Hong Kong Filmart: Volatile Currencies Put Buyers on Edge at Film Markets
The strong dollar is bringing joy and pain to buyers and sellers, while also slowing down deals.
The impact of high volatility in global currency exchange rates is being felt across the international entertainment industry, but particularly at events such as Hong Kong Filmart, where acquisitions for films, TV and other content are negotiated. The strength of the U.S. dollar is creating winners and losers at markets, and also slowing down some deals while buyers play a waiting game hoping that rates will move back in their favor.
"Every morning I check the exchange rates as this year the rise of the dollar has been very rapid," said Justin Kim, CEO of AVA Entertainment, an independent buyer of content for Korean IPTV and cable stations who exhibits at Filmart every year. "If it was stable, then we could plan ahead, but when it's moving this much, it's really difficult."
"We hedged and bought a lot of dollars last year, but we've used them all now. I want to tell President Obama, 'You're killing us!'" added Kim, who said he was delaying full payment on some acquisitions in the hope the dollar would weaken.
Delayed payments because of the strong dollar is something that Sophie Ya of China's Yi Animation has been experiencing with buyers from some Southeast Asian countries.
"It didn't affect the negotiations or the selling of our film as much, but they definitely don't want to pay when the dollar is so strong," said Ya, who is representing animated feature Kung Food at Filmart.
For American companies selling content, the strength of the greenback can be an excuse for buyers to offer less money in negotiations, as well as slow down the process, reported Jeff Goldman of Burbank-based Cardinal XD, which has a number of titles at the market, including Checkmate, starring Danny Glover and Vinnie Jones.
Despite the currency issues, Goldman has been seeing more activity from buyers since the beginning of the year, while the stronger dollar makes it cheaper to actually attend markets.
The Japanese yen has fallen by more than a quarter over the last year, though the effect has been hitting companies in different ways.
"Every single buyer knows about the cheaper yen so they try to push the prices down," said Takayuki Hayakawa of the international department at Japan's Fuji TV.
For co-productions though, the strength of the dollar means a Japanese partner currently has to pony up more yen, pointed out Hayakawa. For partnerships where a Chinese company is the majority investor, it will be priced in RMB, though the yen has also weakened against that currency too.
Over at Toho, where Attack on Titan was attracting a lot of interest for the Japanese major, Yusuke Kikuchi said that the weaker yen wasn't leading buyers to put in lower bids for its films, but was helping profitability for its dollar-denominated sales.
Meanwhile, the Ile-de-France Film Commission (IFC), which was at Filmart to encourage international productions to shoot in the Paris area, were touting the advantages of a weak currency in addition to tax incentives and access to prime locations such as the Louvre.
"Don't forget the euro is 1.08 to the dollar now, down from 1.34 over the last year or so. This makes shooting in France much cheaper now," said Umaru Embalo, co-founder and creative director of Knight Works, a Paris-based VFX and post-production house that was in Hong Kong with the IFC.