August 25, 2011
- Hollywood continues its frustration with the Chinese government’s limits on how many imported movies can play in its theaters in addition to how box office receipts are shared. Now, prominent American film producers are seeking change through ambitious deals that provide alternative routes into China’s market.
- Success with the Chinese may prove crucial. With traditional distribution models such as DVD sales presently slumping, China could become a much-needed revenue source.
- “It’s not about détente, it’s about making money,” suggests the Los Angeles Times. “The partnerships give the American firms better access to the country’s growing movie market.”
- According to the LA Times report: “China’s box-office receipts surged 64 percent last year to a record $1.5 billion, and they will likely bring in about $2 billion in ticket sales this year. By the end of the decade, industry experts predict China will grow from the world’s No. 5 movie market to No. 1.”
- Although lobbyists and the World Trade Organization have been unsuccessful in getting the Chinese to relax import restrictions, smaller American film companies such as Legendary and Relativity are partnering with Chinese-based companies in co-production and exhibition deals. Through the partnerships, companies are not subject to restrictions and find they can dramatically improve upon percentage of box office receipts.
- Major Hollywood studios have not formed long-term partnerships to co-produce with Chinese firms, but have discovered other alternatives, such as making Mandarin-language productions in China and pushing digital product, including 3D: “To boost the rollout of high-tech projectors in the country’s theaters, China in 2007 began allowing several pictures per year into the country on a revenue-share basis if they played only in digital theaters.”
- The ultimate goal is to eliminate the restrictions, but for the time being Hollywood is finding ways to work around them.