Distributors to theaters: raise our shares! (2)

The profit share stands for the net revenue distribution after taxes. The previously normal ratio was set at 43: 57. During the 2011 season, Zhang Yimou's former partner Zhang Weiping fought eight major Chinese theater chains to raise profit shares from 43 percent to 45 percent for "The Flowers of War." The dispute was settled after Chinese Film Bureau officials intervened. When a film company has an ace in one hand, they will play the card.

This year, five major distributors fought back and formed a coalition. "They are the Avengers (as in the American comic book characters)," industry insiders will jokingly say, "They are fighting against the Justice League," -- a.k.a. the theater chains. The fact that the notice should be taken as an order, not an opening bid stunned many theater managers.

When China.org.cn approached him about the above mentioned issue, Liang Liang, a veteran Wanda Cinema salesman said, "I have only three words: Go to hell!"

Zhu Yuqin, chief editor of the Zongyi Weekly's movie section, a state publication on variety media, said in her tweets that the first negotiations may take place tomorrow. Several theater chain giants will convene next Wednesday to further work out this matter.

"This is like brothers killing each other," Zhu said, "China's film industry already has a frail base and the burden for cinemas is heavy. Theaters now have to hand over 3 percent of the gross revenues in taxes, and 5 percent to China's government film fund, and then give another 43 percent to film distributors and studios. And expenses don't stop here. 20 percent goes to the theater's annual renting fee and 15 percent serves as an operating fee, so how is a theater supposed to make money in the end? "

"A multiplex cinema with 1,500 seats will have to gross 25 million yuan a year in order not to lose any money. In China, less than 20 percent of all cinemas are able to achieve this."

But other Chinese media outlets reported that it was actually the Chinese authorities who requested a profit share raise when the central government announced they would help boost China's home-made film production. After learning today's news, many moviegoers fear that theaters may raise ticket prices to compensate for the losses they will suffer after the change in profit shares sets in.

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