LOS ANGELES - While most executives in the American film business were busy handicapping the prospects of late Oscar entries like “Zero Dark Thirty†and “Les Misérables,†those who run China's movie business - the officials in the State Administration of Radio, Film and Television - have been occupied with a different problem. Namely, how to sustain ticket sales for the country's own films, like the historical epic “Back to 1942,†even as Hollywood films like “Life of Pi†fill China's theaters.
Their solution is one that may not cheer Hollywood studios looking to export more films to China. In a recent circular to the Chinese film industry, state officials declared that they will give a financial incentive to any theater chain that gets at least 50 percent of its annual box-office revenue from Chinese films.
Writing for The International Herald Tribune on Friday, Didi Kirsten Tatlow mentioned the incentive while reporting that Tian Jin, the dep uty director of the Chinese film agency, had noted at a recent news conference that the market share of Chinese films in China had dropped to 41.4 percent.
The new incentive, described in more detail a recent post by the China film consultant Rob Cain, is aimed at getting that share back to 50 percent by creating a rebate to theater owners of the fees - 5 percent of all ticket sales - paid by exhibitors to the National Film Development Funds Management Committee.
If half of a theater owner's revenue comes from domestic films, the entire fee is refunded. If at least 45 percent of sales come from Chinese films, 80 percent of the fee is returned. If the percentage falls below 45 percent but exceeds the domestic market share in the previous year, 50 percent of the fee comes back.
The new system gives China's theater owners a strong incentive to keep a lid on films from the United States and elsewhere even as a revised quota system admits as many as 34 foreign f ilms each year. And some privately argue that the incentives give the Chinese exhibitors an added reason to attribute revenue from Hollywood movies to local films - an illicit practice that is suspected by some to have kept the actual receipts collected by Hollywood studios artificially low.
Either way, the new policy points toward new complications in a trans-Pacific business relationship that is supposed by many to be Hollywood's future.
Michael Cieply covers the film industry from the Los Angeles bureau.
