EBay and other companies ambitiously targeted China and drooled over the potential goldmine of revenue to be reaped from its gigantic population base. Each aspiring effort has proved a costly struggle to realize. (EBay recently restructured its offerings there.)
Casino Royal was recently released to widescreen audiences in China. With over a billion potential viewers, Sony aggressively pursued the release which was scheduled for around 1000 screens. Censors were given early access to review the film for objectionable content (Previous Bond movie Die Another Day (2002) was rejected outright). Even Danielle Craig, the star, was in Beijing for the premier.
The James Bond franchise finally making it to Beijing underscores yet again the promise and pitfalls of breaking into new international markets, especially China, where government controls make it among the most extreme environments for any would-be marketer to navigate and profit from.
Despite the marketing effort, the direct revenue upside from this movie is limited. China’s state owned film distributor shares only 13% of revenue with the production company. In most other international markets that number nears 50%. According to some estimates, if Bond does phenomenally well in China Sony stands to earn $2m or $3m at most in gross revenue.
Given the costs of marketing, and those limited direct returns, the upside for Sony may be with future releases. Typically China allows only around 50 foreign titles to have theatrical release per year though studios are lobbying China Film for more access. Positive relationships built over Bond could help Sony gain a larger percentage of the quota – whatever number it is. Relationships built over Bond could also help Sony gain ground with authorized DVD sales – in contrast to the large black market of pirated titles that exists.
China, like any international market, brings a business unique marketing challenges and currency issues with finance. The controlled environment of China is additionally so restrictive that the right relationships and affiliations can make or break chances of success. That’s a tremendously unpredictable risk factor for any company still, Sony, it looks to me, is testing the waters of those relationships and trying to find a way to work with China, in China.