FEATURE FOCUS


Quota deal satisfi es both East and West


The recent agreement between China and the US to widen the revenue-sharing quota has been met with enthusiasm by all parties and is driven by consumer demand, reports Liz Shackleton


I


t rarely happens that when the relaxation of an import quota is announced, both sides believe they have come out on top. But this would


appear to be the case with the recent agreement between the US and China to widen the revenue- sharing quota by an additional 14 enhanced-for- mat films a year, and increase the foreign distributor share to 25%. While some Chinese companies and fi lm-makers are reacting cautiously to the news, there are many — particularly the larger private and state-owned companies — who are saying “bring it on”. Yu Dong, CEO of Chinese studio Bona Film


Group, recently told a roomful of fi nance analysts that it was great news for Chinese companies, especially private outfits with distribution and exhibition capabilities. “Companies with a verti- cally integrated business model, including cinema ownership, will benefi t directly from the distribu- tion of Hollywood blockbusters,” Yu said. Hong Kong fi lm-maker Peter Ho-sun Chan, who


has worked extensively in China, says he remem- bers when Taiwan’s quotas were removed and the market share of Taiwanese and Hong Kong fi lms in that territory collapsed overnight. “I don’t think anything as drastic would ever happen in China, not only because of state control, but also because of the taste of the Chinese audience,” says Chan. “When you look at what is making money in China, only a few exceptional titles such as Transformers and Kung Fu Panda are as big as we think.” Indeed, many believe the widening of the quota


is a necessary step in the evolution of the market and could even have a positive impact on the local industry. The real issue is that a market which is adding eight new screens a day needs a lot more product, and while the local industry is growing quickly, its bigger films such as Bona’s Flying Swords Of Dragon Gate tend to cluster around just two major holiday periods: October’s National Day, and Christmas to January/Febru- ary’s Chinese New Year. Though the agree- ment followed years of US lobbying and World Trade Organisa- tion wrangling, Motion Picture Association of America (MPAA) chair- man Chris Dodd says it was this “bottom-up pressure for content” that convinced China the time was right. But the devil is in the detail, and more important


■ 16 Screen International at Filmart March 20, 2012


than quota numbers and percentages is how the agreement is interpreted and its knock-on effects. Certainly it has the potential to shake up China’s domestic distribution sector, which remains heav-


ily monopolised and under state control. Though it is not included in the agree- ment, there is great hope among private Chi- nese studios that they will get a stab at distributing some of the additional revenue- sharing fi lms. Currently, state-owned China Film


Kung Fu Panda 2


Group and Huaxia Film Distribution are the only companies allowed to distribute foreign movies and their dominance is not likely to end any time soon. But it is understood the Film Bureau under the


State Administration of Radio, Film and Television (SARFT) is already asking some private players to submit their credentials, and will favour compa-


nies with a strong track record in distributing Chi- nese fi lms both locally and overseas. As always, the authorities are likely to experiment with new dis- tributors before proclaiming their entry as offi cial policy (even before the US-China trade agreement, a handful of 3D fi lms such as Rio and Green Lan- tern were being imported each year outside the quota), but the fact they are already fi elding sub- missions is seen as a positive step. The promise of reciprocal market access should


also lead to a stronger working relationship between the US and Chinese film industries — indeed, between the Chinese and all international fi lm industries — as the trade agreement is not lim- ited to the US. As China tends to learn quickly and adapt Western business models, rather than being overwhelmed by them, this is not necessarily a bad thing. Again, Dodd says it is this desire to learn and


Flying Swords Of Dragon Gate


‘Companies with a vertically integrated business model


will benefit’ Yu Dong, Bona Film Group


Green Lantern


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