This forum was held in the theater at Warner Fox World. Because Duke was personally present, the usually routine China-U.S. Film Forum immediately became extraordinarily appealing. Not only media reporters, but many local directors, actors, and producers also participated.
Riding through the attractions of Warner Fox World in a golf cart, Duke and Scarlett arrived at the musical theater, but their objectives were different. At the media area in front of the theater, Tina Fey accompanied Scarlett to prepare for an exclusive interview with Chinese media, while Duke was directly guided by staff from China Film Group into the auditorium.
The number of people inside the theater wasn't large, but every single one of them was a notable figure in the Chinese film industry.
In the front seats, Duke recognized many familiar faces, such as the couple Yang Lan, the national film masters here, Jiang Xiaojun and Ge Guangtou, as well as Feng Daya, and even Zuoshandiao appeared.
This was an oval-shaped musical theater. The top-tier core participants of the forum sat in a circle at the very center, and in this discussion Duke attended, only these people actually had the right to speak.
Seated here were not only those who make films but also representatives from theater chains, which are also a crucial part of the film industry.
The discussion started with the host Yang Lan and gradually shifted toward free discussion. Duke listened the entire time and barely spoke. Eventually, someone naturally brought the topic to the currently popular The Avengers, both in China and globally.
"Yesterday I visited several theaters and discovered something very interesting."
The speaker was Jiang Xiaojun. Looking at Duke, he said, "The best-selling products in stores and markets near the theaters are two types of T-shirts, the commemorative T-shirts of The Avengers. 75 yuan each…"
Knowing Duke could understand Chinese, he continued, "And they're in short supply. Related phone cases are also selling extremely well."
Duke only smiled slightly, saying nothing, because Marvel's licensing negotiations were still ongoing here.
Jiang Xiaojun, curious, asked, "Director Rosenberg, may I ask, what percentage of your film's total revenue comes from box office? I mean, what percent?"
"Before 2000, roughly thirty to forty percent, depending on the type of film," Duke replied honestly, looking at Jiang Xiaojun.
"For current films, it's basically between twenty and twenty-five percent, rarely exceeding twenty-five."
As soon as he said this, Jiang Xiaojun, Ge Guangtou, Feng Daya, Master Zhang, and the Wang brothers all showed unusual expressions. Duke's films rarely grossed under $500 million, and by his proportion, what would the total revenue be?
Glancing around, Duke sighed inwardly. In fact, what Chinese cinema needs most is not abstract things like innovation or creativity, because innovation represents huge risk. What Hollywood can circulate worldwide isn't its creative innovation; Chinese films most need industrialization and standardization.
As for the latter… he looked at Zuoshandiao and lightly shook his head. Problems that even Zuoshandiao couldn't solve weren't something an outsider like him could explain in a few words.
"How much of a film's revenue comes from box office?"
When Feng Daya asked this, the room fell silent. After a while, the eldest of the Wang brothers spoke: "On average, more than ninety-five percent."
Then he added, "I'm talking about domestic box office."
"So a Chinese film's domestic box office accounts for over ninety-five percent of total revenue!" Feng Daya voiced what everyone was thinking. "Let's not even mention the unrealistic international market. Where is our domestic merchandise market?"
He then turned to Duke. "Director Rosenberg, could you share the situation of your films' merchandise revenue in China?"
Some things Duke could discuss, but commercial secrets were certainly not among them.
However, what he said was still truthful: "For any film market to mature, it needs a development stage, especially the merchandise market."
After thinking a few seconds, Duke said to Feng Daya, "The development of Chinese film merchandise is basically in its primitive stage. Most merchandise only accompanies film promotions. Merchandise is an indispensable link in the film industry chain and a key element in satisfying audience cultural consumption. The development of Chinese film merchandise is still at a low point, which means there's enormous market potential for marketing and development."
As soon as Duke finished, Yu Pang immediately nodded and continued, "The domestic film merchandise market isn't standardized enough. Market development and sales channels aren't complete or smooth, and the consumer market for merchandise also needs cultivation. There's a long way to go for the domestic merchandise market."
"Also, piracy is rampant, and the profits of genuine products are being eroded, causing profit margins to drop sharply."
The Wang brothers clearly had studied this issue. "In recent years, many domestic manufacturers quickly produce pirated merchandise during film releases based on legitimate products, distributing them through wholesale markets and online channels, forming a complete piracy industry chain. Pirated products compress the profit space of legitimate products, occupy a large market share, increase competition pressure for genuine operators, and create a reverse crowding-out effect, limiting the growth of China's fledgling film merchandise market. Managing pirated products urgently requires policy support."
By the end, many people's eyes swept over to Zuoshandiao.
Although not in charge of copyright, Zuoshandiao was still the only official person present.
Unlike those mysterious big figures, Zuoshandiao had been immersed in this industry for decades and also hoped to see Chinese cinema develop.
He cleared his throat lightly and said, "The awareness and capability for merchandise development are insufficient. This is currently the most important challenge facing all domestic filmmakers."
As soon as he said this, many people looked toward Jiang Xiaojun, who could only show a faint wry smile.
Last year, a single film Let the Bullets Fly allowed him to "make money standing still," earning the envy of others. But Jiang Xiaojun himself knew there was still much money left unearned, with the most important part being the development of film merchandise.
Merchandise development requires a deeply ingrained prototype and visionary personnel to develop the merchandise market. Many domestic films only have distribution rights, without original authorization, so they lack the conditions to develop merchandise; or they have authorization but no awareness of developing merchandise; or they have the awareness but lack independent development capabilities…
Since this was a film forum, as long as it didn't involve business secrets or personal interests, Duke would still say a few words. Even though he had understood the so-called "positions" and "identities" decades ago, his inner inclinations were unavoidable.
"Currently, most traditional Chinese film merchandise is low-end, elementary, and can't stand on the table."
Though harsh, Duke's words, given his personality and lifestyle over the years, were straightforward without beating around the bush.
Of course, he wouldn't mention so-called innovation or creativity, because anyone with basic understanding of the film industry knows that innovation and creativity have never been the foundation for industry development.
Moreover, there are countless examples of good ideas being turned into bad films—too many to count.
For a country's film industry to truly develop, industrialization is a necessary path.
"Chinese films must first pass quality standards, establish a brand, and after serial production, build their own cultural influence."
After a few seconds of silence, Duke spoke into the microphone again, "Abandon temporary development, OEM production, and quick-profit thinking. Thoroughly research the market and develop products that appeal to audiences of the film's target age group. Additionally, clarify copyright ownership, establish fixed merchandise networks and sales channels; create dedicated consumer product companies covering different pricing levels for all consumption tiers. Most importantly, patiently cultivate audience habits of purchasing merchandise over time."
"Films should be an industry chain. The works we usually see in theaters are merely the locomotive of this chain."
Jiang Xiaojun, Ge Guangtou, and Master Zhang all nodded. To them, Duke's somewhat harsh words were far more sincere than those Hollywood directors who came to China to lavish praise on Chinese cinema.
Yes, they could feel from Duke's words his understanding of Chinese cinema and his sincerity in helping it develop.
This sincerity was limited, but for a foreigner, it was already rare.
"Currently, people's focus on films is mostly on box office, largely neglecting the development and utilization of film merchandise, which is precisely the key distinction between modern and traditional film industries. As far as I know, China lacks professional licensing companies and industry standards, so the film merchandise market has always been an undeveloped mine."
Duke's words did not stop. "In Hollywood, merchandise revenue accounts for up to seventy percent of total film revenue, far exceeding box office. Based on my understanding, over ninety-five percent of your country's film revenue comes from domestic box office and product placement, and many films' merchandise revenue is even zero."
At this point, Duke cited some real data to give the audience a more direct understanding of merchandise's huge impact on the film industry.
"For example, the Star Wars trilogy earned $1.8 billion at the box office, but its merchandise brought in over $20 billion."
Duke's speaking pace wasn't fast, and his Chinese was somewhat stiff, yet it didn't prevent him from being the most eye-catching figure in the room. "Disney's animated film The Lion King had a production cost of only $80 million, earned $800 million at the box office, but merchandise revenue reached $3 billion. Some even jokingly called The Lion King Disney's money-printing machine."