Feature Film Division
China’s passion for movies, at home and abroad, is resulting in phenomenal levels of growth and is outperforming China’s traditional industries, such as manufacturing. According to experts like McKinsey and Co., The Boston Consulting Group, and experts from Wharton, China is on track to have the largest film audience in the world, by possibly as early as 2020.
The phenomenal growth in this sector is due to increase income levels and market access. The infrastructure is growing at an unprecedented rate. China is building 15 new movie screens daily in new and existing cinemas, up from more than three screens a day in 2012, according to the U.S. commission’s report. China currently has 31,627 screens while North America has approximately 39,000 screens, according to The Hollywood Reporter. Bloomberg reports that China is expected to have 53,000 screens by 2017.
Entrance to Market
Hollywood can enter the Chinese market in three ways: through revenue-sharing films, flat-fee movies and co-producing a movie with a Chinese company.
The quota of 34 films applies to revenue-sharing films, which lets foreign studios take 25% of the box office receipts or about half the norm for other parts of the world.
2. Flat-fee Films
Flat-fee films, which have a different quota, are not a popular vehicle because Hollywood sells movies for a fraction of their worth, according to the U.S. commission’s report.
Co-productions, allow Hollywood to bypass quotas and receive about half of ticket sales.