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Funding crucial to the plot for film industry

Ken Lo

IT IS ALWAYS deadly to disagree with Jackie Chan, as hundreds of villains in his movies have demonstrated, but I am going to anyway. In an article on the Hong Kong movie industry in May, the action star was quoted as saying, in regard to the poor performance of the Hong Kong movie industry, that 'we can only wait for a miracle'.

Not that I disagree with him on the dire straits that the industry is in, but I do think that there are more things the industry can do than waiting for a miracle to revive what was once the third-largest film producer in the world.

Sure, VCDs, other forms of entertainment, piracy and the long economic downturn contributed to the industry's decline. The total box office receipts of the 100 highest grossing films, according to the Hong Kong, Kowloon & New Territories Motion Picture Industry Association (MPIA), dropped 25 per cent in the 10 years ending in 2001, even without accounting for inflation.

But during the same period, the receipts of non-Hong Kong produced films have increased three times, and by 2001 they accounted for 56 per cent of the box office receipts, up from 13 per cent a decade earlier. Waiting for a miracle is perhaps the last sort of answer we would expect from any chief executive when asked what his company plans to do in response to a dramatically declining market share.

I am well aware that Hong Kong's movie production houses, at this stage at least, simply cannot compete on resources with their US counterparts.

US movies that employ heavy animation and special effects techniques are not something that Hong Kong's companies can justify given the size of their markets. But how do they justify the fact that about 30 per cent of the gross receipts in 2001 were collected by foreign-made movies that are made with modest technology?

The audiences who have flocked to these medium-budget foreign films in Hong Kong has simply outgrown the movie industry in sophistication. They are increasingly demanding entertainment that has a clever, unexpected plot.

They want movies that are well researched, and if the movie depicts a certain profession (law, police, banking), they expect that it be depicted realistically, with the actors showing some convincing knowledge of the profession.

They want to be able to discuss their take on the movies with their friends, critique the plot and the actors' performance, and maybe even to use the movies to reflect on their lives.

This is something that, aside from a few hits these past couple of years, the movie industry has largely failed to deliver. The Hong Kong movie industry, aside from waiting for a miracle to happen, should leverage its advantages to revive itself. The ever-increasing Chinese and overseas Chinese markets will allow Hong Kong movie companies to justify bigger budgets and employ more state-of-the-art technology.

The cultural similarities, the wide recognition of Hong Kong's stars among Chinese and other Asians, and the recent Cepa agreement gives Hong Kong a substantial leg up over rivals in Hollywood, Taiwan and Singapore.

Hong Kong can also access the huge and cost-effective production capabilities that China offers, and the years of experience, creativity, technology, and movie-making talent that Hong Kong accumulated cannot be caught up by others in a short time.

The freedom with which films can be produced without fear of repercussions from the authorities is something that mainland, and to some extent Singapore, companies cannot enjoy.

What the Hong Kong movie industry needs is a more systematic approach to movie-making. Gone are the days of hasty and sloppy movie making, and milking the popularity of a genre or a star until it dries out. Movie companies need to spend more resources on developing, securing and researching scripts and plots, and they need to scale up to compete with foreign companies by seeking external financing.

And to secure external financing, the movie industry needs to be more systematic in its planning, understanding and segmenting of the markets - including Hong Kong, the mainland, Taiwan, Singapore, the rest of Asia, overseas Chinese, and perhaps even the non-Chinese audiences in the West - and forecasting the markets, just like normal companies do.

Ken Lo is the managing director of BusinessDevelopmentConsultants & Company, a strategy and management consulting firm.