Cannes: Pegasus Motion Picture CEO John Chong on the Future of Film for Hong Kong (Q&A)

THR Cannes John Chong - H 2014
Philipp Engelhorn

THR Cannes John Chong - H 2014

The Hong Kong film mogul talks co-productions, the power of the Chinese market and what local audiences respond to: "They wouldn’t know who Brad Pitt is."

John Chong co-founded Media Asia in 1994 and during his 18-year tenure has produced such Hong Kong classics as The Infernal Affairs trilogy (the basis for Martin Scorsese’s The Departed), Initial D and the Wachowski siblings’ Cloud Atlas. He left in 2012 to join veteran producer Raymond Wong’s Pegasus Motion Pictures as CEO.

An avid reader and hiker, the 55-year-old Chong -- who recently published a collection of essays on the film industry in Hong Kong and China titled The Way of Light and Shadow -- opened up to THR about Pegasus’ venture into the exhibition business and the current film market in Hong Kong and China.

Pegasus recently has rented the most successful cinema in Hong Kong, at Langham Place, as a move into the exhibition business. What is your strategy for development?

The Langham Place cinema will be our flagship cinema; it is one of the cinemas with the largest market share in Hong Kong. Pegasus is developing an exhibition business in China. The first one will open at the end of this year. We are hoping to build a cinema in Guangdong and some in the Northeast. The potential for cinemas in China is still huge; there might be saturation in the major cities, but there is still a lack of cinemas in the remote areas.

PHOTOS: The Scene at Cannes 2014

Of the 10 highest-grossing local films in China in 2013, five were Hong Kong-Chinese co-productions. What do you think about the future of Hong Kong-Chinese co-productions in China?

It has always been this way. There had always been five, or over five, top 10 highest-grossing films that were Hong Kong-Chinese co-productions. So when someone in China says we don’t need Hong Kong anymore, I don’t agree. How come there were five top-grossing Hong Kong-Chinese co-productions in the top 10 if they don’t need Hong Kong anymore? It’s clear that Hong Kong films are popular. The fantasy genre, the martial arts genre and the cop-movie genre popular in Hong Kong films are grossing very well in China.

In your book you wrote that Hong Kong companies are losing their advantage in making Hong Kong-Chinese co-productions. Is this still the case?

For Hong Kong companies, the business is getting tougher. Chinese companies can hire Hong Kong cast and crew directly; for the cast and crew from Hong Kong, it doesn’t make a difference as to where the financing comes from. So Hong Kong companies are at a disadvantage. There is more competition for the Hong Kong investors. And for the filmmakers in Hong Kong, they might think it’s more convenient for them to work directly with Chinese investors. But it’s the norm: An established industry can’t compete with a blooming one, which can provide better conditions.

What about the future of films made specifically for a Hong Kong audience?

As a company, if we were to only do films made without consideration for the Chinese market, it might be dangerous, and the potential for development might be smaller. The Chinese market is the fastest-growing one in the world; even the Americans are looking to get a piece of the pie. The box office of Titanic 3D was a good example -- it grossed more in China than in the U.S. Everyone is looking at China as a [growing] market. If we were to make films only for the local Hong Kong market -- take, for example, The Way We Dance, which grossed almost $15 million in Hong Kong. The producer told me it is about to break even. The fact that such a high-profile film is only breaking even means there is little hope for films with lower profiles. We will not give up on films made only for the local Hong Kong market, but we have to be careful. There might be a few charitable souls that would like to invest in films just for the local market, but it doesn’t create a film business. But that doesn’t mean there will be no more films made just for the local market.

How do you think domestic Chinese-language films can compete with Hollywood imports?

China hasn’t reached the point of market economy, so the authorities can still manage it. (Laughs.)

You mean by scheduling the release dates of foreign?imports?

Yes, and other methods. But the problem in the long term is that they have to open the market eventually, because of WTO. It will take an adjustment period. Now it’s been opened up to 34 imported films a year, and they’re saying that there will be 10 more in the future. So everyone is worrying that if the market is open, how can we compete with Transformers? Now there is not a problem. This view is based on our understanding of the big cities in China. The big cities in China are on the same level of any metropolises in the world. Residents are of higher education standards and higher income range, so their tastes are more international. They might compare a $200 million Hollywood production with a 100 million yuan [$6 million] local production and prefer the former. But on the other hand, as the number of screens rises, the big cities are saturated. There are more screens in the second- and third-tier cities. We can take note of the period during Chinese New Year. In the past, box office during the Chinese New Year was poor; but during the past year, the box office during Chinese New Year has shown?growth.

What’s the reason for that?

It’s because in the past, when people went back to their place of origin, there were no cinemas, and they couldn’t watch movies on the big screens. But now there are cinemas in remote cities. There is also another type of audience, one that rarely goes to the big cities. They only see television series at home, and they see television stars such as Wang Baoqiang, Xu Zheng and Huang Bo, so they created the immense box office of Lost in Thailand. These are big stars in these audience’s eyes; they wouldn’t know who Brad Pitt is. As a result, though Hollywood films might have an advantage over Chinese-language films in the big cities, Chinese-language films have a strong following in the third- and fourth-tier cities.