China’s box office sales grew nearly 50% in the first three quarters of 2015, and now everyone wants a piece of the pie. In an attempt to strengthen the bond between Chinese and American film industries, the Motion Picture Association of America is hosting the Fifth Annual China International Co-Production Film Screenings in Los Angeles from Monday through Friday.
California-based audio firm THX (one of the conference’s sponsors) said “Business has been thriving” since it entered the Chinese market a year ago. The firm has partnered with “prominent entities” such as China Film Group and China Giant Screen, and is launching THX-certified auditoriums throughout Beijing, Shanghai, Wuhan, Hangzhou, Harbin, and Xuzhou by the end of this year.
China currently has the world’s second highest gross ticket revenue after North America, earning $5.2 billion in the first three quarters of this year. And its continued high growth (adding on average 15 new cinema screens per day) is projected to make the country number one by 2017. But the growing number of Chinese moviegoers is too lucrative an opportunity for foreigners to snap up the lion’s share. So each year China allows just 34 non-Chinese films into its domestic movie market, on a revenue-sharing basis. And Chinese regulators’ usual strategy is to schedule high-profile Hollywood films head-to-head to diminish foreign dominance in Chinese theaters, while giving domestic films the best release windows. (Even so, foreign films account for some 40% of market share.)
However, two British firms, Varcale Capital Management and Pairstech Capital Management, have come up with a way around this bottleneck. On Tuesday, ScreenDaily broke the news that they will own half of a $77 million joint U.K.-China film, TV, and media investment fund, to launch in early 2016 with the aim of funding new co-productions for both countries’ markets. This follows a landmark U.K.-China film co-production treaty ratified in March that exempts eligible co-productions from China’s quota on foreign films. The fund now has its sights set on expanding assets under management to $2.3 billion by 2020.
There is also growing investment from Chinese firms into Hollywood, such as Bona Film Group’s deal announced on Thursday to invest $235 million into six major Twentieth Century Fox movies. Additionally, last Friday China began debating a proposed law to help its domestic film industry compete internationally. Financial incentives may be offered for script writing, filming, distribution, screening, and overseas promotion of domestic films, Variety reported. Other incentives could be given to Chinese firms for investing abroad and building theaters.
A much-needed step would be to scale back and clarify the government’s film censorship policies. Down the road, that could lead to a more open culture, and of course more authentic films.