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China’s Movie Moguls Call for Tax Reforms, Precision Marketing and Diverse Content

Issue 21 BKLOT Shanghai - H 2013
Tomohiro Ohsumi/Bloomberg via Getty Images
Shanghai

Speaking at the Shanghai International Film Festival’s industrial forum, film company chiefs call for officials and peers to fine-tune industrial norms.

SHANGHAI – China might now boast the world's most enthusiastic financiers and audiences for movies, but the country’s leading film executives are showing no signs of complacency. In fact, some are calling for further improvements in industrial norms in an effort to "make the cake bigger."

Speaking at a series of panels at the Shanghai International Film Festival Forum on Monday, some of China’s most high-profile movie moguls are calling for measures that could ramp up the system, ranging from demands to cut down the tax bill for film companies to pleas for their colleagues to consolidate diversified slates and market them with precise audiences in mind.

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Yu Dong, CEO of the Beijing-based but Nasdaq-listed Bona Film Group, said the Chinese government is keeping tax rates too steep to allow for development in what he described as a "cultural industry with special characteristics and qualities."

While painting an aggressively upbeat picture of the future of the Chinese film industry – which, he said, will earn a record-breaking $3.59 billion (22 billion yuan) this year, on its way to surpassing the U.S. total by 2018 – he complained about the authorities’ legal requirements to take 5 percent of a film’s box-office revenue in addition to the profits tax film companies have already paid.

He also said mainland Chinese filmmakers might be facing an uphill struggle in cashing in on the ever-louder ringing tills too, saying how he sees “local” productions as taking up half of total earnings in the future – but with that gross shared by co-productions with Hollywood and also film companies from Hong Kong and Taiwan.

Speaking at a subsequent panel, Le Vision Pictures’ CEO Zhang Zhao said financiers and producers eyeing co-productions should reflect on whether these projects could attain “multilateral co-operation between markets and audiences” from the source countries of the funding.

“What is your main target audience? How will your find a local marketing company which could help you reach that demographic [in the country of the co-producers]? It’s only after this that you could be sure what films you are to make, and how you are going to make them,” he said. Quoting his experience in distributing The Expendables 2 in mainland China – the film took in $54.8 million (336 million yuan) during its run last September, despite being released around the same time as The Dark Knight Rises and The Amazing Spider-Man – Zhang said his use of social media in promoting the film among younger filmgoers is a way to “localize” co-productions.

Meanwhile, producers should also aim for diverse slates rather than simply following trends, said two other high-flying executives in yet another panel on Sunday.

Enlight Media CEO Wang Changtian said he was dismayed by people cashing in on the success of his company’s recent box-office hits Lost in Thailand and So Young. “After the two films were hits, I saw more than 100 titles being submitted [for approval from the Film Bureau] – and most of them are problematic premises,” said Wang.

Still, he also stated that his company is pursuing a strategy of both supporting new directors and sticking to genre films – a reference, perhaps, to Lost in Thailand (an odd-couple buddy road movie directed by actor-turned-director Xu Zheng) and So Young (rite-of-passage romance drama helmed by Vicki Zhao Wei, the A-list actress making her directorial debut).

Ren Zhonglun, CEO of the Shanghai Film Group, also said the key to success for Chinese commercial cinema is in the consolidation of genre movies – but producers should also look at how different projects could succeed in different ways.

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“For example, [Jia Zhangke’s] Still Life wasn’t a hit in China – I can now admit that actually the box-office performance is not very good at all. But the film was acclaimed abroad and has won a lot of awards,” said Ren, referring to how Jia won a Golden Lion at the Venice Film Festival in 2006 with the film.

Shanghai Film Group has stuck with Jia ever since, and is one of the major backers for A Touch of Sin, the uncharacteristically violent social drama which secured Jia a Best Screenplay award at Cannes last month.

The Shanghai International Film Festival Forum continues until June 20, with speakers at further panels and master classes including Sid Ganis, Oliver Stone and Tom Hooper. The festival itself runs until June 23, with its film market slated to begin on June 17.