Foreign film releases are limited to 20 per year, and usually 12-15 are American.
KNIGHT RIDDER NEWSPAPERS
BEIJING -- Chinese seem to have a taste for American movies, judging by the way Hollywood films move off the shelves at small DVD shops across the nation.
Fat good it does Hollywood, though. The movies are all pirated.
"Piracy is out of control. It's running at 95 percent" of U.S. films sold in China, said Mike Ellis, the senior vice president of the Asia Pacific region for the Motion Picture Association, which promotes American films globally.
Hollywood's complaints about piracy and other obstacles are part of a chorus of gripes from U.S. industry -- running the gamut from pharmaceuticals to software -- over lopsided trade arrangements with China. Yet the difficulties that American movie studios face in China resonate with a restless Congress as the U.S. trade deficit with China increases.
China limits foreign films to 20 theatrical releases per year, imposes censorship and allows pirates nearly free rein.
Unfair piracy issue
The American film industry calls the situation "wildly unfair," and U.S. Cabinet members visiting China nearly always bring up the DVD piracy issue.
"We -- just recently walking around Beijing -- were offered a DVD of the new 'Star Wars' at $1, and we had our choice of many, many movies," Commerce Secretary Carlos Gutierrez said earlier this month. He said such piracy was equivalent to counterfeiting money.
China's communist leaders don't readily admit it, but they appear to harbor lingering doubts about showing decadent capitalist entertainment in their movie houses. They also, however, want to protect China's own nascent film industry.
"We need some time for the Chinese film industry to develop. Otherwise the industry will be totally destroyed," said Lu Chuan, a prizewinning young director.
China's films are getting better, and their success abroad is exacerbating Hollywood's complaints. In the past year, Chinese-made movies such as Zhang Yimou's martial arts epic "House of Flying Daggers" as well as Stephen Chow's chop-socky comedy "Kung Fu Hustle" have done well in U.S. theaters. The overseas box-office receipts of Chinese-made movies have soared, doubling last year to $133 million, according to China eCapital, an investment bank.
That overshadows the $81 million combined box office for all 20 foreign films that were released in China last year (15 of them American-made), the bank said. The top foreign hits were "Lord of the Rings: The Return of the King," "Day After Tomorrow" and "Troy."
It's little wonder that movies earn poor ticket sales in China: Most theaters are in pitiful shape, with lumpy seats and odor problems.
China has only about 2,500 movie theaters for its 1.3 billion people, compared with about 30,000 movie theaters in the United States, with one-fifth the population.
If you build it ...
Hoping to lure more Chinese moviegoers, Time Warner's Warner Bros. has entered into a joint venture to build modern theaters in affluent cities such as Shanghai and Nanjing.
Whether they'll see the latest Hollywood blockbuster as they sink into their stadium seating at the local multiplex, drinking green tea, is another question.
While Chinese movies enjoy unfettered access to U.S. theaters, dependent only on commercial viability, Chinese law requires American studios to submit films to China Film, the monopolist distributor. Of the 20 foreign films that China accepts each year, on approval from censors, 12 to 15 are usually from Hollywood.
U.S. movie studios get a tiny portion of ticket revenue -- somewhere from 13 percent to 17 percent -- which Ellis called "one of the lowest rates in the world."
The hundreds of Hollywood films that don't make the cut each year usually show up in China anyway, appearing in ubiquitous DVD shops that offer pirated movies at a buck a pop.
"A lot of the very movies we can't get in here are here. You can find them all over the place," said Dan Glickman, a former Kansas congressman who heads the Motion Picture Association of America, a Washington-based lobby whose members include Walt Disney Co., Warner Bros., Columbia Pictures and Paramount Pictures.