I was fortunate to have been invited to the Asia-Pacific Producers Network annual meeting last week in Taiwan. There were 40 or so producers there from China, Hong Kong, Japan, Korea, Malaysia, Singapore and Taiwan, and Patrick Frater, Variety’s Asia Bureau Chief, who is based in Hong Kong.
I spoke to a good number of them and there was one topic on pretty much everyone’s lips — China. Everyone has been, is or wants to be doing productions with the Chinese. The Koreans however are excluded at the moment because the Chinese government doesn’t like the Thaad Missile Defense System the Americans moved onto a disused golf course there, as a counter to North Korean missile test firings towards Japan. Until that’s resolved the Koreans are getting the cold shoulder from the Chinese entertainment business.
As a counter to this, a Korean producer pitched me a NZ-China co-pro because he could no longer do it between China and Korea. His proposed Chinese producing partner was also attending. It transpired that in the month that we had been communicating about it prior to my arrival, the Chinese producer was no longer interested. The reason — Chinese demand had changed. It’s name directors and actors and big budgets now, not small comedies as he had planned or any other lower budget projects.
According to Variety’s Frater, the Chinese market can dramatically change from week to week and it’s almost impossible to keep up. It’s been obvious for some time however that the Chinese government was clamping down on capital outflow. Chinese company Dalian Wanda is the most obvious example of this. Wanda bought mini studio Legendary Pictures and the US’s AMC Entertainment Group, which is now the largest theatre owner in the world. It had to abandon its plans to acquire Dick Clark Productions for $1 billion. Other deals that suffered include Xinke’s US$345 million planned purchase of Hong Kong’s Voltage Pictures and last week Recon gave up on its US$100 million acquisition of LA-based Millennium Films.
Even though it can take up to two years to get money out of China if at all, it hasn’t deterred Asian production companies from wanting to do business there. All the highly active Hong Kong producers now either have offices in China or live there. Taiwanese producers I was given introductions to were away in China for meetings. The Japanese I met were making frequent trips to China to drum up business.
China now has 41,000 movie screens, over 700 million mobile internet users and three major streaming providers in iQIYI, Youku Tudou and Tencent with a combined total of 70,000,000 paying viewers in the first quarter of 2017. Revenue from paying users of internet video in China is expected to hit US$2.2 billion this year. No wonder Asian producers are making films, TV series, and web series for and with the Chinese.
American streamer Netflix, who is dominating in the rest of the world, is playing catch up in Asia. It’s done a deal with China’s iQIYI, is producing local content in Japan and India, has announced a licensing deal for Korean shows and will be premiering Korean original material in 2018. In Singapore and Indonesia it has partnerships with local telcos for distribution. Elsewhere in Asia, though, Netflix has far greater competition from domestic streamers who already have significant local offerings.
So what does all this action in Asia mean for us here?
Natural History New Zealand and Sir Richard Taylor’s Pukeko Pictures have well established relationships in China built over many years, and they are already producing TV content with the Chinese. Huhu Animation announced a multi-picture deal and the first official China-NZ co-production, animated feature Beast of Burden. These apart, there’s not a lot going on although two official feature co-productions with China and one with Korea are mooted.
We have seen in recent months a small number of Chinese TV series shooting in Queenstown, and we can expect more such inbound productions. I believe it’s unlikely though that we’ll see the volume of China-related production that Asian producers are engaged in, in the short to medium term.
One of the great difficulties we and the Australians face in dealing with China or any Asian country for that matter, is the language and or cultural divide. The Asians are much better at understanding each other culturally, and the similarities have made programmes and films cross borders there a lot more easily. A Japanese producer I spoke to told me that his drama series was selling all around Asia and that it had been remade in Korea.
Of the 78 film and TV co-productions the New Zealand Film Commission has on record since 1988, only five have been with Asian countries, three of those with China. The rest are with predominantly English speaking countries such as Canada , the UK, and Australia, although Germany does feature in the statistics, too, primarily because they have come in as minority co-production partners who have an affinity with NZ content, particularly, Maori. English-speaking Singapore, with whom we have a co-production treaty and one film (The Tattooist) under our belt, has an undeveloped film sector and a highly active domestic TV production base. The other English speaking country in Asia is the Philippines, with whom we have no formal co-production agreement. With both, though, there is the cultural divide.
I expect that when we have more Chinese-speaking directors, writers and producers in New Zealand we will see volume pick up. But until then, we’ll just have to look to Netflix, Lightbox and hopefully Amazon Prime for increases in New Zealand film and TV production volume. And perhaps one day soon, someone will crack the straight to international market TV drama nut and provide a pathway for others to follow.