Theater construction booming in China, but what does it mean for Hollywood?

posted by CSWalczak on March 11, 2011 at 9:44 am

LOS ANGELES, CA — The pace at which new, western-style cinemas are going up all over China is currently very rapid and accelerating. However the implications for films produced by U.S. studios and theater chains is unclear, as China currently has strict limits on the number of films that can be imported into the country and does not allow foreign cinema operators to have a majority interest in any theater ownership.

Still, the main drivers are practical. Unlike in the U.S., where DVD sales can account for as much as 40% of a film’s revenue, rampant piracy has forced studios here to depend almost exclusively on domestic box-office receipts. Bankrolling more pictures and boosting profits requires more screens.

Then there’s boredom. As Chinese workers grow richer and have more leisure time, they’re itching for something to do. The typical ticket costs about $5, slightly less than what many new college graduates earn per day. Still, Chinese movie fans have shown a willingness to pay a premium for better sound, a better picture and swanky venues to hang out with friends.

There is more in this article from the Los Angeles Times.