Co-production conundrum

International co-productions are not a new phenomenon in Asia. China and some South-East Asian countries have been co-producing for decades, and over the past few years, East Asian nations, including Hong Kong, China, Korea and Japan, have regularly worked together.

Romantic comedy My Ex-Wife’s Wedding (pictured), which had its world premiere at this year’s Pusan International Film Festival (PIFF), is a perfect example of how the East Asian formula works.

Each co-producer – Beijing-based Polybona, Hong Kong’s Sundream Motion Pictures and Korea’s iHQ – contributed finance, talent and distribution in its respective territory. The rationale is to reduce risk and expand the market for the film. As with many pan-Asian co-productions, the film was made in Chinese as mainland China is the biggest potential market.

However, until recently, none of these co-productions were made under official treaties. Only in the past decade have Asian government officials sat down to discuss agreements at a national or regional level. But the number of treaties is now escalating, with China and Singapore being the most active signees (see list of co-production treaties below). 

The pros and cons of co-production – both within and the outside the framework of these agreements – was the major topic of discussion at this year’s PIFF and concurrent event, Asian Film Policy Forum, orgnanised by the Busan Film Commission (BFC) and Asian Film Commissions Network (AFCNet).

The most obvious advantage of the treaties is that they enable producers to access subsidies and incentives – particularly as more are being signed with the major sources of soft money in Europe, Australia and New Zealand.

“There’s been a strong record of co-production in Asia where treaties have not been in place,” said producer and AFCNet advisor Michael Lake at the Asian Film Policy Forum. “That’s easier to enter into but the advantage of treaties is that you have access to a broader range of finance.”

Lake then outlined the financing of 3D shark-attack thriller Bait which has accessed Australia’s producer offset scheme and also has equity investment from Screen Queensland and Singapore’s Media Development Authority (MDA).

“You have to choose your partner well,” Lake advised. “Ensure that the benefits accruing to each partner are actually beneficial. And there’s a lot of paperwork and legal work so allow a lot of time.”

In addition to Singapore, several other Asian countries have introduced subsidies. Like the MDA, the Korean Film Council (KOFIC) makes equity investments in qualifying projects, while Taiwan’s Government Information Office (GIO) and the Taipei Film Commission (TFC) both award grants. Each organisation has its own requirements regarding local talent and content, so bilateral treaties could in theory make it easier to apply.

Japan, one of Asia’s more insular territories, has yet to sign any treaties but said it may do so in future. “Our film industry has been focused on the domestic market, so has had a low level of interest in co-production,” said Japan Film Commission (JFC) chairman Ken Tarawaki. “But the industry is changing, and the government has also recognised the importance of agreements at a national level.”

Smaller nations such as Malaysia are also mulling the introduction of treaties. “We have Pinewood studios coming to Malaysia and around this presence there will be a need for official co-productions to take place,” said Kamil Othman, vice president of Malaysia’s Multimedia Development Corporation (MDEC).

Delegates also discussed a challenge that Asia faces with regards to co-production that doesn’t exist to the same degree in Europe. “We have to remember there are huge differences in the size of countries and living standards and costs across Asia,” said Korea University law professor Park Kyungsin.

He added that less developed countries could see their costs rise when co-producing with a richer nation, to a level that could cancel out the investment that the richer partner brings. The poorer partner might also end up with a smaller equity stake in the production unless purchasing power parity (PPP) is taken into account. “We have to make sure that we’re not blindly rushing into treaties unless we’re clear on the benefits they bring,” Park said.

Several delegates also tried to bring the discussion back to practical filmmaking, by arguing that co-productions should only happen if they make creative sense. Japan and Korea have entered into several co-productions, in an attempt to draw audiences in both territories, but only 10% have been a box office hit in both markets.

“The aim of co-productions should be to help filmmakers express themselves and work more comfortably in another country, but it’s easy to lose sight of that if everything is money and policy-related,” Oh Seok-geun, the recently appointed chief of BFC and AFCNet, told Screen at the end of the forum. “What we should do now is focus on how to improve Asia as a location, and beyond that how to improve the infrastructure of the Asian film industry in general.”

China was singled out as the country that is attracting the most amount of co-production interest – not for subsidies, as it doesn’t offer any, but because it’s now a huge box office market and also a rich source of creative material.

Co-productions with China can also bypass the country’s quota system, although they don’t have to be made under official treaties. Asian countries are lining up to co-produce with China, usually outside official agreements, while Adelaide-based director Mario Andreacchio is currently in post on the first official China-Australian co-production The Last Dragon.

At a separate event organised by PIFF, panellists discussed how the US and China are working together on non-official co-productions. Some of these are English-language films, such as The Karate Kid, which are designed to work in both markets. But some studios, Fox in particular, are focusing on Chinese-language co-productions that are aimed at the Chinese market. In some cases, these will also be released in North America – Fox’s first Chinese production Hot Summer Days is receiving a limited theatrical release in the US – but this is not their primary market. 

“It’s a tremendous challenge bringing foreign-language product into the US because it’s competing with films from Hollywood, indie films and other world cinema,” said Fox executive vice president of worldwide acquisitions, Tony Safford. 

He added: “Around 22 films were acquired at Toronto, most of which were picked up by smaller distributors looking for some other kind of revenue model which is not necessarily theatrical. But that is an opportunity for foreign films in the US, and we’re at the tipping point where it will generate revenue for producers and distributors.”

ASIA PACIFIC MAJOR CO-PRODUCTION TREATIES:

AUSTRALIA: Canada, China, Germany, Italy, Ireland, Israel, Singapore, UK (treaties). France, New Zealand (memoranda of understanding).

CHINA: Signed with Australia, Canada, France, Italy, New Zealand and Singapore. In talks with Belgium, India, Russia and UK.

INDIA: Signed with Brazil, Germany, Italy and UK. In talks with France and Canada.

JAPAN: None

MALAYSIA: None

NEW ZEALAND: Australia, Canada, China, France, Germany, Ireland, Italy, Singapore, Spain, South Korea, UK.

SINGAPORE: Australia, Canada, China and New Zealand.

SOUTH KOREA: France, New Zealand.

TAIWAN: None (Due to pressure from China, Taiwan is only recognised as an independent nation by a handful of small countries).