“Django”, “Iron Man” Tangle For China Box Office

Censor trips up “Django”

The recent tale of two Hollywood blockbusters and their very different fates in China is casting a spotlight on both the huge potential and challenges of the Chinese box office, which has boomed in recent years to become the world’s second largest but remains tricky to navigate. The bumpy road for Quentin Tarantino’s slavery revenge movie Django Unchained reflects the unique risk that filmmakers face in China from censors, whose opaque and sometimes inexplicable behavior can cost studios and theater operators millions of dollars in lost revenue. At the same time, Disney’s (NYSE: DIS) new release of a special China edition of its superhero film Iron Man 3 underscores just how important the market has become for Hollywood and the international box office. (English article)

The troubles for Django began abruptly last month, when the film was suddenly pulled from Chinese theaters on its debut date for unspecified reasons. Speculation quickly grew that China’s strict censors had inadvertently approved a version of the film that included explicit sexual scenes, prompting the abrupt reversal. The film’s producers later cut those scenes, and a new acceptable version of the film is now set to return to Chinese theaters on May 12. (English article)

While the film was ultimately allowed to screen in China, the last-minute scheduling chaos has probably cost Tarantino, other filmmakers and Chinese theater operators millions of dollars in lost revenue. That’s because movie makers and theater operators usually work closely together to carefully plan their release schedules, aiming to maximize returns by pacing their big blockbusters. Thus this surprise move by the censors left a major hole in theater schedules for April, and has created headaches for theater operators who had already filled their screens with other films for May.

Despite the Django woes, the release Wednesday of a special China edition of the latest Iron Man movie reflects the growing importance of the Chinese box office, which grew 30 percent last year to generate 17 billion yuan ($2.75 billion) in ticket sales and is now second worldwide behind only the US. The new Iron Man was shot in China, and the special Chinese mainland edition will feature extra footage of Chinese scenery as well as more screen time for local film stars like Fan Bingbing.

This kind of move is rare for Hollywood, since creation of country-specific editions takes lots of extra time and money and isn’t usually worth the investment. But in the case of China, where single films can now generate $100 million or more in sales, the studios have clearly decided the extra expense is worthwhile and we can probably expect to see more such China editions of major Hollywood films in the years ahead.

Disney is hoping the new Iron Man will follow in the footsteps of recent films like Paramount’s (NYSE: VIAb) Transformers 3 and locally made Lost in Thailand, whose success reflects the great strides that Beijing has made in opening up its box office to both global and domestic filmmakers. But the latest slip with Django shows there’s still work to do, most notably in adding more transparency and flexibility to the strict government-controlled system for film approval and distribution.

Bottom line: China needs to make its film review and distribution system more transparent to improve the local movie industry.

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