China May Raise Quota Floor, Revenue Share For Hollywood Movies – Report

With China and the U.S. returning to the negotiating table as regards the film industry, the Middle Kingdom is expected to allow more Hollywood movies into the market, state news media reported today. Under the current five-year deal, which was signed in February of 2012, there is a quota floor of 34 foreign films which are imported to PROC screens.

The Memorandum Of Understanding that was agreed back in 2012 lifted the quota from 20 to 34 and increased revenue share from 13% to 25%. With consulations beginning on the next MOU, the studios have been eyeing an increase in the movies that can access the world’s second-largest box office market, as well as a hike in the rev share. However, Huang Guofeng, an analyst from Beijing-based consultancy Analysys International, told The Global Times that any increase in the box office share is not likely to be as big as the 2012 jump.

Another thing the studios are understood to covet would be the ability to set their own release dates. Those are currently controlled by local authorities and often Hollywood films are positioned against one another which can cut into profits.

Towards the end of last year, in a last-ditch attempt to increase box office after growth slowed in China, the powers that be rushed in a number of Hollywood titles which resulted in the total for 2016 increasing to 39.

The negotiations are beginning amid uncertainty about the administration of Donald Trump’s policies towards China. However, in a phone call with Chinese President Xi Jinping this morning local time, Trump eased his earlier stance on Taiwan and agreed to honor the longstanding “one China” policy. He has previously suggested he would raise trade tariffs on Chinese goods, and been tacitly warned by Xi that in a trade war, “No one emerges a winner.”

Joanna McIntosh, EVP of Global Policy & External Affairs at the Motion Picture Association recently commented, “The MOU with China, signed in 2012, has provided American businesses with greater access to the Chinese market, boosting U.S. film and television exports and creating high-quality jobs and economic growth at home. We look forward to working with the Administration to continue building on this progress and supporting creativity.”