Theaters, film companies agree on new revenue sharing

As Chinese cinema enters the most lucrative season of the year, here comes big news concerning movie revenues. More than 30 major theatre chains in China have reached an agreement on splitting revenues between film companies and theatre chains. Many hope the new deal will boost the creation and production of domestic blockbusters.

Under the new agreement, 43 percent of revenues will go to film producers and 57 percent to theatres, if revenue is less than 300 million yuan, or about 48 million US dollars.

For revenue between 300 and 800 million yuan, producers get 45 percent and theatres 55 percent.

If revenue is above 800 million yuan, producers get 47 percent and theatres 53 percent.

Before theatres and producers split revenues, 5 percent has to go to the State film fund and 3.3 percent in taxes. The State film fund uses the money to sponsor film industries in less-affluent regions and to support non-commercial films.

Film producers used to get no more than 43 percent of the revenues. However, In 2011, before Zhang Yimou's much-anticipated epic, The Flowers of War, hit domestic theaters, its production company Beijing New Pictures Film requested raising its share of the profit by 2 percent. And a battle took place between distributors and cinemas over ticket prices and profit sharing.