WEBVTT - How China Influences Hollywood 0:00:00.160 --> 0:00:04.200 This is Bloomberg Business Week with Carol Masser and Bloomberg 0:00:04.280 --> 0:00:08.479 Quick Takes Tim Stinovic on Bloomberg Radio. The next guest 0:00:08.720 --> 0:00:11.280 is definitely a timely guest. I think about the Olympics 0:00:11.440 --> 0:00:15.280 that are on. We see the Oscar nominations this week, 0:00:15.400 --> 0:00:18.800 and we see tensions between the US and China tim 0:00:18.800 --> 0:00:21.759 on a lot of front as they battle for influence, 0:00:21.800 --> 0:00:26.000 whether it's in politics, on the global stage, the global economy, military, 0:00:26.040 --> 0:00:29.360 my technology. There's a battle, and that also includes the 0:00:29.360 --> 0:00:32.480 movie business. Yeah, it certainly does. It's been pretty remarkable 0:00:32.520 --> 0:00:35.879 how quickly China has been able to get to to 0:00:35.920 --> 0:00:38.400 build out. It's it's version of Hollywood in China, and 0:00:38.400 --> 0:00:41.080 it's something that Eric Schwartzel, Hollywood reporter at the Wall 0:00:41.120 --> 0:00:43.400 Street Journal, dives into. He joins us right now on 0:00:43.440 --> 0:00:46.320 the phone from Los Angeles, Eric, how are you. I 0:00:46.560 --> 0:00:49.120 am happy to be here, Thanks for having me. Congratulations 0:00:49.120 --> 0:00:51.440 on the new book, Red Carpet Hollywood, China and the 0:00:51.479 --> 0:00:56.680 Global Battle for Cultural Supremacy. Your book opens with an 0:00:56.920 --> 0:01:00.280 anecdote about a group of executives from China coming to 0:01:00.280 --> 0:01:02.800 the United States all the way back in well not 0:01:02.840 --> 0:01:05.080 that long ago, two thousand and eight. They were there 0:01:05.120 --> 0:01:08.920 to to learn from Hollywood executives, some of these executives 0:01:08.959 --> 0:01:12.840 having run companies that are, you know, a hundred years old. Um, 0:01:12.880 --> 0:01:16.839 how quickly has China been able to build out, Uh, 0:01:16.920 --> 0:01:21.399 it's movie business, it's entertainment business. Since that time, it 0:01:21.520 --> 0:01:23.959 has done in about a decade and a half what 0:01:24.040 --> 0:01:26.880 it took Hollywood a hundred years to do. I think 0:01:26.920 --> 0:01:29.760 a lot of listeners might be familiar with the concept 0:01:29.760 --> 0:01:32.520 of technology transfer that we see in a lot of 0:01:32.560 --> 0:01:35.480 sectors when it comes to China. The the idea of 0:01:35.520 --> 0:01:38.040 being that if you want to invest in China, if 0:01:38.080 --> 0:01:40.280 you want to do business in China, you might need 0:01:40.319 --> 0:01:42.440 to show them how it's done. You might need to 0:01:42.520 --> 0:01:46.800 hand over airplane blueprints or partner with a state backed 0:01:46.840 --> 0:01:51.640 company that might want to learn how to sophisticate their operations. Well, 0:01:51.720 --> 0:01:54.480 the same thing happened in Hollywood and the movie industry. 0:01:54.640 --> 0:01:59.480 As Hollywood moved into China, China started to observe how 0:01:59.520 --> 0:02:03.240 Hollywood operated, sometimes in a literal classroom like you referenced, 0:02:03.280 --> 0:02:06.440 and sometimes just by hiring talent and bringing them over 0:02:06.480 --> 0:02:10.239 to show them how to make commercial films. And since 0:02:10.280 --> 0:02:13.560 then we've seen the Chinese film industry just take off 0:02:14.240 --> 0:02:18.240 and movies they're routinely grows upwards of five six hundred 0:02:18.240 --> 0:02:22.640 millions dollars in China alone. And now we're trying to 0:02:22.680 --> 0:02:24.880 see also this sort of final leg of the race, 0:02:24.919 --> 0:02:28.200 which is exporting those movies abroad as America has done 0:02:28.240 --> 0:02:30.760 for decades as well. You know, it's interesting in a 0:02:30.840 --> 0:02:33.160 day when we're reporting Disney earnings, I think about the 0:02:33.240 --> 0:02:37.120 role of these big global companies, including a Walt Disney, 0:02:37.200 --> 0:02:41.880 their role in in terms of um helping out China. 0:02:42.320 --> 0:02:45.480 Maybe move forward when it comes to movie making, how 0:02:45.520 --> 0:02:47.480 do you how do you think about how do you 0:02:47.520 --> 0:02:49.799 write about a company like Disney and their role in 0:02:49.880 --> 0:02:54.000 all of this? This needs a fascinating case study because 0:02:54.440 --> 0:02:59.720 it's spent the past twenty five years going deep into China. 0:02:59.800 --> 0:03:04.040 At one point, Um Bob Iger, the former CEO, described 0:03:04.440 --> 0:03:08.840 the Shanghai Disneylands Park as the best opportunity for the 0:03:08.880 --> 0:03:12.519 company since Walt Disney himself had bought land in central Florida. 0:03:12.960 --> 0:03:15.880 I mean this was a country of one point four 0:03:15.919 --> 0:03:18.639 billion people, a lot of whom had children, and a 0:03:18.680 --> 0:03:21.480 lot of whom had only children. So I mean, if 0:03:21.520 --> 0:03:25.000 you're operating Disney's business. You know, a nation of a 0:03:25.040 --> 0:03:28.840 bunch of only children is about this a dream scenario 0:03:28.960 --> 0:03:32.840 as you can get. Um. However, we've seen some of 0:03:32.880 --> 0:03:37.040 that sex success turned into something of a liability because 0:03:37.480 --> 0:03:39.960 there is a massive theme park in Shanghai, and there's 0:03:39.960 --> 0:03:44.120 another one in Hong Kong, and the movies do exceptionally well. However, 0:03:44.480 --> 0:03:48.080 it's just gotten trickier to do business there overall, not 0:03:48.200 --> 0:03:51.680 just because under shi jing Ping, doing business in China 0:03:51.720 --> 0:03:54.920 has grown more opaque, but also because in some cases 0:03:54.920 --> 0:03:58.560 it has put Disney at odds with its own American government. 0:03:59.000 --> 0:04:01.080 Well what does Disney had to give up in order 0:04:01.120 --> 0:04:06.040 to operate successfully in China? Well, I mean, so let's 0:04:06.040 --> 0:04:08.800 start with the theme park in Shanghai. Disney is not 0:04:08.960 --> 0:04:12.240 a majority owner of that park, like a lot of 0:04:12.360 --> 0:04:17.279 other business ventures in China, it had to partner with 0:04:17.600 --> 0:04:21.160 local firms and give them majority ownership. So that means 0:04:21.279 --> 0:04:24.240 that I think about forty is owned by Disney and 0:04:24.279 --> 0:04:27.440 the rest is owned by companies that are local and 0:04:27.600 --> 0:04:32.040 state affiliated. And there were other issues with with disney strategy, 0:04:32.120 --> 0:04:36.440 the first being that you know, in the mid nineties nineties, 0:04:36.600 --> 0:04:39.720 when Disney first started looking at building a theme park 0:04:39.800 --> 0:04:45.520 in China. Chinese officials wanted it right away, and Disney 0:04:45.520 --> 0:04:47.240 had to say, whoa wa wa. You know, there's a 0:04:47.279 --> 0:04:50.080 reason we only have four or five of these things 0:04:50.080 --> 0:04:52.400 in the whole world. We don't just build a theme 0:04:52.440 --> 0:04:55.119 park when someone asks for it. We have to start 0:04:55.680 --> 0:04:58.480 start to seed affection with children. So they beg their 0:04:58.520 --> 0:05:01.120 parents to take them to that theme park first. And 0:05:01.160 --> 0:05:04.360 they initially wanted to get the Disney Channel onto Chinese 0:05:04.360 --> 0:05:07.839 airways right. Government officials in China said no, but they 0:05:07.920 --> 0:05:12.279 did have other more creative ways to introduce Chinese children 0:05:12.360 --> 0:05:16.240 to Disney characters, including for a time a string of 0:05:16.320 --> 0:05:20.320 English language school right that would teach the airtsees and 0:05:20.520 --> 0:05:22.760 the Disney characters. Eric, we're going to come back continuing 0:05:22.760 --> 0:05:25.520 the conversation we're talking about. Eric Schwartzel, author of the 0:05:25.520 --> 0:05:27.960 new book Red Carpet, will continue in just a moment. 0:05:28.120 --> 0:05:30.279 I want to get right back to Eric Schwartzel, Hollywood 0:05:30.279 --> 0:05:32.840 reporter for The Wall Street Journal, also author of the 0:05:32.880 --> 0:05:35.760 new book came out yesterday. It's called Red Carpet, Hollywood, 0:05:35.800 --> 0:05:40.040 China and the Global Battle for cultural supremacy. Eric joins 0:05:40.120 --> 0:05:42.560 us on the phone from Los Angeles, Eric, I want 0:05:42.560 --> 0:05:47.200 to talk about Maverick's jacket, and I'm talking Tom Cruise 0:05:47.200 --> 0:05:49.800 Maverick here. This book is full of so many great anecdotes. 0:05:49.839 --> 0:05:54.000 I had no idea about the controversy or self censorship 0:05:54.240 --> 0:05:58.640 surrounding this patch here, but explain the story and how 0:05:59.200 --> 0:06:02.719 self censorship is embodied in what Paramount has done for 0:06:02.760 --> 0:06:06.120 the reboot of Top Gun. Right, it's one of the 0:06:06.160 --> 0:06:10.839 most iconic movie star costumes of all time, right, the 0:06:10.839 --> 0:06:14.880 the sunglasses and the leather jacket that Tom Cruise wears 0:06:15.000 --> 0:06:18.160 in Top Gun from the nineteen eighties, and when crew 0:06:18.240 --> 0:06:20.600 sued it up for the reboots that I think is 0:06:20.640 --> 0:06:22.480 now coming out this year, if not next year. It's 0:06:22.520 --> 0:06:24.840 been delayed a couple of times because of covid um. 0:06:24.960 --> 0:06:28.560 People notice a key difference on that jacket, which is 0:06:28.600 --> 0:06:31.880 that the flag patches that were on the back had 0:06:31.920 --> 0:06:36.240 in the eighties included the flags of Taiwan and Japan, 0:06:36.760 --> 0:06:39.920 but in this reboot they were gone. And the reason 0:06:40.000 --> 0:06:44.520 why I discovered is because Chinese financiers who were helping 0:06:44.600 --> 0:06:47.880 pay for the film pointed out that those could be 0:06:47.920 --> 0:06:52.200 a problem because a Taiwanese flag implies that Taiwan is 0:06:52.240 --> 0:06:55.840 its own country, a geopolitical stance that Beijing disagrees with, 0:06:56.200 --> 0:07:00.960 and tensions between China and Japan have always been charged, 0:07:01.200 --> 0:07:03.840 and so maybe while the costume designer was at it, 0:07:04.080 --> 0:07:06.880 they should take that patch off as well. And so 0:07:07.040 --> 0:07:12.560 suddenly you had this movie that in thees symbolized frankly 0:07:12.600 --> 0:07:18.400 Reaganism on screen, you know, raw raw cinema instead bending 0:07:18.760 --> 0:07:22.920 to Chinese rules without China really even having to say 0:07:22.920 --> 0:07:25.080 a word. That is as I think one of the 0:07:25.160 --> 0:07:30.000 striking things about China's relationship and influence on Hollywood is 0:07:30.040 --> 0:07:33.360 that we're at the point now that China doesn't even 0:07:33.400 --> 0:07:36.040 really need to say anything for Hollywood executives to know 0:07:36.240 --> 0:07:39.600 what lines not to cross. Well, you also write in 0:07:39.600 --> 0:07:42.080 the book audience in China are reminded every time they 0:07:42.080 --> 0:07:43.920 go to the movies that what they're about to see 0:07:43.920 --> 0:07:47.840 has been approved by their government. And you know, one 0:07:47.880 --> 0:07:51.040 of the things I think we praise or or embrace 0:07:51.120 --> 0:07:54.080 big time is that when it comes to art in 0:07:54.080 --> 0:07:56.760 in so many different forms, including the movie industry, that 0:07:56.760 --> 0:08:01.320 that is an opportunity for directors, writers, producers, actors, actresses 0:08:01.880 --> 0:08:06.239 to put out lots of different points of view freely. Um, 0:08:06.280 --> 0:08:10.800 it's very different in China, but American companies, global companies 0:08:11.000 --> 0:08:13.400 have agreed to kind of play by Chinese rules. Is 0:08:13.400 --> 0:08:19.600 that fair? Absolutely? And and the business behind it makes 0:08:19.600 --> 0:08:22.000 it something of an economic no brainer for a lot 0:08:22.000 --> 0:08:25.240 of the studio a chiefs because the Chinese box office 0:08:25.240 --> 0:08:28.040 has grown so quickly at a time when the US 0:08:28.160 --> 0:08:32.840 box office has flatlined. Maintaining access to that market is 0:08:32.920 --> 0:08:38.319 really about maintaining access to growth and to get into 0:08:38.360 --> 0:08:41.440 the Chinese movie theaters, as so many studios want to do, 0:08:41.920 --> 0:08:45.840 they have to pass censorship by Chinese Communist Party officials. 0:08:45.840 --> 0:08:48.280 So every major movie that is trying to get into 0:08:48.360 --> 0:08:52.480 Chinese theaters has to be first viewed and approved by 0:08:52.600 --> 0:08:56.920 these Communist Party sensors. So that means not just removing 0:08:57.440 --> 0:09:00.439 you know, maybe something little, some little detail that or 0:09:00.480 --> 0:09:03.880 a line of dialogues of Chinese sensors don't approve of, 0:09:04.080 --> 0:09:09.080 but also just avoiding whole topics altogether, like Taiwan or 0:09:09.120 --> 0:09:12.200 Tibet or aspects of Chinese history that its leaders would 0:09:12.280 --> 0:09:16.240 rather not see on screen. What is lost here when 0:09:16.280 --> 0:09:19.760 it comes to self censorship, when it comes to making 0:09:19.800 --> 0:09:24.520 sure that movies that are made by American studios don't 0:09:24.559 --> 0:09:28.000 offend audiences globally, or I wouldn't even use the word offend, 0:09:28.040 --> 0:09:30.959 but adhere to to what that government sees as its 0:09:30.960 --> 0:09:34.680 own values. Well, you loud to this a little earlier, 0:09:34.679 --> 0:09:37.360 and I think it's I think it is a change 0:09:37.800 --> 0:09:40.439 for what we've come to expect Hollywood to do. I mean, 0:09:40.600 --> 0:09:45.240 since the nineteen sixties and seventies, Hollywood has been the 0:09:45.320 --> 0:09:48.640 industry that is supposed to push the envelope and sort 0:09:48.640 --> 0:09:53.840 of stand as the American industry of free expression, and increasingly, 0:09:53.960 --> 0:09:57.760 especially in a global marketplace, that has not really been possible. 0:09:58.040 --> 0:10:03.600 And so not only do we see certain political concerns 0:10:03.800 --> 0:10:06.480 or stories taken off screen, but we also see really 0:10:06.800 --> 0:10:11.320 um and undercutting a certain representation um. You know, for instance, 0:10:11.320 --> 0:10:16.840 in China, storylines involving gay characters are all but forbidden. 0:10:16.920 --> 0:10:20.400 So that's not going to fly in major blockbuster movies. 0:10:20.440 --> 0:10:22.959 But I think in general, what we're seeing is that 0:10:23.040 --> 0:10:27.760 for the first time in hollywood hundred and twenty year history, 0:10:28.120 --> 0:10:32.600 it is not making movies with Americans first in mind, 0:10:32.800 --> 0:10:39.000 but many times with Chinese censors. Wow, So how do 0:10:39.120 --> 0:10:42.640 you you report on this world? How do you kind 0:10:42.679 --> 0:10:46.840 of put it up against the increased tensions that we're 0:10:46.880 --> 0:10:48.800 seeing between China and the rest of the world, and 0:10:48.840 --> 0:10:52.720 certainly between the United States, and being in an environment 0:10:52.760 --> 0:10:55.440 coming off of George floyd In and the pandemic where 0:10:55.440 --> 0:10:58.480 we're saying, wait, there's inequalities, there's inequities, there's a lack 0:10:58.559 --> 0:11:01.760 of diversity and inclusion, and there's racism out there. You know, 0:11:01.920 --> 0:11:03.920 corporate leaders, you need to stand up. We all need 0:11:03.960 --> 0:11:07.200 to stand up to make it a better system. How 0:11:07.240 --> 0:11:11.920 do you cross that with what you write about? It's 0:11:12.000 --> 0:11:14.720 you know, it's it's it's the tension that I think 0:11:15.360 --> 0:11:20.560 has also enveloped entities like the n b a UM, 0:11:20.640 --> 0:11:25.119 which has also waded into Chinese politics and based similar criticism. 0:11:25.120 --> 0:11:26.760 You know, it's sort of like, where's this? Is there 0:11:26.800 --> 0:11:30.920 an hypocrisy there that that actors or athletes who are 0:11:31.000 --> 0:11:34.920 so willing to engage on social issues domestically won't engage 0:11:34.920 --> 0:11:39.160 on them when they are Chinese. Uh? In nature? I 0:11:39.200 --> 0:11:42.800 think that I think that hypocrisy has really rubbed a 0:11:42.840 --> 0:11:46.400 lot of consumers and politicians the wrong way. And as 0:11:46.880 --> 0:11:50.120 tensions between the US and China rise, and I'd also say, 0:11:50.160 --> 0:11:53.840 maybe even more importantly, as awareness of human rights abuses 0:11:54.400 --> 0:11:59.120 in China rise, then I think these companies and these 0:11:59.160 --> 0:12:01.960 athletes are these actors are going to have more to 0:12:02.040 --> 0:12:05.120 answer for. And we have yet to see what that 0:12:05.200 --> 0:12:09.480 public pressure leads to, because so far, anytime there's something 0:12:09.480 --> 0:12:13.000 of a flare up, it fades from memory rather quickly. 0:12:13.040 --> 0:12:15.360 And I think the calculation for a lot of business 0:12:15.400 --> 0:12:19.880 leaders has been the pr hit at home will fade 0:12:20.040 --> 0:12:24.960 faster than any punishment I face in China. So just 0:12:25.040 --> 0:12:27.400 take the pr hit as long as you can maintain 0:12:27.440 --> 0:12:31.480 access in China. Well, I don't know if that dynamical ship. Well, 0:12:31.520 --> 0:12:33.280 just look at all the corporate sponsors that are over 0:12:33.960 --> 0:12:39.520 the part of the Olympics. Such a timely conversation, We 0:12:39.600 --> 0:12:42.200 really appreciate it, and good luck with the book. Eric Schwartzel, 0:12:42.400 --> 0:12:44.760 Hollywood reporter at the Wall Street Journal, on the phone 0:12:44.760 --> 0:12:47.560 from l A. Check out his new book, Red Carpet Hollywood, China, 0:12:47.600 --> 0:12:50.080 and the Global Battle for a Cultural Supremacy. This just 0:12:50.160 --> 0:12:53.000 crosses so many different conversations and themes that we're having 0:12:53.080 --> 0:12:53.400 right now.