China's economic rise and growing international profile are spurring Hollywood's interest in movies using Asian themes and production money, U.S. movie industry veterans said Tuesday.
Big studios are trying to push further into China, where box office receipts rose more than a third last year to $2 billion. China represents one of the most attractive growth opportunities for the U.S. movie industry, which is facing declining North American theater revenue and slumping DVD sales.
For the last decade, China has allowed only 20 foreign films a year -- mostly big-budget Hollywood fare -- to get national distribution. But it opened the door a little more last month when it changed the rules to allow in up to 14 more films a year as long as they are made in 3-D or for the big-screen Imax format. The foreign share of ticket sales will rise to 25 percent, up from 13.5 percent to 17.5 percent under the old system.
"I know studio executives and even chairmen of studios who've never been to China, who are now saying: I need to go, I need to meet people," said Hollywood producer Tracey Trench.
At its current growth rate, China is expected to become the world's 2nd largest movie market in a few years, with box office takings projected to top $5 billion by 2015. In North America, revenue has fallen for two years straight, and ended 2011 with $10.2 billion in ticket sales.
Glenn Berger, the screenwriter of the "Kung Fu Panda" movies, said that China is a trendy theme now.
"Hollywood needs to tell the same story in new and unusual ways and right now China is hot, it's interesting and most people in the West don't know very much about it," Berger said.
"Kung Fu Panda 2," about a cartoon panda named Po who battles a peacock villain, raked in $665 million at the box office last year, although only $165 million of that was from U.S. moviegoers.
Trench and Berger spoke at a panel at the Hong Kong International Film and Television Market, or Filmart. The entertainment industry trade show is one Asia's biggest, with 640 exhibitors -- 10 percent more than last year -- hoping to sell their films to 5,200 buyers expected from around the world.
Asia's growing wealth is one big draw for Hollywood studios who are looking for ways to keep costs down, especially on big-budget blockbusters, said Trench, who was executive producer of "The Pink Panther," "Just Married," and "Ever After."
"You already know it's costing you a ton of money, so you try to figure out every way possible to hedge that financial risk," including getting co-production money and rebates and shooting in cheaper locations, said Trench. "This region now plays into a lot of those factors."
Hollywood studios have been busy teaming up with Chinese production companies.
DreamWorks Animation SKG Inc., which produced "Kung Fu Panda," said in February it's tying up with three Chinese companies on a joint venture entertainment company that will make Chinese animated and live action content. Dreamworks will have a 45 percent stake in the venture, which is expected to begin operations in Shanghai later this year.
Legendary Entertainment, producer of hits including "The Dark Knight," "Inception" and the two "Hangover" installments, partnered with leading Chinese studio Huayi Brothers Media Corp. in June to form Legendary East. The venture plans one or two big budget movies a year starting in 2013 for global audiences that are also commercially viable in China. The films will be mainly in English and feature themes based on Chinese history, mythology or culture.
Another Hollywood studio, Relativity Media, said last year it's partnering with two companies to make Chinese films for global audiences and distribute movies in China.
While English is usually the preferred language for Asian-themed movies aimed at international audiences, that could change in the next decade as America's grip on the title of world's biggest movie market weakens, Trench predicted.
"There's a time right now that all of the studios, if they're going to do movies with Asian elements, they're going to be in English," she said. "But that's not going to be forever."
Source - Business Week.