Stellar Chairman Qin: China Will Produce an 'Avatar'

12:57 AM PST 12/09/2010 by Jonathan Landreth
Stellar Chairman Qin Hong. (Stellar Megamedia)

Studio Has Three New Releases from Top Directors, including Chen Kaige's "Sacrifice"

BEIJING – Sitting in his sparsely-decorated corner office in a glass-and-steel high rise in the Beijing’s central business district, Stellar Group chairman Qin Hong proclaims, “There will be another Avatar in China and it’ll be another Hollywood film, but in two to three years' time, a Chinese film will do as much business in China as Avatar.”

By grossing $207 million in China alone this year (second only to its U.S. take), Avatar became China’s biggest box office hit of all time.

However, as the majority investor in upcoming films from three of China’s top directors -- Chen Kaige’s Sacrifice, just out this week; Peter Chan’s Wu Xia, now shooting with Donnie Yen and Takeshi Kaneshiro; and Kekexili director Lu Chuan’s first ancient war epic, King’s Feast, due out next fall – Stellar and Qin could eventually back the Avatar-killer

Stellar handles film production, talent management and one of China’s biggest cinema circuits, and Qin, wearing a navy knit pullover with an upturned zipper collar, jeans and wire frame glasses and smoking Marlboro Lights, says his company soon will be the nation’s leading movie studio through hard work and close ties with the state-run China Film Group.

Stellar invests only in films in which it can hold the majority share and be guaranteed distribution rights in China. These titles help feed the Stellar China Film cinema circuit: 100 theaters with 700 screens, about 200 of which are 3D-capable and nearly 60% digital. Qin sees the circuit it helps CFG operate expanding to 200 theaters and 1,000 screens inside three years, with 70 new theaters now under construction as China’s second-tier city shopping mall boom continues.

“We believe that Chinese people will like Chinese films and we’ll work hard to make sure there’s a Stellar film on screens in each part of the year to satisfy them,” Qin told The Hollywood Reporter in his first interview with the English-language foreign press.

Qin’s bet that Chinese really want Chinese stories as much as Hollywood fare only partly accounts for current rules that limit to 20 the number of imported films allowed to pay copyright holders back a share of the box office gross each year. Still, Qin doesn’t believe that China opening its movie market to greater foreign participation next March 19, under World Trade Organization rules, will make it easier for Hollywood to dominate as it has in China for the last decade.

Stellar’s flagship theaters in Beijing and Shanghai are among the most profitable in the country, with industry estimates ranking them at number nine and 19 in 2009, grossing more per seat than most theaters, Qin says, due to their prime downtown locations, quality seats and projection equipment and focused marketing to China’s rising middle class.

Stellar also now owns 20 theaters outright with nearly 200 screens -- all of them digital and 30% of them 3D-capable. Interim results documents from Stellar’s Hong Kong-listed public arm, SMI Corp., show gross profit from its own theater operation rose 225% in the six months ended Sept. 30 to 33.2 million yuan ($4.9 million). Those profits were pared down to 772,000 yuan after SMI offered share options in the company’s expansion of theater holdings through acquisitions.

In June, SMI, which Qin’s older brother, Qin Hui, controls, holding a 73.7% stake, said it would spend $3.64 million to form SMI-Photon, an 80-20 Chinese-Australian joint venture with a Queensland-based post-production house, installing Hollywood effects veteran Dale Duguid as the minority partner and CEO of the new venture.

One of the first projects likely to benefit from this new venture is a 3D animated film set in the Ice Age that Stellar plans to make with Pathe of France, a project coming together under the Sino-French co-production treaty signed in May.

With China’s appetite for animation and FX whetted by Avatar and Happy Feet before that, Stellar has set its site on showing off the toons in IMAX, where they can charge a premium for tickets – often as much as $24 per head.  Already the operator of the largest digital IMAX theater in China, in Shanghai, Stellar will erect the largest digital IMAX theater in Beijing, next October, set to hold 400 seats.

The new IMAX screen will be housed in a 10-theater Stellar multiplex with a total of 2,000 serving the capital’s northern Yayuncun area, the site of the 1990 Asian Games. Stellar plans to add three to four more IMAX screens in 2011 and expects to have at least 10 IMAX screens installed in the following few years.

To fill all its new theaters, Qin says unit Stellar Mega Films has a current annual budget of 300 million yuan ($45 million) to make six to 10 films per year, from production to marketing and distribution.

On Dec. 4, Stellar’s latest – Sacrifice by Chen Kaige – launched nationwide and over the opening weekend grossed 49.6 million yuan ($7.4 million) with 1.4 million admissions on Saturday and Sunday. The tale of an orphaned boy’s revenge on his parents’ killer, the film -- whose international promotion was launched by Easternlight in Toronto in September -- stars actress Fan Bingbing and actor Ge You in a modern twist on a classic Chinese tale.

After Sacrifice, comes the Peter Chan-produced comedy Mr. & Mrs. Incredible around the Feb. 3 start of the Lunar New Year holiday season. For summer 2011, Stellar will release the Peter Chan-directed martial arts film Wu Xia, with Yen, Kaneshiro and Lust, Caution star Tang Wei.

Qin and Hong Kong-born Chan, whose recent box office successes with Bodyguards & Assassins and Warlords before that -- both with backers other than Stellar -- have forged a new alliance of “old friends,” according to Chan. Qin says Stellar is already backing Chan on two further projects, including a 100 million yuan film in which Chan will direct Taiwan pop singing sensation Jay Chou.

Next fall, Stellar will release the first Chinese war epic from director Lu Chuan, director of City of Life and Death. With Stellar’s backing, Lu is making a third-century B.C., Qin Dynasty story about the battle between two warlords for control of what is today central China. The film, whose working title is King’s Feast, stars actor Liu Ye.

Liu, who previously starred in director Lu’s City of Life and Death, and in Dark Matter with Meryl Streep in Hollywood, is represented inside China by Stellar Group’s talent division.

“The Chinese movie market is so good right now and we’re going full speed ahead. If we work hard, in three to five years we will be as big and important as any of the top Hollywood companies are in their market,” says Qin, adding, “And they can’t do what we do, own everything from production to talent to distribution and exhibition. We may not be the best in each of these individual areas, but put all our parts together and we are the best.”

As China’s booming movie market gets more competitive ahead of opening to greater foreign participation in March under WTO rules, Qin says his focus has not changed.

“The WTO decision is not our problem. We’re ready for it, but we’re not worried about it,” Qin said.

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