China’s New Film Industry Promotion Law (Draft)

四月 19, 2016

China is now on track to overtake the United States as the world’s largest film market in the next few years. The global box office has grown slowly, with worldwide receipts reaching US$38 billion in 2015, up from US$36.4 billion in 2014. Much of the growth was powered by China, where box office receipts jumped 49% in 2015 to reach US$6.78 billion, after growing 34% from the previous year. Heading into 2016, theatrical box office revenues in China grew by 50% in the first three months of this year. Some projections hold that China may top US$10 billion in box office revenues for 2016, nearly totaling the 2015 box office in North America of US$11 billion.1

While growth in the Chinese box office is being fueled in large part by growing demand for Chinese language films, English language films are also benefiting from that growth. By way of illustration, Transformers: Age of Extinction was the first film to make more than US$1 billion at the global box office in 2014. The statistics show that the film has only made US$241 million in the United States, but earned over US$300 million in China alone.2 It is not unheard of for a movie’s Chinese haul to exceed its U.S. take: recent examples include Pacific Rim, Escape Plan and Need for Speed. Pacific Rim only pulled in US$101 million at the U.S. box office in 2013, but earned another US$111 million in China alone.3

With a view to facilitating development of the film industry and regulating this booming sector, China’s National People’s Congress (the “NPC”) issued a draft of the Film Industry Promotion Law (the “Draft”) on November 6, 2015, for public comment. The period for public comment closed on December 5, 2015. Comprising 58 clauses spread over six chapters, the Draft sets forth detailed provisions on the development, production, distribution and screening of films, as well as supportive and preferential policies in the film industry. It is known as the “first” law in the Chinese film industry.

O’Melveny Partners Larry Sussman, Matthew Erramouspe and Wei Qian have authored an article, detailing key features of the Draft and highlighting its potential impact on making films in China, especially for foreign companies intending to explore and navigate the film businesses in China. The article can be found here.

1 See “Global Box Office Hits Record $36.4 Billion Fueled by China”, available here, and China Box Office Grows by 50% in First Quarter, available here.

2 See “Transformers 4 Is The First Film To Make $1 Billion In 2014”, available here.

3 See “Pacific Rim Grossed More Worldwide Than Any Other Live-Action Original Film This Year”, available here.

This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Larry Sussman, an O'Melveny partner licensed to practice law in Hong Kong and New York, Matthew Erramouspe, an O'Melveny partner licensed to practice law in California, and Wei Quan, an O'Melveny associate licensed to practice law in New York, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.  

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