i-marker Culture & Media Investments Ltd. ("i-marker Media"), Horizon Entertainment Group Ltd. ("Horizon Entertainment") and Motion Picture Association of America ("MPAA") have held a meeting in Hong Kong on December 9, 2013, with in-depth discussion on strategic cooperation and related details of implementation regarding the import film business in China, for implementation of their strategic partnership. Mr. Mike Ellis, President and Managing Director Asia Pacific of the Motion Picture Association (MPA), welcomed the strategic cooperation proposal as put forward by i-marker Media and Horizon Entertainment, as American film has a huge growth potential in the Chinese market, especially from 2012 onward, the quota on import films to China had been increased as based on original quota of 20, plus an additional annual quota of at least 14 IMAX, 3D and other enhanced format films, with revenue sharing percentage to the U.S. film copyright owners increased from 13% to 25%.
On December 20, 2013, leaders of China Communist Party Central Committee Publicity Department ("CPC Central Committee Publicity Department") and Managing Director of China National Culture & Art Corporation ("CNCAC") hosted a meeting with i-marker Media, Horizon Entertainment, U.S. film industry participants, including 21st Century Fox, EDKO Films Ltd. (which is also the Hong Kong distributor of Universal Studios, Inc.), Lionsgate, Ivanhoe Pictures, Secret Lab, and other professional parties including China-EU Cultural & Creative Industries Alliance, and Mr. Daniel Cruz from Jordan Capital Markets Inc. on behalf of Liquid Entertainment Inc. and so on. They discussed on the strategic cooperation and related business regarding import and distribution of foreign film and TV content to China, expressed their optimism on the related business and believed it will raise the standard of film industry in mainland China and will play a positive role in integration of resources in the Chinese film industry. In addition to imported films business, the Hollywood studios in the meeting also expressed their intention to participate in diversified cooperation which can stimulate growth of the Chinese film industry, such as film co-production, co-financing movies, building of film city and film-related peripheral products. Fund companies in the meeting said they were actively exploring ways through which strategic investment can assist development of the Chinese film market. Mr. Xue Qiliang, Member of the Eight CPC Central Committee Publicity Department Party Committee and Deputy Head of the Mass Line Educational Practice Steering Group, pointed out the significance of this meeting, as the recently convened 18th National Congress of the Communist Party of China emphasized on "to build a strong socialist cultural nation, the key factor is to enhance the cultural creativity and vitality of the whole nation", and Mr. Xue further emphasized, "We will fully support the full-scale cooperation between CNCAC and Hollywood studios, making the culture related industry bigger and stronger, more prosperous and more competitive." Mr Lu Changhe, Managing Director of CNCAC, said, "The year 2014 will see its full-scale, comprehensive and extensive cooperation with leading Hollywood studios to import and distribute more high quality blockbuster films to China." During the meeting, CNCAC and 21st Century Fox, EDKO Films Ltd. (Hong Kong distributor of Universal Studios, Inc.) and Lionsgate expressed strong intention for strategic future cooperation.
i-marker Media, a company with headquarters in Hong Kong, had entered into a cooperation agreement ("Cooperation Agreement") with CNCAC in October 2013 on the exclusive partnership in import and distribution of foreign revenue sharing import films and flat fee import films and TV content in the PRC. Pursuant to the Cooperation Agreement and on exclusive basis, i-marker Media in association with Horizon Entertainment will apply strategic partnership with leading Hollywood and international film and TV studios, producers, film makers and production teams, and exclusive agreements with strategic partners including Cactus Three and Cargo Entertainment, to assist in film import businesses in China to ensure access to a pipeline of premium Hollywood blockbuster film content and acquisitions of related IPs and other rights including merchandise, internet and mobile gaming for import and distribution across all media platform throughout mainland China, Hong Kong and internationally.
Founded in 1987, CNCAC is a large state-owned cultural enterprise directly under the Ministry of Culture of China. Its main business includes operating various large-scale cultural and artistic performances in China, and actively developing economic cooperation and related product development of well-known art groups and artists in China.
i-marker had signed a MOU on October 8, 2013 with FingerAd Media Company Limited (the "MOU"), a wholly owned subsidiary of China Railsmedia Corp Ltd (Hong Kong Stock code: 745) in relation to the proposed exclusive cooperation in import and distribution of foreign films and TV contents into the PRC. Pursuant to the MOU, i-Marker will assign all rights and obligations under the Cooperation Agreement to FingerAd, including the set up of strategic partnership with world class Hollywood and international film and TV studios, producers, and production teams; formulation of import film plan and strategy; appointment of Hollywood import film agent and partner; and assisting in the set up of cinema circuits in the PRC.
According to the State General Administration of Press, Publication, Radio, Film and Television, China's box office reached USD2.74bn (RMB17.07bn) in 2012, with an annual growth rate at nearly 30% for the past five consecutive years. US and other foreign films accounted for more than half of the China market in 2012, grossing USD1.41bn (RMB8.8bn) for a 51.54% market share.