February 17th, 2012
03:35 PM GMT
Hong Kong, China (CNN) – It’s likely that lots of people in Tinseltown are pretty happy - dare I say giddily animated. That probably includes China’s Vice-President Xi Jinping, who’s widely expected to succeed Hu Jintao as president of China in 2013.
That’s because Xi, wrapping up his week-long U.S. trip in Los Angeles, is expected to announce a major $2 billion silver screen deal between two Chinese firms and Dreamworks Animations - the latter famous for its witty, highly-produced and family-friendly cartoon flicks like Kung Fu Panda, Shrek and Madagascar.
In focus is a huge joint venture with the U.S. animation studio involving major Chinese state-owned media companies. One is Shanghai Media Group,China’s second largest broadcaster. The other is China Media Capital, a fund that backs China’s entertainment industry.
The story centers on the construction of a brand-new film studio – not in Hollywood, but in Shanghai.
The plotline focuses on the maturation of China’s adolescent film, television and live stage industries, with the help of Dreamworks’ expertise.
And the score may sound like the theme from Jaws, when the great white nears to take a chomp out of another hapless victim: Western company wants access to China (duh duh)…China gives permission, allows Western company in and learns as much as it can (duh duh, duh duh)…China then boots Western company out, copies what it has learned and exports similar products (cue bloodcurdling scream).
Foreign film makers may rightly be shouting about how this expected deal may benefit them, given China allows just twenty foreign films to be shown in the country’s theaters.
That is not expected to change with Xi’s visit to Hollywood, but it may turn out to be a loophole for Dreamworks at least.
Once it’s set up in China, the movies it helps to produce out of that new Shanghai studio may not be counted as foreign films, meaning Dreamworks could reach more eyeballs through more movies than other Western competitors who don’t have such a deal.
Looking ahead, other foreign movie companies may want to consider something similar for greater access too.
In 2011, China raked in $2 billion in movie ticket sales to be the world’s number three movie market. Japan barely edged out its neighbor, pulling in $2.3 billion. The U.S. maintained its number one ranking with just more than $10 billion.
But within the next ten years, China is expected to boast the most ticket sales in the world.
And movie companies both inside China and out will not want to miss that multi-billion dollar rush to the box office.
From around the web
About Business 360
CNN International's business anchors and correspondents get to grips with the issues affecting world business, and they want your questions and feedback.