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Hong Kong’s FilMart Braces for Shifting Landscape of Asian Cinema Business

Monster Hunt 2
Courtesy of Lionsgate

The red-hot Chinese box office has created big problems for Hong Kong sales companies.

As FilMart, Asia’s largest film rights sales market, rolls out March 19-22, Hong Kong sales agencies are wrestling with the problem of how to come to terms with an ever-tougher rights sales business, and the changing status of Hong Kong’s once mighty movie sector. FilMart this year is set to be the last stand for Distribution Workshop. The company plans to shrink its sales operations and relocate them from Hong Kong to Taiwan. Former Edko staffer June Wu has been retained as a Taiwan-based sales consultant.

For years, Hong Kong sales firms that outdid themselves to build extravagant sales booths at FilMart were glorified production firms or mini-studios that represented their own output and then picked up a handful of third-party titles from around Asia, but especially from China.

The problem with that strategy now is that Chinese films are becoming harder to sell to international distributors, while the heyday of Sino auteurs churning out festival-winning films has waned.

Since around 2012, when contemporary subjects depicted in broad commercial genres swept aside the previous staple of (allegory-laden) martial arts and historical dramas at the mainland Chinese box office, mainstream films have become more local. Chinese romances, comedies and dramas steeped in recent nostalgia have little appeal for international audiences. And when films such as “Wolf Warrior 2,” “Detective Chinatown 2” and “Operation Red Sea” have all passed the $500 million mark, Chinese producers put their focus on their home market.

In February, China racked up the biggest box office month in movie history, its $1.57 billion eclipsing the high-water mark of $1.4 billion North America achieved in July 2011.

Moreover, much of the top talent that once was the bedrock of brand-name Hong Kong cinema has gravitated toward the China market. Directors John Woo, Andrew Lau, Dante Lam, Wong Jing and Tsui Hark have all made movies in the past year squarely aimed at mainland audiences. Include in that Hong Kong’s Raman Hui, whose “Monster Hunt” franchise has taken in more than $700 million to date in China alone. There’s hardly a Hong Kong film today that is not made as a co-production with China — and none are the big-budget action titles that previously would have sold to markets in Southeast Asia, Europe and home entertainment.

China is also seeing the emergence of its own small film sales sector. It includes companies Movie View Intl., CMC Pictures, Rediance and Asian Shadows. And back from bankruptcy, Fortissimo has now hired staff in Beijing. It will be operated as a Netherlands-China company that launches new titles from Cannes.

That said, Hong Kong as a base still has some enduring strengths, including access to finance, a large pool of experienced film producers and proximity to the booming mainland.

While Hong Kong sales agents deny that their problems lie with competition from the Chinese startups, many are trying to reinvent their business models, putting more emphasis on development, production and festival services.

“We are having a reconception and a new focus, though we will be holding on to local distribution in Hong Kong, Taiwan and China,” says Jeffrey Chan of Distribution Workshop, which will now be folded into a new group company Just Creative Studio. “When we started 10 years ago we only looked at the markets outside China, but now business is pouring into China.”

Reinvention and a greater focus on content are similar themes at other Hong Kong sales companies. “Overseas sales is simply not a strong business any more. And with high [Hong Kong] overheads, it is getting harder,” says Christy Choi, distribution director at One Cool Pictures. “Increasingly, people want to be in project development. It has more upside than rights sales.”

Choi says the Chinese streaming platforms are key partners in greenlighting projects — both feature films and original series — and that One Cool Pictures is considering opening a Beijing office in order to be closer to these decision-makers.

At Good Move Media, Pearl Chan is focusing on Southeast Asia, especially festival titles from Malaysia and Indonesia. Good Move is also handling the new Hong Kong Intl. Film Festival Collection, a select group of films, with some screening at the fest, such as “Posesif” by Indonesian auteur Edwin.

“We don’t want the overhead of [shingles] Emperor, Fortissimo or Distribution Workshop. The sales business is increasingly boutique, increasingly personal. We are about partnerships and long-term relationships with film makers,” says Chan. “That is possible in S.E. Asia where half the talent is not signed up with agents, and where filmmakers talk directly with actors.”