Kung Fu Panda 3 — Coming Soon to A Production Studio Far From You

The DreamWorks China JV has announced it’s first big project in Shanghai.  HuffPo has the details of Kung Fu Panda 3 –

DreamWorks to make ‘Kung Fu Panda 3’ in China   JOE MCDONALD | August 7, 2012 06:27 AM EST |

BEIJING — DreamWorks Animation and Chinese partners announced plans Tuesday to co-produce the next “Kung Fu Panda” movie and develop an entertainment district in Shanghai, expanding Hollywood’s fast-growing ties to China.

Hollywood studios have announced a flurry of deals with local partners to gain access to Chinese financing and a government-controlled film market that is growing strongly at a time of weak ticket sales in the United States and Europe.

“Kung Fu Panda 3” will be produced in China and released in 2016, according to DreamWorks Animation SKG Ltd. and its state-owned local partners – China Media Capital, Shanghai Media Group and Shanghai Alliance Investment.

They said the movie will be produced by a new joint venture, Shanghai Oriental DreamWorks Film & Television Technology Co. DreamWorks will own 45 percent of the company and the Chinese partners will hold stakes totaling 55 percent.

Oriental DreamWorks plans to release one to three films per year and employ as many as 2,000 production professionals, the partners said. They said it aims to become the largest animation production base in China and also will explore opportunities in online games, musicals and consumer products…

ChineseNegotiation first discussed the new operation that sees the US company taking a minority stake in its own brand in February, 2012.   Back then we said it was part of an important trend of major US companies taking minority stakes in China operations where they are supplying the brand equity, intellectual property and high-paying professional jobs — in exchange for market access.   DreamWorks joins Disney and GM as junior partners in China — with SOEs or municipal governments owning the bulk of the Chinese entity.   This case was also central to the new book, The Fragile Bridge: Conflict Management in Chinese Business.

Western companies that compromise on equity holdings in exchange for market entry may end up winning big in China if they can pull off a feat that has eluded many famous brand WFOE (wholly foreign owned enterprises) — making money off of  intellectual property in the pirate cove known as China.  On the other hand, once the local partner has learned the technology and marketing side of the business — the junior partners might be in danger of losing not only their China revenue, but also see their global bottom lines jeopardized by their former students.

Read more about the DreamWorks JV and other examples of conflict management in China:

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