China agrees to allow U.S. film studios more access, profit

Some observers had written off Chinese Vice President Xi Jinping's five-day visit to the United States as heavy on pomp but light on substance. But on Feb 17, just before his plane left Los Angeles, the White House announced that China has agreed to ease restrictions on the number of U.S. movies it allows into the country and the amount of revenue that studios can collect from box office ticket sales there.

Under the deal, China has agreed to allow 14 additional foreign films, at least those that are in 3-D or IMAX, into the country each year under a revenue-sharing agreement. The agreement also increases the amount of revenue that foreign studios collect from movies distributed in China from about 13% to 25% of ticket sales. Easing China's restrictions on access to its vast market has been a top priority for the Motion Picture Association of America, whose chief executive, Chris Dodd, met with Xi. The agreement is a big political win for the Obama Administration, which had seen Hollywood actors and executives giving the President a cold shoulder during a recent fundraising swing through California. Studios were upset with the perception that Democrats were favoring Silicon Valley interests over the industry's intellectual property when the President refused to support controversial legislation that would have further criminalized online piracy. The new trade pact should help Hollywood increase its footprint in one of the fastest growing film markets. The agreement brings with it a message about what the next wave of movie exports will look like: They will be large, in 3-D and mostly unrelated to the real world.