Foreign film studios can release 34 titles in theaters a year in China under a quota deal negotiated in 2012. But release-date schedules show there will be at least 38 foreign theatrical releases this year.
What’s more, several Hollywood features—including “Sully” from Warner Bros. and “Miss Peregrine’s Home for Peculiar Children” from Twentieth Century Fox—have been given release dates in December, a peak moviegoing time typically reserved for Chinese films.
Officials with the State Administration of Press, Publication, Radio, Film and Television didn’t respond to requests for comment on the change. In Chinese news media, agency officials have been quoted as saying that more films were added through “cultural exchange programs” and don’t reflect any easing of the quota.
Several people with knowledge of the situation, including local distributors, theater operators and studio executives, said the move is aimed at reversing a dramatic slowdown in China’s box-office growth.
“Of course they cannot say it out loud that they are doing this to boost the number,” said one film-distribution executive. “That would make them lose face.”
The Chinese box office has grown at an average annual pace of 34% over the past five years. Last year, it surged 49%—boosted in part by heavy discounts, but also by practices such as “ghost screenings,” in which bulk ticket sales are used to inflate box-office numbers. The Chinese government has now cracked down on these practices.
Michael Ellis, president of the Asia-Pacific region of the Motion Picture Association, the trade group representing Hollywood’s six major studios, said this appears to be the first time China has allowed studios to exceed the limit since the quota was raised from 20 to 34 films a year in 2012.
“Hopefully it’s a sign of a maturing marketplace,” he said. “We hope it’s a trend and not just a one-off for this year.”
Mr. Ellis said that the quotas should be seen as a “floor, not a ceiling,” and said he hoped it bodes well for the MPA and its U.S.-based counterpart, the Motion Picture Association of America, which will be lobbying for further expansions when the quota agreement expires next year.
Studios would also like to have fewer restrictions on how long films can run in Chinese theaters.
Because there are no government announcements on which films will be released under the quota system, it isn’t possible to identify the extra films added to the 2016 release calendar. Given the weakness at the box office, however, additional foreign films are likely to be given 2016 release dates in the weeks ahead, the people with knowledge of the situation said.
The 34-film quota applies to foreign films in which overseas studios share the box-office receipts with China Film Group, a state-run film company. It doesn’t apply to foreign films for which distribution rights are sold to Chinese distributors for a flat fee—typically about 30 small-budget films annually in the past few years.
Though Chinese productions are increasingly winning over local audiences, Hollywood tentpoles are still well-embraced. Of the 100 films that were approved for theatrical release in China last summer, 18 imported titles accounted for almost half of box office receipts. Legendary Entertainment’s
“Warcraft,” flopped in the U.S., but it topped the summer tally in China.
Zhang Hongsen, the top film regulator with the state agency, hinted in a recent speech that more foreign films may find their way into China, state media reported.
“The government wants to stir competition between foreign films to see what this would bring to the market” and prepare for the renegotiation, said a Beijing-based executive with a Western film studio.
Source: Wall Street Journal