Warner Brothers’ 2013 science fiction monster flick Pacific Rim, which features the humanity uniting to combat colossal monster invaders before winning the end-game in Hong Kong, was a blockbuster in China. The movie reaped 695 million yuan (US$112 million) at the box office, the highest among the 34 imported movies in the country last year.
Yet despite the enthusiastic reception among the Chinese audience, one thing for sure is that the American filmmaker won’t get the bulk of the money — no more than a quarter of the total — thanks to a fixed revenue distribution arrangement. The majority is bagged by the state-owned China Film Group (CFG), which has a monopoly in movie importation. In the case of Pacific Rim, China Film Group raked in over 500 million yuan, according to Beijing News.
Although no specific figures are available as to how much CFG earned from imported productions, these films altogether grossed over 9 billion yuan last year in China and they are certainly a crucial source of income for the firm.
China sets annual quota for foreign movies in the name of protecting homegrown productions. In 2012, the quota was increased to 34 movies a year. Being the only sizable state-owned cultural and entertainment conglomerate that covers the entire process from filming to distribution, CFG has taken the import business in its back pocket.
Now, gains are accruing from Walt Disney’s Captain America: The Winter Soldier, which has also received critical acclaim and become a smash hit since its Chinese premiere last week. The movie raked in total box office collection of 302 million yuan as of April 7, and CFG will keep rolling in the dough.
Various media reports have indicated, citing a senior Publicity Department official of the Chinese Communist Party, that authorities are mulling a plan that may authorize China National Culture and Art Corp., a state-owned enterprise under the Ministry of Culture, to import movies from overseas starting from this summer. An official from the State Administration of Press, Publication, Radio, Film and Television, which oversees the media and film industry, has however refuted the rumor.
Analysts say CFG has lost its edge as private filmmakers such as Huayi Brothers (300027.CN), Enlight Media (300251.CN), BlueFocus Communication (300058.CN), Huace Film & TV (300133.CN) and HualuBaina Film & TV (300291.CN) have gained ground with hit productions. Although CFG also holds some stake in films made by these companies, its role is only limited to distribution.
While some of the domestic productions from private firms have taken the country by storm, most of CFG’s indigenous films, such as The Founding of a Republic and The Founding of a Party, feature heavy propaganda. The two titles mentioned above, for instance, garnered weak box office collections relative to the hefty investment. In such a scenario, importing overseas productions, mostly from Hollywood, has become the cash cow for CFG.
It is still unclear whether regulators will remove barriers and allow more companies, especially private ones, to import films. But CFG is sparing no effort to fend off potential threats. The company, which also runs cinema chains across the country and owns half of China’s top ten cinemas as measured by box office, is said to have banned some competing chain operators like Wanda Cinemas from screening hotly anticipated Hollywood films such as the Transformers series in a bid to weed out rivals.
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