Local movie studio China Star Entertainment has teamed up with rival Mei Ah Entertainment in an exclusive video distribution deal.
Mei Ah Entertainment will be the sole video-products distributor in Hong Kong and Macau for China Star's more than 1,000 film titles and all its new movies in the next three years.
Patrick Tong Hing-chi, Mei Ah Entertainment's managing director, said the deal would strengthen its leading position in the Hong Kong VCD and DVD distribution market.
'Our market share will improve from 30 per cent to more than 50 per cent,' he said, adding that the company released up to 200 titles in VCD and DVD formats last year.
It now has a library of about 3,000 films - one of the largest Chinese film libraries.
China Star, which last year released the popular films Master Q 2001, Love on a Diet and The Legend of Zu, plans to release about 20 new films in the next 18 months, according to Mr Tong.
He said the commission income from the new partnership would be more than HK$10 million each year.
However, critics say aggressive price-cuts for new VCD and DVD titles have squeezed the profit margin for distributors.
As part of the deal, Mei Ah's small-scale movies will be shown on China Star's digital projection television theatre chain in the mainland.
China Star, which saw its net loss widen from HK$56.10 million in 2000 to HK$191.20 million last year, said it planned to shoot 10 movies this year on a budget of between HK$200 million and HK$300 million.
Meanwhile, China Star's mainland video distribution arm, Ocean Shores Group, aims to diversify into the hotel and pay television businesses.
