Good News for Hollywood

In Focus

The Global Times, a prominent state-backed Chinese newspaper, recently reported that the Chinese government is expected to expand its quota on foreign film imports and permit Hollywood a larger share of box-office revenue after government officials and industry representatives from China and the U.S. meet to negotiate trade terms later this month.

Under the current five-year deal which was signed by Vice President Joe Biden and Chinese president Xi Jinping in February 2012, China allows 34 foreign titles per year, with 14 required to be 3D or large-format movies.

Although the idea of expanding the number of films allowed into the country is important, this time around studio heads are looking beyond that quota to Chinese marketing restrictions, distribution demands and ticket-revenue splits.

To enter the Chinese market, Hollywood must submit films for approval by state censors that often mandate editing out objectionable content. Studios hope to increase their share of box-office revenue from 25% to 40%, change rules that allow China to release Western movies simultaneously, and end blackout periods that forbid Hollywood movies during holidays and other popular times in China.

A Complex Picture in China

China now leads the world in the number of its cinema screens. China had fewer than 20,000 cinema screens in 2013 and today boasts close to 41,000, eclipsing the number in the U.S. by several hundred. And the country is still underscreened: There are just 23 screens per million Chinese, compared to 125 per million in the U.S. But in certain locations, the number of people attending these new cinemas is very small. Residents in many of these outlying areas have not acquired the habit of moviegoing, instead opting to watch films online for free. Another factor is their limited household budgets. Meanwhile, ticket prices have risen now that several online ticket services have eliminated discounts. While the Chinese market has huge potential, a moviegoing culture still needs to be painstakingly cultivated outside major population areas.

A New Strategy at Viacom

Viacom, the struggling media giant, unveiled a plan earlier this month to help revitalize Paramount Pictures by integrating the studio more deeply into the fabric of its other brands. It is clearly a strategy akin to what Walt Disney has established with its Marvel, Pixar and Lucasfilm movies.

Kudos to Viacom for this strategy, but let’s not forget that the billions spent by Disney on their three properties has propelled them to be the envy of all other Hollywood studios. A strategy is but a strategy; content is what makes it tick. Viacom in the past has tried to create stronger ties between Paramount and its cable channels—but in the end we are dealing with brands geared to younger moviegoers and there is lots of competition in that arena.

Viacom said that Paramount’s film slate will now include one or two co-branded releases from each of the flagships annually. Nickelodeon and Paramount will collaborate on four films – the first, Amusement Park, will play in cinemas in summer 2018. Additionally, and at the same time, Paramount hopes to bolster its roster of franchises and tentpole releases.

It appears that the Brad Grey regime has been given a chance to build its business, but accountability is what will keep them moving forward.

Remembering Fred Mound

One of the true gentlemen of the motion picture industry passed away recently at the age of 84. Fred Mound was a longtime executive at Universal Pictures and United Artists and served as Universal’s president of distribution in the 1990s.

Mound retired in 1996 after serving as head of distribution for six years. Fred was well-liked, very professional, and supported all industry charities including Will Rogers and the Motion Picture Pioneers. He was succeeded by Nikki Rocco. Fred is survived by his wife of 62 years, Fanny Belle, and three children. This editor knew Fred for nearly 35 years. We all express our condolences to the Mound family.