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Studios Still Bit Actors in China

Hollywood executives salivate over the mass market but are thwarted by booming piracy, a `Da Vinci Code' ban and other setbacks.

June 18, 2006|Jim Puzzanghera and Mark Magnier | Times Staff Writers

For Hollywood, the road into China has become such a long march that film executives are rethinking their expectations for the elusive market.

The decision by Chinese officials this month to abruptly pull "The Da Vinci Code" from theaters, even though the thriller was a hit with moviegoers, marks the entertainment industry's latest frustration with a communist government that critics see as wary of Western media, overprotective of its filmmakers and lax on rampant piracy.

China "is making a transition from insulated country to more openness," said Jim Gianopulos, co-chairman of Fox Filmed Entertainment. "Anybody who thought China would be an overnight bonanza was wishfully hoping."

With 1.3 billion people and a growing middle class, China is a market that has long made studio executives salivate, especially since officials in 2001 doubled the number of foreign films shown annually in its theaters, to 20. Hollywood's take in China leaped from $24 million in 2000 to $67 million in 2005.

But that amount is relatively small for a country that size. The industry made about the same in Switzerland last year.

Veteran entertainment lawyer Peter Dekom, who advises clients on China, said it was impossible to forecast how much money could be made there.

"They will open up the doors wide and tell everybody to rush in, and six months later they'll say, 'That's not what we want,' " Dekom said.

Many industry executives wonder whether they would be better off covering their bets by developing other overseas growth markets such as India and Russia. Walt Disney Co. recently hired a former Russian media executive to head a new office in Moscow. Sony Pictures Entertainment is planning its first Indian film, "Saawariya," a collaboration with leading Bollywood director Sanjay Leela Bhansali.

Executives are especially disillusioned that China hasn't done more to stop the sale of cheap bootlegged movies that proliferates on its streets.

On Friday, in front of the Beijing Friendship Store a few blocks from the U.S. Embassy, a man carrying a black shoulder bag was working the street. The 35-year-old man, who would identify himself only by his family name, Li, said he had been doing this for six years. Even though "The Da Vinci Code" is no longer in theaters, the man said, he sells five or six bootleg versions a day, making it his top seller.

His DVDs generally go for the equivalent of 70 cents to $1.10, depending on how aggressively customers bargain. He said he earned about $120 a month.

"If the police come, I can run away quickly," he said. "But it's all right now. The cops are all on lunch break."

China had the highest piracy rate of any country in 2005, with 90% of potential revenue lost to copyright-violating DVDs, according to a study by the Motion Picture Assn. of America.

Although "The Da Vinci Code" was pulled from theaters, DVD versions remain widely available on the streets of Beijing and Shanghai. Along with costing Hollywood money -- an estimated $244 million last year -- the availability of cheap DVDs reduces pressure on the government to allow in more foreign films.

"If every movie that has ever been produced is available on the streets, sometimes before it's in normal distribution, it just removes the desire and demand," said Dan Glickman, chairman of the Motion Picture Assn. of America.

Pushed by Hollywood and the high-tech industry, which believes that the value of bootlegged software in China amounts to billions of dollars, the Bush administration is considering filing a formal complaint against China with the World Trade Organization for failure to protect copyrights. China's decision to pull "The Da Vinci Code" could bolster the case.

But trying to read China's film bureaucracy is a challenge, industry experts say.

On censorship matters, China's National Board of Film Censorship and its National Commission of Film Reexamination review foreign films, demanding cuts or rejecting outright movies that members consider inappropriate. Some films are banned for running afoul of China's mores, such as "Brokeback Mountain" with its gay love theme; but studio executives remain puzzled about why China nixed others, such as the popular action flick "Independence Day."

This week, Paramount Pictures received permission to show "Mission: Impossible III" -- partly shot in Shanghai and nearby Xitang -- after agreeing to make editing changes, said producer Paula Wagner.

The cuts show that even the smallest details don't escape China's censors. Concerned about Shanghai's image, they demanded trims in shots that showed laundry hung out to dry in the city.

As unpredictable as China may be, the "Da Vinci Code" decision stunned studio executives. It was the biggest Chinese rollout yet of a U.S. film. And government censors had approved it.

The Sony Pictures film, directed by Ron Howard and starring Tom Hanks, opened on a record 393 screens in China on May 17, 4 1/2 hours before its official premiere at the Cannes Film Festival.

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