China: Theaters must meet domestic movie quota

[January 27, 2010]  BEIJING (AP) -- China's government is urging theater operators to make sure that at least two-thirds of the films they show are domestically made after the latest Hollywood blockbuster "Avatar" wowed audiences and became the highest-grossing film in the country's history.

James Cameron's 3-D sci-fi epic has grossed about $103 million as of Jan. 12, although the film's state-run distributor ordered it removed from 2-D theaters in an apparent move to reduce competition for China's homegrown films like a state-backed biopic of Confucius, which brought in a lackluster $5.6 million during its opening weekend.

China remains highly protective of its domestic film industry and permits just 20 revenue-sharing film imports each year. The restriction amounts to a limit on foreign blockbusters that are typically distributed under revenue-sharing deals.

That has not dampened China's enthusiasm for Hollywood films. "Avatar" has smashed the box-office record of $67.3 million set by "2012" in December. The disaster movie broke the previous record of "Transformers: Revenge of the Fallen."

"Transformers" in 2009 surpassed an 11-year-old record held by another Cameron epic: "Titanic."

This week, China's State Council Web site posted a statement that theater operators should support the "expansion and development of the domestic film industry" and that no less than two-thirds of movies shown each year should be domestic.

China's restriction of movie imports has been taken up by the World Trade Organization. In December the WTO upheld an earlier ruling that China is illegally restricting music, film and book imports from the U.S. The original ruling didn't address the 20-movie limit, but urged Beijing to let foreign companies distribute their entertainment products in China.

In fact, demand has grown for some domestic movies.

The Chinese propaganda movie "The Founding of a Republic" made $61 million in early 2009, not far behind the record takings of "2012" and "Transformers."

But "Avatar's" 3-D experience, and its plot, have struck a chord with Chinese viewers.

The movie revolves around the forced evictions of the alien Na'vi race by humans -- a story line that some have said draws unflattering comparisons to China's own, often brutal removal of millions of residents to make way for property developers.

20th Century Fox said Tuesday that "Avatar" had passed "Titanic" to become the highest-grossing film worldwide, bringing in $1.859 billion at the box office.

The reason for 2-D screenings being scrapped in China is a little unclear.

Weng Li, spokesman for the film's state-run distributor, China Film Group, which decides which movies to import, said select movie theaters did so for commercial reasons.

"'Avatar' 2-D makes up for little more than 5 percent of all 'Avatar' revenue. Everyone wants to watch it in 3-D," Weng said. "It's natural for movie theaters to pull movies that aren't doing well and replace them with more promising ones -- in this case, 'Confucius.'"

Gao Jun, deputy general manager of the New Film Association, one of China's top multiplex chains, said some 2-D showings only had 10 people watching.

"If the government really wanted to push Confucius, they would also push to remove 3-D movies," Gao said.

A UME International Cineplex theater spokeswoman in Shanghai, who would give only her surname, Li, confirmed that they had pulled all 2-D screenings of "Avatar," but declined to give a reason.

Zhang Hongsen, deputy head of the State Administration of Radio, Film and Television, denied that the government had imposed the order.

"Confucius," which opened Jan. 22 and stars Hong Kong actor Chow Yun-fat, did not do as well as hoped on its opening weekend.

"People are still flocking to see 'Avatar' because it's a whole new movie experience," Weng said.

In a sign of its popularity, tourism officials in China's southern province of Hunan are trying to cash in on the movie's success by renaming one of its famous peaks "Avatar Hallelujah Mountain," according to the Zhangjiajie city Web site.

Tourists can make "Avatar"-themed visits to the mountain within the Wulingyuan scenic area -- a UNESCO World Heritage Site known for its towering rock formations.

[Associated Press; By CHI-CHI ZHANG]

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.