Cinema reels in US investor ( 2003-06-27 08:25) (China Daily)
US entertainment giant AOL Time Warner has agreed
to pay nearly 14 million yuan (US$1.68 million) to take a 49 per cent stake in
Shanghai Paradise Cinema City, an official for the movie complex's parent
company said Thursday.
Shanghai Paradise Co Ltd, one of China's largest cinema chain owners, will
hold the remaining 51 per cent stake and the joint venture complex will be
formally established on July 12, said the official surnamed Wang.
This is the first time AOL Time Warner has invested in a cinema on the
Chinese mainland, indicating that the world's leading entertainment company is
ready to tap the potentially vast local film market.
It was also hailed by experts as a signal of a wider opening of the country's film market
and an expansion of the tiny foreign presence in the local film industry,
as the nation has promised in its World Trade Organization (WTO) commitments.
In the past, overseas investors from the United States, Singapore and the
Hong Kong Special Administrative Region have already held minority stakes in
other Shanghai-based cinemas.
A cinema shared by Eastman Kodak and Shanghai Film and TV Group Co is even
located in close proximity to the Shanghai Paradise Cinema City in Xujiahui,
Shanghai's busy commercial area.
Wang, in Paradise Co's general office, said the firm and AOL Time Warner
inked the investment agreement a couple of months ago on the joint venture. The
complex will have a registered capital of 28.5 million yuan (US$3.4 million).
AOL Time Warner yesterday refused to comment on the move, saying that a
statement on this issue will be forthcoming within two weeks.
Wang said the co-operation actually started at the beginning of this year
and AOL Time Warner has already invested some funds in the cinema complex.
Located on the sixth floor of Xujiahui's Grand Gateway Shopping Mall, the Cinema City
has a floor space of roughly 4,000 square metres and is equipped with nine
screens and 1,400 seats. The complex is also a domestic pioneer in adopting
digital projectors.
"Partnership with AOL Time Warner will enable us to renovate the cinema and
make further investments in this field, which was impossible for us in the
past,'' Wang said.
Moreover, the arrival of AOL Time Warner's managers will also
introduce advanced management technology to Chinese cinemas.
"Both sides considered the other party as the first choice in co-operation,''
Wang said.
AOL Time Warner is the world's leading media and entertainment company, with
holdings including interactive services, cable systems, filmed entertainment,
television networks, music and publishing.
The Chinese partner Shanghai Paradise Co Ltd is the nation's first
joint-stock firm in the culture industry. It was established in 1993 based on
the restructuring of the Shanghai Film Distribution and Projection Company.
It is now a holding company specializing in theatre system integration which
includes film distribution, the design and installation of cinemas,
manufacturing cinema seats and other services such as advertising and tourism.
The company has stakes in more than 50 cinemas in Shanghai and neighbouring
areas.
Shanghai Paradise Cinema City has also produced some of the highest box
office receipts in Shanghai.
Last year, sales revenue for the complex reached 30 million yuan (US$3.6
million).
Experts say AOL Time Warner's new investment also indicates increasing
foreign interest in China's growing cinema market, which generates revenues of
about 1 billion yuan (US$120 million) a year.
For the investors, Shanghai is a particularly important cinema market
in China. While it only represents about one per cent of China's population, it
accounts for 12 per cent of the country's total box office revenue.
Historically, the Shanghai audience has also always been a trendsetter in China
in the consumption of both domestic and imported films.
