Sony
unit, Dalian Wanda in tie-up to tap China's huge movie
market
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[September 23, 2016]
By Jackie Cai and Brenda Goh
SHANGHAI (Reuters) -
Chinese conglomerate Dalian Wanda Group will market Sony
Pictures' films and co-finance some upcoming movie
releases of Sony Corp's film unit in China, which is
forecast to become the world's top movie market as soon
as next year.
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Wanda, owned by China's richest man, Wang Jianlin, and Sony
announced a deal on Friday under which Sony Pictures will
utilize China's biggest theater chain owner Wanda to better
access a rapidly growing yet restricted movie market.
The alliance will help Wanda extend its Hollywood footprint and
further Wang's goal of making the group a global entertainment
powerhouse.
Wanda said in a statement on its website the tie-up would use
its consumer-facing infrastructure to bolster Sony Pictures'
presence in China, which is on track to surpass the United
States as the world's biggest probably by next year, according
to industry executives.
"This partnership makes a lot of sense for both parties. Sony
will benefit from smoother distribution and playback of its
films in China and Wanda will be able to further integrate into
the content development side of the business," said Ben Cavender,
Shanghai-based principal of China Market Research Group.
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"We are going to see more cooperation going forward...Tie ups
make sense because a lot of Chinese companies are also becoming
interested in film financing as a form of investment," he said.
This would be Sony Pictures' first partnership with Wanda, which
has previously invested in movies made by Viacom Inc's Paramount
Pictures unit, such as "Teenage Mutant Ninja Turtles" sequel,
and would give Wanda a step into movie marketing.
Despite an economic slowdown and dipping ticket sales, China
showed how it could still be a savior for Hollywood producers in
June after Universal's $160 million blockbuster "Warcraft"
managed to chalk up $156 million in China in the first five days
despite flopping in the United States.
But the country's regulator restricts the number of imported
films that theaters can show to 34 a year, a limit that films
which qualify as co-productions and meet other criteria are
exempt from. These films also have an easier time navigating
censorship issues with notoriously picky industry watchdogs.
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Profits at Sony's film unit fell 34 percent over the year to March
after it struggled to achieve hits at the box office over that
period.
Wanda declined to provide further details on the deal. Sony was not
immediately available to comment.
HOLLYWOOD DREAMS
Started by Wang as a property developer in China's northeast, Wanda
now owns theaters, massive shopping malls and amusements parks
around the country.
The billionaire has said he wants to bring Hollywood technology and
capabilities to China through acquisitions, telling Reuters in
August that he was keen to buy Hollywood's "Big Six" studios and was
close to sealing two billion-dollar film related deals.
Wanda already owns Legendary, co-producer of hits such as "Jurassic
World" and "The Dark Knight", which was the biggest U.S.-China movie
deal when it was sealed in January, and U.S. cinema chain AMC
Entertainment Holdings.
Besides Wanda, Chinese companies that have invested in Hollywood
include Fosun International and Huayi Brothers Media Corp.
(Reporting by Jackie Cai and Brenda Goh; Additional Reporting by
Makkiko Yamazaki in TOKYO; Editing by Muralikumar Anantharaman)
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