Huge United States media conglomerate Time Warner is spearheading
the Chinese cinema market, paying nearly half the cost of a
luxurious multi-plex cinema in Shanghai.
The new 28.5 million yuan (about US$3.4 million) cinema has been
preferentially permitted to show Warner's latest blockbuster
production Matrix II one week earlier than any Shanghai cinema,
said Xie Baoxin, general manager of the Shanghai Yongle Co., Time
Warner's Chinese partner in the milestone deal.
Shanghai Yongle will hold 51 percent and Time Warner 49 percent of
the shares of the cinema.
Local film business insiders say the deal will be a step forward in
opening China's movie industry to the world as part of the
country's World Trade Organization commitments.
Time Warner's entry into the domestic market is a strategic
investment plan, leaving behind other US heavyweight competitors
such as 20th Century Fox Corp., Columbia Studios and MGM
(Metro-Goldwyn-Mayer), Xie noted.
Located at the Xujiahui shopping center in downtown Shanghai, the
jointly funded cinema with top-class audio-visual equipment and
facilities will eventually consist of 11 cinemas of various sizes,
the biggest seating 350 and the smallest 110, said Xie.
The cinema sector is generally regarded as the retail market of the
movie industry, and is currently worth less than one billion yuan
(US$120 million) annually in China.
But the population of 1.3 billion and its increasingly rising
economic strength make it a potentially huge market, likely to be
intensely-targeted major international movie businesses.
In
the general manager's view, Time Warner's investment was not or
immediate return, but to set up a model of international standards
for Chinese cinemas, with returns to follow in the future.
Chinese analysts here said that such investments would encourage
China's cinema industry to become more and more involved in the
international market and force local cinemas and operators to
modernize.
Time Warner and Shanghai Yongle were both committed to keep each
other the preferential partner in seeking cinema-building programs
in China.
The Chinese firm holds the largest share of box office revenue in
the nation, controlling 57 cinemas in Shanghai and neighboring
Jiangsu and Zhejiang provinces, Xie said.
The two partners will jointly establish technical services company
for entertainment facilities, offering renovation engineering
technologies to domestic multiplex cinemas and management training
programs.
US
movie operators first moved into China's film distribution market
back in 1929. Warner set up its own distribution company as early
as 1932, but had not input investment in cinemas.
In
1994, China's movie authorities initiated a reform adopting a
profit-sharing policy between the government, distributors and
cinemas, and the first foreign film imported under this policy was
Warner production -- The Fugitive.
(Xinhua News Agency June 20, 2003)