Sleepless in Hollywood: Tales From the New Abnormal in the Movie Business

by Lynda Obst

  It is critical that we remember that they are fundamentally self-interested (who isn’t?), no matter how much money we may reap from their new cinemas—a lesson Warner Bros. and Sony learned in 2012. Both studios were shocked when China scheduled The Amazing Spider-Man and The Dark Knight Rises on the exact same weekend. This would have slashed the performance of each U.S. movie to the benefit of a homegrown Chinese contender. Dismayed, Warners refused the date, and at this writing, their international blockbuster, one of the biggest of the year, has not yet been given a mutually agreeable opening weekend in China. Tricky partners.

  It was announced soon after this debacle that Iron Man 3 would be a Chinese-American coproduction, and many a wise man was seen stroking his beard, thinking, Ah, this is the way to escape the summer blackout! But no sooner was it announced than the partnership was thrown into doubt, with the arcane rules of what qualifies as a “Chinese-American coproduction” being brought into question. That is, can those rules be reconfigured to apply to a Paramount tentpole?

  IMAX made a deep commitment to China, building theaters, buying real estate, and making a partnership with China’s largest movie chain, Wanda. All this was on the basis of the phenomenal success of Avatar. Richard Gelfond, IMAX’s CEO, tripled the number of IMAX theaters he was building, even before he had any idea that a new deal would lift the quota. But he hedged his gigantic bet just a little and is working, like Fox International Productions, with local filmmakers. The first IMAX film not shot in English, Aftershock, made $100 million in China, half of what Avatar did, which is pretty remarkable for the first Chinese IMAX movie. Two more Chinese-produced IMAX films have been shot and are to be released. The first is The Founding of a Party (about guess what?), and the second, Flying Tigers, is about how the United States and China kicked Japanese butt in the 1930s and ’40s. Gelfond seems to have a very good thing going in China, and this newly cut deal justifies his prescience.

  Now they have the theaters we built together. They need our content (until they don’t, a moment they are hastening as fast as they can). We need their screens and audience. We will lobby to raise the quota and the revenue cap even higher than in the recently cut deal. We will trade with the Middle Kingdom. There is no choice. They are our biggest partner in the New Abnormal.

  FICKLE FRIENDS

  In midsummer 2012, right in the middle of our vital tentpole season and in the wake of our groundbreaking deal with the soon-to-be president of China, Xi Jinping, there was a bad bump on Alliance Avenue. Some studios would call it a crisis if they were among those whose blockbusters were forced to be released on the same weekend, like Warner’s The Dark Knight Rises and Sony’s The Amazing Spider-Man. The studios brayed and cajoled and begged and fought for one to get a September release, to no avail. Instead of relief, American studios were greeted in June with strict enforcement of a new blackout policy for American films, whereby no U.S. movies could be released over the critical summer months. Therefore, the two valuable franchises were forced to go head to head on the same weekend, hurting both, though likely Spidey more. This was of course intentional, designed to discourage U.S. film viewership and encourage attendance at Chinese-made films.

  Around this time a member of the powerful state-run China Film Group was quoted in the People’s Daily newspaper saying: “We [SARFT]”2 are “making a series of transitional protection measures, which we hope can provide for the development and growth of Chinese films by supporting their roots, and increasing their ability to defend themselves against imported films.” He went on to say that he “hoped that one day Chinese audiences would tire of American robots and superheroes.”

  What’s going on? A studio head told me that China, unlike other countries, doesn’t have the patience to grow its local film community in the way so many other countries have as its movie appetite grows. “It is clear that the indigenous market always climbs to the top of the local box office after a growth period,” he told me. “But it takes time, subsidies and development. China doesn’t want to wait that long.”

  Apparently it doesn’t have to. It’s all happening faster than a speeding bullet, maybe faster than the government can control. Shocking even itself, China had its first self-created blockbuster, which surpassed Titanic in the Chinese box office in 2013, grossing 1 billion yuan. And it was a comedy, kind of a Chinese Hangover, made for the equivalent of $1.6 million, called Lost in Thailand, about a bumpkin pancake maker and his travails on a trip in Thailand. The people loved that it was free of religion and politics, and that it was funny. It opened in a slot cleared of American competition (Skyfall and The Hobbit had been pushed) but still very much not how the Chinese Film board planned it. It was an indie—not a state-made film—a tadpole! No 3D!

  A forward-looking new Sino-American model emerged recently with the film Looper, a futuristic sci-fi actioner made as a Chinese-American coproduction of Sony/TriStar/Endgame and China’s DMG Entertainment. This movie was not a victim of the summer blackout; it opened simultaneously in China and the United States. This is certainly the way the Chinese would like to play the Hollywood derby: not with our imports, but by reaping the greater percentages of our coproductions until they can take over the means of production themselves.

  There is another, deeper factor: If you read the news out of China, it is clear that the country is experiencing a serious economic slowdown, and seeing 68 percent of its box office gross eaten by American product may not be popular in the politburo or in the streets. The summer blackout reduced that number to 60 percent, a step in the right direction. Sanford Panitch told me that it is always wise to think of China as a huge corporation looking for market share, not as a country. Additionally, it is undergoing a political transition that entails some instability: Our deal partner, Xi Jinping, went missing in the summer before his ascension. He may have been practicing his acceptance speech, he may have had a heart attack, or could merely be suffering a bad back, as was rumored in the press. He is now the president. Hooray for Hollywood. But what we know about our partners is that we know nothing. There are those movie people who understand the Chinese better than others and take Sinosensibilities and sensitivities into account. They read the political winds carefully and give back as well as take out profits. These long-term players will reap more long-term profits out of their deals. Fox, of course, with its savvy indigenous production wing, is initiating a huge coproduction deal and will be able to release its Chinese-made films even during blackout periods, as Looper was. DreamWorks Animation and IMAX are also listening more and complaining less. As Jim Gianopulos, whose studio has been working with them the longest, told me, they are fickle friends.

  SO, COMRADE, WHAT WILL WE SEE?

  I am glad that I have found Legendary to be my comrade. We sincerely value this partnership and believe that this collaboration will not only produce countless fantastic films for our global audience, but simultaneously will allow the world to see China from a whole new perspective.

  —Thomas Tull’s partner in their Variety announcement.

  All these coproductions are subject to strict government regulations. They must be shot in China, and more significantly, they must pass the government censors. This will be no small feat, apparently. People who’ve seen Snow Flower and the Secret Fan (an English-language film) tell me that foot binding never occurred in provincial China in the nineteenth century, as depicted in Wendi Deng and her partner’s coproduction of the classic novel. Or so say the Chinese censors. They didn’t like the dirty laundry hanging in Shanghai in 2006’s Mission: Impossible III either, so it was cut. They are even tough on their favorite kind of tentpole. The Chinese are tough on laundry!

  Recently, while on the jury of a film festival in Beijing, director Jean-Jacques Annaud apologized to the Chinese government for his insensitivities toward Chinese culture in his film Seven Years in Tibet—about the Dalai Lama during the time of China’s takeover of Tibet—in order to shoot his next film there; the Los Angeles Times reported that in
2012, a disaster movie about an attack on the White House, dialogue was inserted for the Chinese version that extolled Chinese scientists as visionaries. It also reported that gratuitous compliments about the Chinese people or government are being inserted into scripts to please financial partners. Pretty soon, with Russia and China as our primary trade partners, we will have no bad guys in our action movies. Only North Koreans.

  What coproduction will also deeply affect are the types of movies we’re less likely to see from the studios, as Chinese box office dominance expands: Dramas. Period pieces. Romances. Anything remotely political. Comedies. All of our financially advantageous (especially to the Chinese) coproductions require extensive rewrites and polishes to please the delicate sensitivities of the Chinese partners. Even the science-fiction hit Looper had to be moved from France to China, sixty years in the future, when it will be the greatest superpower in the world! There’s a subtle change. Not.

  The impact of this new deal obviously cements the studios’ reliance on special-effect-driven tentpoles. Without the new exports, the Chinese market was already moving from number five to number one. They want fantasy, and only we can make giant, spectacular fantasy. It is the thing technology has left us with which to refill our empty coffers. The biggest movie in history led the way.

  Think of what Avatar provided the world. The $2 billion dollar fantasy was the ultimate ride; it was the thrill of seeing a perfectly used technology that was invented, literally, for one movie. It was something that could be done only in America at that point, by only one filmmaker. The creation of that technology converged perfectly with the outfitting of IMAX and 3D conversions in all the emerging markets. Suddenly, teens, kids and families from Indonesia to Peoria, from Kaliningrad to Beijing, from Kyoto to Brooklyn, were all hooked up to the rest of the village. It made everyone feel like they were in tune with everyone else at the cutting edge of technology. You had to see it, and you had the technology to know that, and we had the outreach to tell you that—wherever you were under the Earth’s moon.

  As for ideas—the government of China doesn’t want the West intermediating ideas. The Web is hard enough for them to control, and now they have their own indie filmmakers. Their audience doesn’t want subtitles, or our interpretation of Tiananmen Square. This is not our job.

  How do we keep making movies for them and yet also keep making movies for us? With this potential industry-saving mandate, can we still make something other than tentpoles and sequels? Is the business systemically addicted? Are we addicted? What about those of us who aren’t?

  THE ORIGIN OF SEQUELITIS

  Is It a Disease Without a Cure?

  The Ice Age Paradox: Diminishing Appetite for Sequels Here Is in Direct Proportion to the Increasing Appetite for Them Abroad.

  Here we get to the crux of the matter, where marketing meets international, where our taste diverges from “theirs.” This is where the number crunching tells you what the studios are going to make, what they are going to continue to make (apart from their Oscar bait), why they’ve made what they’ve made, and why there is rarely something you want to see at the mall this weekend but everywhere else they’re flocking to theaters in huge numbers. This is where the rubber meets the road to China. The question I am asked most frequently is, why do the studios keep making sequels? Here we go:

  Jim Gianopulos slaps what I can only describe as a profoundly depressing chart in front of me. It is the grosses for Ice Age, domestic and international. It is clear they exhilarate him, as well they should.

  “So here you go, look at Ice Age,” he says cheerfully.

  A quick scan reveals bad news, if your angle is to reduce the number of unnecessary sequels from the movie diet. “This is fascinating,” I say, scanning the numbers for confirmation of the end of the movie world as we knew it.

  Jim reviews the numbers: “The first Ice Age does $175 million domestically, $206 million internationally. The second one does $192 million domestically, $456 million internationally. The third one does $200 million domestically and $700 million internationally.”3

  “That’s crazy! That’s crazy!”

  He tries to talk. “Yeah. And what that shows you is—”

  “You’re going to make Ice Ages forever is what it shows you.”

  “That’s for sure,” Jim agrees. “But it also shows you the potential of the international market, when you have something that appeals broadly across many audience sectors. Something that is pure entertainment and enjoyment, that has the warmth and emotion that appeals to families, that has the wit and fun that appeals even to teens.”

  It is about now that I want to stick my finger down my throat. But then Jim gets serious.

  “But more than anything, when someone sees a poster, when someone sees an ad and it says Ice Age and he sees those characters, they know instantly what it is.”

  There it is. Preawareness. The enemy of originality.

  “The problem is, even if international is now two-thirds of the box office, getting close to seventy percent—the population that we talked about is five percent to ninety-five percent—you can’t spend twenty times the marketing internationally that you spend domestically. It’s just too outrageously expensive. So when you look by any measure—by total rating points (this is how we measure TV buys), by the amount of the overall spend, by anything—you can’t spend the same to get any particular person per capita abroad to be aware of your movie, to involve them in your movie and to get them to come to your movie as you would per capita in the United States. But when you have a sequel to a film that’s recognizable, that they know, that they’ve enjoyed in the past, that’s when you really tap into the potential. That’s when the population potential and the audience potential really kicks in.”

  “Disease” is a term for any condition that impairs the normal functioning of an organism or a body.

  So, ladies and gentlemen, I give you sequilitis. We are infected, and the infection seems to be killing some and making others very healthy. And wealthy. It will be with us forever. The question is, can the original movie survive despite it?

  *

  1. Star TV’s British affiliate, BSkyB, is 39 percent owned by Fox, a constant source of frustration to Murdoch, who has been recently thwarted in his bid to take it over in its entirety by the tabloid hacking scandal that threatens both his media holdings in Britain and the status of his heir, James.

  2. State Administration of Radio, Film and Television.

  3. The fourth one opened at $46 million domestic, with a global total of $385 million as of July 16, 2012.

  SCENE FOUR

  CREATING PREAWARENESS

  DANCING WITH THE MARKETING STARS

  Creative filmmakers and producers—those who care about original movies—are increasingly dependent on marketing wizards for the survival of movies not based on previously existing material. These films without “preawareness” are the endangered species of the movie business. Christopher Nolan’s Inception, released by Warner Bros., based on an original script by Nolan, is one such film that many in the industry doubted would open at the time, as it had no famous title or comic-book hero to hang its hat on. But it opened like gangbusters due to a brilliant marketing campaign. This is why people like Warner Bros. president of worldwide marketing Sue Kroll are the new Hollywood stars.

  Sue is a complex presence, full of mixed metaphors. She looks like a cameo in a locket but acts like a turbocharged Ferrari. Her demeanor is conservative, but she makes up the hippest campaigns for teen boys. “RELEASE THE KRAKEN!!!” read the ad line for the 2010 hit Clash of the Titans that was so widely and loudly repeated by young boys from coast to coast when the movie was released that it became an international meme. Sue made it up. She is equally intuitive and intellectual.

  I saw her for the first time in September 2009, dancing out of an elevator at the Four Seasons Hotel during the Toronto Film Festival with Matt Damon and her trusty ally and second-in-command, Blair Rich, in tow. I’d bee
n dying to meet her. This is the famous Sue? I thought. It turns out Sue is more likely to be poring over research than boogalooing down hotel corridors; I’d just found her at a very uncharacteristic moment. They must have dared her to do it. Wouldn’t you, if Matt asked you to?

  At the top of the Warner Bros. decision-making team, she had been an inside star for fifteen years. She worked her way up through international marketing, creating Warner’s worldwide Harry Potter campaigns, among others. Warner Bros. was not doing well with its U.S. releases in the mid-2000s (though its international marketing was thriving), and chairman Jeff Robinov got the idea to bring Sue back home from London to L.A. to run the whole shebang. It was a bold move, since the customary thing to do when marketing is in trouble is to play musical chairs and entice someone from another studio. Warner Bros. has been among the top in market share ever since. So I had my eye on Sue even before I was lucky enough to work with her.

  Sue and her Warner Bros. team were opening Matt Damon’s The Informant at the Toronto Film Festival, as well as the Ricky Gervais/Jen Garner movie, The Invention of Lying, that I was producing with my son, Oly. The two movies were sharing a press junket Sue was running, wherein the world’s entertainment press gathered to watch our movies to review them and write features. Sue’s team would try to affect the coverage by feting, wining and dining, and gifting reporters with their paltry movie swag and holding a press conference for each. The game played at press junkets is for the entertainment press to lap up all the perks, free meals and snippets of “intimate” milliseconds with the stars that they possibly can, while remaining as snarky and independent as possible and still manage to be invited back next year. These days there’s a lot of satellite TV, and less mano a mano than before. And the swag is pretty much movie merchandising—a key chain, a board game, printed bath towels, all movie-theme dependent. The New Abnormal has taken the swagger out of swag, and the press is pretty much left with buffets and promotional tchotchkes.