As an official member of the MPAA, Netflix “will benefit from Chinese access, if they wish to go into the market,” MPAA chief Charles Rivkin told Deadline today. Rivkin was addressing ongoing discussions surrounding a new film agreement with the Middle Kingdom, saying the contract “is being reexamined” and that the USTR is negotiating directly with the Chinese government. Netflix, he said, is “plugged into this agreement” given its MPAA status, but Rivkin also noted it would depend on what the streamer’s “theatrical policies might be” for the market.
This could potentially be good news for Netflix in China, if indeed it ever intends to go the theatrical route there. The streaming giant has been unable to crack the vast market with its online platform. In 2017, it entered a licensing deal with iQiyi which has since expired. The company in February acquired global SVOD rights to this year’s mega-blockbuster The Wandering Earth. The deal excluded mainland China where Youku retained dibs.
Overall, the MPAA’s previous five-year agreement with China (which pre-dates Netflix’s membership) went into effect in February 2012, when the number of quota films was increased as was the revenue share, which was upped to 25%.
A new set of terms has been stalled amid Donald Trump’s on-and-off trade war with the Middle Kingdom, but a “hopeful” Rivkin said today that it is “in the interest of both countries to find a resolution,” particularly as China’s box office has grown so exponentially.
Among the terms the studios have been understood to be desirous of are another increase in the number of films officially allowed into the market on an annual basis as well as a hike in the share of turnstiles.
The crackdown in the wake of the Fan Bingbing scandal has led to a production slowdown as local companies scramble to comply with government scrutiny. And with that, China this year is expected to need Hollywood product more than ever to fill its screens. Already in the past two years, it has gone beyond the contractual 34-film quota floor, granting access to a greater number of studio movies in the fourth quarter.