The good news for U.S. indie producers is that most Southeast Asian economies are booming and multiplex cinemas and new channels are proliferating. The not-so-good news is that these burgeoning businesses won’t necessarily guarantee more cinema playing time, higher TV license fees — at least on Rupert Murdoch’s Star TV — or buckets of investment coin.
That was the paradoxical picture that emerged at the American Film Market seminar “Asian Tigers and Little Dragons: Feeding1the Pacific Rim’s Appetite for American Movies” Wednesday at the Miramar Sheraton.
“Most of the (film) business in Southeast Asia is run by Chinese (people) and dominated by Chinese product,” said Thomas Gray, president/CEO of Rim Film Distributors, which releases Chinese pix in the U.S.
Said the L.A-based Gray, who’s also a consultant to Hong Kong-headquartered media conglom Golden Harvest, “There is no chance of equity investment in (U.S) feature films” from Southeast Asia.
Ken Kai, president/CEO of Cosmo Communications, an international consulting and merchant banking firm — and a former president of the U.S. unit of Pioneer Electronics — noted his primary business currently is raising coin for U.S. pictures.
“It’s been tough” in Japan due to the recession and “turmoil” over the past four years, Kai admitted. He’s now trying to tap Singapore for equity investment. He believes Singapore has potential, but concedes there will need to be a “long learning process to explain” how film investment works.
Kai was bitterly critical of the Japanese bureaucracy for “mismanaging the cable/telco sector, noting that cable penetration is less than 5%.
“There is no coordination to make this information superhighway (happen); Japan will be quite behind this new era,” he said.
Gray was bullish about exhibition in Asia, where Golden Harvest is building multiplexes in partnership with Australia’s Village Roadshow.
He told Daily Variety that their Golden Village co-venture initially is targeting eight cities in China as cinema sites. The company will work with local partners, possibly in some cases with municipal authorities. He said groundbreaking on the first multiplex could start within one year.
Also singled out as a nation with a bright future for theatrical expansion was Vietnam. After visiting that country 14 times in the past two years, Gray spoke glowingly of Vietnam’s highly literate, well-educated and predominantly young population: “a sophisticated audience.”
Golden Harvest plans to start releasing Hong Kong films in Vietnam and is producing two films there this year. Even given the country’s low cost base, it was astounding to hear that one of those pix is budgeted at $ 67,000.
Gray expects Golden Village, along with a local partner, will start building cinemas — six screens maximum — in Vietnam in about 2 1/2 years when ticket prices have risen to the point that justifies the investment.
The chief worry in Vietnam is piracy. On Gray’s last visit, “Jurassic Park” and “Cliffhanger” were playing in video-projection cinemas seating up to 1,500.
Gray believes that since the lifting of the U.S. trade embargo, the Vietnamese government will be keen to stop that practice. But he figures it will be much harder to stamp out the 2,000 mom-and-pop video shops in Saigon that rent cassettes for 19 cents a night.
Gray added that in Vietnam, “There is no animosity to the U.S. It’s almost like (the Vietnam War) never happened.”
Gray believes the creation of new screens throughout Southeast Asia will boost local production rather than significantly increasing demand for U.S. product. Illustrating the domination of local product, he said Hong Kong produced 116 films last year, and HK productions grabbed 70% of the total B.O. Still, Gray agrees that U.S. “blockbusters will always be sold and top dollars will continue to be paid.”
Greg Coote, prexy of Village Roadshow Pictures, echoed Gray’s general message when he told how difficult it was to do business in the Pacific Rim. Coote cited his company’s attempt to break into Taiwan in 1988 and said it still hasn’t managed to open the door.
Fresh light was shed on the Chinese government’s recent well-publicized move to shut out Murdoch’s Star group of channels by banning private satellite dishes.
Beijing is under pressure from dish manufacturers to relax the dish ban, said Grace Ip, president of Neutral Distributing Services, a consultant specializing in licensing film and TV product for Southeast Asia. She estimated there are 10 million dishes already in China.
The Star channels reach about 33 million homes in China via cable, according to Tony Watts, VP programming and general manager of Star Movies.
In disheartening news for indie producers, Watts said, “We want the pick of the blockbusters but we’re more interested in co-production deals and in filming in local areas” (covered by Star’s footprint, primarily India and Chinese-speaking markets).
The big question is when Star will encrypt its movie channels and thus generate subscription revenues. Watts told Daily Variety that Star is negotiating with two cable operators in Taiwan and he expects the movie channels will be encrypted there in the second half of this year.