MOVIES may be pure entertainment but financing them is serious business, and as movie-making opportunities increase in Singapore and other less-mature markets in Asia, finding the funds to fuel the process will be crucial to the health of the industry.

Even as new media emerges on a seemingly daily basis to provide viable alternatives to the century-old movie industry, Hollywood producers and industry types from around the world descended on Singapore to attend the Asia Media Festival (AMF) trade event and to spread the good word: Asia has many great stories to tell, and as long as the right partnerships and proper procedures are in place, the money will be there to help filmmakers tell them.

In Hollywood, there's no shortage of money in search of the next big box office hit, but financiers and like-minded studio executives prefer to hedge their bets by bankrolling big names and proven storylines. "The film industry has become a one or two-weekend business," says Ashok Amritraj, CEO of Hyde Park Entertainment, a Los Angeles-based independent movie producer of titles such as Bringing Down the House, Shopgirl and Raising Helen.

Mr Amritraj was speaking at the Media Financing Forum, one of a series of events at the AMF, which runs until Dec 4. "There have been changes in the production and marketing of films - budgets have gotten completely out of control and are in the US$150 million to $200 million region, while marketing budgets are at US$75 million to $125 million per picture."

He adds: "It's become a one or two-weekend business - after the second or third weekend, films tend to disappear, they are not allowed to breathe. That's why films are less original and you have movies like Spiderman 8 and Pirates of the Caribbean 21."

It's a pretty good time for film financing, though, says Mr Amritraj. "Hollywood always seems to find money. The good news is that it is now easier to find funds - the bad news is that too many films are opening each weekend, and movies that shouldn't be made get made."

He says that producers generally shy away from funding single films, preferring instead to structure slate-financing deals - which involve a slate of film projects over a fixed number of years.

Financial institutions and private investors are pouring money into multi-million-dollar film funds and the pattern has extended to Asia as well, with co-productions and partnerships between Asian producers and their counterparts in the West inking deals to produce Asian-themed movies.

The US$40 million Europe-Singapore Co-Production Fund by Singapore's Six-Six-Eight is one such example. "It's a smart way for banks and funds to invest," says Mr Amritraj. "Investing in 15 films is better than investing in one or two because all the films are cross-collateralised. If you pick any 20 films, it's very difficult to lose money." He adds: "It is extremely important to note that with Wall Street's investment in Hollywood, a tremendous amount of clarity has occurred, in terms of revenue streams, accounting, production costs, print and advertising costs."

Says Mr Amritraj: "The availability of funds will help the quality of content and the quantity of the product being made. Co-productions will flourish, the animation industry will see growth and the market for the distribution of Asian films will also grow."

The Asian industry needs to work on a few aspects of the business, says Mr Amritraj. These include clarity over revenue streams and distribution contracts, graduating from a service provider to a creator of content and most importantly, finding great material. "Go to a producer with a good track record, make sure you know what his filmmaking philosophy is, get good legal and financial advice, and protect your downside - the upside will take care of itself if it is structured properly."

More Asian content

After more than two decades in Hollywood, Mr Amritraj, who says he watched The Sound of Music 22 times as a young boy, considers himself a bridge between two cultures and is eager to create more Asian content. "It's a tremendous time for Asia, for talented filmmakers to emerge," he points out. "It's hard to find original ideas, but Asia has the advantage of not having movies that are being made with sequels in mind - when you do that, you lose out on originality."

The financing of major independent films on a slate basis is definitely a workable business model, says Edward R Pressman, whose career as a producer spans four decades and over 70 films, including titles such as Badlands, Wall Street, Bad Lieutenant and Thank You for Smoking (main head picture). "Film financing on a portfolio basis is logically a safe investment," he says. "Sophisticated investment banks are supporting the idea, especially if projects have proper distribution and the people involved have a good track record."

Mr Pressman is also optimistic that movie ideas are translatable from West to East and not just East to West. "Take a movie like Wall Street and set it in the Chinese stock market," he says. "A group in China is taking American subjects - like Trading Places - and putting them into a Chinese context.

"The film industry worldwide is in a healthy, dynamic condition, particularly in South-east Asia," he says, adding that while independent movies were primarily meant for domestic consumption, production companies with a global perspective would benefit the most by breaking out with cross-cultural hits like Run, Lola, Run and Old Boy.

"The rest of the world has been saying for the past ten years that it wants to work with Asia," says Juan Foo, executive producer with The Shooting Gallery, a leading Singapore production house that is trying to raise funds for its initial slate of three feature films currently in development, covering the action thriller, romantic comedy and sword-fighting horror genres.

"Singapore companies trying to engage global partners have to work very hard on developing projects so that we can meet international standards on quality, packaging and entertainment value," he says.

"The product has to be international yet have that cultural uniqueness - we don't want to sell out but we cannot be too Singapore-centric either," says Mr Foo. "We have to spend resources to develop the product - we are on the way to the next level but we are not there yet."

Meanwhile, as international investors look to invest here, investors in Singapore can be divided into small-time punters looking for a quickbuck, and big investors who need commercial justification, says Mr Foo.

"There are more players who want to work with Singapore but we first need a combination of things to happen - there should be funding from the Singapore side to jump start a project and to show confidence in our own industry. Then we can find foreign partners to make it sexy globally. It's about lining up and shepherding everything so that it moves in the right direction, but the first commitment should be from the Singapore side - the MDA (Media Development Authority) has done much, now it's time for the private sector to step up."

Even if everything is in place, however, it is important to note one thing, says Mr Amritraj of Hyde Park Entertainment. "Regardless of how good the financial structures are, if you make bad films, nobody is going to watch them."

__________

"It's hard to find original ideas, but Asia has the advantage of not having movies that are being made with sequels in mind."
Ashok Amritraj, Hyde Park Entertainment CEO

"Film financing on a portfolio basis is logically a safe investment... Sophisticated investment banks are supporting the idea."
Edward R Pressman, film producer

"The product has to be international yet have that cultural uniqueness - we don't want to sell out but we cannot be too Singapore-centric."
Juan Foo, The Shooting Gallery executive director

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