DreamWorks Animation and China's largest media companies plan to invest more than $3 billion to build a sprawling entertainment, dining and shopping district in Shanghai.
A new joint venture called Oriental DreamWorks announced Monday that the company would open Dream Center — an entertainment hub with theaters, cinemas, restaurants and tourist attractions — in 2016.
The announcement marks the latest effort by Glendale-based DreamWorks and other Hollywood studios to bolster business in the world's most populous country, which this year has surpassed Japan as the world's second-largest market for movies outside the U.S.
It also fits the studio's strategy of trying to diversify its business by expanding into television shows, live entertainment and theme parks. DreamWorks said last month it had agreed to license its characters, storytelling and technology for a theme park at a long-stalled and vacant mall in the Meadowlands, N.J.
The studio behind the "Shrek" and "Madagascar" movies also recently acquired New York-based Classic Media, a company that owns the rights to "Casper the Friendly Ghost," "Lassie," "The Lone Ranger" and other entertainment characters, for $155 million.
China has been the focus of DreamWorks Animation's global expansion. Last year, the company entered into a distribution agreement with China's top online video site, Youku.com.
And in February, the studio said it was partnering with China Media Capital, Shanghai Media Group and Shanghai Alliance Investment Ltd. to launch Oriental DreamWorks. The animation studio in Shanghai will develop and produce Chinese animated and live-action movies and television shows for distribution in China and around the globe. The studio could eventually employ more than 2,000 people.
Its first feature-length animated film will be the third installment of DreamWorks' "Kung Fu Panda," the first co-production in China for any major Hollywood animated feature film. "Kung Fu Panda 3" is set for release in 2016.
The "Kung Fu Panda" movies have been very popular in China, and co-producing the third film in the country could be a financial windfall for DreamWorks Animation, which grossed $92.1 million in China from"Kung Fu Panda 2."
"Kung Fu Panda 3" is the latest high-profile Hollywood film to be co-produced in China. Other co-productions include "The Expendables 2" and the upcoming "Iron Man 3" from Disney/Marvel Studios.
A movie produced by a U.S. and Chinese company is exempt from China's quota on foreign films, which restricts the number of theaters in China where foreign movies can be screened and how much box-office revenue foreign producers can collect.
Oriental DreamWorks announced the co-production and Dream Center project during a ceremony Monday to mark the opening of its new headquarters.
"Oriental DreamWorks is a creative exploration of Chinese and foreign cultural exchanges," said Pimin Zhang, deputy director of the State Administration of Radio Film and Television of China. "Our shared dream is to make full use of precious cultural resources, develop a world class production team, create world-class animated films and thus contribute to the exchange of Chinese culture through the world."