Warner Bros. inks historic movie deal with Chinese.

Warner Bros. has become the first American motion picture company to sign a theatrical distribution agreement with the China Film Distribution, Exhibition, Export Import Corp., giving Warner the right to distribute its first-run product in Chinese theaters.

China Film is responsible

Warner Bros. officials called the deal "experimental," and said the first picture under the deal would likely be in Chinese theaters within three months.

No specific films have been mentioned for Chinese release, but Warner Bros. officials said the movies will be selected by both the studio and China Film. The films are to then be dubbed into Mandarin and distributed to theaters in several Chinese cities, according to the plan.

Box-office revenues are to be split between Warner Bros. and China Film, under the agreement, although the terms of that agreement, including just how the revenues would be split, were not disclosed.

The Chinese government's previous policy stated that foreign-made movies could only be sold to China Film for a flat fee, leaving box-office receipts, and the majority of the profits, firmly in Chinese hands.

That policy was changed in March, however, when China Film announced it is willing to split box-office proceeds with foreign distributors.

Several major studios have been talking to Chinese officials about distribution rights since then, and other studios could follow Warner Bros.' move shortly.

American film companies, however, have long been leery of entering the Chinese market, as officials there have been traditionally lax in protecting foreign intellectual property rights. To overcome that wariness, Chinese officials recently announced they will do whatever they can to stop the unauthorized duplication of foreign film products. Chinese officials also made several high-level -- and highly publicized -- trips to the U.S. to tout the new policy directly to American entertainment companies.

The increasing standard of living in China has created stronger demand in that country for entertainment products in general. In April, Showscan Entertainment Corp. of Culver City announced an agreement to sell four motion simulation theater rides in China.

Two of those are now under construction, with the first set to open in Shanghai in spring 1995.

"It looks like there is opportunity in China if you can continue to be patient and keep plugging away," said Seth Foster, vice president of sales and marketing for Showscan.

The number of films Warner Bros. plans to release in China had not been announced by press time last week. But Warner officials said they hope their relationship with the Chinese will move beyond the simple distribution of American films.

Earlier this year, Warner Bros. created Warner Asia, a division that plans to develop and distribute motion pictures produced by Asian film makers for distribution in Asian markets.

"It is also our hope that we will be able to provide China Film with advice and assistance in the transfer of current motion picture technology, and that we will be able to work with the Chinese film community to gain greater exposure for domestically produced Chinese films," said Warner Bros. Chairman Robert A. Daly.