Asia has been integral to IM Global almost since day one. That is a reflection of both of IM Global founder Stuart Ford’s determination to position the company for growth and the company’s financial opportunism.
That puts IM Global in a unique position — an independent with large exposure in both India and in China.
“Our mantra is to stay opportunistic, not be wed to a single business or financing model,” Ford says. “And to keep one eye on the wider business — digital distribution, growth markets, lower cost filmmaking. These make it easier to build a business and make a buck, than building a big studio structure.”
The film industry’s traditional model saw international sales covering risk and the North American market as the profit center. But Ford argues that the U.S. market is the most crowded, expensive and competitive market in the world and therefore the least possible for an independent company to control.
“We cut our risk in U.S., and shifted to new territories,” he says. “The industry has changed. It is more global, and less about U.S. (business than it once was). The meat on the bone today is in growth markets such as China, Russia and Brazil.”
Ford was able to put that into practice in 2010 when Indian conglomerate Reliance ADA Group — which Ford has called “South Asia’s unsexy equivalent of GE” — was casting around for further investments in Hollywood. Having already bought a large slice of Steven Spielberg’s DreamWorks, the company was eyeing the independent sector and in April 2010 it was agreed that Reliance Entertainment would take a majority stake (believed to be 76%) in IM Global. Terms were not disclosed, though Reliance is understood to have invested an initial $20 million, and subsequently more than three times that as production funding.
IM Global’s Anthem label has handled many of the films flowing from Reliance Big Pictures’ Indian production slate, but they represent a small fraction of IM Global’s sales business.
Reliance Big Pictures has downshifted its Indian production strategy to concentrate on midsize titles, which have less chance of major international sales. More recently Reliance has sold off its cinema chain and its post-production facilities and has halted film production. Reliance, however, remains a key distribution component in IM Global’s Apsara activities, the company’s pan-Asian rights operation.
One likely reason that IM Global and Reliance found common cause is that both companies place strong emphasis on China. Although that is a position that few Indian companies have mastered, Reliance ADA has financing from Chinese banks and counts Chinese companies as key suppliers for its power generation and telecoms businesses.
IM Global opened its Beijing office in mid-2013, headed by Leslie Chen, who had worked at Taiwan’s Flash Forward Entertainment and at Chinese giant Huayi Bros. Media.
The Beijing office — IM Global’s East Asian HQ — services IM Global’s existing Asian clients, supports the company’s own movies that are distributed in China and supports Apsara.
“The Beijing office complements our Mexico City, New York and London outposts and underlines how Asia is growing as an important market,” says David Jourdan, senior VP of international business development & operations. “Stuart Ford, (COO) Chris Bosco or myself are there every six to eight weeks. We have a diverse slate. The Beijing office allows us to develop relations with local producers for the long term. And there are increasing levels of activity daily.”
The sales arm got a big boost in spring 2014 when IM Global secured a deal to represent overseas rights to Huayi’s Chinese-language productions, including the high-profile romantic comedy “Women Who Flirt” and “Love on a Cloud” plus upcoming pics “A Tale of Three Cities,” based on the life of Jackie Chan’s parents, starring Tang Wei and Sean Ching-Wan Lau and directed by Mabel Cheung; and “Lost and Love,” a dramatic story of a child’s kidnapping and its aftermath, starring Andy Lau and Jing Boran.
The sales operation has also nabbed pics from other top Chinese groups including Galloping Horse and Wanda Media, two of the largest of the new generation of Chinese film studios. And with Ning Hao’s “Breakup Buddies,” above, IM Global handled last year’s top scoring Chinese movie, which earned $200 million at the country’s box office and secured a North American release through China Lion.
The company’s Cannes slate gives prominent position to “The Ghouls,” which is poised to be one of this year’s biggest local titles. While the film is unusual for China — it’s a Mongolia-set, ghostly thriller, a genre normally frowned upon by content regulators — it is based on the bestselling book “Ghost Blows Out the Light,” and is set for the prime pre-Christmas release period. The pic has the backing of Wanda, Huayi and Enlight, another Chinese major.
Also in post-production is the Justin Lin-produced “Hollywood Adventures,” from Enlight.
“We provide more services in China than just sales,” says Jourdan. “We offer trust, a pipeline and financial exchange.”
IM Global has also brought Chinese financing into a number of independent Hollywood movies. It takes credit for bringing in Beijing-based shingles E Stars Films and DMG onto “Paranoia” and the upcoming “Autobahn,” respectively.
Apsara, which acts as a risk-taking middleman, is another area where IM Global stands out. The unit acquires rights across a dozen Asian territories from leading independents (or holds back IM Global’s own titles). Then, through an output deal, Buena Vista Intl. handles theatrical and home entertainment releases. Apsara handles pan-Asian TV sales.
The intermediary structure is not unusual in Asia, where brokers are often active buyers, but it is seldom done on such a scale. (Excluded are territories including Indonesia, Vietnam, China and Japan.) IM Global pitches Apsara as buying films on 12- to 20-year licenses at indie prices and releasing them as if they were studio titles.
“There is a real difference in box office between what a studio can get out of the market and what an independent can do,” Jourdan says. “It helps to have ‘Avengers’ coming down the line. There is better market leverage. And working with Disney means working with a public and transparent company. Secondly, a seller can have one conversation (with Apsara) for the Asia region rather than with several independents.”
In addition to any short-term gains Apsara may achieve, there is also a longer term play that is predicated on IM Global’s understanding that Asia is structurally still a growth market.
“Our deal with Disney to sub-distribute that content is a simple clean model,” Ford says. “It allows us to build an asset as those library values rise.”