The 2012 American science fiction action film John Carter hit China’s silver screen just one week after its U.S. debut. Chinese filmgoers now stand at the front of the queue for American cinematic successes since the signing during Chinese Vice President Xi Jinping’s February visit to the U.S. of the Memorandum of Understanding on WTO film-related issues.
The memorandum includes three main provisions. The first is that China will allow the entry of 14 3-D or large-screen IMAX movies in addition to the present 20 movies per year from the U.S. Second, American studios that produce movies screened in China will receive, after deducting costs, around 25 percent of the box-office proceeds, as compared to the present 13.5-17.5 percent share. Third, independent companies, rather than the current single, state-backed entity, will be licensed to distribute movies imported from the U.S.
Jeffrey Katzenberg, CEO of the U.S. DreamWorks Animation SKG, has signed an agreement with three Chinese partners, one of them the Shanghai Media Group, on establishing the Oriental DreamWorks joint venture, with total assets of US $330 million. The Chinese companies will hold a majority 55 percent stake in the venture and DreamWorks Animation will hold a 45 percent share.
Chinese film industry authorities have yet to release details of the agreement. Nor have the China Film Group Corporation and Huaxia Film Distribution Co., Ltd., who are responsible for distributing imported movies to Chinese cinemas, made any comment on the agreement. It has nonetheless generated ripples throughout China’s film industry
More Hollywood Blockbusters, Bigger Box-office Proceeds
Statistics show that China’s total cinema box office receipts in 2011 hit RMB 13.115 billion, of which 37 per -cent, or RMB 4.91 billion, came from imported American movies. The agreement stipulates an increase in American exporters’ share of the takings to 25 percent. The greater number of imported overseas films, however, will undoubtedly generate higher revenues. The agreement states that China will increase its imports solely of 3-D and IMAX films. This means that domestic cinemas with the capacity to show such movies will be the second direct beneficiaries, after U.S. film studios, of the agreement.
Wanda Cinema Line Corp, China’s largest cinema operator, formed a close strategic cooperative partnership with Canada’s IMAX Corp in March of 2011. At that time China imported limited numbers of IMAX movies, so rendering most of Wanda’s IMAX theaters idle. The agreement is expected to invigorate their business.
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