The joint venture will build a studio facility in Shanghai to foster the film, television and live stage production with the background of booming media market in China, the report said.
The new studio will be majority 55 percent owned by three Chinese public companies, China Media Capital (CMC), Shanghai Media Group (SMG) and Shanghai Alliance Investment (SAI), and 45 percent by DreamWorks Animation.
DreamWorks Animation has made big success in distributing Kung Fu Panda 2 which ranks one of the best-selling movies in China, 2011. To further the achievements, the co-operation with China’s well-known media groups, Shanghai Media Group and China Media Capital, is a rather sensible choice.
Oriental DreamWorks, the US-Chinese joint venture, hopes to release its first film “with Chinese DNA” made in its Shanghai studio in 2016, Jeffrey Katzemberg, the head of DreamWorks Animation announced.
SMG is China’s second-largest broadcaster and has developed different lines by restructuring itself with animation as one of the focus. CMC is a fund backed by SMG and Chinese government banks and financial institutions.
China’s film market is developing at fast pace, but Hollywood movies still dominate China’s box offices. Five of the 10 top-grossing films in China in 2011 were U.S. productions, according to Wall Street Journal.
Although China’s film market is growing fast, there is restriction in importing foreign movies that only 20 movies are allowed to be shown in theatres every year. The idea of joint venture could help bypass the restriction by producing movies in China, said Wei Gu, a Reuters Breakingviews columnist.
Besides, China’s vice president, Xi Jinping, showed support to the “co-operative partnership” during his visit to America recently. It indicates China is willing to open the market and to encourage partnership.
Hollywood is going through a decline in its DVD sales and according to the FT, China is estimated to be the biggest movie market in next decade. With the idea of joint venture, the US market will see a bright future even with the restriction on limited film types.
Sources: The Financial Times, Wall Street Journal, Reuters
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