China’s quota under pressure

Beijing to address WTO calls to open film market

In what will please those in Hollywood eager to get into the world’s fastest growing major film market, this year is set to be marked by changes in the structure of the biz in China, evolution that could make the country easier to access for foreign shingles.

There is currently a quota of about 20 foreign movies allowed into China every year on a revenue-sharing basis, although overseas studios prefer flat fees as a big hit can make more money. This means a lot of countries fighting over a small number of slots – France won six of the 20 slots last year, for example.

There are signs that the quota system may be about to change.

China is under regulatory pressure to alter the way it deals with foreign pics. In March, Chinese regs are set to address the World Trade Organization’s call for it to open up its film market.

The quota system is also becoming increasingly difficult to justify as the boom in the number of cinema screens increases the demand for content.

Last year, China added 313 movie theaters and 1,533 new screens last year for a total of just over 6,200 screens. Building hardtops has combined with the boom in shopping mall construction in China to result in around three new 450-seat theaters being constructed every day. However, even at this rate of construction, there is still room for expansion, as this translates into one screen for every 200,000 people, far less than the ratio of one screen per 9,000 people in the US.

Chinese movies are picking up some of the slack — Feng Xiaogang’s disaster movie “Aftershock” took $100 million last year, and domestic Chinese pics took in $860 million last year, just over 56% of the $1.5 billion total. This year has seen strong performances by “Let the Bullets Fly” and “If You Are the One 2.”

But Chinese movies struggled to compete with the likes of “Avatar” and “Inception,” and demand for foreign movies is running very high. The biggest movie of the year was “Avatar,” which made $210 million, while “Inception” made $69 million, and “Harry Potter and the Deathly Hallows: Part 1” chalked up $33 million in its first month.

More from Berlin Daily: China & Taiwan:
Problems persist in pic boom | Taiwan movie biz rides high | China’s quota under pressure

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