DreamWorks Animation made an ambitious investment in China on Friday, ratcheting up Hollywood's intensifying attraction to the Asian film market.
The studio unveiled a joint venture with three companies -- Oriental DreamWorks -- aimed at creating animated and feature films in the region.
"Together with our partners in China, we look forward to building a first-of-its-kind enterprise to locally conceive, produce and distribute high-quality creative content and family entertainment experiences -- not only for the people of China but also for related export markets," DreamWorks Animation' CEO Jeffrey Katzenberg said in a statement.
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DreamWorks Animation has had its eye on China and its massive population of moviegoers for some time. Its "Kung Fu Panda" series was set in China and was a hit in the country.
Indeed, "Kung Fu Panda 2" is the country's most successful animated film of all time, grossing about $100 million.
Nor is DreamWorks Animation the only Hollywood studio making in-roads in the country. Relativity Media recently set up a Chinese production and distribution partnership and Legendary Entertainment, through its Legendary East arm, announced plans for a $220.5-million investment in a filmmaking venture aimed at the Chinese market.
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Entering the Chinese market does pose hurdles for Hollywood. In order to work there, companies have to partner with the government. They also must navigate the country's strict censorship rules and quotas on U.S.-made imports.
To that end, DreamWorks Animation will maintain a 45 percent stake in the company, while China Media Capital, Shanghai Media Group and Shanghai Alliance Investment will co-own the production company.
In addition to creating movies, the joint venture may back live entertainment, theme parks, mobile, online, interactive games and consumer products.
Shares of DreamWorks Animation were up 0.93 percent to $19.52 when markets closed. Related Articles: Does Wall St. Want Off the DreamWorks Animation Roller-Coaster? Chris Dodd: 'China's Movie Market Is a Success Story in the Making