MUMBAI: The recent move of the Chinese government to comply with a World Trade Organisation order to treat US films more fairly has been lauded by studio executives in Hollywood.
But privately, they wonder how it will shake out and when because the Chinese government has yet to sign a WTO Memorandum of Understanding.
Hollywood had agreed to live with the resulting agreement because it could be revisited in five years. A fine ticking point was revenue-sharing: The studios wanted 30 per cent but had to settle for 25 (previously, it was 13 to 17 per cent).
Beijing-based DMG Entertainment’s CEO Dan Mintz said, "Obviously, from the top-line level, all of this is good. But it‘s important to remember that the quota is just one layer that is used by the powers that be to control things. They have censorship, they control all the screens and hold control over when a film comes on against which competition and how long it stays in theatres."
The Chinese market is too hot for Hollywood studios not to keep trying. In 2008, the local box-office intake was $630 million; in 2011, it reached a massive $2.1 billion. Theatre construction is also growing by bounds spurring a proliferation of state-of-the-art 3D screens. And this is where Hollywood has the upper hand as its proliferation of 3D films deliver much-needed content.
It may be noted that five of China‘s 10 top-grossing films in 2011 were 3D studio releases, all of them from Hollywood. In 2011, Transformers: Dark of the Moon (3D) was China‘s top-grossing title, earning $172 million.
Interestingly, had the new revenue-sharing deal been in effect then, Paramount would have seen a return of $43 million compared to $26 million.
The first 3D release set to open in China this year is Titanic 3D, in early April. No one -- not even the film‘s overseas distributor, Fox -- knows whether the new rules will be in place by then, but most studios believe they will by summer.
It is also uncertain as to which 3D titles China will accept this year from films like The Amazing Spider-Man, The Dark Knight Rises, Brave, The Avengers, Men in Black III and Madagascar 3.
