China Daily: Regional reel industries need cooperation in their plots

Regional reel industries need cooperation in their plots
Wilfred Wong Ying-wai (right), chairman of The Hong Kong International Film Festival Society, delivers his speech as William Pfeiffer, CEO of Dragongate Entertainment, listens. Asia’s film industry is growing fast but is not very competitive and that will make it hard for Asian filmmakers to expand internationally.
Speakers at the China Daily Asia Leadership Roundtable held on March 20 on the sidelines of the Hong Kong International Film and TV Market noted time and again that the massive opportunities are curbed by the challenge of reaching audiences with different cultural backgrounds.
“There is strength in the Asian market. There is a very large, young population with a very large disposable income. So the future is very clear,” said Wilfred Wong Ying-wai, chairman of the Hong Kong International Film Festival Society.
Last year, Asia overtook Europe as the second largest region in terms of digital cinemas. A recent Ernst & Young study suggests China will replace the US as the largest film market by 2020.
There are plenty of opportunities for growth, not only by adding more screens and raising box-office revenues but also through collaborative productions, making films and TV programs that appeal to multiple audiences and expanding into new media offerings that have the possibility of adding revenue streams.
South Korea is an example of growth. In 2012, the republic’s film and television industry contributed $6.77 billion to the economy and supported more than 67,000 jobs. A report by Oxford Economics suggests that since 2005, the South Korean film industry has expanded by 49 percent, marking annual growth of about 6.9 percent — double the rate of the real GDP.
Taiwan, with 22 million people, has 696 movie screens. So does Indonesia. However, the Islamic country has a population of 242 million, which means a high potential for growth.
Hong Kong is one of the largest exporters of films and television content.
Signs of challenges are evident on the Chinese mainland. While ticket sales are on the rise and new theaters are being built around the country, domestic films are struggling. In the first six months of 2012, foreign film revenues jumped 90 percent to 5.27 billion yuan ($840 million) but revenues from domestic films hit a five-year low, dropping despite a 40 percent increase in overall box-office profits.
Of the 141 made-in-China movies in the first half of 2012, only about seven broke even or made money. The drop followed an increase in the number of foreign films China allows in — from 20 to 38.
For the time being, Asian films have very limited reach.
“Part of it is (due to) fragmentation and part of it is that the films are not international enough,” said William Pfeiffer, CEO of Dragongate Entertainment. “That is the key, to get writers and directors to be more international. The talent will follow.”
Mixing the Asian industry with Hollywood could help take the regional industry to the next level. Money is not really the problem. Wealth in Asia is growing twice as fast as in other regions.
“The name of the game is catching up. Today what we are lacking is quality films that can sell everywhere. Quality films that appeal to the world,” said Wong. Some good Asian films are not even distributed outside their home markets.
What is going to help in future productions is a more scientific approach to market research. Better market research would make it easier for filmmakers to invest.
“This really needs the countries to put their heads together and form an institute to do market research,” said Wong.
There may also be opportunities to expand revenues in other areas.
“People talk about the box-office but in new media, we don’t have that (issue),” said Gong Yu, founder and CEO of Qiyi.com, the video channel of major Chinese browser Baidu.
New media cannot compete with the box-office but around a third of their revenue comes from the Internet, which often hurts film revenue.
Their business model is also different. As much as 90 percent of the income for new media comes from advertisements. Movies, by comparison, cannot rely on advertising for their revenue.
Films with small audiences cannot be released in cinemas but they can be released online, as the cost is relatively low, said Gong.
“We have to set up very standard regulations for cinemas and the cinema industry,” said Gong. After the theatrical release, movies can earn revenue and be protected by Internet companies willing to oversee intellectual property rights.
Perhaps the most obvious solution is for the industry to take up cooperation in a big way. As it is, making a “big” movie on the Chinese mainland requires cooperation with industries elsewhere.
In the long run, the mainland is one of the few markets that can compete with the US, particularly in cooperation with other markets in the region. But regulators may have to step in with policies conducive to the growth of the industry, said Zhang Yuan, a Chinese film director with more than 10 films under his belt.
“Many of us have found that a movie is not a propaganda tool but entertainment,” Zhang said.
http://www.chinadailyapac.com/article/regional-reel-industries-need-cooperation-their-plots