Last Monday two major Chinese film firms—Huayi Brothers Media Corp. and Beijing Enlight Media Co.—confirmed new movie deals with Hollywood companies. They declined to mention the names of those companies for unknown reasons, but according to Agence France-Presse, Huayi Bros. partnered with film and television studio STX Entertainment.
Huayi Bros. and STX have agreed to co-produce at least 18 films by the end of 2017. Huayi will be in charge of distributing some of the films in China and the partners will share global revenue.
In the second deal, there is no news yet on who Enlight’s Hollywood partner is. Enlight said it and it’s mystery partner will co-produce franchise films based on a hit book series of ‘The Hunger Games’-level popularity, although the series is unknown at this time. Enlight also said it has invested in three different entertainment companies and will be working on projects with either Netflix or NBC.
Meanwhile, a subsidiary of Hunan TV and Broadcast Intermediary Company—TIK Films—struck a $1.5 billion deal with Lions Gate Entertainment Corporation, which Xinhua called “the biggest overseas deal in China’s film-making history.” The Chinese company will be paying 25 percent of the production costs of at least 50 Lionsgate films, and receiving 25 percent of all returns. It will be able to distribute four of the films annually in China, and the two have announced plans to co-produce Chinese films as well.
Chinese and American film companies have been embracing teamwork in recent years. Why? As The Wall Street Journal says, “Hollywood studios bring story ideas and blockbuster know-how to Chinese movie theaters…Chinese producers offer easier access onto Chinese movie screens and… well, lots of money.” Chinese theaters brought in $4.8 billion last year, making it the second largest movie market in the world after the United States.
Unfortunately for US companies, China’s movie market is not openly accessible. China limits the number of foreign movies it imports each year, and as a result, Chinese films will often outsell those from the United States. Fortunately, deals and partnerships forged with Chinese companies may help American companies gain access to the massive market.
Due to the benefits of cooperation, these partnerships have been happening for years. Lionsgate has been looking to partner up with a Chinese company since last year. Its representatives met with Alibaba Group Holding Limited founder and executive chairman Jack Ma and Wang Jianlin, founder and chairman of the Dalian Wanda Group, among others, but TIK Films won the deal in the end.
Last year, Huayi Brothers invested $130 million into its US subsidiary which invests, produces, and distributes entertainment in the states. It also intended to invest around $145 million in Studio 8 before Fosun International jumped in and became the studio’s main Chinese partner that June. In 2012, Wanda Group bought the American theater chain AMC Entertainment for $2.6 billion.