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Legendary East, which will produce English-language movies in China and export them globally, is partnered with Asian entertainment conglomerate Huayi Brothers Media Corp. It also on Sunday announced plans to list shares on the Hong Kong Stock Exchange with an initial enterprise value of $441 million. Even companies that don't have expansive Chinese business partnerships are finding new ways to reach the market. When Nu Image Films' "The Expendables" went to China last year, the company collected a flat fee in the six figures, even though the Sylvester Stallone action flick grossed more than $32 million there.
For the "Expendables" sequel, which starts shooting next month, Nu Image hopes to partner with a Chinese distribution company and shoot some scenes in the country. Executives at the independent studio believe a co-production deal could net them some $8 million, or more than 15 times what they collected for the first "Expendables" under the flat-fee system.
"The demand for product in China is going to grow exponentially," said Trevor Short, Nu Image's chief financial officer. "And the net income can be enormous because the [distribution and marketing] costs are so low."
But in order to qualify for a co-production, American scripts must be approved in advance by the government, which can be unpredictable in what it censors and what it doesn't. "No one really knows where the boundaries are," Short said.
Sony Pictures made a similar co-production deal on last year's remake of "The Karate Kid," which it made with China Film Group. The movie was a hit in most of the world but it flopped in China.
Still, no major Hollywood studio has formed a long-term partnership to co-produce films with Chinese companies. However, they have found some ways to release a few movies in the country outside of the 20-import quota.
To boost the rollout of high-tech projectors in the country's theaters, China in 2007 began allowing several pictures per year into the country on a revenue-share basis if they played only in digital theaters. Since 2008's "Journey to the Center of the Earth" kicked off the program, digital projection has become so common that movies like "Toy Story 3" and "Shrek Forever After" received nationwide releases in China by utilizing the exception.
"Show me another country where you can release a movie 100% in 3-D digital," said Jeff Blake, the vice chairman of Sony Pictures. The studio's animated film "The Smurfs," which in China is playing solely in high-tech digital theaters, has grossed $26.1 million since opening Aug. 10.
One other way for U.S. filmmakers to earn money in China is by making Mandarin-language productions in the country, which yielded Fox International's hit "Hot Summer Days" and Disney's flop "High School Musical: China."
Ultimately, American film companies don't want to have to find ways around the quota — they want to eliminate it. And though such a development isn't likely in the near-term, some believe it's inevitable.
"I'm optimistic," Imax's Gelfond said. "So much is being invested in the infrastructure in Chinese exhibition. And I think the government is going to want to support the infrastructure."
Times staff writer David Pierson in Beijing and Amy Kaufman in Los Angeles contributed to this report.
john.horn@latimes.com
ben.fritz@latimes.com
For the "Expendables" sequel, which starts shooting next month, Nu Image hopes to partner with a Chinese distribution company and shoot some scenes in the country. Executives at the independent studio believe a co-production deal could net them some $8 million, or more than 15 times what they collected for the first "Expendables" under the flat-fee system.
But in order to qualify for a co-production, American scripts must be approved in advance by the government, which can be unpredictable in what it censors and what it doesn't. "No one really knows where the boundaries are," Short said.
Sony Pictures made a similar co-production deal on last year's remake of "The Karate Kid," which it made with China Film Group. The movie was a hit in most of the world but it flopped in China.
Still, no major Hollywood studio has formed a long-term partnership to co-produce films with Chinese companies. However, they have found some ways to release a few movies in the country outside of the 20-import quota.
To boost the rollout of high-tech projectors in the country's theaters, China in 2007 began allowing several pictures per year into the country on a revenue-share basis if they played only in digital theaters. Since 2008's "Journey to the Center of the Earth" kicked off the program, digital projection has become so common that movies like "Toy Story 3" and "Shrek Forever After" received nationwide releases in China by utilizing the exception.
"Show me another country where you can release a movie 100% in 3-D digital," said Jeff Blake, the vice chairman of Sony Pictures. The studio's animated film "The Smurfs," which in China is playing solely in high-tech digital theaters, has grossed $26.1 million since opening Aug. 10.
One other way for U.S. filmmakers to earn money in China is by making Mandarin-language productions in the country, which yielded Fox International's hit "Hot Summer Days" and Disney's flop "High School Musical: China."
Ultimately, American film companies don't want to have to find ways around the quota — they want to eliminate it. And though such a development isn't likely in the near-term, some believe it's inevitable.
"I'm optimistic," Imax's Gelfond said. "So much is being invested in the infrastructure in Chinese exhibition. And I think the government is going to want to support the infrastructure."
Times staff writer David Pierson in Beijing and Amy Kaufman in Los Angeles contributed to this report.
john.horn@latimes.com
ben.fritz@latimes.com
