Five Chinese film distributors suddenly issued an ultimatum to theaters, requesting a raise in their profit shares yesterday. But theater bosses said no.

Wu Hehu, a senior manager for Shanghai United Circuit Ltd., told Southern Metropolis Daily that nationwide theater chains couldn't accept either the form or content of the distributors' notice.

China Film Group Corporation, Huayi Brothers Media Group, Bona Film Group, Stellar Mega Films Ltd., and Enlight Pictures Co., Ltd. have joined forces to ask theaters to raise their box office profit shares from 43 percent to 45 percent as the new year's film season starts to take shape, and blockbusters, including Feng Xiaogang's "Back to 1942" and Jackie Chan's "CZ12" will soon hit Chinese screens.

Most cinema bosses are keeping a low profile over the dispute, while vaguely stating that distributors and theaters should understand one another. But Wu responded clearly and strongly by saying both parties should sit down and negotiate and refrain from making one-sided demands.

Wu also said Shanghai United Circuit has gathered a string of other theater chains to boycott distributors' unilateral "unreasonable demands" and gave strong words, saying: "If they insist, and we both cannot reach a consensus, we will stop screening their films!" Wu said film companies unilaterally asked to raise their share just before new golden film season, "they have a dirty agenda."

But Qin Hong, chairman of Stellar Mega Films Ltd., said: "I'm a film producer and I also work in the theater business. I understand film companies are under great pressure. This is actually the leverage effect. The question of profit sharing is not just about current costs, everyone should understand the trend." Qin said he is optimistic and expects theaters to eventually concede and the profit share will rise for most films during the next year.

Over the weekend Chinese theater chain managers will meet in Shenzhen to attend an industry conference, and will likely discuss how to respond to the dispute. A Wanda Cinema official said the negotiation results may come out next week and promised that the dispute has nothing to do with audiences. "We will not raise ticket prices."

In a notice issued to theater chains yesterday, all five film distributors said that China's home-made blockbusters have contributed significantly to the national film market. Yet they complained that as they continue to produce films using state-of-the-art technology and high levels of manpower, production costs will continue to rise. Therefore all five giants stated: "In order to boost the creation and production of so-called home-made movies, improve their quality and gradually smooth over the economic relationships between the stages of producing, distributing and screening, we five companies have reached a consensus that the profit share proportion for distributors should not be lower than 45 percent - against the theaters' 55 percent."

But many industry veterans hold a different opinion. Rao Shuguang, the vice director of China Film Archive said: "In modern film industry chains, it is reasonable for producers to get 50 percent of the profit, otherwise producers assume all the risk."

Peter Chan became the first director to address this issue, saying: "Theaters are like parents, and provide us with food and clothes. If they can raise the share of profit for us filmmakers, it will be a great encouragement, which will raise the film's quality and will attract more audiences, then the box office revenue will be high and producers, distributors and theaters will all benefit."

Gao Jun, former vice general manager of Beijing New Film Association Co., Ltd, said there is no right or wrong answer to this issue. For theaters, the profit is so small, and their life is not easy, considering theater chains have to provide manpower, water, electricity and expensive annual rent to their costs.

Zhao Jun, the general manager of China Film South Cinema Circuit, wrote in his blog, saying China's film resources and wealth were taken by only a few people. "Theater chains and cinemas are the pillar of the entire industry. Now film projectors are more expensive because we all started using digital projectors -- a simple comparison will show the great contributions theaters have made to the industry, and will help producers and distributors reduce film costs."

"But where did the money go? It goes to movie stars!" Zhao continued. "They lose money? No. They took in a lot! Moreover, a cinema worker earns 2,500 yuan a month while a production company's staff member can earn up to 7,000 yuan a month! While cinema's construction and investment are gradually standardized, most producers still take risks, don't follow market trends, and don't produce enough high-quality films. And poor film quality means low profits."

Go to Forum >>0 Comment(s)