Warner Bros joins wave of Hollywood tie-ups in China
By Denny Thomas and Adam Jourdan
HONG KONG/SHANGHAI (Reuters) - Warner Brothers and investment firm China Media Capital (CMC) are forming a joint venture to develop Chinese-language movies, adding to a wave of tie-ups between Hollywood studios and Chinese partners to tap China's fast-growing box office.
The joint venture, Flagship Entertainment Group Ltd, is being launched ahead of Chinese President Xi Jinping's official visit to the United States next week and underscores the growing influence of Chinese movies around the world.
China's box office takings, set to hit $8.9 billion in 2019 from $5 billion this year, according to PwC, are fast catching up with the United States, but global studios have a tough time keeping on the right side of the censors and getting around a strict quota system for imported films.
"The subtext is all these studios are looking at how they can get better access to the China market," said Ben Cavender, Shanghai-based principal of China Market Research Group, adding it also opened up channels to Chinese facilities and funding.
Studios such as Paramount Pictures, DreamWorks Animation SKG Inc, Lions Gate Entertainment Corp and Walt Disney Co have all hooked up with local groups.
Films that qualify as co-productions and meet various criteria are exempt from China's current quota of 34 imported films each year, and have an easier time navigating censorship issues with notoriously picky industry watchdogs.
"The country's incredibly rich history and culture provide a huge trove of great stories, and we want to help tell those stories for new generations of filmgoers, in China and around the world," Kevin Tsujihara, chairman and chief executive of Warner Bros, said in a statement announcing the venture.
Warner Bros is part of Time Warner Inc. Continued...