WTO rules.

 

Anyway, as a state-owned policy company, making money is not the primary pursuit of CFGC. They are there to oversee the China film market. CFGC import and distribute foreign box office sharing movies because they have to, not really because they want. Here is China's public ownership economy to blame ... so ... Point is CFGC plays a big and unreplacable role in protecting local films industry.

 

Another result of the 218 agreement is that CFGC are becoming ever more keen to produce and co-produce films on their own. They have all the resources, why not .... the market is booming.

 

Back to the ratio. 25% pure share for foreign studios, adding modest 8% distribution fee, equals about 33% for local producers+distributors, not as much as they usually get (39%). But again, they get 39%, because they are local companies.

 

And we can not take the 40~50% share of Hollywood getting from other countries seriously, since that number didnt consider any kind of taxes. Europe countries, for example, collect very high taxes from box office. And many countries, Russia, South Korea, France, etc, have similar funds to China's special funds as a way to protect their own film industry. So actual shares are lower.

 

By my understanding, the problem for Hollywood and foriegn studios in China at the moment is not they are not getting a bigger share of box office. But are:

 

1. There are quota limitations. Only 34 box office sharing films can get through every year, adding another dozens of buyout ones. The quota system is said to be lifted or even canceled post 2015. But again, there will always be censorship .... for SARFT, studios can submit all the movies all they want, how many movies eventually get approved, all depends on SARFT (and maybe studio PR).

 

2. Foreign studios can not distribute movies (freely) in China. As long as they can not distribute films in the Middle Kingdom, they can never become really big and powerful player in the market.

 

It is unclear if someday sino-foreign joint ventures can distribute coproductions in the future. 

 

My thoughts.

[dezorz]

In most major territories the studios distribute their own films, and thus keep all of the distributor's gross revenue.

it doesnt matter if a distributor is just a sister company of a big studio or a totally different company.

 

distributors carry expenses to distribute a film. even if it is same mother company, distributors must pay distribution expenses. it is their duty, their business  to get the film to theaters, not studios. studios business is to make the product, distributors to distribute the product. they also carry marketing expenses. this is why they deduct their marketing expenses and their distribution fee out of their share of theaters recipes revenues. simply, any kind of distrbituon (theater, dvd, vod) cost some money (theaters distribution being the most expensive, in US the cheapest marketing expenses for a wide release is about 30M dollars) and these expenses are deducted beforehand. what is left, goes to studios. distributors carry their own risk, if a film is unsuccessfull, their are loosing money too. (they spent a lot of money to get the movie to theaters and to market the film, many films simply dont return their investment). so, rightfully, they demand fair share of revenues of a successfull movie.

 

it is rather comlicated, we don see contracts, each film is a speparaed entity/procuct/sort of a company. box office information is just an illusion. we dont have a chance to find out how much any kind of a movie really earns.

[dezorz]

What is the percentage like? 90% of gross revenue? How do theaters in foreign territories earn with that kind of % when US theaters are complaining about not earning when studios take a lion share of the revenue at 50%??

So bizarre....

 

rullof thum, theater distribution in most foreign countries gets about 50 percent of theaters ticket revenues. from this budget they first deduct their fee (8-12 percent of the money they got, real distribution expenses can be about 8 percent) and then marketing expenses. the rest of money, which might be about half of what they collected from theaters is passed to the studio/production who made the film.

[dezorz]

In any other business, I want to get more out of my investment. 25% is puny considering I am taking all the risk, constant pursuit of creativity, infrastructure, investment in talents being groomed to be stars, publicity cost, other investment in peripheral industries, a mountain of legal fees. What does local distributor do really? Some movies practically market themselves. Getting 50% out of my blood & sweat, and the studios are getting "Oh, pleeeaase..."?

 

dont be silly. most money studios spent is not their owns. different kind of capital is being used. bonds, obligations, wall street investors,  bank loans, funds. investment can be used for a single movie, for a bucnh of movies (it is called slate), or just a loan for a company. studios spent billions annually. it is a lot of money, so a lot of ways to get the money is used. studios usually make very little of their own movies, very ofthen they release films but independed productuion houses, independent studioless studios. they, of course, want to mitigate the risk as much as possible. ans since they are in control of what is being made and how it is being distributed, they get minimum risk. studios usually earn about 15 percent from what they invested. remember, they get 15 percent every year, no matter if they released a flop. what they do is they successfully transfer losses to their investment colegues, they even make losses of of success  just to get biggest share of proffit. big studios are always better off in movie business.

[A Marvel Fanboy]

Weekly (11.18~11.24) Actuals for 2013 week 47:

 

1. Gravity --------------------- 219.3M------ NEW ----- 219.3M

2. Catching Fire ----------------79.4M------ NEW ----- 79.4M

3. Thor Dark World ------------- 42M ------ -72% ------ 325m

4. Escape Plan ----------------- 30M------ -63% ----- 240m

5. Control --------------------- 21.6M------ NEW ----- 21.6M

 

6. Red 2-------------------------- 16.3M------ -55% ----- 52.2M

7. MeAn Irascible Angel ------- 7.5M------ NEW ----- 7.5M

8. Hotel Transylvania -----------4.6M------ -59% ----- 73M

9. Love You For Loving ------------ 2.9M------ -81% ----- 29.5M

10. My 4 Boy Friends ------------ 2.4M------ -47% ----- 7M

 

Week 47 totaled around 430M with 12m admissions, up 30% from the week before while up 49% from same week last year when Life of Pi leaded, claiming the biggest week in November.

 

Saturday logged the first 100m+ day ever in November history, taking 107m.

 

Gravity marks second second biggest opening for a WB film in China, narrowing TDKR (214M) while behind Pacific Rim (283m). Graivity also broke IMAX opening record with over 45m yuan through 6 days on 123 screens, topping the 39m record set by Titanic 3D on 63.

 

CF improved 17.5% over THG on OW.

 

TDW got hit hard; catching GIJ2 (337m) is the target.

 

Control flops.

[The Toymaker]

Foreign owns! 

[A Marvel Fanboy]

Not for long. This week (11.25~12.1) will be the last week of 2013 that foreign movies dominate. Next week No Man Land should be on top.

 

Among the 47 weeks 2013 so far, foreign films won 25. Adding another round this week, so 26.

 

The rest 4 weeks belong to local films. So 26 VS 26, an even.

 

Last year local films won only 18.

[Olive]

Monday numbers est:

 

Gravity-----------15M----------------235m

CF----------------8.8m -----------------88m

Control------- --- 3.8m -------------- 25.8m

TDW ----------    2.3 M- --------------327M

EP-----------------1.7m --- ------------242m

Harsh drops!

[The Toymaker]

No Man's Land looks pretty good too, so I'm happy if it dominates for a while.

[alee7915]

No Man's Land looks pretty good too, so I'm happy if it dominates for a while.

 

I am happy if "you" dominates for a while too.  x 

[zackzack]

China loves zackzack

 

No, don't think so

[alee7915]

No, don't think so

 

yes zackzack...  olive, firedeep etc...  ...  all of them love you...

[Alex Bennett]

yes zackzack...  olive, firedeep etc...  ...  all of them love you...

Zackzack I love you ,  in the way I love my pets.

[zackzack]

yes zackzack...  olive, firedeep etc...  ...  all of them love you...

   

[zackzack]

With no major releases until the end of the year, GRAVITY will have no problem hitting $80M in China, unless CARTEL WAR, LOST or FALLING FEATHER break out in a major way.

[A Marvel Fanboy]

With no major releases until the end of the year, GRAVITY will have no problem hitting $80M in China, unless CARTEL WAR, LOST or FALLING FEATHER break out in a major way.

There are actually just too many major releases .....

 

(And based on early Monday numbers, $80m for Gravity is pretty much dead.)

[zackzack]

There are actually just too many major releases .....

 

(And based on early Monday numbers, $80m for Gravity is pretty much dead.)

 Like? CARTEL WAR? LOST?

[Bob Violence]

With no major releases until the end of the year, GRAVITY will have no problem hitting $80M in China, unless CARTEL WAR, LOST or FALLING FEATHER break out in a major way.

 

I'm not sure what you mean by "the end of the year." Personal Tailor and Police Story 2013 are in the back half of December, by which point Gravity will be done with its run, but this week brings The White Storm (which I assume is what you're referring to as "Cartel War"), next week is the Ning Hao comedy No Man's Land (with two of the three stars of Lost in Thailand) and The Four II (which will get a bunch of 3D screens), and the week after that is Firestorm with Andy Lau. Throw in a bunch of smaller releases and that's a very busy schedule.

 

I'm hoping The White Storm and The Four II fall on their asses, but even if they do, it's still not a good environment for Gravity and other holdovers. Life of Pi only had to worry about Back to 1942 and The Last Supper on its second weekend—the first of which was a disappointment and the second of which bombed—then had a pretty much clear run until Lost in Thailand came out before its fourth weekend. The local studios noticed this and early December is much more crowded this year.

 

Also, what movie is Lost supposed to be?

Edited November 26, 2013 by Bob Violence

[A Marvel Fanboy]

 

Monday numbers est:

 

Gravity-----------15M----------------235m

CF----------------8.8m -----------------88m

Control------- --- 3.8m -------------- 25.8m

TDW ----------    2.3 M- --------------327M

EP-----------------1.7m --- ------------242m

Harsh drops!

 

Gravity-----------15.7M----------------235m

CF----------------8.6m -----------------88m

Control------- --- 3.9m -------------- 25.8m

TDW ----------    2 M- --------------326M

EP-----------------1.5m --- ------------241m

 

Uh ... that is ugly for Gravity, down 65% from Sunday. Noticed its Sunday was also down over 20% from Saturday. While Life of Pi Sunday did not decrease from Saturday. That is the difference between astonishing run and aeverage run. But of course, Pi is a superior film than Gravity.

 

Based on that Monday number, the better case:

 

220m (33/29/24/32/58/44)

140m (16/17/16/14/18/33/26)

70m

30m

5m

= 465M finish

 

Worse case:

220m (33/29/24/32/58/44)

130m (16/17/15.5/12.5/16/29/23)

50m

15m

3m

= 420M finish

 

Apparantly 500m is not happening at this point. 420~465m $69~76m total depending on how new releases hurt it.