Monopoly will get competish

Hua Xia Co. to launch on June 20

Two years after China vowed to free up the tightly controlled film distribution system, a second distrib is poised to enter the market.

The Hua Xia Co. is due to launch June 20, marking the end of the China Film Group’s entrenched monopoly and providing — at least on paper — a competitive spur in a territory that has long suffered from an inefficient and antiquated distrib and exhib structure.

Hua Xia (an old name for China) is expected to start by releasing a couple of B movies acquired on a flat-sales basis. It hopes to handle its first mainstream film (under China’s unofficial quota of 20 revenue-share imported titles per year) in late July or early August.

Until recently, some Hollywood distribs feared the upstart’s ability to compete would be hampered because it is largely state-controlled, with China Film and the State Administration of Radio, Film and Television (Sarft) among the larger shareholders.

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But some U.S. execs now hope Hua Xia will quickly develop into a viable alternative to China Film. “Once it is up and running, there will be a political and bureaucratic imperative to make it work,” said one U.S. rep.

The introduction of a second distrib was delayed chiefly due to infighting between China Film and provincial distribs over how the new entity would be structured and managed. In a compromise, Hua Xia was set up with 10 shareholders, including the Shanghai Film Group and other provincial studios.

Former Film Bureau chief Liu Jian Zhong was named president last year but only recently were execs from other distribs drafted as general manager and assistant general manager.

Sarft has ruled that rev-sharing films will be split evenly between China Film and the new distrib. There’s been no indication yet about the criteria for deciding how films will be apportioned.

The Chinese cinema industry is starting to crank up again after the SARS virus shuttered cinemas in Beijing and other cities. China Film’s offices were closed for most of May, and release dates for several U.S. films were postponed.

“Daredevil” is set to bow June 20, followed by “My Big Fat Greek Wedding” on June 27 and “The Matrix Reloaded” on July 18. “Finding Nemo” has been approved and may go out in August, and “The Core” release is still in the works.