Warner Bros., China Media Capital Unveil Joint Venture to Produce Chinese …

20 Sep 2015 | Author: | No comments yet »

China Media Capital, Warner Bros. Seal Flagship Production Pact.

Shanghai: US entertainment giant Warner Bros plans a venture with China Media Capital to develop films for distribution in China and globally, according to a statement Sunday, as Hollywood seeks a greater share of the massive market. The deal, announced on the eve of Chinese president Xi Jinping’s state visit to the U.S. will see the two companies establish a joint venture company Flagship Entertainment.Headquartered in Hong Kong, with offices in Los Angeles and Beijing, the new Flagship Entertainment Group Ltd. will produce a slate of movies for global distribution, with the first titles released as soon as 2016. Local language film-making is pacing the huge scores made by the biggest Hollywood titles and many forecasters have predicted that China’s box office will exceed North America’s within three or four years.

US studios are keen to get a bigger piece of the Chinese market, the world’s second largest box office outside North America with revenue of $4.8 billion (Dh17.6 billion) in 2014, according to the Motion Picture Association of America. With the deal, Warner Bros. will “gain additional insight into the Chinese film industry,” said Kevin Tsujihara, Warner Bros. chairman and CEO, in a statement. The new entity will combine the expertise of the Hollywood studio with China’s preeminent investment and operational platform dedicated to media and entertainment. Headed by Li Ruigang, former chairman of the Shanghai Media Group, CMC has in turn invested in a clutch of TV channels bought from News Corp., the Fortune Star film library and Oriental Dreamworks.

Flagship Entertainment will be owned 51 percent by a consortium of Chinese investors led by CMC, with Hong Kong broadcaster TVB holding 10 percent within the group. At the same time, cashed-up Chinese companies are ramping up investment in the foreign entertainment industry, as the country seeks to boost “soft power” by crafting films which appeal to global audiences. Recently, it emerged that Li and CMC were taking a small stake in one of the holding companies that control Television Broadcasts (TVB), Hong Kong’s dominant free to air broadcaster. CMC founder and chairman Li Ruigang said in the statement that the deal would “further CMC’s commitment to building a premier platform for making films that resonate with both Chinese and worldwide audiences”. Earlier this month, official media reported Chinese movie theaters had so far taken in 30 billion yuan ($4.71 billion) in ticket sales, surpassing the 29.6 billion yuan they had taken in for all of last year.

This partnership with Hollywood’s most iconic studio will bring Warner Bros.’ deep experience in creative storytelling and unparalleled expertise in producing global titles to China’s film industry. China’s Huayi Brothers Media Corp plans to jointly produce at least 18 films with US film and television studio STX Entertainment, while Chinese conglomerate Fosun International has taken a stake in US media company Studio 8.

Deals with local studios also look appealing for foreign filmmakers because China still restricts the number of foreign movies that can be shown in Chinese theaters. Its sees itself and the companies it has invested in as content suppliers to Internet-connected consumers. “With the proliferation of platforms available to consumers, premium content is more valuable than ever. In the face of stiff competition from Hollywood, local Chinese films have pulled in $2.83 billion (18 billion yuan) so far in 2015, 60 percent of total box office in the country. It said the partnership will tap Warner Bros.’s distribution expertise and look to make what the industry calls tentpole films, or big-budget films intended to reap big-tickets sales. Thanks to a high degree of openness, capability of external co-operation, an edge in language ability and close ties with the outside world on community levels, Hong Kong has an unique advantage in collaboration in international scientific research and art and culture.”

This creative collaboration between U.S. and China filmmaking partners also allows for the exchange of technical expertise and the development of young Chinese talent for years to come, combining Warner Bros.’ technical and creative knowledge base with CMC and TVB’s access to local talent and market expertise.

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