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Enoch Yiu

Producer prefers stable earnings of travel channel

Film producer Dong Ping, co-producer of multi-Oscar winner Crouching Tiger, Hidden Dragon as well as numerous other films and television shows, is a down-to-earth person.

While the stylish kung-fu movies brought him international honours, the chairman of Hong Kong-listed Asian Union New Media (Group) does not focus solely  on Hollywood blockbusters. In fact, the company's The Travel Channel, on satellite television in the mainland, provides more stable earnings than films.

Founded a decade ago by Mr Dong with just a handful of staff, the company has expanded to several hundred people who have made more than 40 films in the past decade and each year produce 500 hours of TV drama.

Mr Dong, 46, is a Beijing native who studied and trained to be an opera singer at university. But instead of a stage career, he opted to join the business world.

These days he hones his singing skills at the karaoke box. He is married with a daughter.

You studied music in university, so why did you become a businessman?

I like music and it is a subject that helped me to be creative. This is important for my work as a businessman where I need to be innovative and open-minded.

I did not plan to be a singer by profession. In fact, I had always wanted to be in business.

After graduating in 1986, I worked in the cultural administration department for two years before setting up a chemical products trading company.

That worked well but I was still interested in the cultural industry, so I opened my own media company - Asian Union Film - in 1997 to produce and distribute films.

Mainland state-owned Poly Group became a partner in 2003 and took a 50 per cent stake  in the company which helped to increase the capital and management strength of the company. It has also added government support.

What was your company's first film?

It was Keep Cool  by mainland director Zhang Yimou and was entered in the Venice Film Festival in 1998. That was followed by Jiang Wen's Devil on the Doorstep which won the grand prix at Cannes in 2000.

Of course, the most well-known internationally was Ang Lee's Crouching Tiger, Hidden Dragon co-produced with  Columbia TriStar, which won four Oscars in 2001. It was an important production in that it was the first time a Chinese co-produced movie won an Oscar. It also marked an international expansion for our company.

What are the difficulties of operating a film and media company in the mainland?

The media is still a sensitive industry in China and we need to get approval from government departments to produce and distribute our films and programmes. Luckily, we already have 10 years' experience in this field so we understand the related rules and regulations and know the approval procedures.

One of our shareholders Poly Group is a state-owned entity which also helps us to get government support for our projects.

There are many ways to make money, why did you choose film-making?

It allows me to do something creative and related to culture. A good film can have a significant impact on a society for a long time. It is also interesting to work with different famous directors in China.

The group made 260 million yuan in profit last year but most of that was from a one-off valuation gain and from advertising income from The Travel Channel. Does that mean TV and film-making are not so profitable?

The film and TV productions have brought us fame and awards but the income is not stable. When a film is good, it is very profitable but when it is not popular or when the industry is doing badly, it is not a good investment.

The Travel Channel may not be so well known internationally but it provides us with a more stable income. It is a nationwide  24-hour channel with an audience of 400 million that covers travel, food, fashion and lifestyle. Economic growth in the mainland has led to increased demand for this sort of information.

There are other magazines, websites and TV channels that offer the same travel and lifestyle information, how do you compete with them?

Compared with the internet and print media, TV covers a larger audience and provides more comprehensive programmes.

It is not easy to secure a TV channel in China so there are not so many rivals that have the same exposure as The Travel Channel.

We have advertisements from all the large companies and from all sectors, including cars, food, electronic appliances and cosmetics. Our advertising income has been increasing ever since we bought the channel in 2004. It totalled 218 million yuan last year, up 30 per cent from 2005 and three times that of 2004.

What do you want the government to do to help the media industry?

The Travel Channel has the support of the national travel bureau which has helped us make programmes and to do the distribution. Our programmes on mainland cities help foreigners better understand our country, history and culture.

And when we do programmes on overseas countries, they help mainlanders to  prepare for their trips. With the increase in living standards in China, more and more people would like to travel overseas on their own instead of joining a tour group. There are already 80 countries that mainlanders are allowed to travel to.

The promotion of the industry will help our channel become more popular.

What are your company's expansion plans in the next few years?

Firstly, the mainland is rapidly developing multimedia and we would like to look at opportunities distributing channels for 3G phones or other mobile phones that have a TV function. We may also consider forming joint ventures or providing content to other companies.

Secondly, we want to develop more interactive television where the audience can have direct participation in programmes.

Do you plan to expand by acquisitions?

We would not rule out acquisitions but we would be interested only in things that are related to our media business. It could be acquisitions of stakes in companies or joining with other TV or telephone companies to help our advertising or distribution.

As a mainland company listed in Hong Kong, do you think it is difficult to follow the  listing rules and regulations?

After listing in Hong Kong in 2005, we had to follow a lot of regulations and corporate governance requirements, which is very different from being a non-listed mainland company. For example, we had to find three non-executives to sit on our board. We also needed to report our results every six months and disclose connected and large transactions. This was all new and took almost a year to learn.

But it is good to have a culture of good corporate governance. It prevents us from taking risks that are too high to protect our shareholders. This is why we abandoned a plan to invest in director John Woo's movie project War of Red Cliff which with a budget of US$75 million, was far too expensive and might have been too risky.

What do you feel most strongly about being a media businessman?

I remember  when my 19-year-old daughter one day told me that she thought her father was doing something really important and was making a big contribution to society.

She  learned that only when she went to university and found her professor teaching about society's relationship with the media. The media is part of our daily life and has a far-reaching influence on our society.

I was really touched when she told me about that.

As a mainlander who is always travelling between Hong Kong and China for business, how do you compare the two places?

Hong Kong is a very good financial market, with a good banking and legal system. This is a good place for mainland companies to raise funds. But in terms of size, the Hong Kong market is far too small with only 6.8 million people. In the mainland, we have a population of 1.3 billion and a high income group that could reach 500 million. This provides a much bigger market for us.

This is the best combination for companies to use Hong Kong as a platform to raise funds to develop in the mainland market.

How do you compare yourself now with a decade ago  and where do you expect you will be in 2017?

Ten years ago, my film company had only a few staff. Now we have 400 people and annual revenue of more than 300 million yuan.

In 10 years' time, we would like to become  a multi-billion yuan corporation. This is not impossible as the mainland consumer market is developing and that will increase advertising revenue.

The Olympic Games next year are  going to give the media and advertising market a huge boost.



Dong Ping focuses on the sensible thing