Wanda's money can only help Hollywood reinvent itself
Zhang Yuchen |
Tuesday, Nov 15, 2016
A Chinese realty tycoon’s buying spree in the United States entertainment industry has touched some American politicians’ nerves.
In its latest move, Dalian Wanda Group announced its US$1 billion (S$1.4 billion) acquisition of Dick Clark Productions, which has organised many award ceremonies including Golden Globe and Billboard.
The real-estate conglomerate spent US$2.6 billion to acquire AMC Entertainment, the second-largest cinema chain in the United States, in 2012, aside from investing billions in studios, theme parks and digital marketing.
Wanda’s expansion, however, is not restricted to the US.
It covers Europe and Australia too.
Some US politicians are crying foul over the influence of Chinese capital in Hollywood productions while some US lawmakers seek stricter rules to stop the “cultural invasion”.
However, these investment initiatives are just a realty company’s commercial moves against the background of China’s economic transformation.
Wanda chief Wang Jianlin’s address to Hollywood last month, mainly on the prospects of China’s movie market in the coming years, should free critics of their unnecessary anxiety about the motive behind his purchase of Hollywood studios.
Read also: Ex-Disney exec joins Wanda
As the largest movie market after the US, China has seen continuous annual increases at the box office, with last year’s figure exceeding US$6.5 billion, up 50 per cent compared with 2014.
It is estimated the Chinese market will be worth US$10 billion in 2018 and, subsequently, surpass the US as the largest.
The huge demand in China’s movie market will have to be met with good content, for which Hollywood has to use creativity, which in turn will help it reinvent itself.
Also, Chinese funds will facilitate the addition of Chinese factors to movies.
With China’s economy transforming from investment-driven to consumption-led growth, Wanda has accelerated its diversification from the housing market to other sectors.
In an interview in September, Mr Wang warned about the risk of the growing bubble in the housing market, thanks to skyrocketing prices, especially in first- and second-tier cities.
Therefore, people who are worried about a Chinese cultural invasion of Hollywood have no reason to.
According to World Trade Organisation rules, China’s current quota restricts foreign movie imports to 34 titles a year on a revenue-sharing basis.
And even though it will open up further in 2017-18, quality will still decide the fate of a movie in the market.
And that is precisely why some domestic “black horses” have beaten Hollywood blockbusters in the past.
Moreover, Wanda’s expansion in the global entertainment industry will create more jobs.
For instance, its joint venture – Qingdao Movie Metropolis (QMM) – promises a 40 per cent rebate on some movies and TV productions, provided they have Chinese elements along with two other requirements.
The QMM, once it fully opens in 2018, will need professional management and talent mobility similar to Hollywood.
Wanda’s entertainment move is purely commercial, and it should be seen as such.
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