February 18, 2012 in Nation/World

China to ease rules on U.S. film studios

Agreement allows more access, greater profits
Los Angeles Times

LOS ANGELES – Some observers had written off Chinese Vice President Xi Jinping’s five-day visit to the U.S. as heavy on pomp but light on substance. But late Friday, just before his plane left Los Angeles International Airport, the White House announced that China has agreed to ease restrictions on the number of U.S. movies it allows into the country and the amount of revenue that studios can collect from box office ticket sales there.

Under the deal, China has agreed to allow 14 additional so-called enhanced-format foreign films – those that are in 3-D or in IMAX – into the country each year. The agreement also increases the amount of revenue that foreign studios collect from movies distributed in China from about 13 percent to 25 percent.

The agreement was finalized Friday in negotiations between Vice President Joe Biden and Xi, who was visiting Los Angeles on a trip to promote more trade between the countries.

Easing China’s restrictions on access to its vast market has been a top priority for the Motion Picture Association of America, whose chief executive, Chris Dodd, met with Xi on Friday.

Dodd was joined by other studio executives, including Walt Disney Co. chief executive Bob Iger and DreamWorks Animation chief executive Jeffrey Katzenberg, who just announced a deal to build a new animation studio in Shanghai with two state-owned Chinese media companies.

The rapid growth of the theater industry in China has made the market that much more appealing to studios, which can generate $20 million to $40 million in ticket sales per film, compared with about $1 million a decade ago. Popular movies released in China include the blockbusters “Avatar,” “Alice in Wonderland” and “Harry Potter and the Deathly Hallows.”

The announcement came shortly after Xi and Biden attended several events in the Los Angeles area and heaped praise on each other and their countries.

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