Sesame Street's popularity and growth in China is a reflection of how fast the animation and live action media market is expanding in recent years - mostly backed by the Chinese government.
The government, as part of promoting the country's soft power, has pushed to expand the animation market with supportive policies. Starting from 2004, the government has been subsidizing quality products or programs that are well-received, which has been a huge drive for the producers.
"It raises the bar and challenges a lot of producers to think about how they can produce differently so it can work on a world stage. It's creating a healthy competition, which is always good," Regan says.
In 2010, China produced 385 animated films, a 28 percent year-on-year increase. The industry earned more than $78.7 million from exports the same year, jumping by 60 percent, according to the State Administration of Radio, Film and Television.
A Chinese cartoon called Pleasant Goat and Big Big Wolf has been translated into 17 languages and is shown in more than 50 countries and regions because of an agreement between the Walt Disney Co and Creative Power Entertainment, the cartoon's producer.
Chinese box office receipts of US movies grew by 35 percent in 2011 to $2 billion - by far the largest growth in major markets - becoming the second-largest international market behind Japan, according to a report released by the Motion Picture Association of America (MPAA).
During Chinese Vice-President Xi Jinping's visit to the US in February, he signed a deal that will allow 14 extra foreign films, in formats such as 3D and IMAX widescreen technology, to enter the Chinese market, which currently allows 20 foreign films, each year.
The deal was hailed by the MPAA, which represents Hollywood's biggest movie studios, and major industry players such as Disney's CEO Robert Iger who describes it as a "significant opportunity" and a "new era".
"This is a major step forward in spurring the growth of US exports to China. It has long been a top priority for the MPAA, and it is tremendous news for the millions of American workers and businesses whose jobs depend on the entertainment industry," says former US senator Chris Dodd, who is now the chairman and CEO of MPAA.
Local producers say that foreign investors should look into the growing animation and live action market because the country has the demographic advantage to offer that can be a good long-term investment.
With about 370 million youths, 220 million of whom are 14 years old or younger, China has one of the world's largest animation audiences. Children between the ages of 4 and 14 spend an average of about two and a half hours daily in front of the TV.
"Television is a major media for children in China, which has the most children's channels in the world," Xu Bin, deputy director of Children's Channel at CCTV, said in February at New York's KidScreen Summit, a kids' entertainment annual event.
Xu adds that there are 38 children's channels in total in China - 33 local ones and five animation channels.
Regan says the demographics in China are a major driver for Sesame Street to enter the market because it will help them affect millions of children, which enables the organization to reach its goal of improving children's lives.
"It is an important market because we can reach a tremendous amount of children by creating content that reaches those children," she says.
In 2011, the total animated-related TV programs reached up to 260,000 minutes, compared to 12,000 minutes in 2003, says Xu, adding China will likely surpass Japan and become the world's largest market in terms of audience size and production volume.
Despite these figures, Xu says China has been on a "slow start" in children's media, especially in animation and live action. "The market is for sure to grow in the coming years."
Regan says the China market is also a "dynamic one" that has changed rapidly in the past decade.
"China is a content rich country with so many wonderful stories. To bring that alive through animation or live action is very exciting. It's wonderful for the world to experience that."
In May, China's National Animation Industry Park in Tianjin Eco-City, some 100 miles southeast of Beijing was jointly developed by China and Singapore.
The park was part of China's Ministry of Culture's $695 million commitment to pump up the national animation industry and make films that can compete in the international market. Visitors to the park can find Hollywood's influence everywhere, with life-size Disney and Pixar characters such as Beauty Belle and the Beast, Mowgli and Baloo, and Buzz and Woody.
But local producers say that aside from these projects initiated by the government, in order to spur and liven up the industry and bring it to a higher level, local producers need to work with animators from Hollywood and other countries to learn their expertise and technologies.
Yang Wenyan, general manager of Shanghai's Toonmax Media, says co-producing films that have elements from both cultures will be a win-win strategy for both local and foreign producers.
By Zhang Yuwei
Editor: Liu Fang
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