How China's animation industry is evolving to appeal to global markets

Although China’s animation industry is barely a teenager compared to its decades-old counterpart in Japan, Chinese animated features have started to make some significant strides into international markets in recent years.

A slew of films aimed at international audiences are in production, many of which combine China’s growing skills base with talent and partners from North America and Europe. In addition to adventure comedy Abominable, co-produced by DreamWorks Animation and Shanghai-based Pearl Studio, Beijing-based BaseFX is producing Wish Dragon with Sony Pictures Animation, iQiyi Pictures is lining up Sino-French collaboration Spycies and Huayi Brothers Wink Animation is working with Cinesite Montreal on Extinct.

While most of these features are scheduled for release this summer or next, China has already produced a global animation brand in the Boonie Bears series, aimed at younger children and revolving around two bears who try to stop a logger from destroying their forest home. Shenzhen-based Fantawild Animation has made six features in seven years in the series, which have grossed over $415m combined in China and secured theatrical distribution in more than 20 territories overseas. The TV series the films are based on has been distributed in more than 85 territories.

And while it was always targeted primarily at Chinese audiences, Light Chaser Animation’s White Snake has been selected to play in competition at this year’s Annecy International Animated Film Festival (June 10-15) after grossing an impressive $65m at China’s box office. Few Chinese films make it into competition at the world’s most prestigious animation festival, but White Snake’s selection comes not long after Enlight Media’s Big Fish & Begonia secured an Annecy competition slot in 2017.

Light Chaser, BaseFX and Fantawild are at the forefront of Chinese digital animation studios that are gaining international attention. While some employ thousands of artists at sites across China, others such as Pearl Studio and Huayi Wink Animation focus on being a creative hub and outsource most production. The potential for these studios to work at an international level is huge.

While Chinese live-action features have struggled to reach global markets, animation can be dubbed into multiple languages and has an easier ride with Chinese censors as it is often aimed at family audiences. But despite access to capital, technology and a huge domestic market, local animation producers say business is far from a slam-dunk.

Domestic challenges

The first hurdle is that huge but demographically restricted Chinese market, which actually limits the box office for animated films. As Chinese box office has grown, it’s become clear the 18-24 age bracket accounts for more than two-thirds of the market. Below that age, young children and teenagers are often under too much academic pressure for leisure activities, while older audiences are busy with work. But the perception is that locally produced animation is suitable only for kids.

“It takes either strong word of mouth or really smart marketing to change that perception,” says Huayi Wink Animation CEO Joe Aguilar, who was formerly chief creative officer at Oriental DreamWorks. “That’s why it’s difficult to get investors on board for bigger-budget productions because the numbers don’t play out.”

Even Hollywood animation from the likes of Disney/Pixar underperforms in China relative to the success of live-action films. While China-themed Kung Fu Panda 3, co-produced by DreamWorks Animation and Oriental DreamWorks, grossed $145m in 2016, most US animation ends up around the $20m-$50m mark. The few exceptions include Zootopia, which grossed $220m in 2016, and Coco, which took $175m the following year. Industry insiders say these two films worked because they had strong family values or certain sequences that touched Chinese audiences or made them laugh.

As for local animated features, dozens are released each year but very few gross more than $15m (rmb100m). Boonie Bears aside, the ones that succeed are aimed at the core cinemagoing audience of young adults, such as White Snake, Monkey King: Hero Is Back, which grossed $138m in 2015, and Big Fish & Begonia, which took $82m in 2016.

“After releasing our first film Little Door Gods three years ago, we realised that the family animation market in China is still immature and very competitive,” says Light Chaser co-founder Yu Zhou. “On the other hand, it’s clear the mainstream audience is mostly young adults. It’s very different to Japan and the West where high-school students regularly visit the cinema. In China, you don’t get much free time until you reach college.”

The Chinese audience also skews female, which is why the creators of Wish Dragon made sure to include a strong female character in what is otherwise a bromance between a boy and a dragon, but it can be difficult to attract young adult males who are more interested in online video games. “The movies that get the gamers are the ones that really pop, because if you get the gamer you also get his team,” says BaseFX founder Chris Bremble. “But that’s hard unless you’ve got something more exciting than a video game.”

The Boonie Bears films, which are aimed at children and released during the Chinese New Year holidays, have been the exception to all these rules — the most recent film in the series, Boonie Bears: Blast Into The Past, grossed $103m in February. Fantawild Animation president Daisy Shang notes the company needed to work hard to bring parents into the cinemas. “From the very start, we’ve focused on making family films, not just children’s films. When we’re developing the story, we always try to include something fun and interesting for the parents,” says Shang. “We also do market research after every film to ask both the kids and their parents what they’ve enjoyed and what they think we can improve.”

Shang says the films initially benefitted from being based on a recognisable IP, but adds: “That only helps with the first one — after that it’s down to the strength of the content.” The studio has no fear of original stories and is gearing up to release Realm Of Terracotta, set in an imaginary underground world, which was developed with writers who have worked on Shrek 2 and Madagascar. Tellingly, given the composition of the Chinese audience, the film has a romantic twist and is aimed at slightly older audiences.

International ambition

Fantawild was also one of the first Chinese animation studios to take the international market seriously. Shang has been attending Mipcom since 2008 and the company has an in-house English-language dubbing team based at its offices in Shenzhen. She puts the international success of the series down to its universal emotions: “The stories revolve around friendship, growing up, father-son relationships — these are emotions that touch everyone. But we still face challenges, especially with dialogue and character design. That’s why we pay a lot of attention to dubbing and sometimes change the dialogue to make it more relatable to Western audiences.”

Other Chinese studios are also grappling with these challenges — as in the live-action sphere, it can be difficult to find stories that work across China and the West. China has a vast canon of mythology, at first glance fertile terrain for animation producers, but the amount of exposition needed for Westerners to understand it would be a bore for Chinese audiences who grew up on these stories.

Light Chaser’s Yu explains that one reason White Snake worked at the Chinese box office is that it serves as a prequel to a centuries-old fable. “For Chinese audiences, it had this plus point that it answered questions not addressed in the original story,” says Yu. “But for Westerners who may not understand that, it still seems to work as a straightforward love story.”

Bremble argues it’s not so much the story as the way you tell it that’s important. “If you make a film about contemporary China, and the story is very focused, that doesn’t mean it has to be ghettoised to China,” he says. “Anytime anyone sees a clip of Wish Dragon, they laugh.”

But he adds that to compete artistically at an international level, you need the kind of budgets that probably won’t recoup solely in the Chinese market. Costing at least twice the budget of an average Chinese animated movie, Wish Dragon has been a five-year journey for BaseFX, including two years focused solely on the story. But with Sony on board, the film is heading for a global theatrical release. “When it comes down to the quality of the animation in China, it’s not a question of talent, it’s all about budget and whether you’re given enough time to get it right,” says Bremble.

Huayi Wink Animation, which has offices in Shanghai and Los Angeles, has adopted a strategy of making films that lean towards either Western or Chinese markets, with budgets adjusted accordingly, but hopes all the films it produces have elements that appeal to both. Extinct is aimed at global audiences, but as Aguilar explains: “It takes place in China, so the setting is recognisable, and the two leads are a brother and sister with issues. Anything heartfelt that relates to family instincts works well here.”

With so many ambitious players experimenting with different models, China’s animation industry looks set to grow. The big question is how it balances costs with the different demands of audiences at home and internationally. And as the Chinese market for animation matures, there could be opportunities for international producers selling into China. French animation White Fang recently secured a June 14 Chinese theatrical release.

Looking ahead, there should be growth in related areas such as theme parks and merchandising. While China is still in the early stages of developing properties across platforms, both Fanta­wild and Huayi Brothers operate theme parks and BaseFX is developing merchandising for Wish Dragon.

“Licensing and merchandising is the untapped opportunity of this industry in China,” says Bremble. “We’re a year out from release and we’ve already started working on prototypes for our dragon. We’re trying to be really thoughtful about that side of the business.” Ns