Oriental DreamWorks, a Chinese venture by DreamWorks Animation SKG Inc. (DWA:US), will invest more than 20 billion yuan ($3.1 billion) building an entertainment center in Shanghai to rival New York’s Broadway and London’s West End.
The Dream Center, which will include theaters, shops, restaurants and hotels, is scheduled to open in 2016, Oriental DreamWorks said in a statement today. The company also said it will co-produce “Kung Fu Panda 3” in China and plans to release the animated film in 2016.
The investment will give Glendale, California-based DreamWorks Animation a footprint in one of the world’s fastest- growing movie markets. Ticket sales in China rose 35 percent last year to $2 billion, according to the Motion Picture Association of America, making China the third largest movie market behind the U.S. and Japan.
“We have formed what we think is a very valuable strategic partnership to make world class feature animation,” Jeffrey Katzenberg, chief executive officer of DreamWorks Animation, said at a press conference in Shanghai today. “We’re very confident that the creative talent exists here in China. We’re very enthusiastic about building a studio.”
The animation studio will hire 800 people over the next four years, Katzenberg said, and add more employees eventually. He also said it has seven scripts in development, one of which will be the company’s first original production out of China.
“Kung Fu Panda 3” will be a sequel to the 2011 and 2008 films, which generated more than $600 million each in worldwide ticket sales, according to Box Office Mojo, an industry tracker. Oriental DreamWorks plans to release one to three films a year following its first solely created feature production in 2017, it said in today’s statement.
DreamWorks Animation owns about 45 percent of Oriental DreamWorks, with the rest held by China Media Capital, Shanghai Media Group and Shanghai Alliance Investment Ltd. The companies are seeking partners to fund the investment in the Dream Center in Shanghai, said Li Ruigang, Chairman of China Media Capital.
Li, 43, will head Oriental DreamWorks as the chief executive officer, Katzenberg said during the media conference. Li is also a board member of Dublin-based WPP Plc. (WPP), the world’s largest advertising company by market value.
The entertainment complex will feature a “Dream Walk,” the world’s largest Imax screen, which can be used for film premieres and other events, according to the statement. It will be located in the district of Xuhui along the Huangpu River that winds through Shanghai.
“It’s an incredible metropolis here with many beautiful aspects to it but it doesn’t have that sort of cultural, entertainment center to it, and that’s what sort of got us started on this idea,” Katzenberg said. The Dream Center will be a “celebration of great theater, great art, great culture, great music, all in one place” and will target 18 to 34 year olds, he said.
Ben Wood, who designed Shanghai’s Xintiandi, an urban dining, shopping and entertainment district in the downtown area, will be among the designers for The Dream Center, Katzenberg said.
The project will be “complementary” to the Shanghai theme park being developed by Walt Disney Co. (DIS:US), Katzenberg said.
Disney Theme Park
Disney and its state-owned China partner Shanghai Shendi Group Co. announced in 2011 it will invest about $4.4 billion building the resort, which will open in about five years. The company also said in April it will co-produce “Iron Man 3” in China with Beijing Film Studio DMG Entertainment.
DreamWorks Animation shares slipped 0.7 percent to $17.83 in New York yesterday, paring its gain this year to 7.4 percent. Disney retreated 0.2 percent to $49.65, having rallied 32 percent in 2012.
Entertainment companies are seeking tie-ups with Chinese filmmakers in a bid to circumvent the country’s annual quota on the number of foreign-made films that can be shown in theaters. China allows 34 foreign films to be screened in China each year, with 14 to be shown in 3D or large format. Movies that are co- produced with Chinese partners can skirt the quotas.
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