Chinese Billionaire Gary Wang on Building "The Pixar of China"

The Light Chaser Animation founder talks about launching a studio without any background in film, why local movies are beating Hollywood in China and the tip he got from Illumination Animation CEO Chris Meledandri.

As China's box office continues its historic expansion — last year the market grew an astounding 50 percent — today's Chinese entertainment industry suffers no shortage of hubris.

The country's tech billionaires and real estate barons are all scrambling to secure a piece of the market, and hardly a month goes by without a multi-billion dollar business deal or a boast of world-conquering ambition. Even so, Chinese entrepreneur Gary Wang's recent career trajectory stands out.

Wang founded streaming video service Tudou.com in 2005 — shortly before the debut of YouTube — and built the company into China's second-largest video site. In 2012, he sold Tudou to rival VOD platform Youku.com for $1 billion in stock, which, at the time, was the largest tech deal China had ever seen (last year, Youku Tudou was bought by Alibaba Group for $3.67 billion). Walking away with a fortune, Wang, then 39, could have pursued virtually any endeavor, or he might have retired to a life of luxurious distraction. He chose to create an animation studio.

In March 2013, Wang unveiled plans for Beijing-based studio Light Chaser Animation. Despite no background in filmmaking, Wang announced that he wouldn't just build a team and run the company; he would write and direct the studio's movies himself. The studio would come to be known as "the Pixar of China" — and its first film would be released in three years or less.

"Building an animation studio requires someone who has a deep understanding of tech and computer science, but also a good sense for story and management," Wang tells THR. "It felt like a natural fit."

Something of a polymath, Wang indeed seems uniquely suited to the challenge he's set for himself. Before he entered the business world with an MBA from INSEAD and a stint as a corporate development director at German media giant Bertelsmann, Wang wrote a popular Chinese novel, Waiting for Summer, based on his experience as a foreign exchange student in the U.S. in the late 1990s. He's also penned stage plays, and in 2011 he wrote a libretto for the San Francisco Ballet.

Today, Light Chaser Animation employees a team of 190 — most in their 20s — including several animation veterans poached from Pixar and DreamWorks Animation. The state-of-the-art studio occupies a 25,000 square-foot-warehouse in an industrial district turned arts compound in the northeast outskirts of Beijing. A full-scale 3D cinema and 16-camera cutting-edge motion capture lab are among the studio's various facilities — "our rent is low, so whatever is required in terms of technology, we provide it," says a founding member of Wang's team.

"This place gives me the same feeling of excitement that Pixar had in the early days — there's great energy here," says Light Chaser's head of animation, Colin Brady, who served on the early Pixar team that animated Toy Story, Toy Story 2 and A Bug's Life.

On Jan. 1, Light Chaser released its first film, Little Door Gods. While the film's CG is of Hollywood standard, its story is unmistakably Chinese. The movie follows the comedic adventures of two "door guardians" — figures from Chinese folklore who protect the entranceway of one's home — who are out of work because contemporary Chinese people are so busy with modern consumer life that they have forgotten about the spirit world. Distributed by Alibaba Pictures, the film has grossed $12 million to date. The studio is midway through its second feature and plans to release a movie each year.

The Hollywood Reporter spoke with Wang about learning from Illumination Entertainment CEO Chris Meledandri, why Pixar movies struggle at the Chinese box office and how long it will take before China produces a global blockbuster.

How do you create an animation studio from scratch in less than three years, with no background in animation?

The first thing to do is just read a lot of textbooks. My co-founders and I devoured books over a couple of months and got a pretty good sense of what an animation studio requires. We then decided to go to the U.S. to visit Pixar and DreamWorks Animation to further our study and talk to talent we might recruit. We met up with a couple hundred people and came to the realization that what this industry basically requires is art, technology and management — all three are extremely important. Then we came back to China and began hiring, first the tech set, then the project management team, and finally the creative team. Meanwhile, I was writing the script and working on the story. So all these things were moving forward at the same time.

What else did you take away from your meetings in Hollywood?

In terms of the guiding philosophy of our studio, I once sat down with Chris Meledandri, CEO of Illumination Entertainment, and he basically told me that the most important thing for running a budget-conscious animation studio is discipline. If you set a production target, when you reach that stage you absolutely have to be done, so that you can move on. That was a great takeaway.

When I toured your studio, I was struck by how young your team is.

Yeah, I feel like an old man here. I'm 42, and the average age of our full team is about 28. The animation industry in China has been struggling for a couple decades, so anyone who was any good has quit by now to do something else. So we are left with young people. Often they are self-taught, which we see as a good thing. They're quick learners, they're curious and they're really passionate.

In North America, animated films take roughly 10 percent of annual box office, but in China it's still less than 5 percent. Many are predicting 2016 might be the year Chinese animation breaks out...

A lot of people in China still tend to think animation films are mainly for children. To make animation feature films that can challenge this expectation requires an extremely high degree of achievement in terms of both art and technology — and it also requires a tremendously large budget. So, it wasn't so easy for China to produce quality animated films when the market was still relatively small.

Also, for American movies basically the world is the market. For Chinese movies, due to language issues and cultural issues, the main market is still mainly the domestic market, and some parts of Southeast Asia where there are small Chinese audiences. That means it's much harder to scale up and meet those big budgets that Hollywood-quality movies require. The challenge for us is to be able to achieve world-class quality while working from a budget that the Chinese market can support.

How much is that right now?

Basically, our budget per picture is $12 million.

How do you make that happen — world-class quality at a budget constrained by the domestic Chinese market?

We actually made a quick calculation. A Pixar or a DreamWorks film costs about $150 million to $200 million. It's about $70 million to $80 million for an Illumination Entertainment film. We want to be somewhere in between those two, in terms of quality. But Chinese salary levels are no longer one-tenth or one-fifteenth of L.A. salaries. With our rising GDP and all that economic stuff, a Beijing salary is about one-quarter of an LA salary today. So, we still have a natural advantage there that gets us down to about $40 million. How do you get from $40 million to $12 million? It all has to come from efficiency, basically. We're a startup company, so we work twice as hard. In addition, it really comes down to all of the newer, cutting-edge tools that are out there today. We could implement cutting-edge collaboration and rendering tools from day one, because we didn't have any legacy to maintain. With all of these factors combined, we made our first film with a little over $12 million. If you take a look at it, I think you'll be impressed by what we were able to achieve.

How do you manage your various roles — not just hiring an entire team and building a functioning studio, but also writing and directing the actual movies?

Well, I guess in a way I'm used to that. In the Internet industry it's kind of a given that the founder must be a programmer, manager, CEO and the public face of the company. I'm used to that all-in-one role. It's simply required. I also have two very strong co-founders.

It has often been said that Light Chaser Animation wants to become "the Pixar of China." But Pixar's movies haven't done particularly well in China. Illumination's Minions grossed $68.5 million, while Inside Out made just $15 million.

Yeah, we've noticed this. [Laughs]. Pixar's box office performance is one thing and their artistic achievements are another. Being in the animation industry, all of us here at Light Chaser have great admiration for what Pixar has achieved — they pioneered the CG animation industry and each of their films goes beyond the previous one in terms of technological achievement. We also deeply admire that they only do original stories. So basically, Pixar has inspired us here with their quality, ambition and curiosity. That's what we mean when we say we are looking to Pixar's example.

And in terms of box office in China…

Nobody knows whether a film will perform well or not at the box office, and why exactly a film does or doesn't. But my guess is that Pixar's typical style of storytelling is really more culturally relevant to Americans, or to those with exposure to Western values. It's harder for people in second or third tier cities here to appreciate the nuances and sentiments, so they tend to kind of prefer the Minions approach. But I feel the Chinese audience's tastes are rapidly evolving. It's really quite astonishing the way the audiences in some of these newly developed regions are learning to discriminate between a good and bad film. They're learning very fast. So, who knows, maybe they will catch up quite soon. I can tell you that everyone around here feels pain when we see that Inside Out only gets $15 million China. Eventually — maybe in two or three years — a Pixar film will get the box office here that it deserves.

One of the big trends at the Chinese box office in 2015 was the extent to which local Chinese movies outpaced Hollywood imports, taking 61.6 percent market share for the year over Hollywood's 38.4 percent share. What do you make of that?

On the macro level, I don't think it's so unique for domestic Chinese films to outperform American films. You see that pattern in India, and you often see it in Japan and Korea. I suppose if you have a large enough market, plus a homogenous culture with a long history, you'll find that the domestic audience appreciates domestic films a great deal. China obviously has both — scale and cultural history — so it's natural. But we all recognize that Hollywood movies tell stories at a world-class level, so there's definitely a tremendous percentage of the audience that wants to see Hollywood films, too. It's healthy that way. Personally, I find it most satisfying to see both — to see culturally relevant movies made here, and also to see great international films.

The world is waiting for a Chinese film to become a global hit. Perhaps a high-quality animation could be the vehicle to achieve that — sort of in the way Hayao Miyazaki's films took Japanese animation global ten years ago?

Well, our first goal is simply to be successful here in China. If our films are any good, they could travel. We've shown our first film to a lot of Western visitors here, and people seem to like it. One of the comments we hear most often is that they've never seen a film like this, because it's quite Chinese in terms of values and setting, but it's very well made. That seems to excite people, so we'll see. American culture is still the dominant culture globally. I don't think China is cool yet. I hope to be seen as a "cool Chinese" someday. People don't tend to associate the Chinese people with coolness yet, so that will take some time.