The Hollywood entertainment marketing company the Cimarron Group has closed its office in Beijing after less than a year in operation.
The development underscores the challenges American companies face when trying to do business in China, where movies must meet the approval of government censors and studios are subject to rules that restrict how much revenue they can collect on box-office ticket sales.
Cimarron, which creates movie trailers and TV spots as well as print and digital ad campaigns for major studio movies, opened the office last year as part of an effort to grow its business in China, now the second-largest market for Hollywood films.
But the office, which employed about six people, quietly shut down late last month, eight months after Cimarron received a business license from the Chinese government to operate without a partner.
Company executives said the decision became necessary after one of its major clients, MGM Grand, pulled out of a planned casino project in Vietnam. They also acknowledged that progress had been slower than anticipated in building up its film marketing business in China.
"The system they have now is very much like the system we had in America years ago, where directors are cutting their own trailers,'' said Senn Moses, the president of Cimarron Asia. "So the idea of using an outside vendor who is specialized in marketing and understands segmented audiences is rather new."
But Moses stressed that Cimarron would retain a presence in China and would eventually open a smaller office in the future.
"We're retrenching but our commitment to staying there is very real," Moses said. "We've had some hiccups with some of our hospitality clients and we're just figuring out how to handle our operating expenses."
In addition to MGM Grand, Cimarron clients include the consumer products division of 20th Century Fox and Village Roadshow, producer of "Man of Tai Chi," an upcoming Chinese co-production that stars and is directed by Keanu Reeves.
But one former employee protested Cimarron's handling of the closing, saying workers were not given any severance and were owed as much as one week's pay.
"All of us were very excited to join this company," said Echo Gao, a former account director at Cimarron Asia. "We were very sad to hear this news about the company. They didn't give us enough time to react. It's such a shock."
Gao, who handled public relations work for Cimarron Asia, said she has filed a complaint with government officials in Beijing over how the workers were treated.
Moses said he could not comment on Gao's complaint because he had not seen it.
Cimarron is among several entertainment companies and studios in Hollywood that have signed deals in an attempt to capitalize on the rapidly growing theater business in China.
DreamWorks Animation SKG and Walt Disney Studios have unveiled joint venture plans to build animation partnerships in China. Raleigh Studios in Hollywood was tapped to manage Wuxi, a sprawling facility outside of Shanghai that will be a hub for China-U.S. productions. Portions of the upcoming Marvel Studios movie "Iron Man 3" were filmed in China.