Bona Opens New China Back Door 博纳欲与美国同行合拍电影中国同好莱坞恋情升温

By newsdoug on April 20, 2012

Bona in co-production talks The growing new love affair between Hollywood and China is taking yet another step forward, with news that New York-listed movie maker Bona Film (Nasdaq: BONA) is in talks with several major US studios to co-produce films for the China market. (Chinese article) In fact, such co-productions aren’t completely new, and many of the other studios have used them in recent years to circumvent a strict quota system that limits the number of foreign films that can be imported to China each year. But Bona’s plan looks particularly aggressive, presenting a potentially interesting proposition for foreign investors looking to buy into the China film story. According to the reports, Bona is talking with a number of major studios, including 20th Century Fox, Universal, Sony Pictures (Tokyo: 6753) and Paramount (NYSE: VIAb) about co-producing movies for the Chinese market. Furthermore, the company’s chief executive says his ultimate goal is to make 2 such co-productions a year. Such a large number would mark a big opening into China for the foreign studios, which until recently were only allowed to collectively export 20 of their films each year into China, now the world’s second largest movie market. Beijing recently increased the total by saying it would allow another 13 movies into the market each year using high-tech formats like 3D. Still, the appetite and potential for high-quality films in China is clearly capturing Hollywood’s attention, leading to a recent flurry of moves into China by the major studios. One of those moves, in fact, saw 20th Century Fox’s parent News Corp (Nasdaq: NWSA) take a 20 percent stake in Bona Film itself last month (previous post); accordingly, I wouldn’t be surprised if 20th Century Fox ends up signing the first co-production deal with Bona in this new round of tie-up talks. Bona’s talks come as other major studios are making their own new moves into China, amid increasing signs that Beijing wants to open the industry to more outside investment. Disney (NYSE: DIS) and DreamWorks Animation (NYSE: DWA) both announced new animation joint ventures in China earlier this year (previous post); and HNA Group and Wanda Group have both discussed major new moves to open and expand their domestic theater operations to accommodate the expected big influx of Hollywood-quality movies. (previous post) Another name to watch could be Huayi Brothers (Shenzhen: 300027), one of China’s other major privately held film studios with foreign experience, though that company has tended to focus more on co-productions with other Asian firms. Either way, these foreign-focused Chinese studios could make an interesting investment play into the market as it prepares for major expansion, with the potential to perhaps someday rival some of the major US entertainment giants.

Bottom line: Bona Films’ aggressive pursuit of foreign co-productions reflects the recent opening of China’s film industry, which is forging growing ties with Hollywood.

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