The Telegraph
Since 1st March, 1999
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India chance in China loss
- Hollywood explores other options after ‘long march’

Los Angeles, June 18: For Hollywood, the road into China has become such a long march that film executives are rethinking their expectations for the elusive market.

The decision by Chinese officials this month to abruptly pull The Da Vinci Code from theatres, even though the thriller was a hit with moviegoers, marks the entertainment industry’s latest frustration with a communist government that critics see as wary of Western media, overprotective of its filmmakers and lax on rampant piracy.

China “is making a transition from insulated country to more openness,” said Jim Gianopulos, co-chairman of Fox Filmed Entertainment.. “Anybody who thought China would be an overnight bonanza was wishfully hoping.”

With 1.3 billion people and a growing middle class, China is a market that has long made studio executives salivate, especially since officials in 2001 doubled the number of foreign films shown annually in its theatres, to 20. Hollywood’s take in China leaped from $24 million in 2000 to $67 million in 2005.

But that amount is relatively small for a country that size. The industry made about the same in Switzerland last year.

Veteran entertainment lawyer Peter Dekom, who advises clients on China, said it was impossible to forecast how much money could be made there.

“They will open up the doors wide and tell everybody to rush in, and six months later they'll say, ‘That’s not what we want,’” Dekom said.

Many industry executives wonder whether they would be better off covering their bets by developing other overseas growth markets such as India and Russia. Walt Disney Co. recently hired a former Russian media executive to head a new office in Moscow. Sony Pictures Entertainment is planning its first Indian film, Saawariya, a collaboration with Bollywood director Sanjay Leela Bhansali.

Executives are especially disillusioned that China hasn’t done more to stop the sale of cheap bootlegged movies that proliferates on its streets.

China had the highest piracy rate of any country in 2005, with 90 per cent of potential revenue lost to copyright-violating DVDs.

Although The Da Vinci Code was pulled from theatres, DVD versions remain widely available on the streets of Beijing and Shanghai. Along with costing Hollywood money ' an estimated $244 million last year ' the availability of cheap DVDs reduces pressure on the government to allow in more foreign films.

Pushed by Hollywood and the high-tech industry, the Bush administration is considering filing a formal complaint against China with the World Trade Organisation for failure to protect copyrights.

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