Chapter 828: Sincerity in Helping Chinese Cinema

The forum was held at a theater in Warner Fox World. Because Duke was attending in person, the usually routine China-US Film Forum instantly became a massive draw. It wasn't just the press; many local directors, actors, and producers had also joined in.

After taking an electric cart past the attractions of Warner Fox World, Duke and Scarlett arrived at the musical theater. Their destinations differed, however. At the press area out front, Tina Fey stopped with Scarlett to prepare for an exclusive interview with the Chinese media. Duke, led by staff from the China Film Group, headed straight inside.

There weren't many people inside the theater, but every single one of them was a prominent figure in the Chinese film industry.

Duke spotted many familiar faces in the front seats. There were Yang Lan and her husband, the local National Master Zhang, Jiang Xiaojun, Baldy Ge, Big-Toothed Feng, and others. Even Mountain Eagle had shown up.

It was an oval-shaped musical theater. The core heavyweights attending the forum sat in a circle in the very center. In the discussion Duke was participating in, only these people actually had the right to speak.

Those seated weren't just filmmakers; there were also representatives from the theater chains, which were an equally vital part of the film industry.

The topic started with Yang Lan, who was hosting the forum, and gradually shifted into a free discussion. Duke listened the entire time and barely spoke. Later, someone brought it up, and the conversation naturally turned to The Avengers, which was currently a smash hit both in China and worldwide.

"I went to a few theaters yesterday and noticed something very interesting."

The speaker was Jiang Xiaojun. He looked at Duke and said, "In the shops and markets near the theaters, the best-selling items were two T-shirts—commemorative shirts for The Avengers. Seventy-five yuan apiece..."

Knowing Duke could understand Chinese, he added directly, "And they're in short supply. The related phone cases are selling like crazy, too."

Duke just smiled and said nothing. Marvel Comics was still in the middle of negotiating the relevant licensing rights here!

Jiang Xiaojun looked a bit curious and asked, "Director Rosenberg, if I may be so bold, what proportion of your films' total revenue comes from the box office? Ah, I mean what percentage."

"Before the year 2000, it probably accounted for thirty to forty percent, depending on the genre."

Resting his hands on the table, Duke looked at Jiang Xiaojun and told the truth. "For current films, it's generally between twenty and twenty-five percent. It rarely exceeds twenty-five percent."

The moment he said this, Jiang Xiaojun, Baldy Ge, Big-Toothed Feng, National Master Zhang, and the Wang brothers all showed somewhat strange expressions. Duke's films rarely grossed under 500 million dollars at the box office. Based on his percentages, what was the total revenue of a single movie?

Glancing around, Duke sighed inwardly. In truth, what Chinese cinema needed most wasn't abstract concepts like innovation and creativity; after all, innovation carried massive risks. Hollywood didn't circulate across the globe by relying on creative innovation, either. What Chinese cinema needed most was industrialization and standardization.

As for the latter... He looked at Mountain Eagle and gently shook his head. If Mountain Eagle couldn't solve the problem, it wasn't something he, an outsider, could clarify in a few sentences.

"How much of our total revenue comes from the box office?"

After Big-Toothed Feng asked this, the room fell silent. It took a long time before the elder of the Wang brothers spoke up. "On average, over ninety-five percent."

Then he added, "And I'm talking about the domestic box office."

"Meaning that a Chinese film's domestic box office accounts for over ninety-five percent of its total revenue!" Big-Toothed Feng voiced what everyone was thinking. "Let's set aside the unrealistic international market for now. Where is our domestic derivative market?"

He turned to Duke. "Director Rosenberg, is it convenient to disclose the derivative revenue for your films in China?"

Duke was willing to say certain things, but anything involving commercial secrets was absolutely out of the question.

However, what he did share was the honest truth. "Any film market needs a developmental phase to mature, especially the derivative market."

Thinking for a few seconds, Duke looked at Big-Toothed Feng and said, "Currently, the development of Chinese film derivatives is essentially at a primitive stage. Most merchandise is just window dressing for promotional campaigns. Derivatives are meant to be an indispensable link in the film industry chain, and a key to satisfying the audience's cultural consumption needs. Yet, the development of Chinese derivatives is still at rock bottom. This also means there is massive market space for marketing and developing these products."

As soon as Duke finished speaking, Fatty Yu nodded and took over. "The domestic derivative market lacks standardization. Our market development and sales channels aren't sound or smooth enough, and the consumer market for these products urgently needs cultivation. The domestic derivative market still has a very long way to go."

"Furthermore, piracy is rampant, encroaching on legitimate interests and causing profit margins to plummet."

The Wang brothers had clearly researched this area. "In recent years, many domestic manufacturers have used authentic products as prototypes, rapidly producing bootleg merchandise during a film's theatrical run. Relying on wholesale markets and online channels to push inventory, they've formed a complete piracy supply chain. Bootleg goods compress the profit margins of legitimate products and seize massive market share. This increases the competitive pressure on legitimate operators and creates an adverse crowding-out effect, restricting the growth of China's fledgling film derivative market. Cracking down on piracy urgently requires corresponding policy support."

By the end of this statement, many gazes swept toward Mountain Eagle.

Though he wasn't an official in charge of copyright, Mountain Eagle was, after all, the only government representative present.

Unlike those ever-mysterious bigwigs, Mountain Eagle had been steeped in this industry for decades and genuinely hoped to see Chinese cinema flourish.

He coughed lightly and said, "A lack of awareness and capability in developing derivatives is the most critical hurdle currently facing all domestic filmmakers."

The moment he said this, many people looked back at Jiang Xiaojun, who could only offer a somewhat bitter smile.

Last year, Let the Bullets Fly had allowed him to "make money standing up" for once, earning everyone's envy. In truth, Jiang Xiaojun himself knew there was plenty of money left on the table, most importantly in the development of film derivatives.

Derivative development required deeply resonant prototypes and visionary market developers. Many domestic films only held distribution rights rather than original licensing rights, so they lacked the conditions to develop derivatives. Some had the rights but lacked the awareness to develop them; others had the awareness but lacked the independent capability to execute it...

Since it was a film forum, as long as it didn't involve trade secrets or his own interests, Duke was willing to say a few words. Even though he had figured out issues of "stance" and "status" decades ago, it was still impossible to avoid having an internal inclination.

"At present, traditional Chinese film derivatives are mostly low-end and primitive. They aren't fit for the big stage yet."

Though the words were harsh, given Duke's personality and his working lifestyle over the years, he didn't beat around the bush.

Of course, he wouldn't bring up things like innovation and creativity. Anyone with even a slight understanding of the film industry knew that innovation and creativity had never been the foundation of its development.

Furthermore, there were far too many examples of great ideas being turned into terrible movies—countless, in fact.

If a country's film industry truly wanted to develop, industrialization was an inevitable path it had to take.

"First, Chinese films need to pass the quality test and build a brand. Once they become franchises, they can establish their own cultural influence."

After a few seconds of silence, Duke spoke into the microphone again. "You must abandon the mindset of last-minute development, slapdash OEM production, and making a quick buck. You have to thoroughly research the market and develop merchandise that appeals to the age demographics of your film's audience. Furthermore, clarify copyright ownership, establish fixed online and physical sales channels for derivatives, and build specialized consumer product companies that cover all levels of consumption with different price points. Most importantly, you need to spend time patiently cultivating the audience's habit of purchasing derivatives."

"Cinema should be an industrial chain. The works we usually see in theaters are merely the locomotive of that chain."

Jiang Xiaojun, Baldy Ge, National Master Zhang, and the others were all nodding. To their ears, Duke's less-than-flattering words were far more sincere than the Hollywood directors who came to China showering Chinese cinema with high praise.

Yes, they could sense from his words his understanding of Chinese cinema and his sincerity in wanting to help it.

That sincerity was limited, but coming from a foreigner like him, it was already incredibly rare.

"Right now, people's focus on films is still largely concentrated on the box office, mostly neglecting the vital stage of developing and utilizing film derivatives. Yet this is precisely the critical difference between the modern and traditional film industries. As far as I know, China currently lacks professional licensing companies and has no industry standards. Consequently, China's film derivative market has remained an untapped ore bed."

Duke didn't stop speaking. "In Hollywood, derivative revenue accounts for up to seventy percent of a film's total revenue, far exceeding the box office. From my understanding, over ninety-five percent of your country's film revenue comes from the domestic box office and product placement, with many films seeing absolutely zero revenue from derivatives."

At this point, Duke cited some real figures to give these people a more intuitive understanding of the massive impact derivatives had on the film industry.

"For example, the entire box office revenue for the Star Wars trilogy was 1.8 billion dollars, yet its derivative earnings exceeded 20 billion dollars."

Duke spoke at a moderate pace, and his spoken Chinese was a bit stiff, but that didn't stop him from being the most captivating presence in the venue. "Disney's animated film The Lion King had an initial investment of only 80 million dollars and grossed 800 million dollars at the box office, but its derivative revenue reached a staggering 3 billion dollars. Some people even joked that The Lion King was a money-printing machine built by Disney."