Rather than predicting a bursting bubble, executives involved in the booming China movie business see a rational business taking form, according to panelists at the Film Finance Forum East presented by Winston Baker in association with Variety at the Toronto festival.
Several cite the fact that serious money is being paid for video-on-demand rights.
Marc Schipper, chief operating officer at Exclusive Media, says rival Chinese VOD outfits surfaced at the 2010 American Film Market, paying tens of thousands of dollars for Hollywood films and by 2011 prices leapt to six figures. He adds that Western films getting the promotional boost from Chinese theatrical release can fetch well above the $150,000-$250,000 that is the current price range.
China’s movie business is driven by theatrical — its box office is expected to top $3 billion this year, and despite the rise in price for VOD, TV rights remain miniscule in China.
While there is opportunity in the country, it has its quirks.
“Long contracts sometimes aren’t appreciated,” says Forum panelist Maarten Melchior, international representative of the film and TV division of financial services outfit Fintage House, which handles film contract collections and disbursements for film companies.
“The Chinese will ask, ‘Why do you have to spell out every possible issue that may or may not happen.’ They figure it’ll be resolved anyway because you are doing business with people you trust.”
Schipper says it is ultimately the people who understand the culture and get along with Chinese partners who will be successful: “You cannot do anything without the right Chinese partners.”
Of course, local partners can help foreigners navigate the constraints of Chinese regulations and censorship rules, which includes a ban on depicting police corruption, or ghost stories.
While most Western indies focus on movies, Screen Capital Intl. is investing in theaters as part of a strategy that starts with building brick-and-mortar cinemas in the underscreened territory.
“It’s our view it’s more efficient to build a base of theaters in which you can establish an in-theater advertising business, then a distribution business and finally a production business,” says Clint Kisker, director of media industries investor Screen Capital Intl. “It can be seen as a path into Chinese entertainment infrastructure from reverse angle than the more commonly way to start with co-production model.”
Screen Capital opened its first Chinese cinema in February in partnership with Red Carpet Cinemas, which has plans to build 50 theaters in underscreened areas.
9:30 – 10:45 a.m.
State of the Industry: Financing Single Picture Deals in Today’s Market
Addressing new investor models, deal structures and understanding capital structure, among other issues.
Moderator: Jay Cohen, the Gersh Agency
Panelists: Teddy Schwarzman, Black Bear Pictures
Michael Benaroya, Benaroya Pictures
Adam Ripp, Crime Scene Pictures
Bill Lischak, OddLot Entertainment
11:15 a.m. – 12:30 p.m.
Independent Strategy: The Art of Project Development and Packaging
Finding the right partners, identifying, securing talent and reps, plus defining the budget.
Speakers: Anthony Rhulen, FilmEngine
James Huddleston, Informant Media
Adam Rymer, Lava Bear
Mark Ankner, WME
Christopher Woodrow, Worldview Ent.
1:30 – 2:45 p.m.
Making the Sale: Securing Domestic and Intl. Distribution
Latest strategies on getting pics into outlets.
Moderator: Robert Darwell, Sheppard Mullin
Panelists: Laurie May, Alliance Films
Mark Gill, Millennium Films
Berry Meyerowitz, Phase 4 Films
Jonathan Sehring, Sundance Selects/IFC Films
Lisa Wilson, the Solution Entertainment Group
2:45 – 3:45 p.m.
Search for Incentives: Lining up U.S. and Canadian Soft funds
Speakers: Joe Chianese,
EP Financial Solutions
Will French, Film Production Capital
Mariella Perez, Puerto Rico Dept. of Economic Development and Commerce
4:15 – 5:15 p.m.
Beyond North America: Lessons Learned from Investing in China
Speakers: Marc Schipper, Exclusive Media
Maarten Melchior, Fintage House
Clint Kisker, director, Screen Capital
• Coin flowing again to indie features