Speaker 1: This is Bloomberg Business Week with Carol Masser and Bloomberg
Speaker 1: Quick Takes Tim Stinovic on Bloomberg Radio. The next guest
Speaker 1: is definitely a timely guest. I think about the Olympics
Speaker 1: that are on. We see the Oscar nominations this week,
Speaker 1: and we see tensions between the US and China tim
Speaker 1: on a lot of front as they battle for influence,
Speaker 1: whether it's in politics, on the global stage, the global economy, military,
Speaker 1: my technology. There's a battle, and that also includes the
Speaker 1: movie business. Yeah, it certainly does. It's been pretty remarkable
Speaker 1: how quickly China has been able to get to to
Speaker 1: build out. It's it's version of Hollywood in China, and
Speaker 1: it's something that Eric Schwartzel, Hollywood reporter at the Wall
Speaker 1: Street Journal, dives into. He joins us right now on
Speaker 1: the phone from Los Angeles, Eric, how are you. I
Speaker 1: am happy to be here, Thanks for having me. Congratulations
Speaker 1: on the new book, Red Carpet Hollywood, China and the
Speaker 1: Global Battle for Cultural Supremacy. Your book opens with an
Speaker 1: anecdote about a group of executives from China coming to
Speaker 1: the United States all the way back in well not
Speaker 1: that long ago, two thousand and eight. They were there
Speaker 1: to to learn from Hollywood executives, some of these executives
Speaker 1: having run companies that are, you know, a hundred years old. Um,
Speaker 1: how quickly has China been able to build out, Uh,
Speaker 1: it's movie business, it's entertainment business. Since that time, it
Speaker 1: has done in about a decade and a half what
Speaker 1: it took Hollywood a hundred years to do. I think
Speaker 1: a lot of listeners might be familiar with the concept
Speaker 1: of technology transfer that we see in a lot of
Speaker 1: sectors when it comes to China. The the idea of
Speaker 1: being that if you want to invest in China, if
Speaker 1: you want to do business in China, you might need
Speaker 1: to show them how it's done. You might need to
Speaker 1: hand over airplane blueprints or partner with a state backed
Speaker 1: company that might want to learn how to sophisticate their operations. Well,
Speaker 1: the same thing happened in Hollywood and the movie industry.
Speaker 1: As Hollywood moved into China, China started to observe how
Speaker 1: Hollywood operated, sometimes in a literal classroom like you referenced,
Speaker 1: and sometimes just by hiring talent and bringing them over
Speaker 1: to show them how to make commercial films. And since
Speaker 1: then we've seen the Chinese film industry just take off
Speaker 1: and movies they're routinely grows upwards of five six hundred
Speaker 1: millions dollars in China alone. And now we're trying to
Speaker 1: see also this sort of final leg of the race,
Speaker 1: which is exporting those movies abroad as America has done
Speaker 1: for decades as well. You know, it's interesting in a
Speaker 1: day when we're reporting Disney earnings, I think about the
Speaker 1: role of these big global companies, including a Walt Disney,
Speaker 1: their role in in terms of um helping out China.
Speaker 1: Maybe move forward when it comes to movie making, how
Speaker 1: do you how do you think about how do you
Speaker 1: write about a company like Disney and their role in
Speaker 1: all of this? This needs a fascinating case study because
Speaker 1: it's spent the past twenty five years going deep into China.
Speaker 1: At one point, Um Bob Iger, the former CEO, described
Speaker 1: the Shanghai Disneylands Park as the best opportunity for the
Speaker 1: company since Walt Disney himself had bought land in central Florida.
Speaker 1: I mean this was a country of one point four
Speaker 1: billion people, a lot of whom had children, and a
Speaker 1: lot of whom had only children. So I mean, if
Speaker 1: you're operating Disney's business. You know, a nation of a
Speaker 1: bunch of only children is about this a dream scenario
Speaker 1: as you can get. Um. However, we've seen some of
Speaker 1: that sex success turned into something of a liability because
Speaker 1: there is a massive theme park in Shanghai, and there's
Speaker 1: another one in Hong Kong, and the movies do exceptionally well. However,
Speaker 1: it's just gotten trickier to do business there overall, not
Speaker 1: just because under shi jing Ping, doing business in China
Speaker 1: has grown more opaque, but also because in some cases
Speaker 1: it has put Disney at odds with its own American government.
Speaker 1: Well what does Disney had to give up in order
Speaker 1: to operate successfully in China? Well, I mean, so let's
Speaker 1: start with the theme park in Shanghai. Disney is not
Speaker 1: a majority owner of that park, like a lot of
Speaker 1: other business ventures in China, it had to partner with
Speaker 1: local firms and give them majority ownership. So that means
Speaker 1: that I think about forty is owned by Disney and
Speaker 1: the rest is owned by companies that are local and
Speaker 1: state affiliated. And there were other issues with with disney strategy,
Speaker 1: the first being that you know, in the mid nineties nineties,
Speaker 1: when Disney first started looking at building a theme park
Speaker 1: in China. Chinese officials wanted it right away, and Disney
Speaker 1: had to say, whoa wa wa. You know, there's a
Speaker 1: reason we only have four or five of these things
Speaker 1: in the whole world. We don't just build a theme
Speaker 1: park when someone asks for it. We have to start
Speaker 1: start to seed affection with children. So they beg their
Speaker 1: parents to take them to that theme park first. And
Speaker 1: they initially wanted to get the Disney Channel onto Chinese
Speaker 1: airways right. Government officials in China said no, but they
Speaker 1: did have other more creative ways to introduce Chinese children
Speaker 1: to Disney characters, including for a time a string of
Speaker 1: English language school right that would teach the airtsees and
Speaker 1: the Disney characters. Eric, we're going to come back continuing
Speaker 1: the conversation we're talking about. Eric Schwartzel, author of the
Speaker 1: new book Red Carpet, will continue in just a moment.
Speaker 1: I want to get right back to Eric Schwartzel, Hollywood
Speaker 1: reporter for The Wall Street Journal, also author of the
Speaker 1: new book came out yesterday. It's called Red Carpet, Hollywood,
Speaker 1: China and the Global Battle for cultural supremacy. Eric joins
Speaker 1: us on the phone from Los Angeles, Eric, I want
Speaker 1: to talk about Maverick's jacket, and I'm talking Tom Cruise
Speaker 1: Maverick here. This book is full of so many great anecdotes.
Speaker 1: I had no idea about the controversy or self censorship
Speaker 1: surrounding this patch here, but explain the story and how
Speaker 1: self censorship is embodied in what Paramount has done for
Speaker 1: the reboot of Top Gun. Right, it's one of the
Speaker 1: most iconic movie star costumes of all time, right, the
Speaker 1: the sunglasses and the leather jacket that Tom Cruise wears
Speaker 1: in Top Gun from the nineteen eighties, and when crew
Speaker 1: sued it up for the reboots that I think is
Speaker 1: now coming out this year, if not next year. It's
Speaker 1: been delayed a couple of times because of covid um.
Speaker 1: People notice a key difference on that jacket, which is
Speaker 1: that the flag patches that were on the back had
Speaker 1: in the eighties included the flags of Taiwan and Japan,
Speaker 1: but in this reboot they were gone. And the reason
Speaker 1: why I discovered is because Chinese financiers who were helping
Speaker 1: pay for the film pointed out that those could be
Speaker 1: a problem because a Taiwanese flag implies that Taiwan is
Speaker 1: its own country, a geopolitical stance that Beijing disagrees with,
Speaker 1: and tensions between China and Japan have always been charged,
Speaker 1: and so maybe while the costume designer was at it,
Speaker 1: they should take that patch off as well. And so
Speaker 1: suddenly you had this movie that in thees symbolized frankly
Speaker 1: Reaganism on screen, you know, raw raw cinema instead bending
Speaker 1: to Chinese rules without China really even having to say
Speaker 1: a word. That is as I think one of the
Speaker 1: striking things about China's relationship and influence on Hollywood is
Speaker 1: that we're at the point now that China doesn't even
Speaker 1: really need to say anything for Hollywood executives to know
Speaker 1: what lines not to cross. Well, you also write in
Speaker 1: the book audience in China are reminded every time they
Speaker 1: go to the movies that what they're about to see
Speaker 1: has been approved by their government. And you know, one
Speaker 1: of the things I think we praise or or embrace
Speaker 1: big time is that when it comes to art in
Speaker 1: in so many different forms, including the movie industry, that
Speaker 1: that is an opportunity for directors, writers, producers, actors, actresses
Speaker 1: to put out lots of different points of view freely. Um,
Speaker 1: it's very different in China, but American companies, global companies
Speaker 1: have agreed to kind of play by Chinese rules. Is
Speaker 1: that fair? Absolutely? And and the business behind it makes
Speaker 1: it something of an economic no brainer for a lot
Speaker 1: of the studio a chiefs because the Chinese box office
Speaker 1: has grown so quickly at a time when the US
Speaker 1: box office has flatlined. Maintaining access to that market is
Speaker 1: really about maintaining access to growth and to get into
Speaker 1: the Chinese movie theaters, as so many studios want to do,
Speaker 1: they have to pass censorship by Chinese Communist Party officials.
Speaker 1: So every major movie that is trying to get into
Speaker 1: Chinese theaters has to be first viewed and approved by
Speaker 1: these Communist Party sensors. So that means not just removing
Speaker 1: you know, maybe something little, some little detail that or
Speaker 1: a line of dialogues of Chinese sensors don't approve of,
Speaker 1: but also just avoiding whole topics altogether, like Taiwan or
Speaker 1: Tibet or aspects of Chinese history that its leaders would
Speaker 1: rather not see on screen. What is lost here when
Speaker 1: it comes to self censorship, when it comes to making
Speaker 1: sure that movies that are made by American studios don't
Speaker 1: offend audiences globally, or I wouldn't even use the word offend,
Speaker 1: but adhere to to what that government sees as its
Speaker 1: own values. Well, you loud to this a little earlier,
Speaker 1: and I think it's I think it is a change
Speaker 1: for what we've come to expect Hollywood to do. I mean,
Speaker 1: since the nineteen sixties and seventies, Hollywood has been the
Speaker 1: industry that is supposed to push the envelope and sort
Speaker 1: of stand as the American industry of free expression, and increasingly,
Speaker 1: especially in a global marketplace, that has not really been possible.
Speaker 1: And so not only do we see certain political concerns
Speaker 1: or stories taken off screen, but we also see really
Speaker 1: um and undercutting a certain representation um. You know, for instance,
Speaker 1: in China, storylines involving gay characters are all but forbidden.
Speaker 1: So that's not going to fly in major blockbuster movies.
Speaker 1: But I think in general, what we're seeing is that
Speaker 1: for the first time in hollywood hundred and twenty year history,
Speaker 1: it is not making movies with Americans first in mind,
Speaker 1: but many times with Chinese censors. Wow, So how do
Speaker 1: you you report on this world? How do you kind
Speaker 1: of put it up against the increased tensions that we're
Speaker 1: seeing between China and the rest of the world, and
Speaker 1: certainly between the United States, and being in an environment
Speaker 1: coming off of George floyd In and the pandemic where
Speaker 1: we're saying, wait, there's inequalities, there's inequities, there's a lack
Speaker 1: of diversity and inclusion, and there's racism out there. You know,
Speaker 1: corporate leaders, you need to stand up. We all need
Speaker 1: to stand up to make it a better system. How
Speaker 1: do you cross that with what you write about? It's
Speaker 1: you know, it's it's it's the tension that I think
Speaker 1: has also enveloped entities like the n b a UM,
Speaker 1: which has also waded into Chinese politics and based similar criticism.
Speaker 1: You know, it's sort of like, where's this? Is there
Speaker 1: an hypocrisy there that that actors or athletes who are
Speaker 1: so willing to engage on social issues domestically won't engage
Speaker 1: on them when they are Chinese. Uh? In nature? I
Speaker 1: think that I think that hypocrisy has really rubbed a
Speaker 1: lot of consumers and politicians the wrong way. And as
Speaker 1: tensions between the US and China rise, and I'd also say,
Speaker 1: maybe even more importantly, as awareness of human rights abuses
Speaker 1: in China rise, then I think these companies and these
Speaker 1: athletes are these actors are going to have more to
Speaker 1: answer for. And we have yet to see what that
Speaker 1: public pressure leads to, because so far, anytime there's something
Speaker 1: of a flare up, it fades from memory rather quickly.
Speaker 1: And I think the calculation for a lot of business
Speaker 1: leaders has been the pr hit at home will fade
Speaker 1: faster than any punishment I face in China. So just
Speaker 1: take the pr hit as long as you can maintain
Speaker 1: access in China. Well, I don't know if that dynamical ship. Well,
Speaker 1: just look at all the corporate sponsors that are over
Speaker 1: the part of the Olympics. Such a timely conversation, We
Speaker 1: really appreciate it, and good luck with the book. Eric Schwartzel,
Speaker 1: Hollywood reporter at the Wall Street Journal, on the phone
Speaker 1: from l A. Check out his new book, Red Carpet Hollywood, China,
Speaker 1: and the Global Battle for a Cultural Supremacy. This just
Speaker 1: crosses so many different conversations and themes that we're having
Speaker 1: right now.