Road Pictures’ Cai Gongming On Strength Of Japanese Anime, Gradual Return Of Hollywood Movies In China Market
Speaking at a TIFFCOM seminar, Cai Gongming, founder of Chinese distributor Road Pictures, explained how his company has built up Japanese anime to be one of the strongest film import categories in the mainland China market. And although Chinese audiences remain focused on local, Chinese-language movies, he also said that Hollywood has been making a slow comeback in the market this year.
Road Pictures scored major hits in 2023 with Japanese anime titles Suzume, which grossed $117M, and The First Slam Dunk, which took around $84M. As a result, the total box office of this category in the China market increased by 90% year-on-year.
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This year, Cai said the combined box office of Japanese anime movies is on the same level as 2023, although the per picture average is lower as twice as many titles have been released. Road Pictures’ biggest hits have included Spy x Family Code: White, with around $40M, and the re-release of Your Name with $19M. (Studio Ghibli’s The Boy And The Heron, released by Alibaba Pictures, is the highest-grossing Japanese anime so far this year with $110M).
“Japanese anime titles are very strong because of their IP attributes – young people know the IP because it has reached them through different channels over many years. Japanese live action movies have less of these IP attributes and the stars are less recognized by the Chinese audience,” Cai explained.
He added that Japanese arthouse movies can also perform well but have a ceiling, Road Pictures released Hirokazu Kore-eda’s Cannes Palme d’Or winner Shoplifters in 2018, which remains the highest-grossing Japanese arthouse release in China with around $14M.
But he also attributed the strong performance of Japanese anime in China to proactive marketing activities. He explained that his company has introduced an “integrated business strategy”, combining film distribution with a new venture, GuGuGuGu, spanning merchandising, physical stores, live events and other exploitation of IP. So far, the venture has opened around six GuGuGuGu Home standalone stores and another 40 stores located inside cinemas.
“Chinese audiences expect this integrated service – we learned this from the distribution of One Piece and other films, that they not only go to the theatre to see the movie, but also want to buy goods, meet friends and celebrate together,” Cai explained.
In China, these activities have included special premieres with immersive elements, merchandising and in-store events: “The Chinese fans want everything that the Japanese fans are receiving, no matter the expense.”
Talking in general about the China market, Cai said that before the pandemic, imported films had around a 47% market share (it was during this golden period that Road Pictures released Shoplifters), but the share is now under 20%. Last year, around 70-80 foreign movies were imported into China, across revenue-sharing Hollywood titles, and the so-called flat fee films that sometimes receive a revenue split.
Hollywood movies have been declining in market share since the pandemic, and while their combined box office is three times that of Japanese anime movies, the per picture average is around the same level.
However, Cai said there are signs that the market is starting to recover this year for US studio titles, with Alien: Romulus grossing $110M, much higher than expected, and the ongoing re-releases of all the Harry Potter franchise films.
“Japanese anime is strong in China because of the fanbase, which extends to TV series and other forms of merchandising and media. Hollywood is not so active in China. Also, anime appeals to younger audiences and Hollywood has been losing young people.”
Cai also talked about the regulatory framework in China, noting that he also faces challenges securing approvals from the Japanese companies involved in each release. “But at least Japan has the production committee system, which is a good, coordinated approach. In China, it’s not so coordinated because lots of different business partners control different parts of the IP. They don’t talk to each other, so it can be difficult to synchronize.”
On the China side, he said there are currently fewer restrictions in terms of the quotas and overall numbers of films imported into the market: “The audience needs diversity, and the policy is following this demand”. He also said that censorship appears to be relaxing for some genre films, including Alien: Romulus and Taiwanese crime thriller The Pig, The Snake And The Pigeon, which both contained content that would have been considered problematic before the pandemic.
“Alien was a surprise for many of us when it passed censorship – the policy seems to be getting more relaxed for genre movies,” Cai said. “We see that as a good thing as the audience wants to see different kinds of content and the regulator wants to meet this demand to see a strong box office performance.”
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