As US animation titans such as DreamWorks set up business in China, a local studio is hoping the fortunes of a plucky goat will take the battle for box office supremacy straight to its big rivals.
Imagi -- a company that almost went bankrupt after the dismal failure of its take on the Japanese TV series "Astro Boy" in 2009 -- is home to the champion of China's animation industry: Pleasant Goat and Big Big Wolf.
Based on the antics of a goat called Pleasant and his valiant bid to thwart a scheming wolf, the franchise has produced four films in the past four years taking a combined domestic box office haul of 548 million yuan ($87 million).
In terms of animated films screening in China, that amount has only been bettered by DreamWorks' Kung Fu Panda franchise, whose two films have commanded takings of 744 million yuan since the original's release in 2008.
"We welcome competition, we are looking forward to it," said Soh Szu Wei, executive director of Hong Kong-based Imagi International Holdings Limited that owns the Pleasant Goat franchise, which has also been spun-off into a television series.
"We have broken away from the locals. We are now competing with the internationals."
The Chinese box office expanded by around 30 percent last year, meaning it accounted for an estimated RMB13 billion in takings, third in the world behind Japan and the first-placed United States and closing fast.
That potential has encouraged DreamWorks to set up its very own Chinese operations.
The venture will "engage in the development and production of high-quality original Chinese animated and live action content," according to a DreamWorks statement.
DreamWorks Animation's Chief Executive Officer, Jeffrey Katzenberg, described it as "a first-of-its-kind enterprise to locally conceive, produce and distribute high-quality creative content and family entertainment experiences -- not only for the people of China but also for related export market".
It hopes to get its Shanghai studio up and running by the final quarter this year, with the first productions slated for release in 2016.
The Hollywood giant could not have chosen a better setting for its operations in China, said Hong Kong-based film historian Jacob Wong.
"China has a glorious history of animation, especially the Shanghai film studios in the 1960s, but it has been a while since they have had a major success," said Wong, who programmed the Animation Unlimited segment of this year's Hong Kong International Film festival.
"In those days, the shorts they made were reminiscent of classic Chinese water-ink paintings and they really were beautiful. These days, Chinese studios are doing the animation process and post-production for a lot of people, they are mostly concentrating on the technical side of things."
While few studios are making feature films, "films such as 'Legend of a Rabbit' may be a sign of things to come," he added.
Released last year and bearing a striking similarity to "Kung Fu Panda", "Legend of a Rabbit" was a flop at the domestic box office, returning only an estimated $1.5 million of its rumoured $12 million budget.
But in terms of animation technique the film showed that Chinese studios were closing the gap on the high-quality on-screen imagery audiences have come to expect from the likes of DreamWorks and its US rival Pixar.
"It is probably too early to predict how things might move along. Animation is a long, tedious and expensive process," explained Wong.
"DreamWorks' move is interesting because they are entering Shanghai, which has this glorious history of animation. It will be interesting to see what effect this has on the work coming out of Chinese studios."
Imagi's Soh, for one, said that partnerships with international film industry players will help develop Chinese cinema and its reach.
Imagi collected the Pleasant Goat franchise when it bought out China's Toon Express Group last year.
Last month it announced a deal with the Disney group to take the character's television series to 46 territories across the Asia-Pacific region.
"In [China] there is us and then there is everyone else," said Soh. He cited a report last year by audit firm Deloitte on the Chinese animation industry that claimed out of 6,000 animation companies, only 10 break even.
Soh and his team now have plans to release four more Pleasant Goat films in the next five years. "We go from script to cinema in six months," he said.
"What we have to learn now is to improve our quality or then Chinese animation won't progress," he said. "Kung Fu Panda cost around US$100 million and that one movie can go right across the world.
He added that his production costs have never exceeded US$2 million per film.
"As we look to increase our market we know we have to increase our costs. Greater China is still the core but the Pleasant Goat brand is starting to grow."
Source: AFP Global Edition