Films unit closes, investing takes weight
HONG KONG — U.S. venture capital giant Intl. Data Group has shuttered IDG Films, its Los Angeles-based shingle set up last year to produce films in Asia.
“The closure of IDG Films is not bad news. It allows us to become more involved in China,” IDG Asia chief Hugo Shong said. “What has happened in the last year is that the China market has grown, our funding potential has grown, and we have become better suited as investors than developers.”
Headed by former Columbia execs David Lee and Steven Squillante, IDG Films burst onto the scene at Cannes last year, when it co-acquired multiterritory rights to Chen Kaige’s “The Promise” with the Weinstein Co.
In December it unveiled its involvement in two movies based on the “Witchblade” comicbooks. To be lensed in China, the films were set up with Platinum Studios and Relativity Media in a deal that saw IDG Films put up 40% of the production coin and Arclight Films handle international sales.
At IDG Asia, Lee will advise Shong on entertainment investment opportunities, while Squillante’s new shingle, Haven Wood, has been offered a production deal with IDG. He is in the final stages of setting up “Witchblade” again but has yet to determine where the pics will shoot.
Through a separate arm, IDG is partnered with Daily Variety‘s owner Reed Business Information and is one of three owners of Variety China.
“These have been Steven’s projects all along, and we would be interested as investors if they shoot in China. If not, they are outside my remit,” Shong said.
Group focus now will turn to investment in the corporate equity of technology and media companies, especially content producers. One of the earliest venture capital firms to operate in China, IDG earlier this year launched IDG Accel China Growth Fund in association with the Accel group.
In March the new fund acquired a 6.7% stake in Hong Hong-based video duplication and distribution company Mei Ah Entertainment. It has also purchased an interest in China-based TV, clip and mobisode producer Vhong Bo and a stake in Ocean Butterfly, a Singapore-domiciled outfit that is one of China’s largest music distribs.
In addition it has bought into Movienet, a video-on-demand company that streams movies into 20,000 Chinese Internet cafes and a further company distributing content to mobile phones.
“We are not film producers, but we will be going through partners with more expertise than us. Our investments may be in companies that use the distribution companies we have bought into,” Shong said. “We need to invest in content and secure the Internet distribution rights. We can then help promote that content through different channels.”