Asian marketplace in a lull

Local films make way for Hollywood movies

HONG KONG — The Asian film marketplace is undergoing what stock market analysts might call a correction. The one-way traffic that for much of the 21st century saw Asian theatrical markets and the numerous local cinema industries moving upward, had to slow or reverse eventually.

Current year bears several hallmarks of a pullback — in many of the most mature territories, Hollywood films are doing well and local pics have slipped as the multiplex building surge comes to an end. But there are bright spots in the region’s developing territories of Southeast Asia. Korean B.O. for the year to the end of August was down 4%. In Japan, admissions for each of the three summer months were down, and in the May-to-July period total ticket sales slumped by more than 18%. In both territories poor perfs by local films led the downturn — Japanese movies sustained a 41% decline in a July-to-July comparison. Hollywood movies, enjoying a bumper summer around the globe, held their own.

Asia’s third-biggest market, China, looks like it is still growing. Officials reported that B.O. in the first six months hit 1.2 billion yuan ($160 million). Although the year to date in China has been dominated by Hollywood titles (“Transformers,” which grossed some $36 million, did twice the nearest contender), the government says because of the second half weighting of a number of big (Chinese-language) films, B.O. is on course to beat 2006’s $357 million and could hit $400 million. Expected B.O. champs include “The Sun Also Rises,” released on Sept. 13, Ang Lee’s “Lust, Caution” and Feng Xiaogang’s war pic “Assembly.”

Theatrical growth in China partly reflects the opening of 100 cinemas repping 700-plus screens so far this year.

Reflecting a slightly saner environment, production levels in South Korea appear to be dropping for the second year running. Same is true in Hong Kong, though there bizzers fret that the industry is shrinking and losing its export potency.

It lost its claim to be Hollywood’s rival in Asia in the late 1990s, but has yet to fully adjust to its relationship with China. Mainland market offers big upside to certain Hong Kong movies, but Chinese factors are increasingly influential in terms of casting and release dates — and not always to Hong Kong’s advantage.

Hong Kong companies can console themselves that four of the top 10 movies at the Chinese B.O. in 2007 are Hong Kong-made or -financed (“Protege,” “Invisible Target,” “Secret” and “Teenage Mutant Ninja Turtles”).

Korean congloms have no such comfort from neighboring Japan, which for a few years was their biggest sales market. Korean sellers had a dismal time at the recent AFM, Berlin and Cannes markets, and data from the Korean Film Council (Kofic) says the country’s sellers in the first six months of 2007 scored 148 deals worth just $7.5 million — a 57% slump.

But investment company Torino recently announced that it had achieved a $2 million presale on its romantic drama “Sookmyeong” to Japan’s Formula Entertainment, and other companies will be hoping that they can emulate that at Pusan’s Asian Film Market.

Showbox and CJ Entertainment can also breathe a little easier after their “D-War” and “May 18” titles put in massive B.O. perfs of $58 million and $50 million (figures to Sept. 23), respectively, at home. (And many territories around the world would love to have the kind of problems of South Korea, where local films’ share of B.O. is down 3 percentage points to 49%.)

Good news for the big northern Asian producers is that Southeast Asia’s smaller territories are growing and have a developing taste for their movies. New companies have started building multiplexes in Vietnam and Indonesia. These have the twin effect of enlarging the size of the marketplace and expanding the number of titles on offer.

In Indonesia, locally financed Blitz Megaplex has opened three cinemas and launched Queen Distribution to acquire indie films for distribution. A significant proportion of the pics nabbed to date have been Korean.

In Vietnam, where the government started to relax its controls on the industry in 2004, U.S. exhibition veteran Ted Shugrue’s Megastar Media has opened four complexes and has plans for four more by the end of next year. A subsidiary, MSD, was quickly launched to acquire and distribute pics in the country. Not to be outdone, the country’s leading private-sector movie firm, Galaxy, is also accelerating theater construction and acquisition. Total number of moves to reach the Vietnamese market this year could be about 120, a significant increase.

The Indian theatrical market is also subject to many of the same forces of modernization and expansion. Conducted by more than a dozen well-financed local firms, replacement of traditional single-screen cinemas by multiplexes is spreading from the largest metro areas to smaller cities. In populous, movie-mad India, new screens set to join the market in next years can be counted in thousands.

Early signs are that with multiscreen cinemas comes both wider releases and an expansion of choice. U.S. movies have been the main beneficiary, and saw their market share rise to some 8% last year, although distributors such as Indo-Overseas recently experimented with India’s first theatrical release of a Korean movie, last year’s megahit “The Host.”

India may be increasing its imports, but export growth is moot. Though they are played in just about every Asian territory, there is little sign to suggest that Indian films are finding new distributors or crossing over to auds beyond the far-flung Indian communities.

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