You Missed the No. 3 Movie in the World, Don't Miss Chinese Media Production Growth

China's growing audience has been enough to bring a film which had very few North American views to No. 3 on international charts. Investors should pay attention.

Mar 16, 2014 at 7:00AM

While it did not even make the list at the U.S. box office, Beijing Love Story was No. 3 on the international charts during the third week of February 2014 according to Hollywood Reporter. A spin-off of a popular 2012 Chinese TV series by the same name, this sappy love story captivated Chinese viewers. The movie was hardly seen by viewers in North America, but its performance in China was still strong enough for it to earn a high place on the international box office charts.

Beijing Love Story
A still from the Chinese TV series turned Movie Beijing Love Story. Photo: BeijingLoveStory.com

Why should you, a Hollywood-loving movie-goer (and investor) care about this Chinese movie?
The films that reach the top of the U.S. box office results are generally the same films that reach the top of the international charts because Hollywood movies are popular around the world. MGM's The Hobbit: Desolation of Smaug was the number one movie during the same week when Beijing Love Story was number three. U.S. charts usually indicate the profitability of a movie; The Lego Movie made about $275 million for its production company Warner Bros. of Time Warner Co. (NYSE:TWX) by the end of its third weekend in theaters. Beijing Love Story fell far short of this result with about $37 million in cumulative profit over a period of the same length. So why should we care about this movie?

Diao Yinan

"Black Coal, Thin Ice" won the Golden Bear award for best film at the 64th Berlin Film Festival. Photo: The Economist

We should care because the position of this Chinese-produced movie on the international list shows the growing clout of Chinese viewers and the growing capacity of Chinese film production. The Chinese film industry is starting to gain international recognition as well. In February, the Chinese-produced film Black Coal, Thin Ice won the Golden Bear award for best film at the 64th Berlin Film Festival, along with the the best-actor award. The best cinematography award went to another Chinese film, Blind Massage. While the film industry in China may still be in its adolescence, it is growing quickly.

China's media is booming more than ever, but can Hollywood companies gain from this?
A film industry that can reach $500 million in one month, which outpaces the full-year revenue for the same region in 2007, could be a huge opportunity for Hollywood companies that look to extend their international roots into growth markets. Dreamworks Animation (NASDAQ:DWA) and Disney (NYSE:DIS) have already made large on-the-ground investments in China. Dreamworks and Disney have each partnered separately with the Shanghai Media Group, along with separate other local entertainment investment companies, to build local entertainment branches in the nation. Disney Studios president Alan Bergman said, "Disney's collaboration with SMG adds an exciting chapter of new stories for the next generation of global Disney fans."

Dreamworks Animation's Oriental Dreamworks, a joint venture that includes studios and attractions in Shanghai, is described by the company as a "Chinese content company." The company intends to involve itself in animated TV production, live action films, live action TV, and mobile and Internet content. Oriental DreamWorks is already developing four feature projects that will include Kung Fu Panda 3, one other U.S.-Chinese co-produced animated feature, and two live-action Chinese-language projects.

Qingdao Wandawood Map

"Wandawood" is preparing to be the Hollywood of China, and soon maybe, the world.

The Hollywood of China
Beijing Love Story is interesting for another reason. The film was produced in part by Wanda Media Group. This is the largest land development company in China, which develops and runs shopping malls, department stores, hotels, and over 500 cinemas. Run by a person who recently became the wealthiest man in China, the Wanda group is now constructing the "Hollywood of China," a media-production complex that will prove to be the most impressive in the world.

The $8.2 billion project will include a 10,000 square-foot main studio, 19 smaller studios, a theme park, seven hotels, an IMAX (NYSE:IMAX) research center (the company has also inked a deal to place up to 120 IMAX screens in Chinese cinemas), a film museum, a waxworks center, and even a year-round automobile and yacht trading center. This "Oriental Movie Metropolis" is set to open in 2016. The CEO, Wang Jianlin, has said that China will have the world's largest film industry by 2018. He predicts that China will surpass the U.S. in box-office revenue by 2018 and double U.S. box-office sales by 2023.

Why U.S. entertainment investors should be excited about a booming Chinese film industry
The film industry is booming in China, and this is good for Chinese companies as well as the Hollywood companies which partner with them. Disney Studios president Alan Bergman said, "Disney's collaboration with [Shanghai Media Group] adds an exciting chapter of new stories for the next generation of global Disney fans." Entertainment companies can benefit from growth in their consumer base as hundreds of millions of Chinese consumers become regular movie audiences. Smart investors will keep watching to see which companies, such as Disney, Dreamworks, and IMAX, take advantage of this trend.

Bradley Seth McNew owns shares of Walt Disney. The Motley Fool recommends DreamWorks Animation, Imax, and Walt Disney. The Motley Fool owns shares of Imax and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers