China has been touted to become the world’s largest movie market as early as 2018 and Sony have been solidifying their ties to the nation as they announced a joint venture with Dalian Wanda Group, a media company owned by China’s richest man.
The two companies said in a joint statement to the press that Wanda’s massive theatre chain will be utilised to access the Chinese market at the maximum possible scale.
Sony will also be hoping to moderately reform the nation’s restrictive movie market.
Wanda’s owner, Wang Jianlin, has been desperate to make the company a world player in the entertainment sector and the current tie-up will help him increase the group’s Hollywood footprint. In the statement Wanda said the venture would allow them to use their consumer-orientated infrastructure to build Sony’s reputation in China.
According to industry experts, China will overtake the U.S. as the world’s biggest movie market, most likely by the end of 2017.
“It’s a perfect partnership for all parties concerned,” said a key advisor at CTI China Renaissance in a phone interview. “Wanda will have greater prominence on the world stage and be able to get more involved with content development. For Sony, their distribution network in China and Asia will be vastly improved, and obviously there will be a massive market for its new blockbusters.”
“The trend towards film financing as a form of investment is gathering momentum, so we expect to see more action in the sector,” he added.
Wanda has previously invested in the movie business having put funds into several films produced by Sony rivals Viacom, specifically their Paramount Pictures operation. This would be the firm’s first dealing with Sony.
Industry investors have been heartened recently as Universal’s $170 million hit “Warcraft” nearly recouped its entire production cost in the first week it was released in China. The economy has slowed and ticket sales have been low this year but Universal has shown that a targeted release can be a big winner.
The only downside in the deal could be the government’s restrictive policy on foreign movies entering the Chinese market. Theatres are currently allowed to show only 30 imported releases per year, and Sony will be hoping their lobbyists can try and have some impact on sector watchdogs in the country.
Neither company involved in the deal responded to questions regarding the tie-up.
