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China Opens Up Market to U.S. Movies

18 Feb, 2012 By: Erik Gruenwedel

The Obama administration and Chinese officials Feb. 17 announced a détente of sorts in the ongoing trade embargo of Hollywood studios movies allowed into the communist country’s largely untapped theatrical market.

Under terms of the deal, China will allow in 14 high-definition releases in 3D and IMAX, in addition to the current quota of 20 movies annually. It also will allow studios to keep 25% of box office revenue — up from 13%.

There was no mention if the agreement includes DVD and Blu-ray Disc. China is notorious for turning a blind eye to a rampant internal black market for pirated studio titles released on disc.

The agreement was announced this afternoon by Vice President Joe Biden, who was in Los Angeles meeting with Chinese VP Xi Jinping, considered the next president of the world’s most populous country.

"The agreement announced today will allow significantly more job-supporting U.S. film exports to China and provide fairer compensation to U.S. film producers for the movies being shown there," the Obama administration said in a statement.

Chris Dodd, CEO of the Motion Picture Association of America, hailed the decision as a major step in spurring the growth of U.S. exports to China.

“It has long been a top priority for the MPAA, and it is tremendous news for the millions of American workers and businesses whose jobs depend on the entertainment industry,” Dodd said in a statement late Friday. “This landmark agreement will return a much better share of the box office revenues to U.S. studios, revising a two-decade-old formula that kept those revenues woefully under normal commercial terms.”

Dodd said the agreement complements efforts to fight movie piracy and help protect the jobs of workers in both countries, which are dependent on a healthy entertainment industry.

Warner Bros. Home Entertainment Group last summer became the first studio to bow a transactional video-on-demand platform in China — a service it expected to be available in 3 million Chinese homes by the end of last summer.

Separately, the Independent Film & Television Alliance applauded the agreement, saying it affords smaller filmmakers and studios a new market for content.

”For independents, this agreement is momentous,” said IFTA CEO Jean Prewitt. “Our sector has been unable to benefit fully from the existing revenue-sharing importation 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.”

Finally, DreamWorks Animation Feb. 17 announced it formed a joint venture with two Chinese media companies called Oriental DreamWorks. The new company, based in Shanghai, will create animation and live-action movies and TV shows targetting family audiences and is set to release films beginning in 2016. DreamWorks Animation last year inked a transactional VOD deal with website Youku.com for several titles, including the "Kung Fu Panda" movie franchise, which is popular in China.




About the Author: Erik Gruenwedel

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