BEIJING -- International success -- especially for filmmakers such as Zhang Yimou -- has given birth to new ambitions in the Chinese film community, with locals looking to modernize financing structures and expand the biz further, especially as the private sector starts to play a bigger role in Chinese cinema.
Many of the biggest films coming out of China by the biggest names still rely on old-fashioned funding models. Government cash, "angel funding," a bit of equity and some presales comprise the mother lode of coin. Although the local biz is red hot -- Chinese B.O. is up a whopping 30% over 2005 -- there is a growing sense among Chinese film mandarins that they need to create alternative ways to fund pics.
But like everything in China, reality tends to be a bit complicated. The state-run China Film Group dominates moviemaking; however, state cash injections often heavily politicize films, putting constraints on subject matter, the size and scale of release, even the timing of when the movie comes out.
The most dominant structure for getting a film made is the "mom and pop" funding models -- the helmer as moody main man and the producer role filled by a director's wife or by the helmer himself. The husband-wife team then cozies up to a state-run factory to get a few hundred thousand yuan to fund the first stage of shooting. Or they approach a rich uncle, looking for a favor.
While this has proved effective, there is a growing realization that the industry has to modernize its system of gathering coin if it is to realize its full potential.
In February, one of China's top film biz officials said it was time to introduce a new kind of producer in China.
"We now urgently need film producers who are politically sensitive, aesthetically sophisticated and have a flair for marketing," said Jiang Ping, veep of the Film Bureau, which is part of the all-powerful State Administration of Radio, Film & Television. "The system is ill adapted to China's market economy, and we need more outstanding film producers. The advantage of the producer system is the producer's sensitivity to the market."
Jiang noted approvingly that some large state-owned and private Chinese film studios and groups have begun to bolster the producer's role in the hope of forming a self-perpetuating cycle of investment, production, marketing, cost-reclaim and reinvestment.
Ah, that word, market. This is something that Chinese filmmakers are increasingly aware of. The international success of such pics as "Hero" and "House of Flying Daggers" has given everyone a yearning for a taste of the bounties outside the arthouse circuit. But this requires more modern funding models than the use of own-capital and reliance on sympathetic corporate parents, such as Warner Bros., whose China unit has been extremely successful, but also local heroes Huayi brothers.
Angel funding, where independently wealthy investors supply capital for a private company to provide seed financing for a project, is growing in China.
"On another level, there is a lot of interest from institutional money as well," says producer Nansun Shi of Film Workshop.
This often involves players who are looking at film financing not on a project-by-project basis but bundled with other related businesses, which spreads risk, and often with IPO hopes, which she says will go some way to modernizing the business.
And she also points out how, increasingly, the banks are stepping up to the plate. Standard Chartered, one of the top banks in Asia, has opened up its loan books to filmmakers in the region. So far its role has been minimal, the biggest investment to date being the Bill Kong/Zhang Weiping-produced "Curse of the Golden Flower," but its presence in the market is viewed as potentially significant.
China Merchants Bank recently became the first mainland bank to finance a local film when it put up 50% of the money for helmer Feng Xiaogang's latest project, a $10 million war story called "The Assembly," now shooting in northeast China.
And other international finance houses, such as Deutsche Bank, have been spotted at biz gatherings, quietly checking out the possibilities.
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