Oriental DreamWorks 'U.S. parent company plans to give up its stake and is negotiating with China investors

According to a report by the American media Vanity Fair, Oriental DreamWorks, a joint venture established by the Chinese Cultural Industry Investment Fund, Shanghai Culture Radio, Film and Television Group, and Shanghai Lianhe Investment Co., Ltd. and DreamWorks Animation, will undergo tremendous changes. DreamWorks Animation's parent company Comcast is planning to give up its 45% stake in Oriental DreamWorks.

Original title: Comcast may give up Oriental DreamWorks, another marriage between Chinese and American animation comes to an end.

The marriage between Chinese capital and American DreamWorks Animation may come to an end.

According to a report by the American media Vanity Fair, Oriental DreamWorks, a joint venture established by the Chinese Cultural Industry Investment Fund, Shanghai Culture Radio, Film and Television Group, and Shanghai Lianhe Investment Co., Ltd. and DreamWorks Animation, will undergo tremendous changes. DreamWorks Animation's parent company Comcast is planning to give up its 45% stake in Oriental DreamWorks.

If the plan finally takes shape, one of the closest ties between China and Hollywood will also be severed. The reporter asked Oriental DreamWorks and the Chinese Cultural Industry Fund for verification today, but as of press time, neither party had responded to this matter.

In February 2012, Kazenberg, CEO of DreamWorks Animation in the United States, announced that he would join hands with a China company to establish an animation company in Shanghai. The significance was regarded as "no less significant than the introduction of Volkswagen in Shanghai."

This joint venture case was once regarded as a new benchmark for China's animation industry-becoming the first animation company in China to meet Hollywood standards. People hope that this marriage between China's powerful capital and leading animation companies in the United States will bring Hollywood's advanced processes and technologies to China, and at the same time become the Whampoa Military Academy for China's animation industry.

However, things did not go so smoothly. After the establishment of Oriental DreamWorks, three CEOs were replaced within five years. There were reports of layoffs from time to time, and the animated film business also fell short of expectations. Finally, it was revealed that even Universal Pictures wanted to give up the project.

A former Oriental DreamWorks executive who has participated in the negotiation between the Chinese Cultural Industry Fund and DreamWorks of the United States told reporters: There

were many uncertainties from the beginning of the project. The intentions of both sides were definitely good at the beginning, but this result can be attributed to the difficulty of sparks being created when two completely different modern cultures collide. Animated films are inherently risky. If they rise to the level of tens of billions, various problems will be amplified.

This cannot be said to be the fault of China or the United States. Both teams are very good. However, cultural integration is not as easy as everyone thinks, especially cultural products. China is the controlling party, and American culture is stronger and values control over creativity. When the concepts of the two sides conflict, who do you listen to?

Universal can't wait.

For Katzenberg, Oriental DreamWorks is a good bargaining chip. Universal Pictures has always been coveting the China market. Sino-US co-productions can not only get rid of the quota limit on introducing films every year, but also enjoy a share of 45% of the shares compared with the 25% foreign film companies get from the divided films. The ratio is more than ten points higher. In the end, Comcast bought DreamWorks Animation for $3.8 billion, a premium of nearly 50% to DreamWorks Animation's share price before the deal was disclosed.

However, Global only realized that this was a hot potato after taking over-it took 6 or 7 years to get in touch with Katzenberg and Li Ruigang, reach an intention, establish the company, and be acquired by Global. "Now that Katzenberg has retired, Global has no more than seven years to get to know each other again with China." The above-mentioned former executive said.

As an important business segment among listed companies, Universal Pictures needs more tangible results. Unfortunately, in 2016, Universal Pictures grossed a total box office of US$3.314 billion worldwide, nearly half of the US$6.89 billion in 2015. Under these circumstances, Universal Pictures really has no time to care about a troubled Oriental Dream Factory far away in China.

When China and the United States decided to cooperate, it was the peak period of DreamWorks Animation. A series of animated films such as "Shrek","Madagascar","Kung Fu Panda", and "Train the Dragon" have made DreamWorks Animation gain both fame and fortune. However, after the establishment of Oriental DreamWorks, the entire environment has changed.

DreamWorks Animation does not have a mature industrial chain and monetization channels like Disney, but relies more on the success or failure of a movie. As a result, from 2014 to 2015,"Genius Glasses Dog", which cost 140 million yuan to produce and box office 270 million yuan globally, and "Guardian Alliance", which cost 140 million yuan to produce and box office 300 million yuan globally, both dragged down DreamWorks Animation's performance.

At the same time,"Kung Fu Panda 3", the first China-US co-produced animated film produced by Oriental DreamWorks, was finally released. The production cost of US$140 million and the global box office of nearly US$522 million cannot be said to be very satisfactory. Moreover, according to Vanity Fair, DreamWorks Animation is the only Hollywood company to go to China, and operating costs in China are higher than in the United States.

Cost wasted due to the inability of Chinese and American teams to adapt

. There are contradictions that are difficult to reconcile behind the high operating costs of Oriental DreamWorks.

"When building the team back then, Dongmeng really had ambitions to achieve a career. For this reason, all the configurations were based on this plan. Everything had to be equipped with the best and it also spared no effort to recruit employees, so the operating costs themselves are very high." The above-mentioned former executive said.

But the bigger problem is the poor process and waste of costs caused by cultural and conceptual differences in cooperation between China and the United States. Katzenberg once told the media that the China side of Oriental DreamWorks is responsible for company operations, while the Hollywood side is responsible for creativity and production. The two parties will fully communicate in their respective fields, which is a "fully inclusive" model. However, there are actually many problems in specific implementation.

A former project leader at Oriental DreamWorks told reporters: "Cultural differences are the core issue. At that time, China paid for it, and the United States provided technology and brand names, wanting to do joint development. But Americans don't believe that China has creative ability, and China is really disappointing and lacks good screenwriters and high-quality technical personnel."

So in the end, the mechanism formed within Oriental DreamWorks was that all early ideas for a project were completed in the United States, which usually took two years. When China first saw the project, it was already in the middle and late stages, and finally won the title of Oriental DreamWorks and enjoyed preferential policies for co-production.

The starting point of this process is good, but it is really problematic for a group of American creative teams who have never been to China to tailor content for the China market. "It's like Chinese food made by Americans and then brought it to China and asked us if it was delicious."

"At that time, we sat down to discuss the script, and the Americans told a story, and they all laughed back and forth, but China employees didn't respond at all. Then the plan would definitely be overturned. There are too many such situations." The above-mentioned former executive also said.

If a project that has been developed for two years is overthrown and restarted, it will inevitably lead to high waste of time and capital costs. However, if it is not restarted, the story, role setting, etc. are not suitable for the China market, and this kind of problem exists in every project.

The above-mentioned former project leader said: "In the early days of Eastern Dream, American bosses made the decisions. They were usually older and didn't know much about what young people in China liked, so we had to find a lot of information every day to tell them what is popular in China. These tasks are cumbersome and often cannot be understood by American leaders. We also tried to cooperate with young culture, but it was a pity that we didn't pass it."

The case that Oriental DreamWorks is experiencing the pain of change

has also sounded the alarm for China's animation market. People had hoped that this marriage, which combined China's strong capital and leading animation companies in the United States, could bring Hollywood's advanced processes and technologies to China, and at the same time become the Whampoa Military Academy in China's animation industry. After all, this industry is too short of high-quality talents.

But in the end, this cooperation model did not work. Early senior management realized that they could not rely on the company's strength to solve the problem of running-in, and changed jobs or started their own businesses, while ordinary employees were accompanied by the pain of running in Oriental DreamWorks.

The appointment of new officials is accompanied by changes in operational thinking. An industry insider close to Oriental DreamWorks told reporters: "Since mid-December last year, employees of Oriental DreamWorks have begun to come out frantically looking for jobs. After Universal acquired American DreamWorks Animation, it believed that many teams at Oriental DreamWorks at that time were not good, because most of these teams were doing contract processing before, their technology could not keep up, and their wages were higher than the industry average. Naturally, they had to lay off employees."

In fact, in the middle of last year, an employee revealed to reporters that Oriental DreamWorks had abolished a special effects team. According to the above-mentioned former Eastern Dream executive, there is another reason for layoffs. After DreamWorks was acquired by Universal Pictures, there was a handover period during which there was no time to take into account the situation at Eastern Dream Works.

According to the Sino-US cooperation model described above, and with the addition of teams here in East Dream, there are no work to do. The first to bear the brunt are those teams that make big outsourcing and OEM operations for the United States.

According to foreign media reports, Oriental DreamWorks once had nearly 300 employees, but now there are less than 100 people. However, Oriental DreamWorks is not trying to tighten its business here. The new movie "Everest" will be released in 2019.

The above-mentioned industry insider said: "The top management is replaced and the bottom management is replaced. Of course, those senior animators and directors can't sit still. They are not the targets of East Dream's layoffs, but people want to change, and some key forces naturally leave. It can be said that the East Dream team is undergoing a comprehensive process of blood transformation."

Editor: Nancy