Cine Qua Non preps for steep challenges

How can a mid-sized distrib survive in Japan’s brutal indie market and celebrate its 20th birthday in 2011? “It’s going to be tough,” says Cine Qua Non prexy Lee Bong-ou. “A lot of indie film companies are going to disappear.”

To make sure Cine Qua Non is not one of them, Lee has developed a three-year plan for corporate survival. One element is diversification, with a corporate reorganization creating divisions for the company’s legit theater, film school and talent management operations. To underwrite these expansions, Cine Qua Non is increasing its capitalization by $2.2 million, while slashing expenses.

Another is a new partnership with Fox Japan. Cine Qua Non is developing three soon-to-be-announced pics, with Fox providing coin and distribution. “These are commercial films that we plan to release on about 300 screens,” says Lee. “We hope to continue working with Fox on other projects as well.”

At the same time, Cine Qua Non is continuing with its core business — producing and distribbing pics for arthouse auds, including those in the five theaters it operates — four in Tokyo and one in Kobe.

Skedded for a February bow is the CQN-produced romantic drama “Halfway,” the directorial debut of hit-making TV scripter Eriko Kitagawa. Also on the production slate is “Yume o kanaeru zo” (The Elephant Who Makes Dreams Come True), a dramedy based on best-selling self-improvement book, “Kokoro no Hana” (Flower of the Heart), a period drama by veteran helmer Kazuyuki Izutsu (“Pacchigi!”) and “Hula Girls 2,” a sequel to the smash 2006 pic about a struggling hula dance troupe in a hardscrabble mining town in 1960s Japan. “We plan to make about five or six of these smaller films a year,” says Lee.

Cine Qua Non will also release “Dear Doctor,” a drama by young helmer Miwa Nishikawa (“Sway”), and the Kim Tae-gyun drama “Crossing” in 2009, with more lineup announcements for next year yet to come.

But the Japanese indie arthouse biz, notes Lee, is struggling, as the young aud migrates to big commercial pics produced by the networks.

“There’s been a big change in the market just the last five years,” he says. “The TV network films distributed by Toho are the only domestic films making money. … It’s hard to survive on art films alone.”

In addition to strengthening its core businesses, Cine Quan Non is exploring unorthodox income sources. One is selling naming rights to two of its Tokyo theaters to Human Trust Holdings, a Tokyo-based temp agency. “They will be able to promote their business through our theaters, while we collect fee income over the five-year period of our contract,” explains Lee.

Another is to launch a pic production company with Fields, a major maker of machines for pachinko and pachisuro (pachi slot) — hugely popular gambling games resembling pinball. The short pics produced by CQN will be shown on the machines themselves so that players can enjoy more visual stimulation than watching steel balls fall into holes.

“There are already pachinko versions of ‘Star Wars,’ ‘The Seven Samurai’ and ‘April Snow,”‘ a popular Korean pic, says Lee. “We plan to use our own hit theatrical pics that lend themselves to pachinko.” Not, however, “Hula Girls.” Explains Lee: “It would be too distracting.”

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