The movie studios and the White House are giving themselves some hearty pats on the back because they just finagled a new deal for releasing Hollywood movies in the Peoples Republic Of China.
The new deal keeps the quota of 20 Hollywood movies being released in China per year, but exempts up to 14 "premium format" films like Imax and 3D from that quota. It also bumps up the piece of the action the studios get from the Chinese box office from 13% to 25%.
It all sounds like it's going to be all sugar and unicorns, right?
Well, maybe not.
Let's look at the Pros and Cons.
MONEY: China is a massive movie market, and has been the Holy Grail of money for the big studios for decades. It has a growing economy, and over a billion people who belong to a movie-loving culture that goes to theaters in numbers and frequency not seen in North America since the 1930s. There is a lot of money to be made in China.
DEMOGRAPHICS: China's population is aging, has a terrible shortage of women, and its new-found wealth is leaving large swaths of its massive population behind in an almost semi-medieval limbo. This means that China could face massive social and economic upheaval, and a lot sooner than you would think.
GOVERNMENT: China's market, though more open than it was in the past, is still nowhere near being a truly free market. To participate you need the blessings of the ruling elite in the Chinese Communist Party.
CORRUPTION: The need for the blessings of the political elite breeds corruption like plague bacilli in a rat's gullet. Corruption makes business even harder and more costly to do, until it reaches a saturation point where it stops being worth the effort to even try.
CREATIVE: Then there are the creative aspects of this new market paradigm, in both quality, and the censorship of Hollywood movies.
1. QUALITY: The exemption is specifically for Imax and 3D movies. That means the studios are going to start scrambling for those spots with even more shitty 3D movies.
Why do I say "shitty" because the studios fear, probably irrationally, that things like story, characters, and dialogue, won't fly in foreign markets, and with one of the biggest foreign language markets opening slightly they're going to go for even more special effects, explosions, and empty posturing in the vain hope that what doesn't fly as well over here will make money in China.
2. CENSORSHIP: Then there's the unseemly issue of censorship. The government of China is notoriously touchy about its image and will censor or actively ban anything that it may interpret as making it lose face.
But that's not the insidious part. No, the really insidious part is the self-censorship the studios will do to filmmakers in the name of keeping their spot in the precious quota. You can forget anyone doing anything about the situation in Tibet in the foreseeable future, or human rights that don't somehow put the blame all on the CIA. It could even go as far as dropping scripts that involve the overthrowing of fictional dictators, because they fear it might hurt the feelings of real dictators.
So while they are some short terms gains to be made from this deal, ultimately, those gains could easily turn into an...
The lesson here? Tread carefully.