Chinese Production Budgets Skyrocket

But at What Cost & What is Being Overlooked?

By Ryan Carroll, Editor-at-Large

July, 2018.

Red Liberation Cinema in China is pushing the production budgets to new heights, with Dante Lam’s Operation Red Sea costing $70MMUSD to produce. To which

Operation Red Sea is often compared to Ridley Scott’s Black Hawk Down that cost $92MMUSD (unadjusted) seventeen years ago. Even though it is China’s second most successful movie to-date, earning half a billion at the box-office in a single market, these floundering budgets could create more downturns than blockbuster hits.

China’s box-office, though the second largest in the world, has issues with most of the films made in China either; a.) never reaching the big screen or, b.) not churning out huge results for the majority of its releases.

Most focus on China’s mega blockbusters, its record breaking tallies that overtake Hollywood results, or Hollywood tentpoles that fall off the proverbial cliff in their second Fridays of release. Or, how Star Wars just never makes any money there….

Hollywood had stopped spending, years ago, exuberant budgets on non-blockbuster / specific genre films. Since the 90s Hollywood has come to understand that single market sources of box-office just does not cut it any longer.

This issue is not being addressed in China, as everyone scrambles to be the next Wolf Warrior 2 while overlooking the long term goals of developing IP aka the Disney model.

With the success of Dante Lam’s Operation Red Sea two other Red Liberation Films were greenlit with former Hollywood and current Hollywood A-List directing talent behind them.

Larger budgets will not guarantee major results at the box-office, nor will it create homegrown movie studios in its wake. The cash grab mentality of the Chinese film industry has already begun to see consolidation by conglomerates looking at creating an IP driven business model ie the Disney model. By such companies as Tencent.

It has also seen the crackdown of cheap debt spending by the government on film giants such as Wanda, while other studios like Huayi Bros. takes on a more strategic approach to “Movie Towns” based around specific IP.

The most recent bit of China Regulation comes in the form of crackdown on talent (actor’s) pay, with mega star Fan Bingbing being the poster girl of this. As up-to 90% of the budget could go to its stars, per some reports. With Beijing claiming “money worship” and “tax evasion” – a real issue – based around ying-yang contracts. A common thing in China, not just in the film industry, where two contracts are drafted and signed: one to report to the government and the other that shows the real exchange of monies behind the scene.

China’s box-office and film industry maturity still has a long ways to go, and as I have written many-of-times before. Many of the most important issues that Hollywood, pundits, and other should truly be looking at, are the ones that are oft overlooked.

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About the Author
Born and raised in the Missouri-Ozarks Ryan studied Film Production, and East Asian Culture, at the University of Kansas where he was a UGRA recipient that led him on a seven-year long, Journey From the West, to China. Where he worked with Warner Brothers, the China Film Group Corp. and the National Bureau of Statistics of China. Before returning to the States, where he specializes in Chinese Anime & Comics, China’s Box-Office, and Chinese entertainment-tech industries. He has a dog in China, Abigail, and a dog in the Arkansas-Ozarks, King Blue, who help ease his anxiety of suffering from the “Two-Dimensional Complex” that is trying to understand the Culture Industry landscapes of the Middle Kingdom.