Filmart Preview: Streaming Giants, Southeast Asia and Higher-Quality Chinese Content to Dominate Dealmaking
Asia's preeminent content market finds itself in a moment of flux in its 23rd year, but buyers see much to be optimistic about amidst all of the disruption.
Hong Kong Filmart, Asia's largest and most established content market, is entering its 23rd year during a period of profound transition.
For an industry event that got its start as a gateway to China and a voluble marketplace for home entertainment rights, the mounting slowdown of the Chinese economy and the death of the DVD market would seem dire developments. But Filmart has managed to adapt to the times, with more than 880 companies, from at least 35 countries, expected as exhibitors in 2019.
The biggest change to today's Filmart is the prominent role that will be played by the preeminent international streaming platforms and TV production powerhouses. Instead of the usual film executives debating how to structure co-productions, Filmart's flagship seminar series is packed with the heads of OTT services and high-end longform content producers, such as Gong Yu, CEO of Chinese streaming giant iQiyi, HBO Asia CEO Jonathan Spink and Jim Packer, Lionsgate's president of worldwide TV and digital distribution. Acquisitions teams from Netflix and Amazon Prime are also widely expected to play an outsized role on the Filmart sales floor.
"They have [been] allocating bigger acquisition budgets to Chinese content to feed the growing Chinese populations overseas," says Julian Chiu, senior manager of international sales and distribution for Hong Kong's Edko Entertainment. Recent examples of Netflix's growing interest in high-profile mainland China content — despite the fact that the company has been blocked by Beijing from setting up its service in the country — include the recent acquisition sci-fi blockbuster The Wandering Earth, teen thriller Animal World and romantic drama Us and Them.
It's the smaller projects that are benefiting from Netflix's largesse the most, however. "Smaller-budget Chinese films, such as dramas and romantic comedies, which normally don’t appeal to overseas distributors, now have a whole new platform to be shown globally, which is a good thing," says Chiu.
Examples include the Taiwanese black comedy and sleeper hit Dear Ex, which was scooped up by Netflix just prior to the European Film Market in Berlin in February — a well-crafted Chinese language film that previously wouldn't have traveled far from the festival circuit, but is now available for streaming by a global audience of 180 million.
If there's a drawback to the global streamers' approach, it's that they tend to wait for breakthrough projects or finance their own originals, rather than participating in the presales model that has fueled the film business for a generation.
"We're seeing less prebuying deals for independent movies," says Christy Choi, distribution director at Hong Kong's One Cool Pictures. "[The streamers] would rather spend time on acquiring successful completed movies."
Just as online channels are providing a boost to Asian film producers, some fear that market forces in mainland China, for years a major industry growth engine, could soon become a drag. Throughout the early months of 2019, there has been much talk in the Chinese movie business about a coming so-called "cold winter," caused by last year's tax evasion crackdown, capital flight from the film industry and a slowing of overall growth in the Chinese economy.
"EFM at the Berlinale this year was the quietest market there ever," adds Emico Kawai, head of sales at Japan's Nikkatsu. "Some of it was because it clashed with Chinese New Year, but some Chinese buyers also have stopped buying recently."
Zhang Jin, CEO of Joy Pictures, which has partnered on the upcoming China release of Alfonso Cuaron's Roma, says he sees a silver lining in China's market slowdown though. "The market for foreign-language films in China has still been growing rapidly during the past years," he explains. "Now buyers are being more rational, and only the more experienced ones remain — there is less hot money chasing the latest trend, like the craze for Bollywood films after the success of several Bollywood blockbusters in China a couple years ago."
For acquirers of Chinese content, the slowdown also has seen lower quantity of Chinese content, but higher-quality output.
"Our main business is overseas distribution of Chinese movies, so for me, the growing amount of quality content is what interests me most," says Julia Zhu, an acquisitions executive at CMC Pictures, the global distributor of entertainment conglomerate China Media Capital, which recently handled the U.S. theatrical release of The Wandering Earth, Animal World and Chinese New Year hit Pegasus — all celebrated for their high-production values and quality storytelling. "In the past year, you can see a lot of different new genres and titles getting recognized by the audience and the market, a slight upturn for our industry and a really exciting sign for us."
Zhu says CMC Pictures was tracking at least 10 high-caliber Chinese-language titles as Filmart entered its first day.
Meanwhile, other markets are stepping up to offset China's recently less ravenous appetite for content — namely, Southeast Asia, home to collective population of nearly 1 billion potential consumers and fast-growing film exhibition infrastructure.
"Some industry people think Southeast Asia could be the next growth market," says Nikkatsu's Kawai. "It's not as big as China, but I've been seeing more distributors from places like Vietnam."
"Filmart has always been an important market in that it's not entirely just about doing deals, but building new relationships with distributors from everywhere in Asia — especially industry people from Southeast Asia who don’t travel frequently to Cannes, Berlin or the American Film Market," says Edko's Chiu.
Adds Christy Choi, distribution director at Hong Kong's One Cool Pictures: "Filmart is still the best market to be immersed in the diverse content of all of Asia."
— Karen Chu and Gavin J. Blair contributed to this report.