Asian Distributor Tangren Cultural Film Turns 20

So far in its short history, Tangren Cultural Film is little known outside the specialty film corner of its Australian home base. But splashy branding, useful give-aways, and an events program at the American Film Market in Santa Monica are aimed at quickly raising its profile.

That is in keeping with the leap to another level that Tangren is already engineering in Australasia and which it is planning next to take to North America.
The company was established last year in Australia, and initially operated as a marketing partner on Chinese movies acquired and released by other companies. Tangren’s unique selling point was its connection between advertisers and the diaspora populations of ethnic Chinese in Australian cities.

After getting its feet on the ground, Tangren took the decision to acquire rights on its own account and — after Madman Entertainment handled its first two titles — to operate as a distributor in its own right. Taking that strategy one step further, in May Tangren acquired Milt Barlow’s Asia Releasing, one of just a handful of companies plowing the foreign-language furrow in Asia. (Others include Madman, CMC and China Lion in Australia and New Zealand, and category leader Well Go USA in North America.)

In recent weeks, Barlow replaced Kristy Wang as CEO and is now busily re-engineering Tangren as an “Asian releasing company.”
In many ways, Tangren appears to be the vehicle that the veteran Barlow, CEO of Village Roadshow between 1988 and 1998, has been seeking through a decade of entrepreneurial permutations.

In 2008 his New Zealand-based Incubate helped launch China Lion, a company that since 2010 was involved in releasing more than 50 Chinese films in North America, including “Aftershock” and “If You Are the One 2.”

Barlow exited in 2013, launched video outfit Chopflix, and later returned to the theatrical business with Asia Releasing, operating in Australia, New Zealand, the U.S., Canada and in some instances the U.K.

Both China Lion and Asia Releasing were built on Barlow’s particular vision that there is a small but real market for Chinese-language movies outside China.
It is not a crossover market, but one comprising overseas Chinese populations; some are emigrants, others are students. Many may never have lived in China, but they speak Chinese and have strong cultural connections with the Middle Kingdom.

To attract these groups to watch Chinese movies in theaters requires day-and-date releasing. If that short window of opportunity is missed, audiences will have turned to other outlets instead.

The success of 2004’s “Kung Fu Hustle” and 2007’s “The Forbidden Kingdom” and “Fearless” may have done Chinese films a disservice, by raising expectations at a moment when Chinese cinema was changing to become more contemporary and more parochial. At the early part of this decade, Barlow observed many Chinese film sales held back by their producer or sales agent in the hope of landing a studio deal and a North American release on thousands of screens. But when would-be buyers concluded that few Chinese movies had wide release potential, most went unreleased in English-language territories.

Tangren has adopted the same day-and-date approach as China Lion and Asia Releasing, with Barlow calling it a “a core strategy” to reach audiences before pirate sites and, increasingly, ahead of legitimate Chinese streaming platforms that audiences access through VPNs and browsers. “We can’t afford to go out even one week later,” he insists.

“It is in the nature of Chinese social media that it affects our marketing (in Australia and North America),” says Barlow. “All the money in the world will not convince (overseas) Chinese audiences to watch any movie if the word-of-mouth from China is bad.” He says that is making the segment more polarized. A winning title may earn $800,000 to $1 million, but a flop will struggle to take $100,000. There is little in between.

The other recurring element in Barlow’s strategy as an independent has been to build close relations with the few dozen mainstream theaters that are consistently willing to play Chinese and Asian titles in their multiplexes. Working with AMC (even before its 2012 acquisition by China’s Wanda), Barlow was able to count on securing 30 screens per film in North America, and 60 for a big release. Barlow says that Tangren is close to announcing two major deals in Australia that take this strategy even further.

Already though, he has been able to tap into Tangren’s ad industry connections. The company, which has a staff of 35, based mostly in Brisbane, wraps as many as 400 China-related sponsors around the releases of its Asian movies in Australia and New Zealand. That is a formidable additional punch that he did not have previously.

In a multi-year contract with Val Morgan, the Hoyts-owned (and ultimately Wanda-owned) company that dominates cinema advertising in Australian theaters, Tangren is now also providing Asian-themed pre-show footage. This has proved popular, and its trailers, behind-the-scenes footage and promotional partner messages have expanded to seven minutes.

The moves are having an effect. Rentrak data shows Tangren films achieving some 48% share of the non-Bollywood Asian film market in Australia and New Zealand.
And, in addition to Chinese-language movies, the company is releasing a growing number of films from other parts of Asia — South Korea, Japan and Thailand in the main. “Korean films are very well made, and unrestricted by censorship, they have better scripts than the Chinese films,” says Barlow. Tangren enjoyed strong business with Korean smash hits “Along With the Gods,” parts I and II. Significantly, Tangren is addressing the Chinese diaspora by subtitling these films in both English and Chinese.

“The parent company is encouraging us to buy poster advertising and behave like a more mainstream company,” says Barlow. “That costs money.”
He is tight-lipped about the precise identity of Tangren’s owner, beyond describing it as: “An investment trust, based in Australia, and supported by wealthy Chinese organizations. It has a few key backers and very many small investors.” He says Tangren is its only substantial film industry investment, though it has stakes in businesses in multiple other industries.

“This is an industry where they want to grow, and their attitude is that [Tangren] should think like a Silicon Valley company. They want us to build scale and that profitability will follow later. We have until the end of 2020 to achieve the scale we need.”

The expansion strategy involves: replication of the Australian model in North America; a smaller operation in the U.K.; and one or more acquisitions by mid-2019. In both Australia/New Zealand and North America, the company aims to be releasing 25-30 titles annually, starting next year.

That will require a significant effort at AFM, where Tangren will aim to lock in major titles for Chinese New Year, and some maneuvering around the acquisition strategy of Netflix, which Barlow believes has yet to understand the ancillary market for Chinese-language films. (Netflix is not permitted to operate there, but is a buyer of former China streaming rights.)

“We have been frustrated that a number of Chinese titles have not been available because Netflix has gone and paid $1 million for worldwide rights,” says Barlow. “We need ride that out, and wait for Netflix to crunch its algorithms and see what works for them and what doesn’t. Then the prices will come down.”
By the time that happens, Tangren could be more of a known quantity than it is now.

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