A. China/Hong Kong

With the Olympics upcoming, the State Administration of Radio, Film and Television (SARFT) is facing more intense political pressure to step up the censorship of politically sensitive content. This new zeal follows the controversial release of the movies LUST, CAUTION and LOST IN BEIJING and the tightening of the censorship screws has affected more than 50 productions/co-productions that is currently ongoing, with the highest profile of them all, SHANGHAI which is one of the Weinstein’s company’s joint production and has a US3million set built being denied a shooting permit.

This will affect the supply of especially big blockbusters in the coming years. However, it is expected that the producers can work around the issue as there do not seem to be a shortage of production funds still pouring into China. In fact, the situation is not that there is a lack of funds but a lack of stars and talent as the securing of these talents relies more on personal connections. Another serious issue that China faces is a lack of distribution channels as there are not as many companies interested in investing in distribution as they are in production and also due to regulatory restrictions.

Hong Kong home grown production continues to experience difficulty with continual reduction in the number of films produced, reduction in cinema admission as well as the drop in the quality of movies, and this is compounded with a lack of new talent. However, to counter this, the Hong Kong government via the Hong Kong Film Development Council has recently set up a film development fund amounting to $300million to finance small-medium productions to encourage greater production activities as well as to create employment opportunities and grooming of new talent. With just less than one year, 7 projects have already been approved and with this effort, it is expected to invigorate the Hong Kong film industry.

B. Korea

There is an apparent slowdown in the Korean film industry. While the number of production actually increased by almost 13%, only about 10% of the movies released actually made profits. It also saw a big decrease in film exports, of almost 70% between 2005 and 2007 while production costs increase by at least 50% from 2006 to 2007. The drop in cinema admission is made more painful by the fact that almost 80% of the film revenues come from theatrical release as there is almost no home entertainment due mainly to piracy and online illegal downloads. The reduction of the Screen Quota from 146 day to 73 days added to the pain.

The main reason for the decrease is due mainly to the marked drop in the quality of the films itself and this can be seen from the movies being released recently.

However, the Korean Film Council (KOFIC) realizes this (in fact identified this as a crisis situation) and has kick-started a new 5 year strategy to tackle the problem, from 2007 to 2011. The objective of this plan is basically double domestic and international market share and increase export revenue by almost 4-fold by 2011. It plans to do so by several measures which include the setting up of a Film Development Fund of approximately USD547million over the 5 years and the development and strengthening of various infrastructure such as research, production and post-production support.

With the above and the involvement of the telecom companies (KT and SK Telecom) which plans to inject a large amount of money into film production and distribution, the outlook is still upbeat.

C. Japan

Japanese domestic market has seen a dip since its big breakthrough in 2006 where total number of Japanese movies released topped 417 titles and domestic market share reached more than 53%, the highest in about 20 years. Total number of movies released in 2007 dropped to 407 titles but still much higher than the 356 titles in 2005 and 310 titles in 2004. The noted trend is the re-making/adaptation of popular Japanese novels, dramas and manga/anime into feature length movies such as TOKYO TOWER, ALWAYS: SUNSET ON 3RD STREET, NARUTO etc. While these are popular in the domestic market, many of these movies could not travel outside Japan. In fact, only about 10% of Japanese movies can travel outside of Japan and as such the Japanese must make more effort to market the movies outside of Japan so reach a larger audience. It must also be noted that the quality of Japanese movies is improving and in many productions, have regained its past glory and have surpassed the quality of Korean and even Hong Kong movies.

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