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Film Entertainment Industry in Hong Kong

Overview

  • Hong Kong has one of the largest and most dynamic film entertainment industries in the world. As one of the world's largest film and television content exporters, Hong Kong has captured a fair share of the markets of Taiwan and Southeast Asia. The boom in Asian cable and satellite channels over the last few years has also provided a ready market for content producers. Hong Kong's films have gained increasing recognition from the international film industry. Apart from buying rights for theatrical distribution, Hollywood is also interested in acquiring rights to remake Hong Kong movies. Hong Kong film talent and professionals have managed to make their names known in both Eastern and Western movie market.
  • In light of the 3D movie frenzy that has swept the global film market, Hong Kong’s film industry has also acquired an acute interest in the 3D movie trend. Following the project entitled Hong Kong 3D Film New Action by The Hong Kong Film Development Council, there has been a spree of locally produced 3D films, including Firestorm, Baby Blues and Out of Inferno.
  • Hong Kong has been chosen as the regional base in Asia by foreign film production companies, in order to tap the Chinese mainland and Asian markets. Legendary Pictures, for example, set up its subsidiary company “Legendary East” in Hong Kong.
  • Hong Kong's audio-visual industry has preferential access to the huge Chinese mainland media entertainment market under CEPA, with quota free access to the Chinese mainland of Hong Kong-produced Chinese language films. Hong Kong-mainland co-produced films and television programmes are treated as mainland productions after receiving approval from mainland authorities.

Industry Data

Motion Pictures and Other Entertainment Services

Sep 2013

Number of establishment

2,327

Employment (excluding those in civil service)

16,163

Source: Quarterly Report of Employment and Vacancies Statistics, Census and Statistics Department


 

2012

2013

Number of local films released

52

42

Number of foreign films released

249

268

Total box office receipts (including foreign film) (HK$ million)

1,559

1,625

Source: Hong Kong Box Office Ltd

 

Service Providers

Most local film companies deal directly with cinema chains for local screening on a revenue-sharing basis. Rights will then be sold to distribution companies for other forms of release, including video rental and sales, and television broadcasting. There are also companies which specialize in distributing foreign films in Hong Kong.

The film industry is represented by several industry associations, including the Movie Producers and Distributors Association of Hong Kong Ltd (MPDA), the Motion Picture Industry Association (MPIA), the Hong Kong Film Directors’ Guild (HKFDG), and the Hong Kong Screenwriters’ Guild (HKSWG).

Hong Kong ranked second in Asia’s per capita film production in 2012, only trailing Bhutan.

 

Exports

Exports

2011

Audio-visual production and related services (HK$ million)

858

Source: Report on Hong Kong Trade in Services Statistics for 2011, Census and Statistics Department

 

Industry Development and Market Outlook

Film distribution

As of February 2014, there were 47 cinemas in Hong Kong. Films are mainly released through channels such as United Artists, Broadway Circuit, the MCL Circuit, the AMC Circuit, Golden Harvest and Newport Circuit. Other movie distribution channels include selling of film DVDs and CDs, and broadcasting by local free televisions, pay televisions, subscription satellite services and online platforms such as Amazon, iTunes and Google Play.

Hong Kong is among the world's largest film exporters. In 2012, 52 locally produced films were released, with about US$26 million worth of film exports in the form of videotapes, DVDs and other compact discs. Hong Kong's film industry as a whole is reliant on overseas revenues, given the limited size of the domestic market. Asia accounts for the majority of the foreign sales income. In recent years, the Chinese mainland has become a vital market for Hong Kong movies.

Nowadays, an increasing number of movies have been co-produced by Hong Kong and mainland film production companies. Thanks to such cooperation, many good-quality films earning acclaims have been produced. For example, The Silent War won the Best Costume Designer in the 7th Asian Film Awards (AFA). The Grandmaster, another co-produced film, won the Best Cinematography of the 56th Asian Pacific Film Festival (APFF). Also, Journey to the West: Conquering the Demons was the top movie on the mainland in 2013, with the box office receipts on the Chinese mainland over RMB 1.2 billion.

Hong Kong's films have gained increasing recognition from the international film industry   over the years. For example, in 2011Ms Deanie Ip received the Best Actress award at the 68th Venice International Film Festival, 15th Tallinn Black Nights Film Festival and 6th AFA for her role in the film A Simple Life. In 2012, Johnnie To won the Best Director award at the Taipei Golden Horse Film Festival with the film Life Without Principle. In 2013, The Way We Dance received the Fukuoka Audience award at the Focus on Asia International Film Festival Fukuoka 2013.

Apart from buying rights for theatrical distribution, Hollywood is also interested in acquiring rights to remake Hong Kong movies. For example, Hollywood's The Departed, which won four Oscar awards in 2007, was the remake of a 2002 Hong Kong film Infernal Affairs. In 2008, Hollywood's The Eye was also a remake based on a 2002 film Gin Gwai directed by Hong Kong's Pang Brothers. Korean film Mujeogja was a remake of Hong Kong gangster film A Better Tomorrow in 2010.

Utilisation of special digital effects has become a worldwide trend in film production. This is also becoming increasingly common in film production in Hong Kong. Recent examples of Hong Kong movies with vivid special digital effects include Journey to the West: Conquering the Demons, Firestorm, Baby Blues and Out of Inferno.

Hong Kong has a unique advantage in bridging the Chinese mainland with the Western audiences and opening a window on the world for Chinese audience. Hong Kong film talents and professionals have managed to make their names known in both Eastern and Western movie market. For example, Ann Hui also won the Lifetime Achievement Award of the 6th AFA. In Hollywood, Yuen Woo Ping is one of the best known and Chinese martial arts movie choreographers because of his involvement in Matrix. John Woo, Chow Yun-fat, Michelle Yeoh, Cory Yuen, Sammo Hung and Ronny Yu are just some of the Hong Kong names that have managed to successfully straddle both Eastern and Western markets. For instance, the box office of The Grandmaster reached US$6.5 million in the North America market.

While major film companies have their own distribution departments, smaller independent filmmakers usually rely on distribution companies to sell their films in overseas markets. Key channels for international distribution are the three main film markets in Los Angeles, Cannes and Berlin, where producers, distributors and buyers meet to initiate deals for the distribution of films. Hong Kong has hosted an annual film market since 1997 to promote Hong Kong as a film distribution centre in the region. In 2013, FILMART attracted 710 exhibitors and more than 6,300 visitors, with 3,335 overseas visitors.

FILMART (Hong Kong), Marche Du Film (Cannes) and American Film Market (the US) have been chosen by film industry players as the top three most important global film events. FILMART was ranked second by exhibitors and visitors in the world and first among Asian film market events.

Hong Kong acts as the hub of buying and selling Chinese mainland films and TV dramas through FILMART and it is increasingly seen as a remarkable platform to explore co-production in Asia. In 2013, there are nearly 150 Chinese exhibitors in FILMART.

Hong Kong has been chosen as the regional base in Asia by foreign production companies in tapping the Chinese mainland and Asian market. For example, Legendary Pictures, which produced Inception and Hangover, has set up its subsidiary company “Legendary East” in Hong Kong to produce movies with Chinese elements and cultures. The first film announced by the company is The Great Wall. Hong Kong is also a popular place for overseas crews shooting commercial films, TV programmes and advertisements. In recent years, feature films from various countries that have made Hong Kong their filming locations included Batman: The Dark Knight (USA), Push (USA), The Castle (France), The Suspect (Korea), Pacific Rim (USA) and Transformer 4: Age of extinction (USA),  For TV programmes, America’s next top model (US) and Running Man (Korea) were filmed in Hong Kong as well.

Microfilms are getting popular on the Chinese mainland and become one of the preferred formats of advertisement. Unlike the traditional movies, the length of a microfilm is generally less than thirty minutes. Given shorter lengths, microfilms can be distributed through online media, enabling them to leverage on social networks and mobile platforms with viral promotion effects. As such, microfilms become a popular media for advertising on the Chinese mainland. For example, the first advertising film of Orange Hotel has more than four hundred thousand views in the week after it was uploaded. Leading video websites such as Youku, Sohu and Tudou are commonly used for launching microfilms.

Television programmes

Hong Kong TV companies derive a substantial portion of their revenue from overseas markets, targeting primarily Chinese-speaking populations. In addition, some programmes are dubbed into other languages to target the non-Chinese-speaking audience. Hong Kong's television broadcasters sell their products using the following methods: programme licensing, pre-packaged programme content and subscription fees, with satellite distribution and landing rights now becoming an increasingly important source of revenue.

China has the largest television market in the world.  With a surge in TV and cable channels, the mainland's demand for quality programme content is huge. Landing rights have been granted to Hong Kong's TV broadcasters to provide TV entertainment to millions of homes in Guangdong, and much wider access of mainland-Hong Kong co-produced television programmes are provided under CEPA. Hong Kong's TV industry is expected to greatly benefit from more opportunities from the mainland.

Digitisation and Multimedia Convergence

One of the most dynamic developments affecting the media entertainment industry is the rapid digitisation of audio-visual content, which affects not only the ways in which audio-visual content is produced, but also how it is distributed. Hong Kong possesses the best design and multimedia capabilities in the region.

Supports to the film industry

Hong Kong Film Development Council (HKFDC) launched a project called Hong Kong Film: new Action since December 2008, which was aimed at promoting local films and new generation of Hong Kong directors to the Chinese mainland, and some Southeast Asia countries including Singapore and Malaysia.

As of December 2013, 46 out of 74 applications were approved with a total funding of about $132.07 million, since the launch of the Film Development Fund Scheme for Financing Film Production in October 2007.

Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA)

Existing CEPA provisions include significant market liberalisation measures for Hong Kong's audio-visual services industry, including the production of television drama programmes. As at end-January 2014, the Hong Kong government had granted Hong Kong service suppliers (HKSS) certificates to 56 audio-visual companies out of 57 applications.

CEPA relaxes the scope for Hong Kong companies operating wholly-owned units in respect of business of cinema construction and renovation, allowing them to construct or renovate more than one cinema theatre at more than one location for film-screening business. Many Hong Kong companies have set up cinemas, including flagship multiplex cinemas, in various mainland cities.

Under CEPA, Chinese language films produced by Hong Kong companies approved by Chinese mainland authorities are not subject to the import quota set for foreign films. In addition, films co-produced by Hong Kong and the mainland are treated as mainland productions.

Under Supplement IV to CEPA, which took effect from January 2008, any proposal of mainland-Hong Kong television drama co-production, the minimum number of words in Chinese contained in the synopsis of each episode is revised down from 5,000 to 1,500. This measure helps save the administrative cost and time of the involved production companies, giving them enhanced flexibility while streamlining the production process.

Under Supplement VI to CEPA, Hong Kong service providers are allowed to provide videos and sound recording (including motion picture products) distribution services on the Chinese mainland in the form of wholly-owned operations.

Supplement VII to CEPA allows HKSS to establish wholly-owned or joint-venture enterprises to produce video and sound recording products. The new measure has taken effect since 1 January 2011.

Under Supplement X to CEPA, which took effect from January 2014, HKSS are allowed to employ contractual service suppliers to engage in motion picture or videotape production and distribution services in the mode of movement of natural persons on the mainland, under the specific liberalisation commitments of this sector or sub-sector (including services under this sector or sub-sector).

 

Current Scope of AccessAccess for Hong Kong under CEPA

Cinemas

  • Foreign companies are allowed to construct or renovate cinemas in the form of minority-owned joint ventures.
  • In seven pilot cities, namely, Shanghai, Beijing, Guangzhou, Chengdu, Xian, Wuhan and Nanjing, foreign companies can hold up to 75% of the cinema joint ventures.

Cinemas

  • Hong Kong companies can establish wholly-owned companies, each of which may construct or renovate more than one cinema theatre at more than one location for the operation of film screening business.

Co-productions

  • At least one-third of the main cast must be Chinese mainlanders.
  • Story of the film should take place in specific Chinese mainland locations named in the co-production agreement.

Co-productions

  • No requirement on the proportion of principal creative personnel from Hong Kong.
  • At least one-third of the main cast must be Chinese mainlanders.
  • The Cantonese version of films co-produced by Hong Kong and the mainland can be distributed and screened on the mainland, on the condition that standard Chinese subtitles are provided on screen.

Post-productions

  • Post production of the mainland-produced films (including co-productions) is not allowed to be processed outside the Chinese mainland.

Post-productions

  • Post production of the mainland-produced films (including co-productions) is allowed to be processed in Hong Kong.

Imported films

  • Annual import quota of 34 foreign films including 3D and IMAX films.

Imported films

  • Hong Kong-produced Chinese language films are free from the annual import quota.
  • The Hong Kong film production company must own over 50% of the copyright of the film.*
  • The Cantonese-version of films produced by Hong Kong and solely imported by the Film Import and Export Corporation of the China Film Group Corporation can be distributed and screened on the mainland, on the condition that standard Chinese subtitles are provided on screen.
  • Movies produced by Hong Kong are allowed to screen the original dialect sound track when it is contextually required, on the condition that standard Chinese subtitles are provided.

    *The production company in Hong Kong must be a leading producer and contribute at least 50% of the invested budget of the film.

Television programmes

  • The State Administration of Radio, Film and Television (SARFT) to approve the finished tapes of mainland television programmes produced by Sino-foreign cooperation.
  • Few approved imported television productions and co-productions can be broadcast by mainland television stations during prime time (19:00-22:00).
  • The number of episodes of a television drama co-production is capped at 30.
  • Synopsis for each episode of co-production should have no less than 5,000 words in Chinese.

Television programmes

  • Provincial radio and television administrative departments to approve the finished tapes of mainland television programmes with participation from Hong Kong artistes or production crew.
  • Television programmes co-produced by Hong Kong and the Chinese mainland are permitted to be broadcast and distributed in the same way as Chinese mainland produced television programmes.
  • Co-produced television programmes:
    • at least one-third of the principal creative personnel (refer to directors, screenwriters, cinematographers and leading artistes) should come from mainland
    • Mainland enterprise should own at least 51% of the production company
  • The maximum number of episodes of television dramas co-produced by Hong Kong and the Chinese mainland will be no different from that for mainland-produced television dramas. Currently, there is no upper limit to the number of episodes produced by Chinese mainland companies.
  • Any proposal of television drama to be co-produced by the mainland and Hong Kong programme production organisations, the minimum numbers of words in Chinese contained in the synopsis of each episode is no less than 1,500.

Content provided by Picture: Steve Chan
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