Chinese may redo splits

Int'l exex look to set rev-sharing terms at Cannes

SYDNEY — Hollywood studios could soon see their share of China B.O. bump up from current levels, now among the lowest in the world.

China Film Group officials indicated their willingness to consider improving film hire terms when they met reps from the U.S. distribs and the Motion Picture Assn. in Beijing last week.

The chiefs of the majors’ international arms are expected to hammer out proposals for amending rev-sharing terms at their regular get-together during next month’s Cannes Film festival.

Since revenue sharing was introduced for a fixed number of foreign films in 1994, the U.S. studios have received 12%-13% of the gross, with the rest eaten up by exhibs, China Film as the sole importer and nationwide distributor, subdistribs and taxes. New Line, for example, stands to see around $380,000 of the $3.2 million pic has rung up in its 17 days of release in China.

In exceptional cases where films racked up hefty grosses — such as “Titanic,” which made a record $43.5 million in ticket sales — the studio’s take reached 17%.

‘Worst in the world’

“It’s been four or five years since the revenue-sharing terms and conditions were revised, so it made sense to bring up the idea of re-looking at that agreement with China Film,” one U.S. exec told Daily Variety.

That exec declined to reveal what kind of percentage the U.S. companies are seeking but acknowledged the increase would be “incremental” rather than substantial.

The exec was pleased at responses from China Film officials at last week’s meeting, noting, “There was good will on both sides; there was a positive spirit.”

An improvement in the split can’t come quickly enough for one U.S. distrib who griped, “The deal is the worst in the world.”

So far this year “The Planet of the Apes,” “Shrek,” “Jurassic Park III,” “Harry Potter and the Sorcerer’s Stone,” “The Lord of the Rings: The Fellowship of the Ring” and “The Princess Diaries” have been released in China.

UIP has confirmed that the 20th anni re-issue of “E.T. The Extra-Terrestrial” has just been approved by Chinese authorities and is slated for early June.

“E.T.” may preem at Shanghai’s top-grossing cinema, the Shanghai Film Art Center. One exec said it would be a good film to release “just before the Shanghai Film Festival, when everyone is thinking about film history, not just the latest thing.”

Alternative distrib methods

Also discussed at the Beijing get-together were alternative distribution mechanisms allowing more films to be imported than the unofficial quota of 20 rev-sharing titles per year.

There was general support for finding ways to bump up the number of imports. As one U.S. exec put it, “A lot of cinemas are being built in China. Some of them will die unless they get a bigger supply of films.”

There’s still no official word on when a second film distributor will launch and end China Film’s distrib monopoly — an initiative promised by the government. U.S. officials hoped the new entity would be operational in June, but that now seems unlikely. Sources at the Shanghai Film Group, which hopes to be the biggest shareholder in the new distrib, now say they expect an announcement in June.

(Arthur Jones in Shanghai contributed to this report).

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