Flat Fee Distribution in China: There Can Only Be One To Rule Them All

At the China box-office most people are aware of China’s film quota of 34 foreign films allowed in the cinemas each year, but there is another system.

A system that allows for more than 100 – primarily Hollywood films – to be released in China every years: the flat fee distribution system, and one star has shined above the rest. JASON STATHAM.

By Ryan Carroll, Editor-at-Large

March, 2019.

The Meg a Chinese backed blockbuster from Gravity Pictures, a wholly owned Chinese entity, and Flagship Entertainment. Warner Bros.’ official JV in China that focuses on Chinese release films. I honestly was not betting on The Meg being such a box-office hit over there, but I should have known better. As Jason Statham has been the most reliable Hollywood star, in terms of the scale of his solo films and their box-office takes, in China.

Sorry, Dwayne Johnson! That shark known as Jason has gotten you beat.

I have posted on LinkedIn on this before, but it was in the captions of a reposted article from China Film Insider that listed the “Top 5 Grossing Hollywood Stars in China”. The issue with that re-posting and my commits, was because the films listed actors who are in highly successful franchises (Paul Walker – Fast and Furious) or cinematic universes (Robert Downy Jr. – Marvel), and do not stand on their own two feet beyond them.

Sorry, Dwayne Johnson, you were not yet the number one spot on that list! As it predated your 2018 winning streak at the China box-office.

Other notable stars on the list that one would not have expected is, Tony Kebbell (due to King Kong), and Samuel L. Jackson (due to Spike Lee’s Chi-raq…. just kidding, it’s his role as Nick Fury in the MCU and “here goes nothing” Jurassic Park).

The Fast and Furious franchise is the leading factor in most of Vin Diesel / Dwayne Johnson / Jason Statham overall-success in China. But, it is Jason Statham who stands out among the crowd, as his participation in the Furious franchise only bolstered his box-office drawl in China. While his solo medium-sized action flicks produced solid numbers in China. Even before his appearance in the Fast and Furious franchise.

Statham’s Mechanic: Resurrection brought in $49.2MMUSD in China compared to its $21MM take in North America. Compare that to Vin Diesel’s The Last Witch Hunter, an original tentpole style film, with a budget and marketing spend that was at-least triple to the Mechanic sequel’s. Only made $27.4MMUSD.

How can the lead of the most successful franchise in China Fast and Furious – the Marvel Cinematic Universe is a Brand and not a franchise – be less of a box-office draw than his co-star. Who has only recently joined the franchise, after it’s box-office solidification?

I would argue that his inclusion in Fast 6 (which ever one that was….) was due to his growing fan-base in China, along with him being one of the only 80s style action stars left – who isn’t from the 80s and too old to be doing what they’re doing anyways. Except Kurt “it’s all in the reflexes” Russel!

When I was in China I noticed trends, like the large numbers of high school girls doing cosplay at the mall after school (ACGN is now a $72BnUSD industry, up from less than $15Bn back then), to the reliable popularity of certain movie stars. That were not the biggest stars on their own.

If you are new to following me, I lived and worked in China from 2006 until 2013. Working with companies ranging from Warner Brothers to the China Film Group, and even at the National Bureau of Statistics of China. Yes, I worked for The Bureau….

The years that I spent in Shanghai and I would sit in the lobby of a mall movie theater with my computer, just because it was quiet, and during that time 2012/2013 I noticed something:

All of Jason Statham’s and Liam Neelson’s action flicks were released in China, but if you attempt to look up their China box-office takes on Box-Office Mojo. Only Liam Neeson’s Non-Stop is listed with $16.62MMUSD. A very strong result for 2014.

There is an over-looked factor as to why Non-Stop is listed, as was distributed by Huaxia one of the officially licensed distribution arms in China, while their other films are not. This is because they were released as “flat fee” films.

Note. Today flat fee releases do have tracking numbers by-and-large, but back then they were either hard to find or non-existent.

Around 2014, before the pre-2016 box-office boom, the numbers of “flat fee” releases had steadily grown from around 50 films per year to 100. I am unclear on the number now, but it is around 200, maybe going as far north as 250. As they include non-Hollywood films, especially Indian, Bollywood, and Japanese releases.

  • Your Name – $84MM (Japan)
  • Dangal – $192MM (India)

A Flat Fee film is a film not released via the official 36 films per year, which participate in the box-office take (25% max) of Chinese cinemas. A Flat Fee is like the name suggest, a company who has an approved licensed may purchase a non-Chinese film and release it as their film in China.

Basically, a Chinese distributor, movie theater chain, or film studio, buys a foreign film for $250K (a standard flat free purchase from a year-or-so ago) and takes the risk of P&A and distribution in China. With the Flat Fee holder taking in 100% of the box-office, with no participation from the foreign rights owner of the film. In other words, Your Name and Dangal‘s distributors made bank.

This has been changing with the growth of streaming platform services, and other forms of post-theatrical revenues. To where the license holder may offer some form of back-end after the Hollywood film meets certain expectations in China. This is not officially apart of the ‘flat fee’ license, but something that is occasionally established company-to-company via a backdoor agreement.

Chinese flat fee license holders tend to only be able to obtain 2 licenses per year, occasionally 3 if they have a good standing with the regulators that issue them – ie. under the table transactions….is what I am implying.

One danger that faces studios who opt for a back-end arrangement, in exchange for waiving the minimum guarantee (MG) aka flat fee. The Chinese entity has the ability to not pay any back-end monies if they so choose, as the current laws and regulations in China do not favor the foreign entity in behind-closed-doors deals like this.

This risk is not as common as in years before, with streaming platforms growing in terms of both, ad revenues and paid subscribers (Tencent Video just reached 77M paid subscribers in Q2). Forming relationships with Hollywood companies that produce films which will be successful via flat fee releases and/or streaming, is a new and viable business model relationship for non-Chinese films looking for Chinese releases.

This model is not always lucrative, but it is a reliable forms of revenue streams. For smaller genre focuses production houses and studios. Obtaining reliable distribution deals like this can make or break smaller producers, especially those without studio distribution deals in place.

While I was living in Shanghai and hanging out in empty movie theater lobbies during the afternoon. I noticed the continuous stream of Jason Statham (and Liam Neeson’s) film releases in China.

Jason Statham:

  • Safe
  • Parker
  • Redemption (this one didn’t seem to stay long, or maybe it never got beyond a poster release)
  • Killer Elite
  • Homefront (2013) $4.96MMUSD – this one actually had figures! So, it may not be a flat fee release.

While Liam Neeson’s movies:

  • The Grey
  • Unknown

Were released around the same time as well.

The reason why we saw these action star’s films being released in China is due to Jason Statham’s involvement in The Expendables franchise, co-financed by China’s LeVision Pictures, and The Transporter franchise which featured Taiwanese star Shu Qi in the first installment. While Liam Neeson’s Taken and Taken 2, just like elsewhere worldwide, provided a basis for Chinese to want to see more of him being an old man kicking arse.

Dwayne Johnson may be Hollywood biggest star in China, with Jumanji: Welcome to the JungleSkyscraper, and San Andres making buku bucks at the China box-office. It is the reliability and track-record of Jason Statham that makes him the King of Flat Fee releases, and the reason why he is a safer bet to put into cross-production films like The Meg.

A film with a reasonable budget compared to those of Dwayne Johnson, and a star that will bring people to watch for his reliability to be in “watchable” pop corn flicks.

One other thing that The Meg has over, say Jumanji 2, is the Chinese backing of the film. That is significant enough it may receive closer-to 40-50% participation (for Warner Bros. via Flagship Ent.), while not technically being released as either a flat fee film or one of the 34 official quota films per year.

Now that we have shown that Jason Statham is the King of China’s Flat Fee Box-Office, my question in the article title is: Can Ruby Rose become the female counterpart to Jason Statham in China?

I ask this because, her role as the Mute Assassin Aries in “be seeing you” John Wick was a standout in an overall great genre film. Leading to land co-starring roles in two major Chinese box-office action-adventure films xXx: Return of Xander Cage, a film that was geared as a Fast and Furious style action film for Vin Diesel but starring Donnie Yen!

And, most recently, her turn in The Meg.

Sorry, Vin Diesel, you fare the poorest among your Fast Dwayne Johnson and FuriousJason Statham co-stars.

Both films having either direct participation, from their inception (The Meg) from Gravity and Flagship, or before their release (xXx: Return of Xander Cage) in the form of Huahua Media and Shanghai Film Group purchasing equity stakes during post production of the film.

In the linked article above I argued that Ruby Rose’s Mute Assassin character in the John Wick Universe will become the lead in the purchased blacklisted script, The Ballerina. While her casting as Batwoman in the upcoming CW Arrowverse show, both provide opportunities for her to become the first genuine female Hollywood action star in China.

Providing a platform for a transition in her career that could resemble Jason Statham’s solo led action flicks. Becoming a reliable, though maybe not huge, box-office draw that directly competes with the likes of Dwayne Johnson, and certain Vin Diesel franchise blockbusters at the China box-office.

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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.