It’s official: a Chinese entertainment company has bought a piece of Hollywood.
Hong Kong-based Orange Sky Golden Harvest Entertainment announced last week that its subsidiary Chengtian had bought a 3.3% share of Legendary Pictures, a Hollywood studio responsible for blockbusters like this summer’s Inception and Clash of the Titans, says CBN News.
The deal, which is worth $25 million, comes as Hollywood’s box office growth has began to lag China’s – in percentage terms anyway. Ticket sales on the mainland surged 86% in the first half of this year, lifted by the phenomenal success of Avatar (it grossed $204 million in China alone) and other popular Hollywood imports. Many expect the year-end take to hit $1.5 billion, an increase of 65% on a year ago.
Having a local partner will help Legendary get more of its offerings into the booming market. Sino-US co-productions are exempt from a movie quota that effectively limits the country to 20 foreign-funded blockbusters a year.
There is also an online gaming angle to the deal. In a separate agreement, the two companies said they will be develop online, mobile and video games, as well as Chinese-language films. In fact, Chen Xiawei, chief executive of Chengtian, recently set up a subsidiary company in Beijing dedicated to online gaming. Chen, formerly president of Nasdaq-listed The9 – one of China’s largest online video gaming companies – is believed to be interested in combining two of the most lucrative entertainment genres: movies and online gaming.
Analysts say Legendary is currently in the process of adapting the enormously popular online game World of Warcraft for the big screen. Other game-to-film projects in the pipeline are Godzilla, based on the famous Japanese lizard; Warren Ellis’ Gravel, and Mass Effect, based on Electronic Arts and BioWare’s hit videogame franchise.
Rather expansively, some observers have been comparing the latest Chinese investment with Sony’s acquisition of Columbia Pictures Entertainment in 1989. Although Chengtian’s investment is dwarfed by the size of Sony’s $3.4 billion deal, the latest investment is being described as an early sign of China Inc’s growing interest in the global entertainment industry.
When it comes to investing in Hollywood, India has much more experience. Indian conglomerate Reliance paid $500 million in 2008 to set up a partnership with Steven Spielberg’s DreamWorks studio. More recently, another Indian firm, Sahara India Pariwar, has been rumoured to be interested in the debt laden Metro-Goldwyn-Mayer, the maker of James Bond movies.
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