XFMedia Expands Production Services with China Film Group Alliance, Partners With David U. Lee

Xinhua Finance Media
2008-04-14 21:04 809

BEIJING, April 14 /Xinhua-PRNewswire/ -- XFMedia (Nasdaq: XFML), a leading media group in China, announced a strategic alliance with China Film Group to collaborate on China film production, distribution and sales. XFMedia has partnered with David U. Lee, an expert in US-China co-productions, to establish new subsidiary Xinhua Media Entertainment as a full service film production and investment company based in Beijing, with a satellite office in Los Angeles.

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XFMedia CEO Ms Fredy Bush said, "China Film Group and Xinhua Media Entertainment have established a strategic alliance to collaborate across various sectors of the burgeoning Chinese film entertainment industry including development, production, post-production, domestic and international sales and distribution of film entertainment content."

China Film Group ("CFG") is the largest and most influential state-run film enterprise in China. All motion pictures imported to China for theatrical release must go through CFG's subsidiary, China Film Import & Export Corporation, while another CFG subsidiary, China Film Co-production Corporation, manages all Sino-foreign co-productions.

China Film Group produces more than 30 feature films, 400 TV plays and 100 telefilms each year. According to statistics from the State Administration of Radio, Film and Television ("SARFT"), since 2003 the movie box office in China has grown at a compounded annual rate of approximately 38%, from RMB 0.67 billion (US$96 million) in 2003 to RMB 3.3 billion (US$470 million) in 2007. Compared to a mature and saturated market such as the United States, with approximately 38,000 screens and annual box office revenues that have fluctuated between US$9.2 and US$9.6 billion over the same five year period, Chinese box office revenue is projected to continue its dramatic growth. Nielsen NRG, a leading research company in film industry, forecasted that Chinese box office revenue would exceed US$720 million by 2010, and that China would become the third largest market for cinema, after USA and Japan.

"Additionally, Mr. Han Sanping, Chairman of China Film Group has authorized Xinhua Media Entertainment to act as its U.S. representative in facilitating the negotiation of potential co-productions," Ms Bush said. "We believe this alliance has significant potential for the Company in terms of revenues, profitability and enhanced visibility."

Mr U. Lee, the Managing Director of Xinhua Media Entertainment, has more than 11 years experience in the entertainment industry and was previously Executive Vice President of Asian Operations at The Weinstein Company, where he oversaw the company's business in Asia as well as its $285 million Asian Film Fund. Before joining TWC, Mr Lee produced ALREADY DEAD, an action-thriller, which was released by Sony Pictures Entertainment in early 2008. He was also a Co-Executive Producer in 2007 of the Jackie Chan and Jet Li film, FORBIDDEN KINGDOM, which he structured as the highest profile China and U.S. co-production to date.

Through his relationship with the China Film Group, Mr Lee has been a member of the China Film U.S. Delegation since 2006. He received both his MBA and BA degrees from the Marshall School of Business at the University of Southern California.

"We are delighted to have David join XFMedia, bringing with him rich experience and relationships in co-productions helping to further expand our services," said XFMedia CEO Ms Fredy Bush. "Xinhua Media Entertainment makes XFMedia's production group more robust and proves again how effective this company is as a bridge between China and the international media community."

Xinhua Media Entertainment has been established to provide a full range of production and deal structuring services for high-profile motion picture co-productions between China Film Group and producers from around the world. The company is expected to be one of the cornerstones of XFMedia's push into the fast-growing China entertainment industry.

"David will leverage his expertise to structure co-productions that achieve win-win collaborations between China Film Group and major US studios with plans to co-produce films in China," Ms Bush said. "We believe XFMedia's positioning and experience in handling international China deals provides a significant business growth opportunity which we plan to build out with Xinhua Media Entertainment with David at the helm."

Xinhua Media Entertainment is part of XFMedia's Production Group, which produces a diverse array of quality programming, animated shows and television drama series, as well as special effects and TV channel packaging services.

About Xinhua Finance Media

Xinhua Finance Media ("XFMedia"; Nasdaq: XFML) is a leading media group in China with nationwide access to the upwardly mobile demographic. Through its five synergistic business groups, Advertising, Broadcast, Print, Production and Research, XFMedia offers a total solution empowering clients at every stage of the media process and connecting them with their target audience. Its unique platform covers a wide range of media assets, including television, radio, newspaper, magazine, outdoor, online and other media assets.

Headquartered in Beijing, the company has offices and affiliates in major cities of China including Beijing, Shanghai, Guangzhou, Shenzhen and Hong Kong. For more information, please visit .

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Among other things, quotations from management in this announcement contain forward-looking statements. Statements that are not historical facts, including statements about XFMedia's beliefs and expectations, the expected development of the film industry in China, and the prospects of Xinhua Media Entertainment, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those contained in any forward-looking statements. Potential risks and uncertainties include, but are not limited to, risks outlined in XFMedia's filings with the U.S. Securities and Exchange Commission, including its registration statement on Form F-1. All information provided in this press release is as of the date hereof, and XFMedia undertakes no duty to update such information, except as required under applicable law.

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Source: Xinhua Finance Media
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