Chinese regulators have introduced a special subsidy for locally produced movies to help offset the effects of tough competish from Hollywood pics.
The managing committee of the National Film Development Fund, which is linked to the regulator, the State Administration of Radio, Film and Television, takes 5% of all B.O. revenues, but it has said it will return all or part of this cut to theaters that show more local movies.
Imported movies, mostly from Hollywood, are eating into local box office.
Chinese B.O. reached $2.1 billion at the end of October, up more than 40%, and more than the whole of last year, but the share for local pics fell to 41% from around 60% due to the rise in imports.
The 5% cut is used to "support public services" right now, but under the new policy, theaters can get the 5% back if more than half their yearly revenue comes from local film. If homegrown fare accounts for 45% or 50% of B.O., then the theater operators get 80% of the 5% take.
If any less than 45% of revenues come from local movies, then the theaters do not get the bonus.
"Surely it is good news for theaters," Chen Zheng, manager of Saga Cinema in Beijing, told China Daily. "It urges us to think about how to better promote Chinese films and balance their screening schedules with those of Hollywood ones."
The committee will also give bonuses to local 3D or large-format films.
Competition has intensified because the quota of foreign films in Chinese theaters has increased from around 20 to 34, including Imax and 3D movies.