Opinion | China film: Paramount wins, Bona bombs
Paramount's decision to make its next 'Transformers' film in China and Bona's quarterly loss highlight the draws and drawbacks of China's fickle film market
New headlines from top Hollywood studio Paramount (NYSE: VIAb) and publicly listed China filmmaker Bona Film (Nasdaq: BONA) are showing both the huge potential of the China box office, and also the fickle nature of the broader film industry. In the more typical Hollywood style, Paramount has splashed across the headlines with word that it will join with two Chinese partners to co-produce the next installment of its blockbuster Transformers franchise. Meantime, Bona was decidedly lower key in announcing its latest quarterly results, highlighted by a slide into the red due to lack of hit movies.
Paramount said the new Transformers film will be shot in China, and will be released in the summer of 2014. No financial terms were disclosed for the tie-up. But the previous installment of the franchise, the 3D, special effects-laden Transformers 3: Dark of the Moon reportedly had a budget of more than US$300 million, with some media reporting the amount may have even exceeded US$400 million. I would expect this next movie to have a similar budget, meaning that China Movie Channel and Jiaflix may have to fork over big bucks to be part of the project.
In this case, I would expect this newest Transformers film should be relatively successful, since the previous titles in the series have all done quite well at the box office. Transformers 3 was one of the biggest hits at the China box office in 2011, generating US$165 million in the country alone, or about 15 per cent of its worldwide total. China's box office was the world's second largest last year, growing 36 per cent to US$2.7 billion.