China Sees a Massive Box Office Uptick

For Chinese cinemagoers, this was the year of the major blockbuster. With both a local and a Hollywood release performing remarkably, they’ve seen a big increase at the box office by pure numbers, but a struggling mid-tier segment does raise some questions about growth overall. We have a full roundup from expert entertainment attorney with Blake & Wang P.A., Brandon Blake.

Brandon Blake

Top-Heavy Success

First, the good news. Ne Zha 2, a domestic breakout like no other, closed with $2.1B in takings, enough to make it the fifth-highest earning movie of all time, as well as the year’s undisputed top film. To further pad out the numbers, Zootopia 2 not only earned itself a Chinese screening but gave a further $558.3M to the total box office. Overall, the Chinese box office saw ticket revenue 20% higher than last year, at roughly $7.41B in sales and 1.24B in admissions.

The Year of Animation

What unites them? They’re both blockbuster-level animations. And, looking further down the list, 57 animated features brought in $3.57B, almost half the year’s total. What’s even more notable is that most of these titles saw fan-favorite status and high repeat viewings, with Nobody, a local animation, bringing in $245M and the international release, Demon Slayer: Infinity Castle, accounting for $95.6M despite an early exit from theaters.

While local titles still accounted for roughly 80% of the Chinese market, and there was encouraging growth in the country’s still-maturing suburban and regional markets, it is notable that most of the list is top-heavy, with mid-tier films shrinking notably for another year, even among Hollywood releases in the market. However, the appetite for locally-made films is still high.

What this could mean for the market overall waits to be seen, but China’s return to the second-largest global film market, at 24% of the global box office, is still to be celebrated.

Pay TV Bundles Grow, For the First Time in Years

It’s looking a little like 2017 again, at least for the Pay-TV world. With bundles showing their first growth in 8 years, there may be a little room to celebrate. And entertainment lawyer at Blake & Wang P.A., Brandon Blake, has the news to share.

Brandon Blake

First Uptick Since 2017

It was a modest increase, certainly. 303,000 new subscribers, over cable, satellite, and streaming packages. While the decline rate was 5.8% still, that’s the fifth quarter we’ve seen it tighten. Notably, the Moffett Nathanson data behind it doesn’t size the total market. But that’s believed to be in the 65M to 70M range. It may not be the king of the market hill anymore, but that is still weighty. More importantly, it may suggest what we’ve suspected all along: Pay-TV isn’t dead, its influence has just shrunk.

Intriguing Implications

With most cable providers showing at least a little improvement in this decline, and a wider move to consolidation and streamlining, we might be looking at (close to) the bottom for Pay-TV. In fact, the bottom may have passed already.

What’s changed?

Pay-TV got the wakeup it needed to start offering more, instead of cruising on what worked in the 90s and 00s. We’ve seen many streaming/cable bundles pop up this year, alongside that consolidation. Interestingly, YouTube TV, which has never been a true cable model, saw steady and in-line, but above all average, new subscriber rates. The slowdown in exits came from traditional broadcasting.

It turns out Pay-TV isn’t dead. It needed a new image and more interest for today’s viewers. It also shows streaming and older models still play nicely together. Pretty similar, in fact, to how theatrical releases have come to support streaming, not fall to it. It seems the Hollywood world does have space for different models and approaches, after all.

Japanese-Based Indie Film Financier Wins New State Support

The Japanese film industry to date has been characterized as conservative, partly held back by a dated film financing system. However, with the news that The Development Bank of Japan has made investment into K2 pictures, one of their most notable indie film financiers, that could be set to change. Blake & Wang P.A. entertainment attorney Los Angeles, USA, Brandon Blake, looks at what this could mean for Japanese indies.
Brandon Blake- Entertainment lawyer
Brandon Blake

New Film Production Fund

Tokyo-based K2 Pictures is looking to launch a new production fund. So far, so regular business. What’s new, however, is the interest from The Development Bank of Japan, or DBJ. It seems there’s growing institutional confidence not only in K2 itself, but also the chances of shaking up Japan’s rather stagnant film financing framework.

DBJ will be investing 500 million yen, about $3.3M, in the new fund. Locally, it’s been called an “unprecedented show of support” for local independent film, especially with a strong list of blue-chip companies adding even modest amounts to the fund.

A Shift in Thinking

It seems that Japan’s most conservative sector of all- finance- is starting to see K2’s support of independent filmmaking as a viable approach. It’s an interesting development, given local cinema is dominated by careful franchises and the odd anime blockbuster. This leads to co-financing models headed by full studio consortia, with an added dash of broadcasters and publishers.

In short, something that not only makes it difficult for smaller filmmakers to compete but is also widely believed to stifle creative autonomy. K2 instead uses a profit-sharing model. This helps to lower the middlemen fees considerably, in turn making financing and production incentives (slightly) easier to access.

From its inception, announced at the 2024 Cannes, K2 has also managed to attract some of Japan’s most influential filmmakers, with names even the West will easily recognize, and also onboarded one of the country’s anime powerhouses. This will be one for independent filmmakers to watch.

Lionsgate Enters Digital Movies with New Launch

After parting ways with Starz and, by default, their largest streaming platform, Lionsgate is back, with a new digital movie network on offer. You could review entertainment lawyer at Blake & Wang P.A., Brandon Blake, fills us in on the details below
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Brandon Blake

DirecTV Debut

The new all-movie digital network will be used to give its extensive 20,000+ title library some extra (and lucrative) airtime. To be called MovieSphere Gold, it will see its debut on DirecTV, Sling Freestream, Friendly, and DishTV, with several other hosts lined up. To no one’s surprise, given the shifts in the streaming environment, it will be an ad-supported subscription service.

While there are plenty of movies on offer across the varied modern streaming sources, this will be the first dedicated solely to movie titles. Plus, of course, the fact that many of Lionsgate’s catalogue are not currently available through other streamers.

An Answer to Broadcasting?

Interestingly, with the recent spin-off of Starz and its linear assets, it seems that Lionsgate Studios is looking to replicate the TV broadcast model that worked so well for them, with a modern streaming twist to reinvent it. It’s not a bad bet, with digital broadcasting in this vein showing steady growth and even a little expansion. As the CEO noted, there are now 8 “diginets” using a similar setup among the Top 50 entertainment networks.

With the Lionsgate reputation and catalog to back it, MovieSphere Gold is an interesting exercise in reinventing old strategies. While they have no plans at present to move fully into a streaming platform framework, despite some solid TV assets under their belt as well, the remaining question is now how much subscriber uptake they will receive, as North American viewers become ever top-heavier on subscriptions. Will Lionsgate’s pull be enough to make it a success? Let’s hope to see it thrive.

Disney Plans $1B Increase in Content Spending

While the cost of producing content, especially for streaming, has been under the Wall Street spotlight for the past few years, there’s a truth to face: to win, you have to spend. With that in mind, the news that Disney, one of the most successful streaming studios to date, is planning to increase what it’s spending on its services will be a welcome one indeed- but not without an attached cautionary tale. Blake & Wang P.A. one of the top entertainment attorney Los Angeles, Brandon Blake, shares the facts and his thoughts.

Brandon Blake

Content Spending Increase Ahead

This past fiscal year, Disney spent $23B, and anticipates that rising to $24 billion for the year ahead. Mostly, this is earmarked to be funneled into live sports spending, an area of streaming that has increasingly become not only a drawcard to streaming platform subscriptions, but also a competitive force. However, it will also be split between new and existing film franchises and their TV content.

Comparing Balance Sheets

It’s worth comparing this to their latest quarterly earnings report, where we saw revenues of $22.5B, with segment operating income at the $3.5B mark. It was a strong quarter for the Mouse House, with Disney+ (their flagship service) increasing subscribers by 3.8M to close at 132M. Combined with Hulu, that was a 12.4M increase, closing at 196M total. The D2C revenue ticked up by 8% (to $6.2B), with operating income seeing a massive 39% increase to $352M.

While the news that most of the increase is earmarked for live sports spending will be disappointing for Hollywood, it’s also worth remembering that Disney has cut back on several lucrative rights deals this year, and given the increasing impact a strong sports lineup can have on streaming subscribers, it’s understandable.

However, with Paramount also announcing that the bulk of its increased content spending (earmarked at $1.5B for them) will go to sports rights as it tries to carve out its own streaming niche, there may be a wake-up call lurking for the entertainment industry at large, and there are definitely lessons to be learned as the new year looms.