Packed houses

Hong Kong, with its annual box office of around $172m, is dwarfed by the mainland China market, but it remains a territory where independent films can be sold freely without import quotas or major censorship concerns.

It is also a vibrant market — in 2010 box office grew by around 13% in line with a growth trajectory stretching back four years. But as in many other Asian markets, the growth is mostly due to new multiplex openings and premium ticket prices for 3D movies. Local distributors say it has become tougher than ever to release independent foreign films.

Their challenges range from local market conditions to global issues such as a reduction in the volume of available product. “It’s becoming much more difficult to find good independent movies,” says Edko Films’ general manager of sales and acquisitions Audrey Lee. “The US studios have cut back on production, so they’re buying independent product to fill the pipeline.”

Back in their home market, distributors struggle to secure screens as exhibitors lean towards 3D tentpoles with higher ticket prices. Even distributors affiliated to one of Hong Kong’s four major cinema chains find this a problem. “Six to eight pictures are opening each weekend so everyone is struggling with the limited number of screens,” says Belinda Tang, head of Hong Kong operations for Orange Sky Golden Harvest. “Of course we can use our own theatres but we still need to book into other circuits.”

‘Everyone is struggling with the limited number of screens’

Belinda Tang, Orange Sky Golden Harvest

Another common gripe is the sorry state of ancillary markets: video is all but dead in Hong Kong, the territory only has one major free-to-air television buyer in TVB and pay-TV is also limited. “We can only get second window pay-TV from companies like Cable TV and [IPTV player] Now TV which is two and a half years after theatrical,” says Deltamac Hong Kong’s senior distribution and marketing manager Gilky Wan. “The first window is retained by regional broadcasters who prefer Asian or US studio films.”

Meanwhile, marketing costs continue to rise in this small but highly evolved media market. “Options are limited because there are no new outlets, but there’s a lot of media so you can’t just focus on one,” says Golden Scene managing director Winnie Tsang.

Yet despite this catalogue of woes, there is a surprisingly high number of distributors in Hong Kong and new players keep emerging. Last year, veteran producer and property developer Hsu Feng launched Tomson International Entertainment Distribution, which aims to be involved in film financing, international sales and talent management, in addition to distribution.

Such a competitive environment is naturally a boon for international sales companies selling into Hong Kong — especially those with independent 3D product — and prices are going through the roof. Three of last year’s top 10 independent foreign films were 3D releases, including the top two: Step Up 3D and Resident Evil: Afterlife. However audiences are becoming more aware of the amount of 3D each film really contains and exhibitors have been reducing ticket prices for some releases.

Outside the 3D craze, recognisable franchises, such as the Twilight series, and big star vehicles continue to lead the way. Times are more difficult than ever for arthouse or non English-language product, despite the fact Hong Kong has historically had a discerning audience. The territory now only has three cinemas which screen specialty product — Broadway’s Cinematheque and Palace IFC and the Grand, co-owned by MCL and Shaw Brothers.

Even mainstream Japanese and Korean films — once a mainstay of the Hong Kong box office — have recently not been performing well. Japan has a huge cultural influence on Hong Kong, which laps up the country’s fashion and pop culture, but there are signs of audience fatigue for the wave of Japanese manga and TV series adaptations.

Last year, the only Japanese live-action film considered a hit was Tetsuya Nakashima’s drama Confessions, released by UA Films. “It did well because of the strong story, and the director has a fanbase in Hong Kong,” says UA Films’ distribution and marketing manager Jennifer Hung.

‘We may consider pre-buying’

Yvonne Chuang, Tomson International Entertainment Distribution

But it seems unlikely there will be any consolidation or dramatic exits from Hong Kong’s distribution sector. It is more probable buyers will be selective in their acquisitions and club together on distribution, as Golden Scene and Panorama Entertainment did last year on The Expendables. Those which have affiliated distribution outlets in other territories, such as China and Taiwan, will also attempt to beat the competition by buying for multiple territories.

It is also likely some distributors will become more proactive and rely less on finished product. “We may consider pre-buying or otherwise get involved earlier in the production process to lock up certain territories,” says Yvonne Chuang, Tomson’s senior vice-president and general manager.

Hong Kong top 10 independent foreign films, 2010

Source: Motion Picture Industry Association

Selected independent Hong Kong distributors