Shanghai Film Festival reinvents itself as gateway event

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SHANGHAI -- Filmmakers around the world see the untapped potential of the Chinese film market as a tantalizing tease. With 247 million people, or only 19% of the population, currently able to afford tickets to a modern movie theater, the rest of the country's 1.3 billion people represent something of a holy grail to filmmakers hoping to take full advantage of China's increased interaction with the rest of the world.

But an opaque import-approval process and strict restrictions on the number of foreign films that may share in Chinese ticket sales -- 20 each year -- leave many international producers feeling like they're on the outside looking in.

Organizers of the 10th Shanghai International Film Festival, which opens Saturday and runs through June 24, understand their pain. Strategically, the SIFF is poised to play a pivotal role in the ongoing process of opening China up to the rest of the world.

The festival will feature nearly 300 culturally diverse films showing at 800 screenings. They are open to the public and will encourage a broad audience through special screenings for students, reduced-price shows and handicapped-accessible events.

This year's red carpet will be rolled out for international stars such as Marion Cotillard, (Picturehouse's "La Vie en Rose"), Kaori Momoi (2005's "Memoirs of a Geisha"), Kim So-yeon (2005's "Chat Gim") and even American Sharon Stone, as well as Taiwanese pop idol-turned-screen star Jay Chou (2006's "Curse of the Golden Flower").

Organizers hope the celebrity presence will build excitement around moviemaking in China, says SIFF organizer Royal Chen, and show that China's industry can bend its own rules to accommodate new business. Festival co-organizer China Film Group Corp. -- which plays an important role in the industry as the sole licensed distributor of films imported from outside greater China -- has announced that this year's best film might be granted preferential import status into China.

Shanghai wants the world to see it as the gateway of choice for foreign filmmakers with their eyes on China, say festival organizers, which include the State Administration of Radio, Film & Television, the Shanghai Municipal Government and the Shanghai Media and Entertainment Group.

"A freer exchange of stories and sharing of culture is good for everyone and is in our shared interest," says Mike Ellis, Asia Pacific regional director for the Motion Picture Assn. "We have seen in many countries that the removal of market access restrictions on foreign movies has had the effect of delivering powerful economic growth to local film industries in those countries."

The MPA and its member companies are partnering with Chinese authorities and the local film industry, Ellis notes, to build a legitimate and successful entertainment industry in China and foster revenue growth.

(In a related aside, SIFF organizers' hands are tied by law when it comes to offering guests a mix of market and festival news in English, the lingua franca of global trade. The Hollywood Reporter and other overseas trade publications are not allowed to publish at the festival.)

Even so, the way in which the worldwide business community views its prospects in China isn't entirely under the control of festival organizers. Major Hollywood studios such as Warner Bros. and Sony are coming to China for the opportunity. A few forays into co-producing have met with modest success, but other efforts at investing in moviemaking infrastructure -- such as building modern cinemas -- have met significant resistance.

Although Shanghai boasts many foreign-funded multiplexes, one -- the Paradise Warner Cinema City in the Xujiahui shopping center -- saw its Hollywood partner divest last November. This occurred even as another, the Shanghai Shanying CGV Cinema, took in a partner from Seoul. The Shanying cinema is a joint venture between the Shanghai Film Group Corp. and South Korea's CJ CGV Co., the largest Korean multiplex franchise.

In other cities across China, theater infrastructure remains underdeveloped, and in a country where many people earn less than 400 yuan ($52) each month, cinema tickets for 50 yuan ($6.50) are out of reach. This greatly limits the number of films that can make money at the Chinese boxoffice, says industry analyst Rance Pow, president of Shanghai-based Artisan Gateway.

Production on a handful of recent films, however, suggests that progress toward the goal of a commercially viable Chinese film industry is being made.

"'Curse of the Golden Flower' with Edko Films and new co-ventures such as the upcoming 'Secret of the Magic Gourd' with Disney are examples of films that are being crafted with high quality and appeal to wide audiences, and that we expect will lead to continued industry development," Pow says. "International productions such as this year's 'Spider-Man 3' also encourage industry growth and popularize local moviegoing."

"Spider-Man 3" is China's highest-grossing film of the year to date, earning more than $13.4 million since it opened May 2 during a national holiday -- this despite the wide circulation of pirated DVDs of the film.

Walking the Shanghai streets reveals a seemingly endless supply of illegally copied discs, but Ellis says that the MPA will continue its cooperation with the Chinese government to support IPR enforcement and education efforts in China.

"The mountain we're climbing is high, and the pirates are busy building the mountain higher every day," Ellis says. "We need every tool -- strong laws to support copyright, strong enforcement of those laws, stiff sentences for people who violate those laws and an understanding by ordinary people ... that buying pirated movies hurts the industry and makes it difficult for moviemakers to make new films."

To spread the word about the anti-piracy message, SIFF will feature a contest for the best creative short film. Director Feng, who was on the SIFF jury last year, was invited back to direct the winning entry for the anti-piracy trailer. The project will be shown before festival screenings.

While Beijing develops its anti-piracy laws and enforcement infrastructure, SIFF is poised to play a more aggressive role in generating international interest in China's nascent film market.

"We expect to see an increasing number of film ventures that draw upon the resources and expertise of local groups," Pow says. "SIFF provides a venue for showcasing local resources, elevates the profile and accessibility of the Chinese industry and encourages further development that benefits local players."

To highlight the increasing opportunities for local talent, Pow cites films such as 2006's "Crazy Stone" (a low-budget sleeper made by Warner China Film HG Corp., Warner Bros. Pictures' joint venture with CFGC) and highly anticipated big-budget titles such as director John Woo's $70 million "The Battle of Red Cliff," currently in production.

The Chinese-Canadian co-production "Iron Road" is another project in production that combines Chinese expertise and resources with overseas creative talent. A historical drama about the building of the Canadian railway told from the perspective of the Chinese laborers who made it happen, the miniseries is the first project to take advantage of a co-production treaty that Canada has had with China for the past 22 years. According to Raymond Massey, president of Vancouver-based independent production company Massey Productions Ltd., one of the primary reasons the treaty has been ignored for so long is the reluctance of international investors to put money into a film in China.

"Even though the market for the project was strong and it attracted big names like Peter O'Toole and Sam Neill, investors were skeptical about China, but not because we are trying something new," Massey says. "We aren't leading-edge because, like every industry, many are looking for profitable opportunities in China, and other productions from the United States or Europe have made successful ventures in China."

Nevertheless, despite Hollywood productions such as 2005's "The White Countess" and 2006's "The Painted Veil" paving the way for "Iron Road," the bureaucratic hassles were a huge challenge, Massey says. Unexpected but mandatory approvals sought by regulatory authorities caused potentially expensive delays that forced changes to the shooting schedule, and moving money in China can be very complicated. Massey says there still are some "Iron Road" payments that have been halted by red tape for several months.

"All of the research and consultation cannot prepare you for the surprises and difficulties," Massey says. "This will continue to hamper the growth of international investment in China's film industry."

Still, Massey says he has developed a deep respect for the Chinese film industry, and he hopes "Iron Road" will be ready for release in May 2008 and will make a splash at the next SIFF. "The Shanghai International Film Festival is a great opportunity to develop the state of the Chinese film industry," Massey says. "The bulk of the films made in China are obsessed with the past, but the festival brings international and Chinese talents together and can inspire the industry to cover new ground and move in new directions."

Adds SIFF's Chen: "Every year, a lot of Chinese films will be screened during the fest while a lot of international buyers will come for their business. It is surely a very precious opportunity for the local film community to make contact with the world."

Jay Rothstein, president of China Venture Films, who plans to attend SIFF's first official market, the Film Mart, says the event also will provide international producers with new financing possibilities. Rothstein is managing postproduction of China Venture's first feature, "Milk and Fashion," and hopes to lay the groundwork with potential investors for the company's next film.

"SIFF creates a unique opportunity for foreigners to showcase work which would otherwise not be accessible to the Chinese audience," Rothstein says. "It brings together filmmakers from around the world.

SIFF organizers also hope to review case studies as a means of examining China's film investment market, the potential for international distribution of China co-productions and the content guidelines that will help producers avoid run-ins with the China's notoriously thin-skinned censors.

Lest the forums appear to be about nothing beyond business, organizers say they also hope to spark creativity through a series of master classes like the International Students' Short Films Exchange. The short-film exchange between Chinese and American students in 2006 is intended as a platform for young talents to expand their work, organizers say.

"This year's new additions make the SIFF a better stage for Chinese filmmakers to collaborate with foreign ones," Chen says, "which will surely add to its fame as an A-level international film festival and forward our goal of encouraging and rewarding new Asian talents and creating a bridge to connect them to the world."


Shop talk: Shanghai's Film Fest Directors Summit offers programmers the chance to exchange ideas
The first International Film Festival Directors Summit will take place June 17 in Shanghai, as organizers of China's biggest local film event help filmmakers visiting the 10th Shanghai International Film Festival explore the ins and outs of the more than 600 film festivals held elsewhere in the world each year. Featuring talks with the directors of the major film festivals in Cannes, Dubai, Hawaii, Pusan, Rotterdam, Sundance, Tokyo and Venice, Eric Mika, senior vp and publishing director of The Hollywood Reporter, will moderate the five-hour forum in two sessions. Ren Zhonglun, president of the Shanghai Film Group, will set the tone for the summit then will hand the reins to Mika, who will encourage audience participation in a discussion of the ways that film festivals can better promote culture and trade internationally. Also expected to weigh in are Chinese directors Wang Quan'an and Jia Zhangke, who won top prizes at the Berlinale and the Venice Film Festival, respectively, in the last year.

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