By Sharon Waxman
February 17, 2012
China agreed to significantly increase market access for U.S. movies in order to resolve an outstanding trade dispute, The White House announced on Friday.
The concession comes as part of an attempt to resolve outstanding issues related to films after the United States won in a World Trade Organization dispute last year.
“The agreement announced today will allow significantly more job-supporting U.S. film exports to China and provide fairer compensation to U.S. film producers for the movies being shown there,” the White House said.
Read more: Top Industry Execs Meet With Biden
The Motion Picture Association praised the agreement as one that would allow 50% more U.S. films in the Chinese market, and noted the following concessions:
>>China will permit 14 premium format films (IMAX, 3D) to be exempt from the 20 film import quota, which remains in place
>>The box office share US studios earn under the master contract increases to 25% from 13%
Senator Chris Dodd, Chairman and CEO of the MPAA issued a statement Friday night:
“This landmark agreement will return a much better share of the box office revenues to U.S studios, revising a two-decade-old formula that kept those revenues woefully under normal commercial terms, and it will put into place a mechanism that will allow over 50% more U.S. films into the Chinese market.”
The good news provides a welcome boost for Dodd, who with the MPAA last month suffered a very public defeat when broad anti-piracy legislation stalled in Congress after a public and social media firestorm.
Chinese Vice President Xi Jinping met with Vice President Joe Biden in Los Angeles on Friday, on the final day of his visit to the United States. Xi is expected to become president of the world’s most populous nation next year. He visited a trade conference downtown, and later visited a suburban school in South Gate that specializes in Asian studies (pictured).
Biden announced the deal and said: “This agreement with China will make it easier than ever before for U.S. studios and independent filmmakers to reach the fast-growing Chinese audience, supporting thousands of American jobs in and around the film industry.”
China represents the largest untapped international market for American movies, but up to now its market has been tightly controlled by quotas. Still, the three highest-grossing films in China last year came from the the U.S., led by “Transformers 3,” which took in $172 million there.
Walt Disney Co. chairman Robert Iger said: “This agreement represents a significant opportunity to provide Chinese audiences increased access to our films.”
”For Independents, this agreement is momentous,” said President-CEO Jean Prewitt of the Independent Film and Television Alliance. “Our sector has been unable to benefit fully from the existing revenue-sharing importation quotas and has had limited avenues through which to distribute.