Wang Jianlin: China's film market will be on par with North America in 2018 and will reach US$30 billion ten years later

According to Wang Jianlin's forecast, the box office of China films in 2016 will be approximately RMB 46 billion to 48 billion, an increase of about 5%-10% year-on-year in 2015, and the growth rate has dropped slightly. Two years later, in 2018, China's film market will reach the size of North America, that is, more than US$10 billion, and will continue to maintain strong growth thereafter, becoming the world's largest film market.

The original title Wang Jianlin Hollywood said boldly: China's box office will reach US$30 billion in 10 years. In 2018, in

order to close the cooperation with Hollywood, Wanda Chairman Wang Jianlin has made frequent appearances in the United States recently.

Yesterday, the Wanda Film Summit was held in Los Angeles, USA. At the summit, Wang Jianlin, chairman of Wanda Group, said that in the past, the ultra-rapid growth of China's film market was of a bubble nature, and this year will be a "small year" for the film industry. After healthy self-adjustment, the growth rate of 15% will be maintained in the next ten years.

"I predict that the box office growth of 15% in the China film market in the next ten years. According to this judgment, ten years later, in 2026, the box office of China movies will reach US$30 billion, accounting for approximately 40%-50% of the global box office market share." Wang Jianlin said.

In his view, there are three main reasons why China's film market can maintain rapid growth: there is large room for growth in film screens, potential for per capita viewing, and a shift to sustainable and rapid growth.

Wang Jianlin believes that ten years later, the overall box office of China will be equivalent to about three times the current size of North America, based on a per capita movie viewing level slightly lower than that of the United States. He mentioned that in the past 10 years, China's film market has achieved an average annual growth rate of 30%. This is caused by two reasons: the influx of capital and the intervention of the Internet.

"This is a shift from ultra-high-speed growth to high-speed growth of China films. It is a positive self-adjustment." He said that looking at the world, 10%-15% is also a rapid growth rate, and maintaining an annual growth rate of around 15% will be sustainable growth after squeezing out the bubble.

Regarding Qingdao Oriental Film Capital, which has attracted global investment for the first time, Wang Jianlin explained that the project is huge in scale and has a lot of hardware, but there is still an urgent need for management technical talents, especially for relevant personnel from Hollywood. Therefore, the construction and operation of the Oriental Film Capital will greatly increase job opportunities in Hollywood. Wanda and the Qingdao City government have jointly introduced various preferential policies that will allow Hollywood companies to obtain lower costs and higher profits. In any way, Oriental Film is an opportunity for Hollywood, not a competition.

At the summit, Oriental Film Capital signed on-site shooting agreements for 11 blockbuster films with 9 Hollywood film companies including Legend, Lionsgate Films, Invesse Films, Arad Films, and Aurora Films. Digital Kingdom, a well-known Hollywood post-production company, is also negotiating cooperation with Wanda.

The following is the full text of Wang Jianlin's speech:

Dear Mayor of Los Angeles, Dear Chairman of the Academy of the United States, Dear Vice Mayor of Qingdao City, Dear General Director, Dear Guests, Ladies and Gentlemen, First of all, I would like to express my warm welcome and heartfelt thanks to you for coming to today's party and celebrating this event. Thank you.

I would like to take this opportunity today to talk about my opinion on China films, so today I am giving a small short speech. It is mainly about China opportunities to talk about world movies.

1. The prospects of China's film market

are first of all my prediction of the prospects of China's film market. In 2016, I think the box office of China films will be about RMB 46 billion to 48 billion, which is about US$7 billion to US$8 billion. The year-on-year growth is about 5% to 10%. This year's growth is relatively low.

I continue to maintain my judgment many years ago. In 2018, that is, about two years, China's film market will reach the size of North America, which is more than US$10 billion, and will continue to maintain strong growth thereafter and will soon become the world's largest film market.

I predict that the box office growth of 15% in the China film market in the next ten years. According to this judgment, ten years later, in 2026, the box office of China movies will reach US$30 billion, accounting for approximately 40% to 50% of the global box office market share. This is my general judgment.

2. Reasons for long-term rapid growth

Why can China films continue to grow?

1. There is a lot of room for growth in movie screens. There are 300 million people in the United States, and now there are 40,000 screens, or about 130 screens per million people. The growth rate of movie screens in China dropped slightly in 2016. I estimate that it will increase by about 8000 this year. The number of movie screens in China this year will be the same as that in the United States, reaching 40,000. The growth may slow down a little year by year in the future. Even if the growth slows down slightly, ten years later, even if the per capita movie screen in China reaches 80% in the United States, the upper limit for the growth of movie screens in China is about 140,000 to 150,000 screens, which means that our movie screens will reach a size of about 3.5 times that of the United States in about 10 years. Moreover, China's movie screens have been newly added in the past ten years or so. It is difficult to see independent cinemas in the China film market, and they are all attached to the current fast-growing Shoppin Mall. This kind of movie screens have higher income per screen and more sustainable and stable income.

2. There is potential for the number of movie viewing times per capita. The average person in the United States watches movies about four times a year. In 2015, the average person in China watched movies less than once. So ten years later, our per capita movie viewing will reach the current level in the United States, or slightly underestimate it, and the overall box office will be about three times the current size in North America.

3. Shift to sustainable and high-speed growth. As we all know, China films maintained an average annual growth rate of more than 30% in the previous decade, from 2005 to 2015. In 2015, the year-on-year growth was 50%. There are two reasons for ultra-high growth: the first reason is the large influx of capital. Due to the ultra-high growth of China's film market, it is relatively easy to make profits from investment, which has stimulated the influx of large amounts of capital into this market and led to rapid growth in film screens or film investment, which has stimulated the growth of China's films. The second is the intervention of the Internet. In order to attract audiences, film websites subsidize audiences, and provide a subsidy of 30% or even 50% for each movie they watch. These two reasons have driven the ultra-high growth of China's films. I personally think this growth is bubbly and unsustainable. In addition, due to the rapid growth, whether it is investing in cinemas, distribution or production, it is easier to make money in this industry. As a result, there are some shoddy content production and products are not taken very seriously. Film subsidies decreased in 2016, but in 2015, the 5 billion yuan film subsidy was gone. This 5 billion yuan (almost 800 million US dollars) reduction in film subsidies probably brought about a drop in box office by more than 15 billion yuan. Why? Subsidy one yuan may also pay another yuan or two yuan to watch movies, so the reduction will definitely not be 5 billion yuan, but at least a multiple of 5 billion yuan. Coupled with the lack of attraction in the content, it is equivalent to China films catching up with a young year in 2016, like American films having a "young year." Therefore, China's film market slowed down in 2016 and did not grow as rapidly as before. But everyone should pay attention to it that it is not a decline, not a decline, but the growth rate is slowing down. This is a shift in China films from ultra-high-speed growth to a high-speed growth. In fact, compared with the world, 10% to 15% is also a high-speed growth. This is a positive self-adjustment and the bubble has been reduced. This kind of growth is more sustainable. This annual growth of about 15% has squeezed out some excessive speculation and squeezed out some bubbles, so I think this growth is sustainable. You can verify what I said today at the end of 2017. I think China films will continue to grow at around 15% every year starting from 2017. It may be lower or higher. I personally judge this kind of sustained growth will last for about ten years. So I think any pessimistic view of China films is wrong. With the urbanization process, the continuous increase in shopping centers, the growth of China's income, the demand for entertainment and other reasons, China's film market will maintain a rapid growth rate of around 15% in the next ten years.

3. How can Hollywood share the cake of China's movies?

How can Hollywood share the cake of China's growth? First, strengthen cooperation with China companies. If Hollywood wants to share the cake of the China market, it must understand China. Many American film companies may think they know a lot about China. In fact, in my contacts with some Hollywood filmmakers over the years, I have found that there is an extreme shortage of professionals in Hollywood who truly understand the China market. Many people sit in Los Angeles and imagine the China market. It is not easy to find talents who truly understand the China market and the American market. What should I do? It is best for American film companies to strengthen cooperation with China film companies, which can be cooperation at the capital level, cooperation at the product level, or cooperation at the technical level. Strengthening exchanges and cooperation with China companies and China filmmakers is an effective way to share the cake.

The second is to add China elements. First of all, I would like to declare here that I am entirely from a purely commercial perspective and do not have any political views. Because we are doing business and want to make money, I speak from the perspective of pure making money. Since you see that China film market will be a growing market in the future and will definitely become the largest market in the world, then if you want to get a piece of the China market and make money, you must understand China audiences, and you must find a way to please China audiences. So the best way is to add China elements to Hollywood films in the United States, especially Hollywood blockbusters. How to increase them? That's for you to study, that is, integrate with China. You can't say that I only go to the market to make money, but I don't care about your taste, I don't care about your audience, I still want the so-called views of some politicians, and I also want to maintain the so-called independence of my films. This is not in line with commercial rules. So if you want to make money, you should study how to make money, and it is best not to be linked to politics.

The third is to improve the quality of Hollywood films. Everyone thinks that China films are still students and Hollywood is teachers. How can students tell teachers here to improve product quality? Do you think it's weird? In fact, it is not surprising that Hollywood has always been famous for its storytelling. I used to watch American movies, and the stories were told very well. I didn't know how to end them. You were completely introduced into them. But in recent years, perhaps Hollywood companies have excessively controlled risks and prevented losses, so there are very few stories of innovation. Many of them are continuations of past IP, one to two to three to four, and even eight to nine to ten. They have all come out. I find it very strange that Hollywood, which is the most good storyteller, has become a place that places too much emphasis on technology and scenes. Is Hollywood not very good at telling stories? Therefore, it depends entirely on the continuation of IP, on scenes, and on technology. It was possible a few years ago in China, but now China people are gradually becoming smarter, so it is not easy to deceive. So if you want to share the cake of China's market, you must be able to tell stories, and Hollywood must return to the track of storytelling.

4. Oriental Film Capital increases job opportunities in Hollywood

. Recently, I found that some media in the United States, including some people who have contacted after arriving in Hollywood this time, are worried that they will establish the Oriental Film Capital and recruit Hollywood companies to the Oriental Film Capital to shoot. Many American film companies have gone to film. You have given us good preferential policies. Are Hollywood jobs lost? Wrong. I think this actually increases job opportunities in Hollywood. Why? There are two points: First, even if there is no Oriental Film Capital, Hollywood will still take photos of what should go to Britain, Australia, and Malaysia, and will not stop going just because the Oriental Film Capital appears. In fact, it's the same for Hollywood. Wherever policies are favorable and wherever it is convenient for them to make money, they can go. The emergence of the Oriental Film Capital may bring a little competition to London, Australia, and Malaysia, but Hollywood still has as many films as it should shoot, and your chances will not be reduced. Second, the Oriental Film Capital is huge. We have a lot of hardware and cannot manage software technical talents. Therefore, we are now working hard to recruit technical personnel around the world, especially in Hollywood. We have a large number of management personnel. demand. Therefore, the construction and operation of the Oriental Film Capital will greatly increase job opportunities in Hollywood. Maybe many technicians may not make a difference in Hollywood and may not make so much money, but they may have a chance to make a difference when they go to the Oriental Film Capital, may make more money, and have better conditions. In addition, in order to increase exchanges with Hollywood, Wanda and the Qingdao City government have jointly introduced various extremely favorable policies, which will allow Hollywood companies to obtain lower costs and higher profits. Therefore, in any way, Oriental Film is an opportunity for Hollywood, not a competition.

Finally, I would like to thank all guests again for coming to today's party. Thank you!

Editor: Nancy