Mickey’s Adventures in China: Theme Park Wars and Copyright

You will likely never see the day when Bugs Bunny and Porky Pig, two of the most famous cartoon characters in Warner Bros’ Looney Tunes stable walk up the main street of Disneyland to greet Mickey and Donald. But that in effect is what happened at the premiere of a new theme park in China, Nanchang Wanda Cultural Tourism City, the brainchild of Wang Jianlin, reputedly China’s richest individual and chairman of real estate and entertainment conglomerate Dalian Wanda. It was reported in western media that visitors to the new theme park were greeted by costumed staff in the guise of copyrighted Disney favourites Snow White, Captain America and Star Wars Storm Troopers. This would particularly rankle the Walt Disney Company, given the investment that the company commits to developing and protecting its brand as personified by its characters, and given the trash talk engaged in by Wang about Disney’s presence in China. Just a couple of weeks prior to the opening of Disney’s flagship park in Shanghai, scheduled for June 16, Wang gave an interview to China Central Television (CCTV) in which he criticized Disney for entering the China market and said that Disney’s lone Mainland theme park would be devoured by Wanda’s “pack of wolves”, meaning the numerous parks—up to 15– that he has or plans to open in China.

Disney has already learned some difficult lessons about adapting its brand to the China market through the theme park that it opened in Hong Kong in 2005. That enterprise, a joint venture (JV) with the Hong Kong Government, got off to a rocky start and attendance did not initially match expectations. But Disney buckled down, absorbed the lessons learned, and increased its investment. The park finally turned a profit in 2012. No doubt Disney planners have taken into account their Hong Kong experience in preparing for the launch of their showpiece in Shanghai. Although strongly supported by the Shanghai government Disney, like other western brands, has struggled to get national distribution for its animated character film and television content in China. This distribution is an important promotional tool for the theme parks. China restricts foreign animation on TV and—although it has eased quota limits somewhat in recent years—maintains tight restrictions on the number of foreign films that can be released in China annually. That of course includes animated films. Disney is planning to work around these restrictions to some extent by engaging in co-production ventures with Chinese media giant Shanghai Media Group. And of course, despite Chinese restrictions, Mickey and his friends are famous world-wide including in China.

Disney will be taking Chairman Wang’s challenge seriously. Dalien Wanda is a formidable opponent and Disney, like western companies in other sectors, is no doubt finding the playing field somewhat uneven when it comes to the China market. China is eager to absorb technology and expertise, and will offer the potential of its enormous market to entice western investment. But once the technology and market expertise has been absorbed, the Chinese government has a habit of trying to squeeze out the foreign competition in China to the benefit of Chinese companies—and then encouraging those companies to compete with their erstwhile foreign investor partners in their home market. Dalien Wanda has followed this model. At one point it had a JV with Warner Bros International Cinemas to design and develop cinemas in China. That ended after Wanda decided it didn’t need its foreign partner any longer, and Warner unceremoniously exited the Chinese cinema market. Dalien Wanda however went on to one success after another, opening hundreds of multiplexes in China tied to its shopping malls and then moving to the US to acquire AMC Cinemas for $2.6 billion. Subsequently it expanded its reach in the US film industry by acquiring Legendary Entertainment for $3.5 billion.

One of the areas where the playing field traditionally has been far from level in China is intellectual property (IP). Respect for copyright, trademarks and patents has been severely lacking even as China has climbed the IP ladder itself. In the area of copyright, the list of problems cited by International Intellectual Property Alliance (IIPA) in its 2016 Special 301 submission on China ranged from media and set top box piracy to sites that index pirated books to next generation pay TV signal theft to camcording in cinemas to other evolving forms of online and mobile piracy. So why should we be surprised at knock offs of Disney characters in a Chinese theme park? In response, Dalien Wanda issued a statement denying that it was responsible for deploying the Disney lookalikes;

“Media reports say that Disney characters appeared within Wanda Park. This is inaccurate. The characters in question appeared in the business area of the Wanda Mall inside the Nanchang Wanda Cultural Tourism City. Nanchang Wanda Cultural Tourism City, or Nanchang Wanda City, is a multi-business complex that houses Wanda Mall, an outdoor theme Park, hotel resorts, a bar street, etc. Wanda Park, which is a combination of the theme park, ocean park and movie park, has never used any Disney characters for display or promotion. Some relevant stores within the Wanda Mall use Disney characters on some merchandise and for promotional purposes. The use is officially licensed by Disney. No infringement has occurred. Dalian Wanda Group attaches high importance to the protection of intellectual property rights, and Nanchang Wanda City owns several cartoon characters with their own intellectual properties…”

Well, perhaps…..although it is hard to believe that Disney would allow Bugs or Porky to get anywhere close to the Magic Kingdom. But things are done differently in China. Maybe we have a theme park with “Chinese characteristics”?

Building theme parks in China is not new. There have been booms and busts in the theme park business before and China currently has a plethora of second-rate attractions. How many theme parks does it need and which ones will succeed? In addition to Disney, Six Flags and Dreamworks are also building in China—and of course there is Dalien Wanda with its 15 mega-parks. Which ones will the Chinese public patronize? It’s a safe bet that the brand recognition of decades of character development and promotion—along with global experience in running parks that attract repeat business—will position Disney well. Thus it is no surprise that Disney was not amused by reports of its characters being hijacked at Nanchang Wanda City as it made clear in its statement, as reported by Bloomberg;

“We vigorously protect our intellectual property and will take action to address infringement…Our characters and stories have delighted generations, these illegal and substandard imitations unfortunately disappoint all who expect more.”

As has been shown many times before, the main value of a company often rests in the intangibles of its copyrights and intellectual property. Wang Jianlin can build a mega entertainment city, and will no doubt be very successful, but he should do it without Mickey, Donald or Snow White.

© Hugh Stephens 2016 All Rights Reserved