Ticket Price Hike Raises Debate Over Profit Sharing

2011/12/2 16:26:00 (Beijing Time)   Source:China Daily    By:Sun Li

BEIJING - Before the movie maestro Zhang Yimou's much-anticipated epic, The Flowers of War, hit domestic theaters, a battle had taken place between distributors and cinemas over ticket prices and profit sharing.

The distributors of the movie, Beijing New Pictures Film, Huaxia Film Distribution and China Film Group, recently announced the minimum price for one of the film's ticket will increase by 5 yuan (80 cents). They also said the distributors will have the right to take 45 percent of the production's profits, and cinemas will have the right to the remaining 55 percent.

As a result of the change, the share of the pie going to distributors has risen by 2 percentage points while that going to the cinemas has decreased by the same amount, said Liu Hongpeng, deputy director of the Beijing Film Distribution and Screening Association.

"That was the critical point leading to the conflict," Liu said.

He said the higher ticket prices will inevitably irritate filmgoers and he is afraid they will turn around and blame the cinemas.

"The average price for a film ticket in Beijing is 35 yuan," Liu said. "According to what was announced by the distributors, the film's minimum price will be 40 yuan. That's a record price."

Believing their interests had been compromised, eight prominent cinema organizations, including Beijing Film Distribution and Screening Association, Shanghai United Circuit and Zhejiang Time Cinema, threatened on Nov 22 to boycott the movie if the distributors did not adjust their rules governing ticket prices and profit sharing.

Zhang Weiping, board director for Beijing New Pictures Film, which produced The Flowers of War, said the price rise is justified since the film runs for 145 minutes and cost 600 million yuan to make, the most ever poured into a Chinese film.

"The cinemas have taken fewer risks than the investors in the film," Zhang said. "There is nothing wrong with investors making more money than the cinemas."

With the tensions rising between the parties, the State Administration of Radio, Film and Television, the country's broadcasting watchdog, has stepped in as a mediator.

Tong Gang, director-general of the administration's film bureau, presided over a negotiation meeting that brought representatives of both the cinemas and the distributors together on Nov 23.

Among its results: There will now be no boycott of the film and the proposed profit-sharing arrangement will be applied only to the first 500 million yuan the film makes at the box office, Liu Hongpeng said.

"If box-office revenue exceeds 500 million yuan, cinemas will be allowed to take a greater percentage of the profits," Liu said.

Liu said the film's minimum ticket price will vary from place to place. In China's four first tier cities - Shanghai, Beijing, Guangzhou and Shenzhen - it will be 40 yuan. In the country's 56 second tier cities, including Wuhan and Chengdu, it will be 35 yuan, and it will be 30 yuan in still others.

"All these are proposals in a first draft and can be changed," Liu said.

"But if the film's ticket price goes up this time, the ticket price of other films might be raised as well in the future," he said.

Kang Yilong, a regular cinemagoer in Beijing, said the actual price of a ticket is often twice the amount of the minimum price.

"When the minimum ticket price is 35 yuan, which happens very often here, the full ticket price will be 70 yuan," Kang said. "But when it becomes 40 yuan, the full price will be 80 yuan. So I will have to pay 10 more yuan than I usually do to watch a film."

The Flowers of War is set in 1937 in Nanjing and stars the British actor Christian Bale, who plays a priest who helps a group of courtesans escape from Japanese troops. It is scheduled to be released in China on Dec 16.

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