Cannes: Southeast Asia's High Hopes for Future Growth, More Hollywood Projects

Malaysian film "Lima's Ghost Goes Home 2"

As one of the world’s great untapped markets for entertainment — with 250 million people in Indonesia alone — the region is ready to take a swing at the global film business.

This story first appeared in The Hollywood Reporter's Cannes Daily on May 16.

With a population of 620 million, an expanding middle class and demographics that skew advantageously young, Southeast Asia long has represented one of the world’s great untapped growth markets for entertainment. Developments now underway across the region suggest the Southeast Asia' film sector finally is ready to take flight.

A recently introduced 30 percent cash rebate on production spending in Malaysia has begun to bear fruit -- Netflix is shooting Marco Polo, its first original period adventure series, in the country -- and the Philippines and Thailand are pondering tax breaks of their own, suggesting a Southeast Asian incentive race to lure more Hollywood projects may be in the offing. 

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Maturing local screen communities, meanwhile, continue to make progress, generating higher-quality festivals and industry events at home and winning more awards at festivals abroad, while also locking down wider distribution and occasionally even dominating Hollywood at the local box office. Crucially, rapid exhibition infrastructure development has meant growing overall pie for the benefit of all.

It’s still early days, but the broader trends at work in Southeast Asia are unmistakable: onward and upward.


2013 Box Office: $166.4M

Highest-grossing local release: It Takes a Man and a Woman, $9.14M

Highest-grossing foreign release: Iron Man 3, $14.95M

Incentives: None (yet)

Facilities: Local studio Star Cinema’s production facility is regarded as the most active and well-equipped. Post Manila and Outpost Visual Frontier are considered the best post facilities.

Recent ShootsPacific Rim (2013) shot a brief scene in Manila. The Bourne Legacy filmed in the Philippines in 2012.

The Pitch: The year 2013 was a breakout one for the Philippines, with more international festival exposure than in any year prior, including four Filipino films screening at Cannes. Factions within the local government are now indicating they would like to build on the industry’s momentum by making a bold entry into the international tax incentive game to attract Hollywood productions. In March, a draft™ bill was introduced to the national legislature that would strengthen the Film Development Council of the Philippines (FDCP), and create a tax credit of 20 percent to 40 percent for foreign productions that shoot partially or wholly in the country. “The bill would not only boost our  lm location services and make the country attractive and competitive to foreign film projects,” says Briccio Santos, chairman of the FDCP, “it would also propel the infrastructure development [that the industry needs].”

Talent to watch: Erik Matti’s On the Job made a splash in the Directors’ Fortnight sidebar in 2013, earning strong reviews. But more significantly for the Filipino film industry, the film was picked up by Well Go USA and XYZ Films for a U.S. release, proving that international sales is a viable path for local filmmakers. Universal Pictures later optioned the rights for a remake. Matti is now at work on a female superhero project, Darna, while developing a sequel to On the Job.


2013 Box Office: $213M

Highest-grossing local release: Limah’s Ghost Goes Home 2, $1.79M

Highest-grossing foreign release: Iron Man 3, $13.90M

Incentives: 30 percent cash rebate

Facilities: Pinewood Iskandar

Recent Shoots: Michael Mann’s Cyber, Marco Polo (Netflix original series), Indian Summers (the U.K.’s Channel 4)

The Pitch: After big investments, a few false starts and much anticipation, 2014 looks to be the year that Malaysia’s film sector finally takes off. The country’s flagship $150 million Pinewood Iskandar film studio opened in mid-2013 and its first major project, period adventure drama Marco Polo, produced by The Weinstein Co. for Netflix, now is shooting with more than 1,000 extras on set. The he™fty 30 percent cash rebate introduced last year by the government for all in-country production spending is beginning to attract other projects too. Indian Summers, a romantic period series from the U.K.’s Channel 4, has signed on to shoot in the country’s Penang state later this year. “Many local directors are worried that the big Hollywood projects will suck up all our crews and talent,” says producer Nandita Solomon (Bunohan), “but ultimately, our people are going to become much more skilled from their experience on the big shoots. The transition will take time, but our output will improve.”

Talent to Watch: Director Chiu Keng Guan’s Chinese-language feature The Journey struck a major chord when it opened in January. The Šfilm, equal parts road movie and family drama, diverged from the local industry’s template of cheap horror and comedy vehicles, instead telling a sensitive story about a cross-cultural romance between a Chinese Malaysian girl and her British fiŠance — and the objections they face from her conservative father. Journey grossed $5.3 million, crushing the prior local box o“ffice record of $3.5 million held by KL Gangster since 2011. Says Chiu: “The simplicity of the story captured the hearts of Malaysians.”

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2013 Box Office: $148.2M

Highest-grossing local release: Pee Mak Prakanong, $18.1M

Highest-grossing foreign release: Iron Man 3, $8.8M

Incentives: None

Facilities: Hollywood productions usually are attracted to Thailand for its stunning locations as there are no studios equipped for a tentpole production. But there are several postproduction facilities known for international-quality work, including Kantana, Technicolor and The Post Bangkok.

Recent Shoots: The Coup (2014), The Railway Man (2014), The Hangover 2, Only God Forgives

The Pitch: In the absence of any tax incentives of their own, many in the Thai film industry have grown concerned about Malaysia’s cash-rebate scheme and the threat it poses to Thailand’s status as the long-running Southeast Asian shooting destination of choice among Hollywood, Bollywood and European filmmakers. But Nicolas Simon, co-founder of Indochina Productions, a Bangkok-based production-services firm that facilitates shoots across the region (Transformers 3 and Act of Valor), says he believes Thailand will remain competitive for some time to come. “The currency continues to be undervalued and Thailand has a very deep pool of skilled crew and some of the best equipment houses in all of Asia — not to mention it’s a very pleasant place to travel and work,” Simon says. “Malaysia’s facilities are really geared toward tentpole productions too, which leaves a large number of projects in the $20 million range that will be better suited for Thailand.” The domestic industry, meanwhile, has proven that it can occasionally outdo Hollywood by appealing to local sensibilities. Thai studio GTH crushed Iron Man 3 at the local box office in 2013 with its ghost comedy Pee Mak Prakanong, grossing a record-breaking $18.1 million, more than double Disney/ Marvel’s Robert Downey Jr. threequel ($8.8 million). The studio, which is celebrating its 10th anniversary this year, has kept up the momentum. Its latest romantic drama, Teacher’s Diary (Khid Thueng Withaya), has grossed $3 million, ranking No. 2 for the year, not far behind Captain America’s $5 million haul.

Talent to Watch: While Nicolas Winding Refn’s 2013 Cannes competition entry Only God Forgives was savaged by critics and stumbled at the box office, its Thai co-star Vithaya Pansringarm was hailed for his haunting performance as “The Angel of Death.” Pansringarm thus far successfully has parlayed the exposure into a compelling career as a character actor. He’s next set to appear in The Last Executioner, from director Tom Waller, and then will begin shooting Thai art house star Pen-Ek Ratanaruang’s Samui Song, playing a mysterious cult leader.


2013 Box Office: $43M (estimate based on admissions total)

Highest-grossing local release: The Sinking of the Van Der Wijck, $2.9M

Highest-grossing foreign release: Iron Man 3, $5.1M

Incentives: None

Facilities: Nothing of an international standard

Recent Shoots: Michael Mann’s Cyber (2014), Java Heat (2013)

The Pitch: Though it has Southeast Asia’s largest population — an estimated 247 million, about two thirds that of the United States — Indonesia’s total box office continues to lag behind its much smaller neighbors. Industry insiders long have pointed to the monopolistic grip local group Cinema 21 has held on the exhibition sector since the Suharto era, hampering cinema infrastructure development and impeding the creation of a healthy and competitive distribution ecosystem. Change, at last, may be on the horizon. Late last year, the deep-pocketed Indonesian conglomerate Lippo Group announced plans to roll out 1,000 screens over the next five years, giving Hollywood and local production companies alike greater access to the country’s upwardly mobile and demographically young and entertainment hungry population. As it stands, Indonesia is one of the world’s greatest untapped entertainment markets.

Talent to Watch: In 2012, writer-director Edwin’s art house drama Postcards From the Zoo landed at the Berlin International Film Festival as the first Indonesian film ever to screen in the official competition lineup. Set in the 1940s and ’50s in Indonesia and the Netherlands, his next feature, Exotic Pictures, is an erotic drama that explores colonial power relationships. Described by the 36-year-old director as an “ode to erotica” — with a “whole visual feel that celebrates sexuality” — it’s certain to be a colorful departure from the modest naturalism of his Berlinale debut.


2013 Box Office: $57M (estimate)

Highest-grossing local release: Teo Em, $3.32M

Highest-grossing foreign release: Iron Man 3, $3.24M

Incentives: None

Facilities: Galaxy, Chanh Phuong, BHD

Recent Shoots: None

The Pitch: The emerging Hanoi International Film Festival will return for a third edition this November, giving visiting critics and cineastes a chance to see some of the cloistered country’s best recent output. As is commonplace in many countries around the world, the lineup of international indie films hosted by the festival provides movie fans in the Vietnamese capital with their only opportunity to see art house cinema on the big screen, as cinemas are dominated by big-budget Hollywood imports and local genre fare. The festival’s roster of panel discussions and an MPA-sponsored talent campus are an invaluable resource for the developing industry’s young talent, who will be given an opportunity to learn from leading international industry directors, writers, producers and execs. 

Talent to Watch: North Hollywood-born Vietnamese-American director Victor Vu relocated to his ancestral homeland of Vietnam in 2006 after studying film at Loyola Marymount University — and he has become one of the country’s most prolific filmmakers since. His latest feature, Vengeful Heart, became the highest-grossing film ever at the local box office, taking $4.1 million after its release in February. And he’s already wrapped his next feature, psychological thriller Scandal: The Comeback, and begun prepping another, a period drama based on the novel Yellow Flowers on Green Grass, from popular Vietnamese writer Nguyen Nhat Anh.