How Viacom's 'Transformers: Age of Extinction' Crushed the International Box Office

The critics have spoken, and Transformers: Age of Extinction is a horrible movie, garnering a meager 17% positive reviews on Rotten Tomatoes. It's been a different story at the box office, as the movie has grossed more money worldwide in its first two weeks than any other film this year.

So how did Viacom (NASDAQ: VIAB  ) -owned Paramount Pictures score this big win? By sucking up to the 1.35 billion people in China -- and their central government.

More than $400 million overseas in two weeks
It used to be that the July 4 weekend was a booming time for movies, but this year ranked as one of the worst on record. Across the globe, though, people flocked to see Transformers, which was released a week earlier in the world's most populated country.

The movie has brought in $174.4 million here in the States, but a stunning $400.9 million overseas. Of that, $212.8 million came directly from China, approximately 22% more than the take in the United States.

Worldwide, the figure stood at $575.6 million, with a large number of top territories still to open after the World Cup. That total puts it in range to overtake X-Men: Days of Future Past -- at $724.7 million -- as the world's highest-grossing movie this year. 20th Century Fox, a subsidiary of 21st Century Fox, produced the X-Men movie.

Sneaking in scenes just for the Chinese
The success of Transformers in the Middle Kingdom is in part due of a number of scenes that are likely lost on American audiences. At one point, Stanley Tucci's character – an American defense contractor – is attacked in an elevator. Out of nowhere, a Chinese character who appeared to be an extra in the film starts kicking butt. That person? Zou Shiming, China's first Olympic gold-medal boxer.

Another scene in Hong Kong: A Chinese man is shown singing and playing guitar. He's no random actor, though, but Han Geng, one of China's most popular music stars.

These are people few Americans have heard of. But they resonate with Chinese audiences, and that's no coincidence.

Keeping the government happy
The movie also hams it up for the Chinese government, which is likely the key to all of this. There is a scene where a Chinese military leader vows to protect Hong Kong, insinuating that the city, which was under British rule until 1997, was better off with the Chinese.

It also might help that parts of the movie make the American government look slightly incompetent. That's something American customers are used to based on the constant critique of the country's leadership in other media. But it's a hit with Chinese. It might also help that there's a lot of stuff blowing up, something that seems to entertain audiences of all kinds.

Forward thinking from Viacom
This is a smart move by Viacom and Paramount Pictures. By being subtle with the references to China, they did not offend American audiences and were able to make the movie a hit oversees by playing to the interests of an entirely separate set of moviegoers.

As the American movie industry continues to struggle to get people in the theaters, finding more specific ways to get movie patrons from across the world makes sense.

This movie shows that strategy works and is likely to continue. In fact, with the financial success of Transformers: Age of Extinction, expect more filmmakers to copy it.

'Transformers has become their Avatar'
Movie makers strive to capture the imaginations of audiences, but some have neglected the business end. To keep making movies, they will likely need to make movies that appeal in China, India, and Indonesia, counties with rapidly growing populations and economies.

Their goal is to not appeal to American audiences, per se, but appeal to audiences across the globe. A little sucking up here and there is good financial strategy in a time when the business is struggling to get people in the theaters.

As bad a movie as Transformers: Age of Extinction might be, people are going to see it for a variety of reasons. As a co-worker of mine recently put it, "Transformers has become their Avatar." I'm guessing it won't be the last. 

Meanwhile, back in your living room...
You know cable's going away. But do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last. And when cable falters, three companies are poised to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple. 

 


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