SYDNEY — Warner Bros. Intl. Theaters plans to accelerate its push into China after finally receiving approval for its first multiplex in Shanghai. Plex is launching Saturday with the preem of “The Matrix Reloaded.”
The company intends to submit applications for joint ventures to build and operate cinemas in two other cities (which it won’t identify for competitive reasons) within two weeks.
It aims to have 10 multiplexes operating in China within three years, WB Intl. Theaters prexy Millard Ochs told Daily Variety from Shanghai.
Warner has a 39% interest in the co-venture that owns the Shanghai cinema, newly branded as Paradise Warner Cinema City, to comply with the law restricting foreign holdings in cinemas to 49%. Its partners are distrib Shanghai Paradise (which owns 51%) and Hong Kong-based restaurant and leisure operator Broadband Investments (10%).
WB hopes to increase its stakes to 50% or 51% for future locations, in line with a corporate mandate that would allow the company to include their revenues in its financial accounts, Ochs said.
China Film Group chairman Yang Buting foreshadowed a relaxation of foreign ownership regs when he spoke at the ShoWest convention in Las Vegas in March, but since then there have been conflicting signals from Beijing on when, or whether, the cap would be raised for cinemas (Daily Variety, July 3).
Ochs is encouraged by recent Beijing rulings permitting Hong Kong companies to control stakes of 51%-75% in mainland cinemas and allowing Hong Kong films to unspool in China outside the unofficial annual quota of 20 imported titles.
Located in the huge Grand Gateway mall, the 1,490-seat, nine-screen Shanghai theater bowed 14 months ago, but WB faced a lengthy wait for approval of the co-venture.
“We all had to go through a learning process and to understand Chinese laws,” said Ochs, who hopes future applications will be dealt with more speedily. “We’re patient: We are part of the start of building an industry in China.”
The cinema traded slightly above projections until the outbreak of Severe Acute Respiratory Syndrome brought the exhib industry to a standstill. Recovery has been ongoing for the past few weeks.
Shanghai has about 1% of China’s population but accounts for 18% of the country’s total B.O.
“Paradise Warner Cinema City is a historic step toward bringing world-class quality films to Chinese audiences and realizing the untold potential of the Chinese marketplace,” said Warner Bros. chairman-CEO Barry Meyer.
Shanghai Paradise is a division of the Shanghai Film Group that controls the United Film distribution and exhibition circuit, which comprises 126 screens and accounts for 80% of the city’s B.O.