New rules may aid foreign film market in China

SHANGHAI — China’s Ministry of Culture is predicting at least 20 joint-venture cinemas to open this year on the back of new exhib regulations. The new rules — which allow foreign investment of up to 49% in movie theaters — kicked in late last year, and the ministry claims to have received many inquiries already.

But industryites are not convinced by the government line that foreign money will be flowing into the country soon.

“These rules are not really new. We were already operating this way before. If the authorities want to attract foreign investment in cinemas, they should start to tackle piracy. They should relax ticket price restrictions, so we can work out for ourselves how to make a profit. And they should let us control what films we play, and how long we play them,” says one Shanghai exhibition exec.

Getting their hands on foreign films is the biggest problem for most cinemas. Although B.O. figures are hard to come by, one local cinema operator estimates that despite comprising only 30% of the cinema playlists, imported films take 60% of the box office, even with import restrictions.

There are signs, however, that things are changing:

First, last year, several cinemas in Shanghai ignored central government pricing rules and set their own ticket prices for “Pearl Harbor.” Tickets for the premiere were as high as 100 yuan ($12), and later shows ranged from $3.60 to $7.25.

And second, the successful release of “Harry Potter and the Sorcerer’s Stone” during the Chinese New Year went against the tradition that foreign films be banned during this period to give domestic films a chance to shine.

Dialing for dollars

New rules, which are set to grant independent distribution rights to local distributors — breaking up the monopoly of the China Film Group — may also help to encourage more foreign investment, which has been trickling in since 1997.

“We sometimes hear about foreign ventures showing interest,” says Crystal Chu, marketing executive at Golden Cinema. “Smile — a Malaysian group — was here for a while, but then shut down. And there are rumors that Universal Cinemas are on the way, but it doesn’t matter how big you are internationally. China is a special case that requires years of hard work and contacts.”

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