Entertainment Industry

Category: Reel China

Indie filmmakers praise China movie deal

Kung Fu Panda 2 China Xi trade agreement

Indie filmmakers gave two big thumbs up to a trade agreement announced late Friday that would allow more U.S. films into China.

The Independent Film & Television Alliance praised the trade deal, saying it would create "unprecedented opportunities" for the U.S. independent film industry.

"For independents, this agreement is momentous,'' said IFTA President-CEO Jean Prewitt. "Our sector has been unable to benefit fully from the existing revenue-sharing import quotas and has had limited avenues through which to distribute. For the first time, through this agreement, there is a promise of creating a commercial foundation that will allow independent producers to participate more fully in the Chinese marketplace."

The agreement announced Friday by the White House would increase the number of foreign films allowed into China under a revenue-sharing agreement by 14, at least for so-called enhanced films that are shown in IMAX or 3-D. The current quota is limited to about 20 foreign films, mostly American. Additionally, the agreement, which stemmed from a longstanding complaint the U.S. filed with the World Trade Organization, also increases the amount of revenue foreign studios can receive under the quota from 13% to 25%.

But the trade deal also gives independent filmmakers, most of whom distribute their movies in China without any revenue sharing, something they've long coveted: the ability to negotiate license deals on commercial terms comparable with other markets. The pact also includes other provisions that are standard practice elsewhere, including audit rights, consultation on market campaigns and the ability to appeal decisions on movies that are rejected for censorship reasons, Prewitt said.

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Photo: DreamWorks' "Kung Fu Panda 2." On Friday, DreamWorks unveiled plans to build a new studio in Shanghai, China. Credit: DreamWorks Animation

 

U.S. and China reach deal to allow more movies into China

Avatar-china-movies

This post has been corrected. See the note at the bottom for details.

Addressing a long-standing concern among major studios, China has agreed to ease restrictions on the number of foreign movies it allows into China and the amount of revenue that studios can collect from box-office ticket sales there.

Under a deal announced Friday by the White House, China has agreed to allow an additional 14 so-called enhanced format foreign films -- those that are in 3-D or in IMAX -- into the country each year.

The current quota limits the number of foreign films allowed into the country under a revenue-sharing agreement to about 20 a year, most of which are U.S. movies. The agreement also increases the amount of revenue that foreign studios collect from movies distributed in China from about 13% to 25% of ticket sales.

The agreement was finalized on Friday in negotiations between Vice President Joe Biden and Chinese Vice President Xi Jinping, who was visiting Los Angeles on a trip to promote more trade between the countries.

Easing China's restrictions on access to its vast market has been a top priority for the Motion Picture Assn. of America and its chief executive, Chris Dodd, who has been working with U.S. trade officials on a compromise with the Chinese government. During his visit to Los Angeles on Friday, Xi met with studio executives, including Walt Disney Co. Chief Executive Bob Iger and DreamWorks Animation Chief Executive Jeffrey Katzenberg, who just announced a deal to build a new animation studio in Shanghai with two state-owned Chinese media companies.

China has faced heavy pressure to comply with a World Trade Organization ruling in 2009. In a decision hailed as a big victory for the U.S. entertainment industry, the WTO ruled that China had violated international trade rules by restricting imports of foreign movies and other media. But China disagreed with the ruling, which stemmed from a complaint the U.S. filed with the world body in 2007.

The rapid growth of the theater industry in China has made the market that much more appealing to studios, which can generate $20 million to $40 million in ticket sales per film, compared with about $1 million a decade ago. Popular movies released in China include the blockbusters “Avatar,” “Alice in Wonderland” and “Harry Potter and the Deathly Hallows.”

The agreement was quickly praised in the movie industry.

"This is a major step forward in spurring the growth of U.S. exports to China," Dodd said in a statement. "It is tremendous news for the millions of American workers and businesses whose jobs depend on the entertainment industry."

Disney's Iger added: "China is one of the most populous countries in the world, and this agreement represents a significant opportunity to provide Chinese audiences increased access to our films."

For the record, 8:00 a.m. Feb.18: An earlier version of this post incorrectly said that Dodd had met with Xi in Los Angeles on Friday. Dodd met Xi at a luncheon in Washington on Tuesday.

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-- Richard Verrier

Photo: A poster for the movie "Avatar" at a Beijing cinema on Jan. 21, 2010. Credit: Liu Jin / AFP / Getty Images

 

DreamWorks Animation unveils China studio plans

DreamWorks Animation announced plans to build Oriental DreamWorks, a studio in Shanghai, in what it billed as a landmark joint venture agreement with two state-owned Chinese media companies
DreamWorks Animation on Friday announced plans to build a studio in Shanghai, in what the Glendale-based company billed as a landmark agreement with two state-owned Chinese media companies.

The creator of the "Shrek" movies said it was forming Oriental DreamWorks, a joint venture with China Media Capital and Shanghai Media Group in concert with Shanghai Alliance Investment -- an investment arm of the Shanghai municipal government -- to establish a family entertainment company in China.

With an initial investment of $330 million, the Shanghai studio would develop original Chinese animated and live-action movies, TV shows and other entertainment catering to the China market. The deal was among several business ventures announced in downtown Los Angeles during an economic forum attended by visiting Chinese Vice President Xi Jinping, who is widely expected to be the country's next leader.

"We share the same vision with DreamWorks Animation to build a world-class family entertainment company," Ruigang Li, chairman of China Media Capital said in a statement. "Oriental DreamWorks will be a unique position to create high-quality content and interactive entertainment products for China and international markets."

The new studio, which has been recruiting some staff in Hollywood, plans to begin operations later this year and could eventually surpass the size of DreamWorks' headquarters, which employs more than 2,000 people, Chief Executive Jeffrey Katzenberg said in an interview.

"Our objective is to build an animation studio that is competitive with what we’re doing here," Katzenberg said. "We already have people working on over a half-dozen projects."

The studio eventually hopes to produce one animated feature film a year, with its first release set for 2016. Additional animators will be hired locally to accommodate the new China facility, Katzenberg added.

The joint venture is the latest push by Hollywood to mine the world's largest country. Last year, DreamWorks signed a deal with online video site Youku.com to distribute the studio's popular "Kung Fu Panda" movies in China. Beverly Hills-based RealD also has partnered with Beijing SAGA Luxury Cinema Management Co. to equip the Chinese theater chain with 3-D technology. Production companies Relativity and Legendary East also have unveiled new ventures to co-finance and release movies in China.

"When you look out five to seven years from now, China will be the No. 1 media market in the world," Katzenberg said. "It’s a huge opportunity for us."

Major Hollywood studios have been frustrated, however, by rampant intellectual-property piracy in China, as well as restrictions the government places on the number of foreign films it allows into the country, and how much revenue foreign studios can share.

Talks between U.S. and Chinese officials to ease those restrictions have heated up this week, raising the possibility that an agreement could be reached during Xi's U.S. visit.

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-- Richard Verrier

Photo: Logo of Oriental DreamWorks, a new joint venture between DreamWorks Animation and Chinese media companies. Credit: DreamWorks Animation

Reel China: Chinese companies take stake in China Lion

China Lion
Two of China’s biggest filmmaking concerns have made investments in China Lion Film Distribution, a new company aimed at bringing Chinese-language movies to North American multiplexes.

The deal, announced Sunday night, for Huayi Brothers Media Corp. and Bona Film Group Ltd. to each acquire 20% of China Lion for an undisclosed sum should increase the number of movies China Lion will exhibit in the United States and Canada.

China Lion, which works closely with theater chain AMC, is currently negotiating to acquire domestic distribution rights to “The Flower of War,” a historical drama starring Christian Bale that recently filmed in China, according to people familiar with the talks who were not authorized to speak publicly.

“This is a major milestone for both Bona and China’s film industry, as it will allow overseas Chinese to watch Chinese movies without delays, as well as open modern Chinese movies to a broader North American audience, and thereby help promote Chinese culture,” Dong Yu, the chairman of Bona, said in a statement.

“In the past year China Lion has broken important ground by bringing to North American audiences the very best of Chinese cinema both from Huayi and other companies. We believe their management team will continue to build Chinese distribution in the important North America marketplace,” said Zhonglei Wang, president of Huayi Brothers.

China Lion has had mixed to poor results with its Chinese-language releases so far.

“If You Are the One 2” grossed more than $420,000 in domestic theaters a year ago, making it China Lion’s top release in its first year of doing business. But only three other of China Lion’s remaining nine films — “Sex and Zen 3D,” “Beginning of the Great Revival” and a remake of “What Women Want,” all of which came out this year — have sold more than $100,000 in tickets.


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— John Horn

Photo: China Lion Chief Executive Milt Barlow, left, China Lion President Jiang Yanming, AMC President of Programming Robert J. Lenihan, Bona Film Group Chairman and Chief Executive Yu Dong, Huayi President Zhonglei Wang and newly appointed China Lion Chairman Greg Coote. Credit: China Lion.

California theater chain plans to expand, teach classes in China

Ultrastar cinemas Xiamen

A California-based theater chain is trying to tap into the growing movie market in China –- not just by building theaters there equipped with the latest digital technology, but also teaching young people how to run them.

The privately held UltraStar Cinemas chain, headquartered in Vista, Calif., has joined forces with the Xiamen Culture and Art Center and Xiamen University of Technology to establish the XMUT UltraStar Academy of Digital Cinema Management. Classes will be held on the public technology university’s campus and begin next year.

The school is part of UltraStar’s developing three-pronged strategy in China. In addition to building theaters, the company also is preparing to build digital cinemas and to create a digital network that will screen live events in the theaters, such as the soccer World Cup or rock concerts. UltraStar plans to build 10 theaters in China in the next five years that will serve as a training ground for students at XMUT.

“The advent of digital cinema … requires individuals trained in digital cinema management and operations,” Xu Xiang Ming, vice director of the Xiamen Culture and Arts Center, said in a statement.

Students will be able to major in digital cinema management and will study such subjects as digital equipment usage, cinema marketing techniques, booking and buying of content and customer service.

The idea for the school originated when Tony Gaston, manager of UltraStar’s Asia operations, spoke at a conference in China in late 2006.

“I became aware of the fact that China had really virtually no cinemas. The ones that existed were very old and the equipment kind of patched together and nothing -– at least in the cities that I was in during that trip -– that would compare with what we think of as a modern cinema,” Gaston said in an interview.

Gaston and John Ellison, chief operating officer and co-founder of UltraStar, visited several cities in China in 2007, eventually choosing Xiamen in Fujian province as a starting base of the company’s China operations. The city, which has a population of 3.53 million, is on the southeast coast of China, about 600 miles south of Shanghai.

Gaston said he was in part influenced to select Xiamen for its geographical similarities to San Diego. The view from his San Diego office is similar to ones that overlook the water of Xiamen. Ellison said it is a “dynamic area. A tremendous amount of growth has happened there and [will continue] in the near future.”

“The reception that we received from the city was wonderful,” Gaston said.

One of the cinemas will be built in Xiamen’s Jimei District, where the university is located, an area populated by more than 580,000 people and that currently has no movie theaters.

In addition to the hands-on studies the cinemas in China will provide, students will also intern with UltraStar in Los Angeles during a study abroad program. The company, which has 13 theaters in California and Arizona, is developing the program with Demos Vardiabasis, a Pepperdine University professor of economics and international business.

Gaston emphasized that the academy will be “developed in line with the [Chinese] culture, rather than bringing in a foreign concept and forcing it upon them –- ‘this is the way to see movies.’” Instruction will be provided by both Chinese educators and UltraStar representatives.

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Photo: Tony Gaston, left, John Ellison, Xu Xiang Ming and Xiamen University of Technology President Terry Guo at a signing ceremony in Xiamen in June. Credit: Nickole Xian

DreamWorks Animation plans to open studio in China

Kung Fu Panda 2

DreamWorks Animation SKG aims to build an animation studio in Shanghai in a further effort to plumb the vast Chinese economy.

The Glendale-based studio, which recently announced a deal with online video site Youku.com to distribute its "Kung Fu Panda" movies in China, is recruiting executives to run a studio that would produce animated movies and TV shows catering to the Chinese market, said a person familiar with the plans who was not authorized to speak about them.

DreamWorks has tapped RSR Recruiting of Los Angeles to recruit staff to run the facility.

A spokeswoman for DreamWorks Animation declined to discuss the proposed studio. "As it is an important market for us and one in which the DreamWorks Animation brand and products have tremendous value, we continue to explore opportunities in China,'' the spokeswoman said. "Any further speculation is premature."

The plans were first reported by AFP and Variety.

China represents big opportunities for studios like DreamWorks, which has enjoyed strong box-office success with its "Kung Fu Panda" movies in China. The country, however, also poses plenty of challenges, including restrictions on the number of foreign films it allows into the country and rampant piracy.

Nonetheless, DreamWorks is one among several studios and Hollywood companies seeking to tap the Chinese market. Beverly Hills-based RealD recently announced that would partner with Beijing SAGA Luxury Cinema Management Co. to equip the Chinese theater chain with 3-D technology. Last month, production companies Relativity and Legendary East also unveiled new ventures in China to co-finance and release movies.

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Photo: The martial arts action hero Po, voiced by Jack Black, in "Kung Fu Panda 2." Credit: DreamWorks Animation

DreamWorks Animation partners with China's leading online video site

Kung Fu Panda 2
 
DreamWorks Animation has become the second Hollywood studio to enter into a distribution agreement with China's top online video site, Youku.com.

Youku said Monday that it had signed a deal with the Glendale-based animation studio to distribute the "Kung Fu Panda" movies in China, marking the first time that DreamWorks releases have been made available in that country through the Internet.

Both of the previously released "Kung Fu Panda" films, which were hugely popular in China, will be immediately available on Youku's premium on-demand service for less than $1. The movies will subsequently be available for free viewing on Youku's Hollywood Movie Channel.

The deal comes two months after Warner Bros. reached an agreement with Youku to stream 450 of the studio's movies, including the "Harry Potter" and "Lord of the Rings" series with Chinese subtitles, on its website for a charge of 46 cents to 77 cents.

To compete against rampant piracy, Youku makes its content cheaper than bootleg DVDs, which cost about $1.50 in China.

"As technology matures and Chinese internet users increasingly turn to the Web for entertainment, Youku has been able to expand on the traditional movie release road map through agreements for studio films such as 'Kung Fu Panda' and 'Kung Fu Panda 2,'" said Victor Koo, chairman and chief executive of Youku. "Both titles have a proven track record of success with Chinese audiences."

The "Kung Fu Panda" pictures, which feature scenery and landscapes inspired by traditional Chinese art and architecture, scored big at the box office in China. "Kung Fu Panda" was the No. 1 movie in China in 2008, while the sequel has grossed more than $92 million.

"Youku is an innovative company with extraordinary reach in China, and we are thrilled that the "Kung Fu Panda" features will now be offered through their platform, which presents high-quality content to consumers online," said Kelley Avery, head of worldwide franchise strategy and distribution for DreamWorks Animation. 

Meanwhile, in another sign of China's allure to Hollywood, Beverly Hills-based RealD announced that will partner with Beijing SAGA Luxury Cinema Management Co. to equip the Chinese theater chain with 3-D technology. The RealD agreement will add 100 3-D-capable auditoriums, the partners said. SAGA said it plans to install RealD 3-D technology in up to 20 theatres around the country within three years.

In November, RealD announced a deal with Wanda Cinema, China's largest theater operator, to add up to 500 3-D screens in the country.

Earlier this month, production companies Relativity and Legendary East also announced new ventures in China to co-finance and release movies.

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Photo: The martial arts action hero Po, played by Jack Black, in "Kung Fu Panda 2." Credit: DreamWorks Animation

'Expendables' sequel to be China co-production

Photo: Eric Roberts and Steve Austin in "The Expendables." Credit: Karen Ballard / Lionsgate. Last year's Sylvester Stallone action movie "The Expendables" was the 10th-highest-grossing release of the year in China, collecting $32.1 million in one of the world's fastest-growing film markets.

But Nu Image, which financed the movie, collected less than $1 million from the country. The reason: Unable to secure one of the Chinese government's approximately 20 revenue-sharing slots per year for imported pictures, the independent studio had to sell rights to a local distributor for a flat fee. The valuable revenue-sharing slots are primarily taken by major studios like Warner Bros. and Sony Pictures.

Seeking to leave less money on the table with its planned "Expendables" sequel, Nu Image is now in talks to partner with a Chinese distributor and shoot some scenes in that country. The studio believes it could generate about $8 million from the local company with which it works. Co-producing the movie with a Chinese partner would also guarantee the "Expendables" follow-up a release in China without having to navigate the byzantine system for exporting movies to the country.

The performance of the first film “whet the appetite for the second film as a co-production,” said Trevor Short, Nu Image’s chief financial officer. But to ensure that the movie will be co-financed by a Chinese partner, Nu Image not only has to add scenes in the sequel’s screenplay that can be shot in China, but also have the project approved by government censors. “It can’t be detrimental to China,” Short said of what the communist authorities look for.

The company tried to attract a Chinese co-production deal for its recent remake “Conan the Barbarian,” but were turned down.  “They seem to have a problem with mysticism and fantasy,” Short said.

For much more on the innovative steps that independent studios like Nu Image are taking to capitalize on the booming Chinese movie market, see the story in today's Times.

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Photo: Eric Roberts and Steve Austin in "The Expendables." Credit: Karen Ballard / Lionsgate.

Relativity Media opens a door into China

M 070_D035_00128-00127rV2_JTrv1 Independent studio Relativity Media is making a jump into the fast-growing Chinese market with a deal that will give it a stake in a local production company and an avenue to release its own movies in the country.

Relativity's chief executive, Ryan Kavanaugh, was in China on Monday morning to announce the deal, which includes a host of partners.

In the first part of the agreement, Relativity is taking a stake in SkyLand, a China-based production venture backed by SAIF Partners, an Asian private equity firm with $3.5 billion under management, and IDG China Media, the Chinese arm of Boston-based technology and publishing giant International Data Group.

The three partners will together control a fund worth about $100 million that will produce content based on Chinese culture in the country with hopes of releasing it around the world.

Formed two years ago, SkyLand 's most recent release was "Snow Flower and the Secret Fan." The movie, which was directed by Wayne Wang and produced by Rupert Murdoch's wife, Wendi Murdoch, was a flop in the U.S., grossing just $1.2 million since its release last month.

Also announced in China on Monday was a partnership by state-owned Huaxia Film Distribution Co., China's second-largest film distributor, with SkyLand. That arrangement will allow Relativity to release its upcoming movies in China without being restricted by a government quota that allows only about 20 foreign movies per year in the country on a revenue-sharing basis.

RyanK That's significant for Relativity, as the young studio is transitioning from co-financing movies with Universal Pictures and Sony Pictures into the riskier business of producing its own pictures. Several high-profile Relativity movies that will get a Chinese release under this partnership include November's ancient Greece-set action movie "Immortals" and pictures coming out next year based on the "Snow White" fairy tale and the Edgar Allen Poe's poem "The Raven."

China is one of the world's fastest-growing movie markets, with box-office receipts up 64% in 2010 to $1.5 billion, making it No. 6 in the world.

Other entertainment companies have been aggressively expanding their presence in the country as well. Legendary Pictures in June announced a new joint venture to produce movies in the country intended for release around the world. Former News Corp. President Peter Chernin last year launched a company to invest in fast-growing businesses in Asia, including in China.

-- Ben Fritz

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Top photo: Henry Cavill in "Immortals." Credit: Jan Thijs / Relativity Media. Bottom photo: Relativity Media Chief Executive Ryan Kavanaugh. Credit: John Shearer / Getty Images.

Warner Bros. to distribute films in China via on demand, pay per view TV

Harrypotter600 
Warner Bros. Entertainment said late Tuesday that it planned to offer movies via cable television in China, allowing the studio to potentially reach millions of viewers in a country where access to Hollywood entertainment has traditionally been limited.

Chinese consumers will be able to watch the studio's newly released films and older titles as soon as this summer through pay-per-view and on-demand services. It is unclear whether movies that are still being shown in theaters would be offered through this new service.

The studio's joint venture in China, CAV Warner Home Entertainment Co., struck the distribution deal with technology provider You On Demand Media.

You On Demand has an exclusive,  20-year joint venture partnership with Central China Television's pay television arm, China Home Cinema. A spokesman said that You On Demand is in conversations with a number of cable operators, but hopes to roll out the service initially to 3 million cable TV homes by the end of the summer.

The ultimate goal is to reach 200 million households in China.

"China is developing methods for consumers to view movies outside the cinema in a legitimate fashion," said Jim Wuthrich, president of International Home Video and Digitial distribution for Warner Bros. "Through You On Demand's platform, millions of potential consumers will be able to view our films. They will make it easy for consumers to see the latest films, including 'Harry Potter and the Deathly Hallows -- Part 1.' "

The on-demand offering would help Warner Bros. combat movie piracy, which is rampant in China. Bootleg copies of movies that are showing in theaters can be purchased on DVD from street vendors and in stores, or obtained on the Internet.

Warner Bros. has made other attempts to make headway against film piracy. The studio reached a deal in 2008 to offer newly released films as rentals online in China.

-- Dawn C. Chmielewski

Photo: Hermione Granger (Emma Watson), Ron Weasley (Rupert Grint) and Harry Potter (Daniel Radcliffe) in Warner Bros. Pictures' "Harry Potter and the Deathly Hallows - Part 1." Credit: Jaap Buitendijk / Warner Bros.

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