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Tuesday, May 24, 2022

Theme Parks Reflect Growth of Chinese Box Office

As with online video, China is attractive to Disney, DreamWorks and other entertainment companies based on the sheer numbers, in this case the population. China, with its 1.3 billion people, is the second largest movie-going market in the world with box office totals forecast to reach $4.6 billion this year, according to EntGroup, an entertainment industry research firm in Beijing. Income growth in China is enlarging the middle class who will want new places to vacation, said John Gerner, a managing director with Leisure Business Advisors LLC, a themed entertainment consultancy in Richmond, Va. “Suddenly theme parks have become much more viable,” Gerner said. Disney’s first foray into China was Hong Kong Disneyland, which opened in 2005 at a cost of $3 billion and underwent a $500 million expansion two years ago. The even bigger $5 billion Shanghai Disney Resort, in which Disney is a 43 percent owner, encompasses 963 acres which includes a Magic Kingdom-style park on 225 acres. There are also two hotels, a lake and shopping district. It is the biggest commitment Disney has made in a theme park and for the Chinese government it presents another opportunity to shine on the world stage after the Summer Olympic Games in 2008 and a world’s fair expo in 2010, Gerner said. “A major Disney theme park on the mainland will give them bragging rights they have arrived as a leading economy in the world,” he added. The DreamWorks Animation venture in Shanghai, done with Chinese partners, is on a much smaller scale. The $2.4 billion Dream Center on 40 acres will open in 2017 or early 2018 with movie theaters, bars, restaurants, performance venues, outdoor plazas and a theater district modeled on Broadway and London’s West End. And though DreamWorks is in the same city as Disney, it is not really directly competing, which it doesn’t really want to do given Disney’s theme park expertise in U.S., Europe and Japan. Instead, it can make headway into the market with a smaller footprint attraction that is complementary, Gerner said. It’s not unlike Orlando, where Walt Disney World Resort is still the dominant attraction but Universal Studios, now owned by Philadelphia media giant Comcast Corp., has a complimentary theme park. There also are other water parks, retail centers and other sites that visitors need far more than one day to see. “It would make sense to see the same thing in Shanghai,” Gerner said. DreamWorks Animation has put about $50 million so far into its China project, where it has a 45 percent stake in the venture and is providing the characters and storylines. Indeed, DreamWorks has reached innovative deals to extend its brand without huge cost to the studio. In London, Merlin Entertainments PLC, the second-largest themed attraction company after Disney, is building a 20,000-square-foot attraction, Shrek’s Far Far Away Adventure. DreamWorks Animation is licensing the characters, and less involved with developing the attraction. “It makes sense for them to be more involved with (China) than they would in something else,” said Wold of B. Riley. – Mark R. Madler

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.

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