Cloud Atlas points to new role for the Hong Kong film industry

The complicated financing process for the epic Cloud Atlas points to how the city can stake out a new role in the international film industry

PUBLISHED : Thursday, 24 January, 2013, 12:00am
UPDATED : Thursday, 24 January, 2013, 10:10am

Hong Kong filmgoers heading to see Cloud Atlas will be taken with its spectacular journey across the globe, from the past to the future.

What they may not realise is that the story of the film's production mirrors its plot, following the same trail across the Pacific from Hollywood to Hong Kong - and offering clues as to how the city can forge a new role in the international film industry.

The latest work from Germany's century-old Filmstudio Babelsberg - where Fritz Lang filmed his classic Metropolis - is an ambitious US$100 million independent production that is set to redefine international filmmaking, from cast and crew to financing - which is where Hong Kong comes in.

With Hollywood studios reluctant to put up the full cost of production, more than one-third of the money to make the film was raised in the city.

According to veteran Hong Kong filmmaker Philip Lee, an executive producer of Cloud Atlas responsible for its fund-raising in Asia, Hong Kong has a unique edge in film financing, especially in the Asia-Pacific region.

"Hong Kong is the Asian financial centre and has a long history in filmmaking. With more collaboration with foreign projects or companies, knowing how to find the right match is very important, and Hong Kong has the expertise," says Lee, who served as an associate producer of the international hit Crouching Tiger, Hidden Dragon and a line producer for Batman film The Dark Knight during its filming in Hong Kong.

Cloud Atlas is an epic production of British author David Mitchell's award-winning novel. The complex story is set in Europe, East Asia and the Pacific, as well as America. It features six plotlines that run forwards and backwards from the mid-19th century to a post-apocalyptic dystopia in the distant future.

The film brings together some of the biggest names in world cinema: the creative team is led by the Wachowski siblings, directors of the Matrix trilogy, and Tom Tykwer, who directed the 1998 German hit Run Lola Run.

The ensemble cast includes Oscar winners Tom Hanks and Halle Berry, and Asian screen darlings Zhou Xun of China and Bae Doo-na from South Korea.

The latest figures from the Motion Picture Association of America indicate why Asia is such a key priority for the film industry.

They show that, worldwide, box office revenue grew about 7 per cent in 2011 to US$32.6 billion, up from 2010's US$31.6 billion. Revenue in the Asia-Pacific region grew 6 per cent, from US$8.5 billion to US$9 billion, largely because of growth in the Chinese market.

China's State Administration of Radio, Film and Television said mainland box office takings rose 30 per cent last year to US$2.74 billion, making it the second-largest market in the world.

Domestic productions accounted for less than half of the total as more foreign films were allowed on to Chinese screens. Fourteen more movies a year can be imported as long as they are in the 3D or IMAX formats, exempting them from the previous quota of 20 foreign films a year.

Box office takings in Hong Kong rose 12 per cent last year to HK$1.56 billion. Hong Kong films raked in HK$347.42 million - 22.3 per cent of the total, compared with 20.2 per cent in 2010.

But despite government efforts since 2007 to promote local filmmaking through the Film Development Fund, the top-grossing films in Hong Kong were all global blockbusters, led by The Avengers, which grossed HK$96.7 million.

The only Hong Kong film to crack the top 10 was crime thriller Cold War. It brought in HK$42.8 million, making it the sixth-highest-grossing film in the city last year.

But while local filmmakers struggle to recapture former glories, the film financing industry in the city is looking promising.

The Hong Kong-Asia Film Financing Forum, which brings together filmmakers and financiers, is celebrating its 11th anniversary in March. The Hong Kong Film Development Council has also begun to direct its resources towards grooming a new generation of film producers.

Hong Kong film companies and investors can and should go beyond regional productions. They should also go for international projects

Cash is certainly available in the Asia-Pacific region. The primary Asian backers of Cloud Atlas include Hong Kong's Media Asia Group, Beijing-based Dreams of the Dragon Pictures (the second-biggest investor in the film), and Singapore container-ship magnate Tony Teo's Ascension Pictures.

"Hong Kong film companies and investors can and should go beyond regional productions. They should also go for international projects," Lee says. "The market in China is there, but it is only at its beginning. Singapore, on the other hand, is keen but they do not have enough know-how of the film industry."

Lee became involved in the project through his friend Grant Hill, an Australian and one of the producers of Cloud Atlas. Lee says they began talking during the early stage of the film's development but that Hill did not officially come on board until around 2009, when the film's funding came up US$35 million short.

Hill says the development of Cloud Atlas began in 2005 during the filming of V for Vendetta, for which Hill was producer. The film's leading lady, Natalie Portman, passed a copy of Mitchell's book, which she described as "fascinating", to the film's co-scriptwriters Lana Wachowski (known as Larry at the time) and her brother Andy. Together with Tykwer, they drafted a script based on the book.

"We approached the studio [Warner Brothers] about buying the book ... but ultimately the studio felt the project was prohibitively expensive," Hill says.

"They will finance established franchises like Harry Potter or Batman. But Cloud Atlas was too much of a risk for them," says Lee, who managed to attach Hollywood heavyweights like Hanks and Hugh Grant to the project when they slashed their fees. Warner Brothers contributed a "significant amount" and maintains the North American distribution rights.

With these distribution rights secured, Hill says it was easier to approach potential financiers from the rest of the world. The team embarked on a globe-trotting journey unprecedented for a film-financing campaign.

The film has adopted a complex funding model: pure equity investment, equity and distribution investment, distribution rights and government subsidies, including US$18 million from Germany. Spain's Mallorca Film Commission and Creative Scotland each contributed US$250,000. But that still left a US$35 million gap.

The team then translated the script into different languages to pitch it to potential investors around the world.

Lee says notable Western studios and production companies like Village Roadshow, Legendary Pictures and Relativity Media have been eyeing the China market because of its potential, co-producing projects with mainland companies.

"There's this gold rush in Beijing, but at the end of the day, the only co-produced film that could drum up the noise in the US was The Forbidden Kingdom," says Lee.

The Forbidden Kingdom, of which Lee was an associate producer, is a 2008 martial arts fantasy inspired by the classic Journey to the West and starring Jackie Chan and Jet Li. This Chinese-US co-production was mainly funded by Relativity Media, with distribution rights sold to mainland, Hong Kong and Taiwanese distributors.

But Cloud Atlas operates according to a different model. The project has several equity investors who get to share the global distribution revenue.

The star-studded cast and A-list production team, together with a story revolving around the theme of reincarnation - which accords with Asian values - helped attract Asian investors, including Hong Kong's leading film company Media Asia.

It's the first time Media Asia has expanded the scope of its business to take part in a truly international production.

"We hoped to try something new," says Media Asia's head of distribution Ricky Tse Chi-keung.

Tse says Media Asia contributed a "small" but "significant" amount towards the project.

No one can tell how the film, which opens in Hong Kong today, will fare in Asia. Its box office gross in the US, where it was released in October, is a relatively modest US$27 million to date, according to the Internet Movie Database. But it has grossed almost US$10 million in Germany and more than US$16 million in Russia.

One thing that is certain, Tse says, is that the global film industry is shifting towards the East. With more big mainland studios such as Bona Film and Huayi Brothers expressing interest in investing Western projects, there will be more happy marriages between Western and Eastern film industries and finances, he says.

And there's an important role that Hong Kong can play.

"The mainland certainly has capital, but can they find the right people? Not necessarily. Hong Kong can be more active in bridging this gap," Tse says.