Hollywood's New Problem in China: How to Sell Its Blockbusters More Cleverly to Chinese Audiences

Hollywood's competition in China has entered a new stage.

On October 8, an uninvited guest turned up at the finale of The Voice of China: Po, the hero of the Kung Fu Panda films.

Two weeks earlier, Jay Chou had announced that he would voice the Golden Monkey in Kung Fu Panda 3, so Po's sudden appearance was naturally billed as a show of support for the singer, a mentor on the show and now Po's fellow kung fu warrior.

This is the Golden Monkey that Jay Chou voices

During the hosts' warm-up before the contest, and again on the Bird's Nest stage after the champion was announced, you could see the panda costume behind the crowd, waving at you goofily. So that the crowd would not block it, the costume was made 1.9 meters tall. It cost more than 200,000 yuan to make.

Compared with the one-minute earworm ad that the used-car platform Uxin paid 30 million yuan to air, Po's gatecrashing cost almost nothing. Canxing, which produces The Voice of China, and Oriental DreamWorks, one of the producers of Kung Fu Panda 3, share a shareholder, China Media Capital (CMC). The placement was one sister company setting up a stage for another.

A month earlier, at the Shanghai premiere of Mission: Impossible – Rogue Nation, Jack Ma's "surprise" appearance suddenly lifted the rather flat mood in the giant-screen hall of the SFG cinema. When the chairman of Alibaba walked on stage, the audience cheered louder than it had for the film's star, Tom Cruise.

Mission: Impossible – Rogue Nation was the first international project Alibaba Pictures invested in, and Ma's appearance had been part of the film's China publicity plan all along. When Hollywood's biggest star and China's best-known entrepreneur appear together, that alone is the best publicity a film can get. What they actually talk about (mostly mutual praise, as you can imagine) hardly matters.

Even so, you could see that Ma had no wish to upstage anyone. He understood that the star of the event, and of the whole China campaign for Mission: Impossible – Rogue Nation, was still Tom Cruise.

Under the original plan, Cruise was to visit as many as five cities and spend nearly a week in China promoting the film. That would have made him the first Hollywood actor to tour the mainland on a "roadshow," the way Chinese-language films do.

In the end, the Chengdu fan meeting was cancelled because air-traffic control kept his plane from landing, and two other stops were dropped over scheduling conflicts, so he went only to Beijing and Shanghai. At the Shanghai event, wearing his trademark smile, he spent the better part of an hour signing autographs for every fan there and posing for photos.

Behind the smile and the patience lies the huge commercial pull of the Chinese market. No Hollywood studio and no Hollywood star can ignore a film market this big.

Bringing the top-billed stars and filmmakers to China has become standard practice. At the very least, every one of this year's highest-grossing Hollywood films in China did it.

Furious 7 brought Vin Diesel and Jason Statham; "Iron Man" Robert Downey Jr. and "Hulk" Mark Ruffalo came to promote Avengers: Age of Ultron. There was also Chris Pratt for Jurassic World and Arnold Schwarzenegger for Terminator Genisys... Except for Schwarzenegger, who had visited China years earlier as a Special Olympics ambassador and as governor of California, all of them made their first trip to China to promote a film after 2013.

The Furious 7 cast on their China trip

Five years ago the market looked nothing like this. China was then just one obscure overseas market among many for Hollywood, and the big stars did not bother with it.

In 2010, Avatar held a lavish premiere in Beijing. The guests included Chinese filmmakers such as Huang Jianxin, Lu Chuan, Xu Zheng and Tao Hong, but the most important person, the director James Cameron, was missing.

The same year, Inception opened in China. Although its director, Christopher Nolan, and its star, Leonardo DiCaprio, were both very popular in China, neither came to promote it. A few years later they did come: Nolan for Interstellar (2014) and DiCaprio for the opening ceremony of Wanda's film complex in Qingdao (2013).

As we said, what draws these stars is China's ever-more-prosperous film market.

It was in 2010, around the time of Avatar, that China's film market began to shoot up like a teenager in a growth spurt. Box office for 2010 was 10.1 billion yuan, 4 billion more than in 2009. That one-year increase equaled 80% of the growth of the previous seven years combined. In the first half of 2015, China's total box office passed 20 billion yuan, twice the figure for all of 2010.

Hollywood blockbusters, in turn, earn more and more in China. The 2.4 billion yuan taken by Furious 7 and the nearly 2 billion yuan by Transformers: Age of Extinction were a powerful stimulus for American filmmakers across the Pacific.

Spurred on, Hollywood is pushing harder and harder in China, and it needs more from its marketing. The old routine (placing stories in the media, localizing a few trailers and posters, buying some bus-shelter ads, holding a premiere) no longer meets the market's demands.

Liao Xuling, who ran China marketing for 20th Century Fox for many years, knows this well. When Avatar came out in 2010, the work still meant conventional premieres and placing promotional materials. Since then, with every film, he has had to "force" himself to come up with something new.

"For Titanic 3D in 2012 we played up nostalgia; for Ice Age: Continental Drift we tried an interactive AR experience at the premiere; for The Wolverine in 2013 we brought in Hugh Jackman and staged the first large outdoor red-carpet premiere for a revenue-sharing import," Liao told QDaily.

Some ideas that had been shelved for lack of budget became easier to pull off once the market grew.

"Grew" here means two things. First, total box office kept rising. Second, after China and the United States reached a memorandum of understanding on WTO film issues in 2012, the share of box office paid to imported Hollywood films rose from 13% to 25%. In other words, for every 10 million yuan a Hollywood blockbuster grosses in China, it now pockets 1.2 million yuan more, and the local marketing budget grows accordingly.

The money goes on more outdoor billboard advertising, bringing more stars and filmmakers to China, bigger premieres, or more local creative ideas. When Liao moved to Legendary Pictures and promoted Godzilla, a summer 2014 release, the studio worked with Beijing's New World Department Store to put up a giant Godzilla statue at the entrance to its plaza, four stories, or about 12 meters, tall.

Godzilla in Beijing in 2014

Bigger budgets or not, when it comes to the actual work, marketing a Hollywood blockbuster is still more constrained than marketing a local film. One constraint comes from inside the studio. "The overall strategy for an imported film still has to be discussed with headquarters in North America. Our American counterparts work in a very mature market, while the industry here is not yet as complete or developed, and sometimes more advanced (marketing) methods don't work as well as adapting to local conditions," says Zhang Wenbo, CEO of Bole Marketing. He has promoted Hollywood blockbusters such as the Harry Potter films, and Monster Hunt, which Bole marketed, has just overtaken Furious 7 as the new mainland box-office champion.

In his view, the standard Hollywood tools of billboard ads, stars and premieres are still transplants of American practice. Compared with domestic films, he says, Hollywood's marketing in China remains crude and broad-brush, with little that is truly tailored to the market.

"The Chinese market is so different from other countries, and so huge, that you have to treat it on its own terms," Liao said.

Overall, one of the biggest differences between the two markets lies in how films are marketed. In the United States, Hollywood still relies mainly on TV and outdoor advertising. In China, TV carries pitifully few film ads. Instead, new media, the internet and the involvement of giants such as Baidu, Alibaba and Tencent make China's marketing channels completely different from America's. Americans know little about any of this, which makes them very hard to persuade to use these channels.

Look closely at any single film and the differences between China and the United States show up in almost every detail. 1905 Pictures and Alibaba Pictures, for example, wanted to add some Chinese elements to the poster for Mission: Impossible – Rogue Nation. But Paramount felt that basic materials such as posters should not be changed much, and with post-production on a tight schedule there was no time to work out a China-specific poster, so Paramount turned the suggestion down.

In another case, 1905 Pictures proposed using Tom Cruise's image in a joint campaign with a fitness brand. Cruise, after all, is past 50 and still in great shape, which fit the image the brand wanted. But a tie-in like this needs approval not only from Paramount but also from Cruise's agency, so the process would be slow and exacting.

Tom Cruise can appear only in Paramount's official materials

"In the end, for some of the joint campaigns, all we could use was the Mission: Impossible logo. Nothing related to Tom Cruise, not a photo, not even a silhouette, could be used in cross-brand marketing," said Li Yi, general manager of 1905 Pictures.

"A big box office for your last film doesn't guarantee the budget for your next one. Often the budget we get is smaller than outsiders think, and the studio always wants to spend less and earn more. Hollywood studios also care a great deal about data: where your money went and what it achieved. Anything that can't be shown in data is hard to sell to (headquarters)," a manager at the China arm of one of Hollywood's "Big Six" studios told QDaily.

Li Yi told QDaily that while working with Paramount on Mission: Impossible – Rogue Nation, the studio asked the Chinese side for data on every marketing activity: its name, duration, budget, reach, results, unique visitors (UV), page views (PV) and so on. The requirement applies to every market Paramount works with, but "the Americans are also using it to learn about China."

Some Hollywood studios have begun to tap social networks, which offer far richer data.

After Guardians of the Galaxy opened last year, Disney invited Gu Dabaihua, who became famous on Weibo for translating American talk shows, to see the film; he then published an article "correcting" the subtitles of the mainland release. This year he was invited to the United States as a guest at the Star Wars convention and Disney's D23 fan expo, and he also translated a version of the release subtitles for Avengers: Age of Ultron.

"In China, the rise of social networks matters more and more to Disney. In our marketing we draw on some of the big Weibo influencers," Andy Bird, chairman of Disney International, told us in an interview at the Disney fan expo in August.

20th Century Fox takes a similar approach. "Audiences increasingly like to share their views on films through social media, so a film's word of mouth there is very important, and our marketing has to take into account how to manage social media," Shen Hui, Fox's current marketing director for China, told QDaily.

In North America, a film's marketing starts before shooting begins, keeping it in the public eye through different means at each stage. That does not work in China: however much marketing you do, if the film is in the end not imported, all of it, however good, is wasted.

Even once a film is confirmed for import, the studio cannot relax. Until the regulator fixes its release date, publicity is tightly restricted. A film can usually release only a limited number of trailers and posters, and with no release date set, there is no way of knowing when they can go out.

Until the public screening permit is issued, the State Administration of Press, Publication, Radio, Film and Television keeps a close "watch" on your every move, and large-scale promotion is not allowed.

To slip these policy shackles, Hollywood studios have turned to deal-making: bringing in Chinese investors or simply setting up joint ventures. The aim is first to get through censorship more smoothly, and second to promote their films as freely and flexibly as domestic ones.

Transformers: Age of Extinction is the best example. With 1905.com on board, the film began building buzz a year before release by holding open auditions for Chinese actors (including ordinary passers-by), then shot on location in Beijing, Hong Kong and elsewhere. It was 1905.com, as both investor and promoter, that arranged for the Wulong scenic area and the Pangu 7 Star Hotel to appear in the film.

Michael Bay filming Transformers: Age of Extinction in Wulong

A person who worked on the film's publicity told QDaily that 1905.com offered several different proposals for placing the Pangu hotel in Transformers: Age of Extinction. After discussion, Paramount and 1905.com settled on a scene of a senior military officer walking out of the hotel, which is the shot that made it into the film.

Po could appear so prominently at The Voice of China finale precisely because the largest investor in Kung Fu Panda 3 is Oriental DreamWorks, a joint venture of America's DreamWorks Animation and China Media Capital. That makes the film a "co-production," which means it can take more than 40% of the box office and can promote itself loudly and openly.

"Because Kung Fu Panda 3 is a co-production, it has a 'new identity,' so the domestic joint venture gets the chance to lead publicity and distribution in mainland China more directly and in a way that connects with ordinary audiences. At the same time, CMC has many resources it can put behind Oriental DreamWorks projects, such as Bilibili, shows produced by Canxing (Po appeared at The Voice of China finale), Ele.me and so on," said Zhang Wenbo. On the strength of Monster Hunt's box-office success, Bole has taken on part of the China marketing for Kung Fu Panda 3. "We've already been holding meetings for more than a month," he said.

Universal Pictures has no comparable investment tie-up, but thanks to Furious 7 and Jurassic World it is the Hollywood studio with the highest mainland box office so far this year, and it too is trying new kinds of marketing to get closer to the market.

Last October, while Minions was still in production, the Chinese phone maker Vivo began talks on a joint marketing deal with Universal Pictures and Illumination Entertainment through a third-party agency, Ruige Communications. One result was that the Minions "endorsed" Vivo phones, and Illumination made a 30-second commercial for Vivo.

The Minions and Vivo

The Minions-Vivo deal is different again from the Pangu hotel placement in Transformers: Age of Extinction. QDaily has learned from sources that although Universal charged a fee, it only covered production costs and related expenses incurred by both sides.

What Universal really wanted was the advertising support Vivo could give Minions. Vivo is the title sponsor of Happy Camp, China's highest-rated variety show, and holds advertising slots on it, slots that cannot be bought at short notice. Vivo also holds a large number of outdoor and online ad spaces. When the Minions commercial went out, Universal hoped the Minions would seize the moment and fill people's field of view.

Spending more on marketing does not guarantee a Hollywood blockbuster a box office in China. Minions and Mission: Impossible – Rogue Nation took only 435 million yuan and 868 million yuan respectively on the mainland, below general expectations. And Disney's animated film Inside Out, which made US$97 million (about 613 million yuan) on its opening weekend in North America, earned only 80 million yuan in its first week on the mainland.

This unpredictable market will probably give Hollywood studios a headache for some time to come when they set their marketing budgets.