HONG KONG The line outside the five-screen multiplex stretches around the corner. The marquee advertises Hollywood's latest action blockbuster.

Inside, the air is heavy with the smell of popcorn and at the concession stand a teenage couple stocks up on cola, chocolates and dried squid

Welcome to Asia, where U.S. entertainment companies are battling for a piece of the world's fastest growing film market.

With the cost of making movies skyrocketing, U.S. box office revenues are no longer enough to break even, much less turn a profit. So Hollywood is depending more on overseas for profits.

According to the Motion Picture Association of America, more than 50 percent of Hollywood studios' theatrical revenues came from outside the United States in 1996.

In Asia, Hollywood is being aided by a boom in construction of multiplex theaters.

From Tokyo to Singapore, a revolution in entertainment is taking place. Old, single-screen theaters, notorious for their moldy seats and scratchy sound systems, are being replaced by glittering entertainment complexes.

Michael Connors, MPAA's senior vice president for Asia, who is based in Singapore, said: "Going to the cinema is now more than just (seeing) a film. They are creating a setting that is attractive to the whole family."

Peter Tam, executive director at Golden Harvest Entertainment, Hong Kong's biggest filmmaker and a leader in cinema construction, said "these multiplex theaters are a one-stop shop for entertainment. They become a meeting place where people gather," he said.

As a result, after years of declining theater attendance, Asians are turning off their television sets and going to the movies.

And Hollywood studios such as Warner Bros., Universal Pictures, Walt Disney Co. and 20th Century Fox are making a killing.

Analysts say that U.S. theatrical revenues from Hong Kong more than doubled in 1996. Singapore and Thailand saw growth of around 50 percent in 1996, while in Malaysia, revenues shot up 80 percent last year.

"The prospects for continued growth in Asia are 100 percent. It is fast and furious," said Connors. "(Audiences) like action out here; the bulk of the business involves big stars."

Ivan Cheah, Warner Bros. senior vice president for theatrical distribution in Asia, said construction of new screens in Asia has been the driving force behind his company's success in the region. "The growth (in Warner Bros. box office revenues) in countries where multiplex theaters has started has been tremendous for us, in triple digits."

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