China's newest stars

Village Roadshow Entertainment Group (VREG) recently confirmed what has been an open secret in the Chinese film industry for several months — the Australian-owned company is about to become a major player in the production and international distribution of Chinese films.

Its new Chinese outpost, Village Roadshow Entertainment Group Asia (VREG Asia), is working with Chinese investment partners to co-finance a slate of movies featuring some of the country’s leading talent. Initial projects include romantic comedy My Lucky Star, starring and produced by Zhang Ziyi, and an adaptation of Chinese classic Journey To The West, produced and directed by Hong Kong star Stephen Chow.

VREG Asia is also co-producing the directorial debut of Keanu Reeves, the mixed Chinese and English-language Man Of Tai Chi, which will shoot in China from early next year.

The new venture is headed by Beijing-based executive Ellen Eliasoph — a China expert and former managing director of Warner Bros Pictures China — who reports to Los Angeles-based VREG CEO Greg Basser. Her team includes former colleagues from Warner Bros Pictures China — distribution executive Lizhi Chen and production executive Ming ‘Beaver’ Kwei.

‘We want to act as a bridge’

The move is not a surprising one — VREG’s parent company, Australia-listed Village Roadshow Limited (VRL), has been active in Asia for decades: distributing the Bruce Lee movies produced by Hong Kong’s Golden Harvest back in the 1970s, and partnering with Golden Harvest and other Asian companies to build a string of multiplexes across the region from 1998. But the company does have a slightly different strategy to some of the other Western studios that have recently set up shop in China.

In addition to production and distribution, VREG Asia aims to contribute to the development of the Chinese film business — which despite its breath-taking growth is still in its infancy — by bringing in expertise in a wide range of related fields such as marketing, market research, audience testing and visual effects. It has formed a string of strategic partnerships to help in this effort — with companies such as US marketing agency Cimarron, research firm Screen Engine and Australian digital-effects house Animal Logic.

“Our whole premise is to come and collaborate — not tell people how to do things. We want to act as a bridge to bring our expertise and at the same time learn from the Chinese,” says Basser, who is also CEO of Village Roadshow Pictures (VRP). VRP has co-financed more than 60 movies with Warner Bros including the Sherlock Holmes and The Matrix franchises.

Basser and Eliasoph describe it as taking the United Artists approach — they started out by talking to Chinese directors, writers and actors, and see the venture as enabling talent rather than locking them into studio-style deals. This is probably a wise move given the recent shifts in the Chinese film industry — with box office and demand for good product booming, the talent has much more power than it did five years ago.

Eliasoph explains how the Chinese market has gone through phases — first there was no money and just three big studios; then there was lots of money, but some of it was dumb money, or at least came with unrealistic expectations; and now, after a string of bad experiences, the talent has become wary.

‘Talent is becoming more picky - they want to work with someone who can market and distribute properly - they’re interested in us because we bring decades of experience’

Ellen Eliasoph

“They’re becoming more picky. They want to work with someone who can market and distribute properly, and they’re interested in us because we bring decades of experience and that currently does not exist in China even with the most well-meaning investors, as it’s such a young industry.”

The venture will work with talent in a variety of ways. Eliasoph describes the company’s relationship with Zhang Ziyi as a strategic co-operation where they will have first-look at all the movies the actress wants to produce. In other cases, such as Reeves’ Man Of Tai Chi, film-makers will bring them projects that may already have a writer, director or even investor already on board.

In each case, VREG Asia will work with an established Chinese investment partner. The first film to emerge from the venture, Journey To The West, is co-financed with Chow’s Bingo Group and Hong Kong producer Bill Kong’s Edko Films, while My Lucky Star, to be directed by US film-maker Dennie Gordon, is a partnership with Beijing-based Dadi Media. On Man Of Tai Chi, VREG Asia is working with China Film Group and exhibitor Wanda, which is making a big push into production.

VREG Asia and Wanda will also partner on a new project from hot Chinese film-maker Chen Daming (What Women Want) — an as-yet-untitled graphic novel-style fantasy along the lines of 300 but set amid palace intrigue in the Ming Dynasty. The English-language project will also mark Animal Logic’s first foray into production investment — Animal Logic co-founder Zareh Nalbandian will be a producer on film — and make use of the Australian company’s experience in visual effects and pre-visualisation techniques.

Co-productions encouraged

Foreign companies cannot directly produce their own movies in China, but the Chinese government encourages co-production and the VREG Asia films will all be set up as Sino-foreign co-productions. While some projects will be set up as Hong Kong-China co-productions, as VREG Asia is a Hong Kong-registered company, the Chen Daming project is being set up as an Australia-China co-production. If it does not qualify under the Australia-China co-production treaty, it should still be able to take advantage of Australia’s 30% post-production rebate.

Chen’s project — a completely new concept for China — is a good example of what VREG Asia hopes to achieve in introducing genre film-making to the country and helping local film-makers diversify their output. The company also hopes to contribute to screenwriting skills — it recently organised a screenwriting workshop with Zhang which brought together Chinese writers with their US counterparts such as Jason Filardi (Bringing Down The House).

But again Basser and Eliasoph emphasise they are not trying to “Hollywood-ise” the China film business. Basser describes VRP as an international player, not a Hollywood company, and points out that when making films in the US, VRP has a stake in the international, but not the US, revenues: “We understand how international markets work and we want to bring that to the China business.”

Though the main thrust is making Chinese movies for the Chinese market, the idea is to also help these movies travel where possible. While the venture’s Chinese investment partners will handle distribution in China, where foreign companies are not allowed to distribute, VRL’s Roadshow Films will distribute in Australia and New Zealand and Golden Village, a joint venture between VRL and Orange Sky Golden Harvest, will distribute in Singapore.

In all these territories, the movies will go out theatrically as well as across home entertainment and TV platforms. In North America and the rest of the world, VREG Asia has signed an output deal with Warner Bros — its long-time partner in US production — for home entertainment distribution, in cases where there is no other international partner on board. “We felt this was the best way to get them in front of people,” says Basser.

The focus will be on digital distribution, though Basser says Warner Bros will release the films on DVD “where it makes sense”, and he is excited about UltraViolet technology that allows for legitimate digital distribution across multiple platforms.

“This means every film we produce in China will have global distribution and that is part of the bridge we’re building out of China to the rest of world,” Basser says.