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China B.O Strength Boosts Quota Chatter

BERLIN – A strong start to the year at the Chinese box office has helped spark speculation of change to the regime that controls the import of foreign movies – two years after the last change to the quota regime.

Any easing of the quotas would be welcomed in Hollywood, where improving access to China and its 1.3 billion population, is a high priority.

“The MPA believes that an open market best serves filmmakers and audiences alike. While not aware of any such plans on this, removing the quota for international films is something we’ve been advocating for some time and would provide the widest possible movie experience for audiences while benefiting the Chinese screen community and our member studios,” Mike Ellis, President and Managing Director Asia Pacific, MPA, said in a statement provided to Variety.

Theatrical box office over the first week of the Chinese New Year period was up by some 80% according to the Xinhua news agency.

B.O. receipts between Jan. 31 and Feb. 6 totaled RMB1.39 billion ($228 million), an improvement of 81% on the comparable 2013 score. Some 38.2 million tickets were sold.

Such growth would make it easier for the Chinese authorities to take the brakes off the film distribution sector, which remains significantly controlled by significant regulation and state-owned enterprises.

Western media have suggested that the current system under which 34 films per year can be imported and given revenue sharing distribution, could soon be expanded to 44 films.
Chinese sources remain unclear on the matter and point out that the terms of a 2012 memorandum of understanding between China and the U.S. treats the current 34 imports as a minimum figure, not an absolute.

The MOU allows for 20 conventional movies per year and 14 digital, IMAX, animated or other “enhanced” format movies. But the agreement hammered out at the beginning of 2012 between US Vice president Joe Biden and Xi Jinping, now China’s president, makes it clear that the number of “enhanced format titles” can be changed upwards at any time.

Other sources point out that China’s import quota system has always been flexible.
“The 34 films figure has never meant precisely 34 movies,” said Shan Dongbing, VP of Chinese distributor LeVision Pictures, at a Variety-sponsored seminar Sunday that was held in co-operation with Berlin’s European Film Market.

Shan explained that definitions of which films are “enhanced” and which year they are given their license have always meant flexibility on the part of the Chinese regulators.

China also allows foreign films to be brought in to the country and licensed to distributors on a flat fee basis (aka ‘buyout system’), as well as importing others for TV screening and online video exploitation.

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