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Slow exhib road to China

Exhibs say patience key to opening market

SYDNEY — An exhib revolution is starting to sweep through China, but it will be some years before the investment in cinemas pays off for exhibitors and Hollywood distribs.

If you want to get involved in marketing and distributing films in China, be prepared for a “Groundhog Day”-like experience on every pic.

Those messages will be delivered at the CineAsia movie convention, which will run Tuesday-Thursday at the Bangkok Convention Center.

“China has enormous potential, but patience is required,” says T.J. Green, Warner Bros. Intl. Cinemas Shanghai-based VP of operational development and special projects. Green will speak Thursday at a seminar on China.

Leading the mission to bring modern multiplexes to the sparsely screened market, Warner plans to expand to around 135 by 2007; it has five multiplexes comprising 44 screens, with a further nine theaters in development.

“We are investing in cinemas for the long term. China is not a short-term investment market,” added Green.

Warners is taking advantage of a subsidy from the Chinese government that gives exhibs a refund on a 5% B.O. levy for all cinemas that opened this year; Green hopes that assistance will continue for at least two years.

China Film will have installed 161 digital screens by the end of this year, and the number of d-screens is expected to hit 300 in the next two years.

Despite that expansion, U.S. distribs admit they will continue to see meager returns from China while their cut of B.O. gross remains at around 13%. Studios are taking the long view and hoping the unofficial annual quota of 20 imported titles will be relaxed.

Han Entertainment’s Thomas Chung came up with the “Groundhog Day” analogy after co-producing “The Touch” and “Silver Hawk” in China. Chung, who worked on releasing the pics with their privately owned distribs, said the experience was like starting anew each time because China has no national media that can be used as marketing tools.

“There’s no (equivalent) of Letterman or Jay Leno, no nationwide covers (like a) Vanity Fair or Premiere,” he said, so Chung focused on local media in the six cities that generate 60%-70% of the B.O.

Chung, who will participate in a CineAsia panel, describes the import quota and China Film’s monopoly on importing and distributing U.S. and other foreign films as “China-made barricades, which mean Hollywood movies can’t be ejected from fighter planes into China, otherwise China would become another (Hollywood-dominated) Europe.”

Warner aims to foster Chinese product by dedicating one screen in each cinema to homegrown product; it sees the success this year of “House of Flying Daggers,” “2046” and “New Police Story” as encouragement. It’s anticipating big B.O. from local releases “The World Without Thieves” and “Kung Fu” this month.

China is one of one of the fastest-growing markets for giant-screen exhib Imax, with four cinemas operating and a further seven due to open by 2006, according to exec VP Larry O’Reilly.

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