Producer-exhibitor Dadi Media ramping up

Company closes sales of 'Confucius,' expanding theater chain

BEIJING -- Film production and exhibition company Dadi Media is riding the growth of China's film industry, both abroad and at home, closing multiple sales of "Confucius" at Cannes and honing plans to triple the size of its nationwide theater chain by year's end.

At the Marche du Film, Dadi, which has offices in Hong Kong and Beijing, succeeded in selling "Confucius," starring Chow Yun-fat as the sixth-century B.C. sage whose thinking is now a centerpiece of President Hu Jintao's push to mould a "harmonious society."

"Dadi's goal is to teach the world about Chinese culture," said Katterin Wu, the head of international sales for the Beijing office, which spent $23 million to make director Hu Mei's film, also starring actress Zhou Xun ("The Message").

At home, "Confucius" was a disappointment, drawing a mix of critical reactions, many negative, and lackluster ticket sales. But at Cannes, Wu said Dadi sold the film to Japanese distributor Twin Co., to 
Eagle Pictures in Italy, to Flins & Piniculas of Spain, to Mirax Blue Black for Hungary, Poland and Romania, to IRIB Media in Iran and to Misteriya Export in the Commonwealth of Independent States and the  Baltics.

"Though not a lot of Westerners seem interested in Confucius the  character, our film is set in a period 2,500 years ago when there were  lots of battles going on in China, so the film has plenty of commercial elements," Wu said, who was in Cannes with colleague Ingrid Guo Yingying, also in sales and based in Beijing.

Dadi's Cannes sales built on earlier deals done at Berlin to Showbox in the U.K., Portugal's Valentim De Carvalho Multimedia, Turkey's Metis Media and, for pay TV in Latin America, to Leda Films.

Wu hopes to close a North American theatrical deal soon, noting that "Confucius" would soon draw attention there as an out-of-competition selection for the World Greats section of the Montreal Film Festival in late August.

In promoting "Confucius" overseas, Dadi opted not to work with the hundreds of Chinese government-backed Confucius Institutes sprouting up around the world with the goal of promoting Chinese culture.

"We thought about working with them, but the time investment was not certain to produce results," Wu said.

On the theatrical front, Dadi -- which started as a record producer in the 1980s and now runs China's seventh-largest cinema chain -- will spend 1 billion yuan ($147 million) this year to triple the number of
screens it owns in the world's fastest growing movie market.

"Our goal is to help bring back the former audience to China's cinemas," said Fang Bin, day-to-day vice general manager of the theater group Dadi Digital, recalling the late 1960's and early 70's when radios and TVs were still out of reach to most average people.

"They were for rich people, so movies were the only collective entertainment experience we had in China," Fang said.

With a focus on second- and third-tier Chinese cities -- which in China often have Internet-savvy populations in the millions and yet no modern movie theater -- Dadi plans to add 400 screens this year,
pushing the company's total to more than 600 screens in 124 theaters in 20 provinces by Jan. 1, Fang said.

"It's important to tap the pent up demand by making it more convenient to go to the movies," said Fang, a firm believer in keeping ticket prices at about 1% of the average monthly income of any given city and
below the national average.

In Foshan, in China's Guangdong province, Dadi operates its most profitable cinema, a three-year-old four-screen cinema that grossed 12 million yuan ($1.8 million) in 2009 with tickets averaging 26 yuan each ($3.80) in a city where the average income is 3,000 yuan a month ($439)

"Marx told us we should decide our ticket price according to the market," Fang said with a smile.

Dadi's new cinemas -- all digital and 3D-capable -- will cost the company 1.5 million yuan ($218,978) per screen, Fang said, adding that more than 160 of its theater sites will be in new shopping malls and some will be refurbishments.

In a market where boxoffice grew 43% last year to $909 million and is forecast to jump another 61% this year, Fang plans to expand Dadi's holdings to 1,500 screens by the end of 2011 and 2,500 a year later.
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