At least 50% of box office cinemas are vertically integrated in China with production firms. Through its subsidiary, Ilustrato Pictures, the Company has strategic affiliations with film groups that controls approximately 35% of all cinemas in China. In addition, the State Administration of Radio Film and Television (SARFT) that controls approximately 15% of all cinemas in China through Huxia Film Distribution Co, Ltd., is also a strategic partner.
The Bona Film Group and the Dalian Wanda Group Co operate other key movie distribution in China.
Vertically integrated box office allied with the Ilustrato’s film production projects lowers the risk of losses relating to any project; the risk to movie projects undertaken is effectively removed in the company’s business model as distribution is guaranteed.
Chinese movie distribution is also more lucrative than in the U.S. for movie productions. The theatrical gross box office returns 33-38% to the film owners in China as opposed to an 18-25% as averaged in the United States.
The owner of the script can control production, partnerships, and ideas. They can also control rights for sale for various markets throughout the world.
Last year there were 803 new theaters and 3,030 screens added, an average of 8.3 new screens a day, for a total of 2,800 movie theaters and 9,200 screens across the country.
Analysts expect the number of screens to reach nearly 12,000 by the end of the year, the slowdown in the real estate market notwithstanding.
Source: New York Times
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