Asia going global by getting local

Focus on home markets is paying off

Related: Asia ent. biz is politics as usual

HONG KONG -- Foreign-language Oscar winner "Departures" is a perfect example of how Asian cinema quickly is becoming more local and more successful at the same time.

The region's film institutions still fret about overseas perception of their industries and hold endless think-tanks about how to break into the U.S. market. But in many ways, the film world is turning to Asia anyway, as those economies have emerged from recession faster than the West and Hollywood studios and indies from the rest of the world have scrambled to join in.

With a few days left of 2009 and final numbers still to crystallize, boxoffice in East Asia looks strong. China in particular appears to have delivered a growth number -- 25% to 30% -- typical of a developing economy, but on a scale that now puts it in the global top 10 territories. South Korea has bounced back with growth of 9% and a market share that has swung back powerfully in favor of local films. Even in troubled Japan, the overall share of the market taken by Japanese films is heading upward.

In the Philippines, Indonesia and Taiwan, local films also have a growing presence.

Special circumstances, notably a string of high-priced flops and a March-to-May releasing hiatus, meant a rotten year for Indian film. But there were many positives: boxoffice records for "Ghajini" in January and "2012" in December. The problems in any case might have had a cathartic effect on the overheated industry.

The recipe in Korea and Japan also was to go local. Local comedy lightened otherwise more-serious pictures in Korea and produced such hits as the monster movie "Chaw," the sport drama "Take Off" and the tsunami disaster movie "Haeundae."

In Japan, manga adaptations and TV franchises proved the winning formula as local films headed by "Rookies the Movie: Graduation" came out top with $88 million and left only two top 10 places for Hollywood films through the first 10 months of the year.

In China, the formula was to put aside the historical martial arts formula and embrace diversity. The boxoffice year was notable for Hong Kong-made mainland comedy "Look for a Star," Ning Hao's crime caper "Silver Medalist," Taiwan's nostalgic "Cape Number Seven" and $4.7 million for "Pleasant Goat and Big Big Wolf," a record for a Chinese-made animation. Later, the controversial war film "City of Life and Death" scored more than $20 million, and the all-star propaganda movie "Birth of a Republic" collected a huge $58 million.

Meanwhile, the expansion of exhibition circuits in China, India and South East Asia continued to grow the business through more ticket sales and higher ticket prices. But it is not clear that theatrical expansion can make up for the erosion of the DVD market by disc piracy and the growth of (legal and illegal) online sources.

India now boasts an international exhibition champion in Reliance ADA's Big Cinemas, which opened its 500th screen worldwide in November; more than half are overseas. But the pace of plex development in its home market is much slower than all operators predicted a couple of years ago. And the shift from a region-by-region flat-fee distribution system to a revenue-sharing multiplex model was at the root of the standoff between producers and exhibitors. Rights owners simply kept their films off all screens until the dispute was settled -- digitally equipped multiplexes played TV feeds of 2009's other entertainment phenom: Indian Premier League Cricket.

For all of Japan's top-line boxoffice exuberance and some exhibition growth (3,359 screens at end of 2008), the country is a market with too many films chasing too few screens. As picking the right window and the best exhibition partner (possibly a single screen in the case of an imported indie movie) are so crucial, films debut late in Japan, and life for indie distributors is perilous. Although Toho and its Toho-Towa subsidiary might have been making hay, indies that shut their doors in 2009 included Movie Eye, Xanadeux and Wise Policy; Gaga was sold and refinanced.

On the production side, "Red Cliff" was the big story. "Part II" took $36 million in China, $13 million in Korea and an astonishing $56 million in Japan, vindicating Avex, the Japanese talent agency-turned-investor-producer, and the much touted intra-Asian co-production model. It's doubtful, however, that there will be another of quite that scale soon. Indeed, Terence Chang and John Woo, producers of "Red Cliff," attempted this year to get a $50 million "1949" off the ground, but it floundered amid squabbles over finance and script rights.

Rather than knitting together pan-regional co-productions alliances, many producers are simply placing China at the heart of their business plans and their films' finances. Many have moved to Beijing, including Woo and Peter Chan, who this year founded Cinema Popular and whose big-budget "Bodyguards and Assassins" dared to release head-to-head with "Avatar" in many territories and could be the film to beat this Christmas in China.

January saw the release of the first significant China-India co-production, "Chandni Chowk to China," produced by India's Ramesh Sippy and backed by Warner Bros. A near-term repeat looks unlikely after it flopped.

Significantly, Chinese regulators and filmmakers seem to be finding ways of greenlighting a more diverse array of projects than before -- though subversive themes, explicit sex and even ghosts remain taboo -- something that will facilitate foreign co-productions with China. The arrival in August of a former studio boss, Zhang Pimin, at the head of the State Administration of Radio Film and Television looks good for the film industry.

Equity funding remains plentiful in China, and boxoffice returns are improving for the minority that make it into theaters. China-centric film funds continue to be announced, and the Korean industry is seeing venture capital cautiously seep back in, buoyed by the success of the 2009 crop. In contrast, JDC Trust in Japan collapsed in ignominy in September. Huayi Brothers added to its coffers with the first stock market listing of a private-sector Chinese producer.

State money for film is scarce in Asia compared with Europe, with Korea and Singapore the most generous. Funding bodies in both countries were criticized for their inefficiency in government audits, and subsidy could be subject to greater controls, though Singapore did manage to launch its international production fund before the report.

More money could be coming to Asia from Hollywood. Nearly all the studios are now involved in local-production ventures in one or more Asian country. CineAsia last week witnessed Sony promoting the Stephen Chow-produced dance picture "Jump" and Fox touting "Hot Summer Days" for a Valentine's Day release in greater China.
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