This was last week’s story, but since I used to do a lot of media work back in the day, I feel obliged to comment. The background is that Time Warner tried for several years to move into the cinema biz over here with JV partners. The government failed to liberalize fast enough for Time’s liking and Time announced last week that they would pull out.

The LA Times article has both points of view. First, that Time had unrealistic expectations of liberalization here and lacked patience. Second, that the Chinese government is engaging in local protectionism.

Both are true to some extent. If I had to guess, I would assume that Time had lots of assurance from a variety of parties that it would enjoy a certain regulatory environment and would be able to invest in a certain way, and that this failed to materialize. Bad investment decisions are made every day here, but I doubt that Time went in blind with completely crazy expectations. These guys have been around here long enough not to fall for some consultant’s song-and-dance routine about friends in high places and how Time might get preferential treatment. Possible, but not likely.

Retrenchment on the part of the government happens all the time here, even after promises are made. As a foreign investor, you either roll with the punches and salvage your position, or you say enough is enough and get out. Time Warner got out now and will be back some day.

FYI, I wonder about cinemas as a business model. Sounds like they were making money in Shanghai, but long-term? Then again, I’m a bad commentator on this subject. I think the last time I saw a movie in a cinema was in 2001. Yikes.