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New Profit Share Models Set as '1942' Premieres

2012-11-27 09:41:44        Chinese Films

Feng Xiaogang's "Back to 1942" premieres in Beijing, Nov. 25, 2012. []

Dust has eventually settled on the current dispute of whether or not to raise profit shares for film distributors, mere moments before Feng Xiaogang's new blockbuster "Back to 1942" premiered in Beijing on Sunday.

On Nov. 15, 2012, China Film Group Corporation, Huayi Brothers Media Group, Bona Film Group, Stellar Mega Films Ltd., and Enlight Pictures Co., Ltd. - five of China's most powerful film distribution and production companies - collectively asked to raise their shares in box-office revenues from the current 43 percent to 45 percent, involving 9 films to screen during the upcoming new year's season. However, the sudden demands angered many theater chains and they opted to fight back.

As the golden new year film season looms around the corner, the distributors of season opening blockbusters "Back to 1942" and Lu Chuan's "The Last Supper" finally negotiated respective deals with theaters as to settle the dispute in time before both sides stood to lose big.

The 10-day deadlock was resolved only right before the premiere of "Back to 1942". It was announced that an agreement had been signed by the nation's 30 major theater chains and Huayi, the film's producer and distributor. The new principles include: When a film grosses beneath 300 million yuan (US$48.18 million), the distributors' profit share is 43 percent against theaters' 57 percent; when a film grosses more than 300 million yuan, the revenue part beyond 300 million will be split as 45 percent against 55 percent; if the film goes on to gross more than 800 million yuan (US$128.5 million), the share will be 47 percent against 53 percent, said Zhao Jun, the general manager of China Film South Cinema Circuit.

Huayi Brothers Media said their new films like Jackie Chan's "CZ12" and Stephen Chow's "Journey to the West" will abide by these new guidelines.

But Qin Hong, chairman of Stellar Mega Films Ltd., said they will adopt another set of standards to share the box office profit: The first week, distributors get 43 percent; the second week, 41 percent; and in the next weeks 39 percent, right until the curtain falls. Qin said he hoped for the theater chains' support as well as that of audiences. The gradual reduction model may please theater bosses and lead to an increase in show time.

It currently remains unclear whether or not other distributors and theaters will follow the two new standards or maintain the old one (43 percent). Negotiations are still ongoing. Nevertheless, the dispute now temporarily spawns two other profit share models, which is a landmark.

General manager of Wanda Cinema Line Corp. Ye Ning commented, "The profit share should not always be the same for all the films and ordered by government. The blockbusters should have high shares and the lower-rated box office films should be subjected to low shares. This is the result of the market lever. It is significant for the further optimization of China's film market resources."

However, the coalition between the five major distributors may eventually dissolve. It was previously expected to be a long term seesaw battle between distributors and theaters, but now it has become quite clear that the distributors are only acting in their own individual advantages and will even go head-to-head with other distributors to gain more screening time slots from theaters, industry insiders said.

To ease the tension, China's film authorities announced last week that they will reward subsidies to film companies and theaters when the box office revenues reach a certain point.

Wang Zhonglei, boss of Huayi Brothers, said at the "Back to 1942" premiere, "Outside, people are talking about who beats who and who compromises, I don't agree with that. This is the normal process of negotiating. I hope that in the future, everyone will ease up on the language, and tone thereof, used with each other. If a film cannot be normally released, the only one who will suffer, is China's film industry. "


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