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 Beijing allows 34 foreign films into the country each year
under a revenue-sharing deal. That quota - which Hollywood wants
to increase - is scheduled to be reviewed in 2017.
China accounted for 18.8 percent of worldwide movie ticket sales
last year, versus 7.5 percent in 2012, according to research
firm comScore. But U.S.-based studios currently account for just
a quarter of Chinese sales, versus the roughly 40 percent
average in other international markets.
While a recent drop in ticket sales in China could muddy the
outlook for foreign movies in the country, Sanford Panitch,
president of Sony Corp's Columbia Pictures, shrugged it off,
saying: "Even a slower China is critical. It's still an
incredible story of a big growth market."
Over January to November, tickets worth 41.4 billion yuan ($5.97
billion) were sold in China, data from industry tracker EntGroup
shows, up 4.4 percent on 2015 - sharply slower than last year's
50 percent growth and on track for the slowest annual growth in
a decade.
But given the potential of the Chinese market, the Motion
Picture Association of America remains eager for Beijing to open
its doors wider to Hollywood. Box office experts say China will
overtake the United States and Canada within the next few years.
An MPAA official said it was "very encouraging" that U.S. and
Chinese officials had agreed in recent talks to address issues
including increasing the annual film quota and the share of
revenue foreign studios receive. For now, co-productions are
helping bring the two sides together.
On Friday, Chinese theaters are debuting "The Great Wall",
starring Matt Damon and produced by Legendary Entertainment -
the Hollywood studio purchased by China's Dalian Wanda - along
with China Film Group and others. The movie was partly filmed at
Wanda's new studio in the eastern Chinese city of Qingdao.
But the focus is on getting a better deal for fully
U.S.-produced films, no easy task as China juggles its desire to
welcome U.S. films, its investments in Hollywood and efforts to
protect its industry.
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"Culturally, they are very (suspicious) of having too many American
imports flood their country. They want their citizens to see
homegrown hits and Chinese stories," said Jonathan Papish, analyst
for China Film Insider.
HEADWINDS: TRUMP EFFECT, IMPROVING LOCAL FARE
Adding to the uncertainty of China's relationship with Hollywood is
the election of Donald Trump in the United States.
President-elect Trump has recently stoked tensions with China by
speaking to the president of Taiwan and suggesting the "one China"
principle was up for negotiation.
U.S.-based media executives had been hoping for improved relations
with China in 2017, said Matt Lieberman, a director at PwC and a
consultant to major Hollywood studios. "That question is now up in
the air."
Trump's transition team did not respond to a request for comment.
China's cinemagoers may also make it harder for Hollywood imports to
succeed, with many pointing to improving local fare.
"Before, local cinema was really low-end and poorly made," said Wang
Ziyi, 27, a consultant in Shanghai. "But I'm starting to change my
mind."
(Reporting by Adam Jourdan; Editing by Himani Sarkar)
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