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The state of China & Hong Kongs film industry and the emergence of Transmedia

THE ASIAN SCREEN is an ongoing series of industry reports on the media and entertainment market in the Greater China region by Haexagon Concepts, a Hong Kong-based creative think tank and transmedia workshop.


October 2012


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IDENTITY HONG KONG The state of the film industry Use of traditional and alternative media in Hong Kong Transmedia in Hong Kong CHINA The state of the film industry Use of traditional and alternative media in China Transmedia in China CASE STUDY #1 Vulgaria CASE STUDY #2 Love Is Not Blind REFERENCES/CREDITS/CONTACT


For the purpose of this study, alternative media refers to anything other than print, television, and radio. This Report Is Licensed Under Creative Commons Attribution-Noncommercial-Sharealike.

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Under the One Country, Two Systems principle of the Sino-British Joint Declaration, Hong Kong is, theoretically, an autonomic region with its own economic and political system. It has a prosperous entertainment industry that once had so much output that the city was dubbed the Hollywood of the East. Due to its history as a British colony and a large number of international firms including Turner Broadcasting - using Hong Kong as their Asia base, Hong Kong has also remained the most English-friendly city in the Greater China Region. Hong Kong has a relatively high expatriate population, it doesnt have the same media and Internet censorship that Mainland Chinese citizens are subjected to, and its literally a stones throw away from Shenzhen, which is slowly becoming Chinas technology hub. As a result, many potential foreign investors believe that Hong Kong would be the ideal gateway into China. However, the only advantage Hong Kong truly has is geographical, as Mainland China and Hong Kong remain separated in terms of culture and political system. In a recent survey, 45% of Hong Kongers identify themselves as Hong Kong Citizen, as opposed to 22.5% for Chinese Hong Kong citizen and 18.3% for Chinese. In other words, if one wishes to understand China, Hong Kong is not the place to do it. Research on Chinas & Hong Kongs media and film industry must be done separately and analyzed only on a compare-and-contrast basis. This is what this report aims to do. Despite its advantages in technological, political, and even social infrastructure, Hong Kong is behind Mainland China in terms of innovation in using alternative forms of media as a storytelling tool. With Mainland China quickly rising as an international power player, Hong Kong keeps falling further behind every minute it fails to keep up with new trends. The good news is that it is trying. The bad news is that it is trying far too slowly. Methods Of Study: Expert Interviews Industry Reports Internet Observation Narrative Analysis

If one wishes to understand China, Hong Kong is not the place to do it

Government shake-ups and new policies - such as the Chief Executive elections and the recent National Education curriculum, which is designed to encourage understanding and patriotism for China - are fiercely opposed when perceived as moves by the Chinese Communist Party to assert their influence on Hong Kong. Many Hong Kong natives even pride themselves on being different from their Mainland compatriots, with new viral videos of Mainland Chinese tourists behaving badly in Hong Kong being circulated at least once a month.

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Hong Kong was once dubbed the Hollywood of the East for its prolific film industry. With China still in the progress of reform (Shanghai was once Chinas major film hub, but that ended with the arrival of World War II) and a weak commercial film industry in Taiwan, Hong Kong was the major source of Chinese-language cinema in the region from the end of World War II to the mid-1990s. At its peak, the Hong Kong film industry produced over 200 films a year and created internationally renowned stars like Jackie Chan, Chow Yun Fat, Maggie Cheung, Sammo Hung, and Jet Li.

The state of the film industry

However, with the rise of piracy and decline of demand for Hong Kong films in Taiwan and Southeast Asia, film revenue began to decline in the mid-1990s. Local box office revenue started decreasing (though audiences still flocked to special effectsheavy Hollywood blockbusters), several of the industrys most popular figures left Hong Kong for Hollywood, and several big-budget attempts to mimic Hollywood productions failed to recoup their costs. Movie palaces with 800 to 1000 seats either closed down or were transformed into multi-screen cinemas to remain competitive with multiplexes. The number of productions reduced dramatically over the following decade, as Hong Kong now produces an average of only 40 to 50 films a year. This is despite the implementation of CEPA in 2003, which allowed Hong KongMainland co-productions to enter Mainland Chinese cinemas as a local film instead of a foreign film, thereby bypassing the strict 20-film quota for foreign films. The Chinese film industry benefitted from Hong Kong filmmakers experiences and technical know-how, while Hong Kong film professionals found a new way to make a living. It seemed like a win-win situation. However, entering Mainland China also meant Hong Kong filmmakers had to play along with Chinas censorship rules, which operate with little transparency and comes with a list of ambiguous guidelines and sometimes unwritten rules (the villains must not triumph at the end of the film, no mention of the Kuomintang, no premarital sex, etc.). The censorship issue has been difficult for both Hong Kong and Chinese filmmakers, but it is especially difficult for experienced Hong Kong filmmakers who have spent years working without ideological censorship and dont have an understanding of Mainland Chinese culture (including business culture). As a result, many Hong Kong filmmakers have uprooted and established offices in Beijing, the heart of the Chinese film industry, to further integrate themselves into the system. Thanks to the co-production system, Hong Kong continues to produce a steady amount of films, while box office revenues for local films have also steadied (even if it remains low compared to the golden age). The coproduction system has also given Hong Kong filmmakers the chance to produce big-budget spectacles, but the disparity

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between Mainland Chinese and Hong Kong culture remains, as co-productions that do very well in Mainland Chinese box office often fail at the Hong Kong box office. For example, Hong Kong director Derek Yees The Great Magician, a comedy that starred two of Hong Kongs most popular male actors, was a major success in Mainland China, becoming the highest-grossing domestic film in the first half of 2012. Even with a Cantonese version featuring the voices of the two leads playing in cinemas, The Great Magician had a Mainland Chinese comedy style that did not appeal to Hong Kong audiences. Unlike I Love Hong Kong 2012 and Alls Well Ends Well 2012 both star-studded comedies with Hong Kong stars and Cantonese humor released in the same time slot The Great Magician will not be among one of the top ten grossing Chineselanguage films in Hong Kong in 2012. The Hong Kong film industry also got a shocking wake-up call in 2011 when Taiwanese coming-ofage romantic comedy You Are the Apple of My Eye beat box office records and became the highest-

grossing Chinese-language film in Hong Kong history. Compared to films starring Hong Kong superstars like Stephen Chow, Jackie Chan, Chow Yun Fat, and Andy Lau that have sat on top of that list for the past two decades, Apple doesnt have any recognizable stars, and the only true appeal the film had was writer-director-novelist Giddens (making his directorial debut) and a strong word-of-mouth among the youth audience. Suddenly, Hong Kong filmmakers realized that their films dont necessarily need big stars and huge budgets to succeed.

showed filmmakers in Hong Kong something: Audiences are hungry for Hong Kong-produced films that are made to be appreciated by Hong Kong audiences. In other words, they want films with no Mainland Chinese elements a demand that has become very difficult to meet in a market as small as Hong Kong. Even Vulgaria, the highestgrossing Chinese-language film of 2012 in Hong Kong as of September 30, 2012, is not among the top 50 highest-grossing Chinese-language films in Hong Kong history.

Audiences are hungry for Hong Kong-produced films that are made to be appreciated by Hong Kong audiences
At the same time, the recent successes of Vulgaria (a comedy filled with Cantonese obscenities), Sex and Zen: Extreme Ecstasy, the Lan Kwai Fong series, and even TVBs Lunar New Year films, also

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Use of traditional and alternative media in Hong Kong

Vulgaria was produced at a HK$7 million budget. To run one 30-second ad on one of Hong Kongs two free-to-air television stations, its distributor wouldve had to spend anywhere from HK$12,000 to HK$455,000 (depending on the time slot). This means to run one week of an effective television advertising campaign (for example, one ad per hour during primetime, equating to four ads a night) on just one television station, the distributor wouldve had to spend anywhere between HK$336,000 to HK$12.7 million. An even more effective form of advertising in Hong Kong is using the public transportation system, which is used by one-third of the population on a daily basis. A one-sheet ad along an escalator in a subway station for three weeks costs HK$50,000 to HK$76,000, while a pillar on the platform of Admiralty Station (a major transfer point in the subway system), costs HK$116,000. The Hong Kong Mass Transit Railway system has a total of 155 stops throughout Hong Kong, and it is still expanding. According to Admangos 2011 Adspend report, the entertainment industry spent locally a total of HK$1.39 billion on advertisement. For the sake of comparison, the average prints & advertising cost of a single Hollywood film in 2009 was US$37 million (approximately HK$286.9 million). This makes most Hollywood films far more proficient in buying up ad space and investing in entertainment advertising globally (and locally), than a high grade (high budgeted) Hong Kong movie. Bearing in mind that these numbers are for an average Hollywood film release, one easily concludes Hollywood tent-pole movies (any film industrys beacon of comparison) have consequentially far more money to spend on their releases (in HK and globally) and far more interest from local ad space vendors to capitalize on their platforms. A major problem in Hong Kong is that there arent enough advertising platforms to make rates competitive. In Hong Kong, there are only two free-to-air television stations (broadband/ cable television networks only reach about one million viewers, mainly relying on subscribers for their revenue) and two commercial radio networks (each network operates multiple stations). In other words, the company that can afford to pay the most for ad space will dominate the city, making local productions buy up more space to try and compete with bigger, foreign competition (hence inflating budgets and driving advertising prices up). that go to cinemas), traditional advertising costs are not always cost-effective. As a result, Hong Kong film distributors are beginning to find cheaper, more cost-effective marketing platforms. For example, the Hong Kong distributor of Japanese horror film Sadako 3D learned from the Japanese advertising campaign and started sending the films ghost character Sadako to crowded areas during the weekend to interact with people on the street. Humorous photos of Sadako posing with people and doing everyday activities like taking the subway were posted on the films Hong Kong Facebook page, raising awareness for the film. This tongue-in-cheek tactic raised awareness significantly and help the film become one of the most successful Japanese horror films in recent years. Hong Kong has also been especially slow in adapting to legal digital distribution, despite the popularity of illegal downloading in the city. Digital music services

Hong Kong film distributors are beginning to find cheaper, more cost-effective marketing platforms

With a HK$10 million gross considered successful for a local film (though roughly half of

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were only launched a few years ago, long after iTunes had already become commonplace in the American music industry. The music and movie sections of the Hong Kong iTunes Store were finally launched in June 2012 after getting support from the local music industry. On the other hand, the movie section featured very few local films, as Hong Kong film companies appear to be taking a wait-and-see

approach to the platform, observing how well the music store does before agreeing to put their films on iTunes. In 2011, Mei Ah Entertainment launched Boyabo, an Internet-based video-ondemand site that sells and rents out films from their catalogue on DivX format. However, their technology and accessibility remain far behind existing internet video-on-demand services like iTunes, Hulu and Netflix.

Transmedia in Hong Kong

While the Hong Kong entertainment industry is beginning to use alternative forms of advertising to sell their products, transmedia is a concept that industry professionals have yet to fully understand. According to the World Bank, over 70% of Hong Kongs population has access to the internet, and yet, it remains an uncharted territory in terms of it being used to expand storytelling. Social media (Facebook and Weibo Chinese microblog mostly) have thrived here, especially with the advent of smartphones, but this increase in use hasnt helped with how stories are being told in the city. Despite the exponential rise of smartphone users, adspend for mobile advertising in Hong Kong is by far the lowest among all the available platforms. However, the use of mobile video is clearly on the rise. In addition to watching video news reports, Hong Kong mobile users are also taking advantage of the increasing mobile internet speed to catch up with their favorite television shows. myTV, a smartphone-based video-on-demand service by Hong Kongs biggest television station TVB, took up 22% of all mobile ad revenue in the first quarter of 2012, and video views for popular series often pass the 100,000 view count mark. The problem is that opportunities for transmedia campaigns in Hong Kong have gone wasted. Films like The Dark Knight Rises and Looper have used transmedia campaigns for their respective American releases, but the local firms handling promotion for these films failed to adopt the same strategy, simply continuing with traditional forms of advertising. In other words, Hong Kong has the infrastructure to pull off a transmedia campaign multiple alternative media platforms, number of users, and technical infrastructure. What it lacks are clients with forward vision and the right opportunity.

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Thanks to the growth of the economy, China is currently the fastest-growing film industry in the world. Thanks to the advent of digital projection technology, the number of cinema screens continues to grow on an exponential rate, with over 1,100 cinemas and over 10,000 screens as of the first half of 2012. Due to high ticket prices (a full-priced movie ticket can be as high as 5% of a first tier citys minimum monthly wage), movie-going remains an activity for the middle class. For those unwilling to pay such premiums for this form of entertainment, piracy is still the preferred solution, making it rampant (and still very profitable) all around the country.

The state of the film industry

Nevertheless, box office revenue continues to grow on a yearly basis, with local films reaching new box office heights every year. This year, Painted Skin: Resurrection became the highest-grossing domestic film in Chinese history, beating a record that was only set a year and a half previously by Let the Bullets Fly, which in turn broke a record set just another year and a half previously by disaster drama Aftershock. However, the revenue growth rate at the Chinese box office appears to be slowing down over the past year. With the exception of the RMB700 million gross for Painted Skin, no other local film has broken the RMB 200 million mark in 2012. Instead, 2012 has been a much better year for foreign films, with nine of the ten highest-grossing 2012 films in China (as of September 30, 2012) being foreign films. Even though the grosses of domestic films havent been as high as imported films, the Chinese commercial film industry has been growing at an incredible rate. Only several years ago, crossing the RMB 100 million mark at the box office was considered a feat only blockbuster directors like Feng Xiaogang (The Assembly, Aftershock) and Zhang Yimou (Hero, To Live, Raise the Red Lantern) could achieve. As of 2012, over 50 directors have already joined this so-called 100-million director club, showing how far the Chinese commercial film industry has come. However, only a number of those 100 million club films were actually profitable. While box office revenue has been growing quickly, film budgets have been growing at an even higher rate. As China continues to attract the worlds attention, the film industry realizes that their films must also meet international standards. For example, Zhang Yimous The Flowers of War became the highest independently funded production in Chinese cinema history, with a bulk of its US$80 million budget coming from private bank loans. Feng Xiaogangs famine drama Back to 1942 reportedly cost RMB 250 million, while Huayi Brothers ambitious Tai Chi series has already cost the studio roughly RMB 210 million over two films. The problem with such high budgets is that revenue from the

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domestic market is not enough for the films to recuperate their costs, especially when one film has multiple financiers that are entitled to a share of the box office. Without a profitable domestic ancillary market (more on this later), sales agents must rely on international sales to recuperate a films cost. In the case of The Flowers of War, while the film made back its budget at the domestic box office, half of that revenue went to cinemas (after a bitter revenue sharing battle before its opening). After the disappointing performance during the American film award season (It only received a Best Foreign Film nomination at the Golden Globe awards), chances of of producer Zhang Weiping recouping his money from worldwide distribution deals diminished quickly. Zhang even signed a revenue sharing deal with the American distributor, but the film grossed only US$200,000 at the American box office Even in the case of Painted Skin, the films main distributor/ financier Huayi Brothers was only entitled to RMB 72 million of its RMB 726 million revenue as

one of the four copyright holders. Instead, Huayis biggest reward was in the price of its stock, which saw a major increase after the well-publicized success of the film. Another major factor causing film budgets to skyrocket is the cost of stars. Christian Bales salary alone reportedly took up 10% of the budget of The Flowers of War, while Hong Kong stars like Chow Yun Fat, Donnie Yen, and Andy Lau consistently command salaries ranging from RMB 25 million to 40 million per film. In comparison, Mainland Chinese stars like Huang Xiao Ming and Zhou Xun reportedly make less than half of that on each film. This also hurts Hong Kong cinema indirectly, as producers of modestly budgeted Hong Kong films have no way of matching the amount of money Mainland Chinese financiers offer. On the other hand, there have been several surprise low-budget hits in China that have spelled major profit for their producers. In 2011, Love is Not Blind, an antiromantic comedy about a womans journey away from the end of a relationship, was produced on a RMB 9 million budget and made RMB 352 million at the box office

(it will be further explored in a case study later in this report). In the same year, horror film Mysterious Island made RMB 91 million from a RMB 7 million budget due the popularity of then-television star Mini Yang (After the films success, Yang appeared in 8 film released in 2012). Even Chen Kaiges cyber-bullying drama Caught in the Web, which cost RMB 30 million with a cast of top Mainland Chinese actors, managed to make RMB 176 million at the box office.

same guarantee from local films. Instead, they want Chinese films that speak to their values and sensibilities. They want films that touch on contemporary issues that they can relate to or films that are up to date on current trends. This is why surprise hits in the Chinese box office are often contemporary films, while the biggest flops tend to be period action epics. Filmmakers especially those from Hong Kong will likely continue to turn to period films for one simple reason: Censorship. Its widely known that period films, especially those based on renowned literary works, have an easier time passing Chinas censorship body because they dont touch on sensitive contemporary issues. But like any Chinese governmental body, SARFT (State Administration of Radio, Film, and Television) lacks transparency and has the right to make changes for any reason, from violence to just a mention of the Kuomintang. Censorship remains one of the most difficult hurdles for filmmakers in China. A film has to go through multiple stages of censorship before it is cleared for release:

Spectacle and big budgets no longer equate to box office success in China

These numbers essentially express that spectacle and big budgets no longer equate to box office success in China. Chinese audiences have learned that big budget and spectacle from Hollywood is like buying a product from a country known for reliable quality, while they cant get that

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First, the script must gain approval before going into production. Then, the finished product must be sent for both technical approval and screening approval. In the recent case of director Lou Yes Mystery, the film was approved to be shown at the Cannes Film Festival (it was given the dragon logo that one can see in the opening of every Chinese film). However, when the film went through the process of getting the final two approvals for the local release, SARFT requested further changes. The director once banned from making films in China for four years for going around the SARFT approval process defiantly refused to make the changes and openly requested a dialogue with the censorship bodies on his Weibo (Chinese micro-blog). In the end, Lou agreed to fade three seconds of the film to black, but claims

that he would remove his name in the approved theatrical version. Theoretically, the American definition of independent cinema films financed outside the Hollywood studio system doesnt exist in China because the Chinese cinema industry doesnt have a studio system, though it has lowbudget films. The annual Beijing Independent Film Festival screens films that have not gone through the official government approval process, which means that any public screening of those films is considered illegal. As a result, the film festival is shut down multiple times by the police every year. Film buffs in China separate films into two categories: Main melody films and commercial films. While commercial films are made by the private sector and are made for profit, main melody films are essentially

propaganda films that sing the praises of the Communist Party, the central government, and its most well-known members. One of the major studios producing these films is the August First Film Studio, which is essentially the film division of the Peoples Liberation Army. Meanwhile, other studios like China Film Group, Huaxia, and Changchun Film Studio toe the line between main melody films and commercial films. China Film Group and Huaxia are the only two companies allowed to distribute imported films on a shared revenue basis. As China becomes an increasingly lucrative market for films, foreign film companies will undoubtedly want a piece of the pie. However, as foreign films are still limited by the imported films quota (recently expanded after negotiations with Americas MPAA), foreign investors are now

looking to doing co-productions with Chinese investors to get around the quota. In addition to most Hong Kong films of recent years, The Expendables 2, Iron Man 3, Looper and The Karate Kid are all examples of recent American-Chinese co-productions.

Many foreign productions simply try to force in Chinese elements into a story
However, unlike Hong Kong filmmakers who play by the rules and bring in Chinese actors/ crew members and shoot most of their films in Mainland China, many foreign productions simply try to force in Chinese elements into a story (with the exception of The Karate Kid, of course) in

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order to get co-production status. The Expendables 2 added a Chinese female character, Looper replaced its planned France location shoot with China and featured a Chinese actress (though many of the scenes were reportedly cut out of the nonChina cut), and Iron Man 3 plans to partly shoot in China with a major Chinese actor in a supporting role. SARFT quickly picked up on this practice and vowed in August 2012 to strictly enforce co-production terms, demanding that films include Chinese locations, Chinese actors, and a story that incorporates Chinese themes. Expendables 2 was the first casualty, having its co-production status removed despite a hefty investment by LeVision Pictures. Looper was suddenly pulled from its release date with no official reason and abruptly returned to its original release date two days before it (The opening dragon logo stated that it is now classified as an imported film). The announcement even sent a shockwave among Hong Kong filmmakers, who had to go to Beijing for an emergency meeting with SARFT. With domestic films underperforming this year at the Chinese box office, SARFT was also

active in protecting local products by increasing competition among foreign films. At the end of June, SARFT prevented any foreign films from opening in what was widely known as the domestic film protective month. Between June 27th and July 27th, no foreign film was released under the revenue sharing status China. SARFT was rumored to have been instrumental in pitting The Dark Knight Rises, The Amazing Spider-Man, Prometheus, and Expendables 2 against each other by having them open within the same two-week period. While none of the four films reached the heights of The Avengers and Ghost Protocol, all four films managed to surpass The Bullet Vanishes, the years second-highest grossing Chinese film as of September 30, 2012. Anyone attempting to enter the Chinese entertainment market will face these major problems on a regular basis: A lack of transparency in the bureaucratic process (which can be fixed with the right connections), sudden and last-minute decisions, protectionist policies that some may perceive as impractical, widely accepted piracy (The first two films of the Dark

Knight trilogy were never released in Mainland Chinese cinemas, but the third film was still a huge success), and unfair revenue sharing terms.

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Use of traditional and alternative media in China

With the various problems facing outsiders attempting to enter the Chinese market, why would anyone still want to try? The answer is simple: China has the third highest adspend in the world, behind The United States and Japan. Radio, television, and magazines are the three dominant media platforms in terms of ad spending in China, but spending on web advertising is quickly surging. A report by PricewaterhouseCoopers states that web advertising spending is expected to hit US$31 billion globally by 2016. In addition to state-run CCTV, each province also has a privately operated television network that can reach the entire nation via cable/satellite/broadband television services. As ratings for shows like The Voice of China, Take Me Out, and If You Are the One continue to rise, television advertising cost is likely to rise along with it. Recently, Zhejiang Television reportedly earned over RMB 100 million from ads on the finale of The Voice of China, earning it the nickname The Super Bowl of China. Mainland China currently has 500 million Internet users, with 300 million of those users accessing the internet on their mobile phones. While western social media sites like Twitter and Facebook are banned in China, Sina Weibo (the most popular Chinese micro-blog service) has passed the 300 million user mark (though its not clear how many of those are active users), with many others using messenger services like QQ and Weixin (both owned by Tencent) as well as social network RenRen to interact with others. Tudou, and LeTV have been offering free and legal entertainment content like feature films and television series for several years. They also quickly adopted the mobile distribution model, offering mobile apps on both smartphones and tablets. LeTV, for example, has followed Apples lead, releasing a set-top box similar to Apple TV, and announcing a Super TV a move that many expect Apple to take in the near future. With LeTV vowing to dominate Chinas net-based video-on-demand market, the merger of Youku and Tudou (the two biggest Internet video sites), and Sohus exclusive deal with Koreas CJ Entertainment to distribute Korean television dramas on their video service, theres no doubt that the future of entertainment distribution in China lies in the Internet.

Chinese advertisers know that they need to spread campaigns out to multiple platforms

Most major advertisers in China now have a presence on these major social media platforms (even KFC and McDonalds both have official Weibo accounts), with followers reaching 150,000 to 200,000. While traditional advertising like outdoor print ads and television ads are still effective in China, Chinese advertisers know that they need to spread campaigns out to multiple platforms to reach all their potential customers. With such a high number of Internet users and a rampant piracy problem, content owners have long adapted to the Internet distribution model. While there is no iTunes store in China, Internet video-on-demand sites like Youku,

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Transmedia in China
One of the major keys to success of video-on-demand sites is the growth of micro films. Essentially short films with a marketing title that rode on the wave of micro-blogs, micro films have been used as a way for novice filmmakers to get noticed, short exercises for reputable directors, and most importantly, advertising tools. Director Pang Ho Cheung was one of the first filmmakers to use micro films as an advertising tool with his 4+1 Project. Created in collaboration with Samsung and Sina, the 4+1 project encompassed four individual short films and one feature length film to be produced by Pang. The films featured popular stars, a large amount of product placement, and were available on the Internet for free. Pang would continue this practice for the Mainland China advertising campaign of Love in the Buff. Thanks to the backing of Media Asia and China Film Group, the films marketing team commissioned a production company under the Media Asia group to produce a series of ten micro films that were only thematically connected to the film itself. The view count for these shorts ranged from 120,000 to 2,000,000. In addition to traditional promotional platforms, Huayi Brothers also looked to smartphones to promote Painted Skin: Resurrection. Like what Hollywood has been doing with some of its biggest films, Huayi commissioned the creation of a smartphone app that allowed users to play games as one of the films characters while they earned points via QR codes they would find around their cities.

Unlike Hong Kong, China has begun to take advantage of transmedia storytelling
Unlike Hong Kong, media producers in Mainland China are beginning to take advantage of the infrastructure available to create transmedia storytelling. Advertisers are aware of the impracticality of simply relying on traditional media and are attempting to allocate resources to promote their products. They also realize that using new media platforms means that they must use new means as well, and expanding their storytelling universe beyond the core content is the freshest and best way to capture the audiences attention.

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Case Study #1

At just over HK$30 million, Pang Ho-Cheungs Vulgaria has become the top-grossing Hong Kong film of 2012. How did a foul-mouthed category III film about making movies manage to become the highestgrossing local films of the year?

1) Language-based humor
Chinese: Year: Director: Producer: 2012 Pang Ho-Cheung Pang Ho-Cheung, Subi Liang Writer: Pang Ho-Cheung, Lam Chiu-Wing, Luk Yee-Sum Cast: Chapman To Man-Chat, Ronald Cheng Chung-Kei, Dada Chen, Simon Lui Yu-Yeung

There are several specific Cantonese curse words that are considered no-no for Hong Kong censors. Traditionally, use of those words would automatically warrant a category III (no one under 18 admitted) for the film, which is why commercial Hong Kong films typically stay away from them. However, in 2007, Pang Ho-Cheungs Exodus became one of the first Hong Kong films to use these Cantonese cuss words liberally and still managed to avoid a category III rating. Reportedly, Pang pointed out to the censors that films with English profanity are often passed with IIB (not an age-restricted rating) and that the use of profanity actually reflects everyday reality. The censors agreed and allowed Exodus to pass with a IIB. This became a game changer of sorts, as other filmmakers began to follow suit. Wong Jings Mr. and Mrs. Gambler features several jokes involving

Cantonese cuss words, Heiward Mak had her idol stars mouth them in Ex, and Pang Ho-Cheung continued to include them in his films until Love in the Puff got the category III when TELA had a problem with the characters using profanity too casually (accordi ng to Pang). However, Puff was also immensely popular among young audiences, and Pang knew that it was partly because young people find Cantonese profanity in films amusing. After making Love in the Buff, his first China co-production, Pang returned to Hong Kong and managed to get HK$7 million from Sun Entertainment to make what was called at the time What We Talk About When We Talk About Hong Kong Movie. It would be packed with Cantonese profanity, raunchy humor, a load of star cameos (many of whom worked for free), and most importantly, it would have the label Hong Kong movie taped tightly to it.

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2) Using Weibo
Pang Ho-Cheung currently has 1.9 million followers on Weibo. He knows hes a popular man on Sina Weibo and other Chinese social media, which is why he has been using it as a tool for the last year and a half. He used it to get extras for Love in the Buff, and he had been counting on those same fans to mobilize and enter the cinema for the romantic comedy. Pang also used Weibo to report the progress of What We Talk About When We Talk About Hong Kong Movie. Pang and producer/ star Chapman To uploaded photos from their meetings and the set of the film for a month before the local press even got to visit the set. On the surface, they seemed like a celebritys everyday post, but every single post included the films Chinese name (which translates to A Vulgar Comedy) and teased the various star cameos. Thats where hype starts.

3) Picking the right handlers

In 2010, local independent distributor Golden Scene premiered La Comedia Humaine at the Hong Kong International Film Festival, four months before its theatrical release. The film was a tough sell - a buddy comedy about a professional killer and a scriptwriter that was about the magic of movies. Not only would the HKIFF launch give the film a quality label, but by having only one screening to 1,000 enthusiastic audience members in the Hong Kong Cultural Center, the amplified response became a good word-of-mouth starter. When opening weekend arrived in August, Golden Scene also sent the films stars on a series of meet-and-greets in Hong Kong cinemas, meeting enthusiastic audiences with what is essentially a stand-up routine. It brought the film festival experience to general moviegoing, and it kept the film in the media spotlight. The result? A film that usually would not have made more than HK$4 million ended up with more than double that amount. With Humaine and the HK$10 million-plus gross for Break-up Club, Golden Scene became THE distributor for hip and alternative Hong Kong commercial films. Golden Scene knew that What We Talk About When We Talk About Hong Kong Movie - now re-titled Vulgaria - would once again be a tough sell to local audiences: Its category III,

it doesnt have a star that guarantees a huge gross, and it was from a filmmaker who has only made one commercial hit in his career. As they had done with Humaine, they started with one exclusive screening at the HKIFF. Knowing that Pang is a darling in film festivals, Golden Scene also used Filmart (happening at the same time as HKIFF) to aggressively push to the film to overseas visitors - buyers, programmers, and critics - at the films market screening. The positive vibe from both the festival and the film market screening raised many peoples eyebrows, and Vulgaria was the road to film festivals around the world.

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4) Your audience & Youtube are your friends

After a run around the world at the Udine Far East Film Festival and the New York Asian Film Festival, Golden Scene kicked off the local advertising campaign for the film. Thanks to Love in the Buff becoming the highest-grossing Hong Kong film of the year, Pang suddenly became a marketable name. Golden Scene uploaded five making-of videos (revolving a mock production meeting between Pang and To), one of which was entirely devoted to the profanity in the film. Thanks to the censor-free world that is free internet, this video now has over 200,000 hits on Youtube. In comparison, the cleaner making of videos have only attracted 20,000-70,000 views. Three weeks before the movies official release date, Golden Scene held midnight previews around town and had Pang Ho-Cheung and Chapman To do post-movie talks. Since this was a category III film anyway, Pang, To, and Dada Chan let it all loose with curse words left and right to full-house audiences around town. In the age of smartphones, everyone promptly pulled out their cameras and started filming. At the first of these talks, To and Pang talk about the importance of making films for Hong Kong audiences, the absurdity of Mainland censorship, the beauty of Cantonese profanity, and sometimes even making fun of

other celebrities. Later, the two began revealing the identities of the people who inspired some of the more controversial characters in the film, including a director who had to run a gambling den to make ends meet. Videos of these shows (the two reportedly did over 150 meet-and-greets by the time they were done) began circulating on the web, essentially giving the film free advertising on Youtube.

5) Pop culture domination

While audience response to Vulgaria ranged from mixed to good, several of the films jokes have become talking points among Hong Kongers. One newspaper columnist even devoted an entire column to a rarely-used phrase that became a plot point in the film. Another way the film attracted audiences was one that the filmmakers wouldve never seen coming: Over the past year, Hong Kong people have grown increasingly dissatisfied with Mainland China - from the rudeness of tourists to their rumored influence over the Chief Executive election to the new National Education program. Suddenly, Hong Kongers feel like their identities were being threatened, and they will take anything they can get to enforce that identity. Thanks to that, the idea of watching Vulgaria not only became the hip thing to do as a Hong Konger; it also became a way to show Hong Kongers love for Hong Kong. If anything, VULGARIA goes to show that to make money in the movies, its not always about making a good movie - its about making the right movie.

Haexagon Concepts | The Asian Screen #1


Case Study #2


The Chinese title for Teng Hua-Taos Love is Not Blind is 33, which literally means 33 Days of Love-loss. Essentially, it refers to the period of heartbreak experienced by someone who has just gotten out of a relationship. In the film, heroine Xiaoxian experiences love-loss when she catches her longtime boyfriend with her best friend. In the end, she moves on from the pain with the help of her effeminate metrosexual co-worker, played by Wen Zhang. Made for RMB 8.9 million, LOVE IS NOT BLIND has become a colossal hit in Mainland China, even out-grossing big-budget action blockbusters. While the film itself has been well-received by the post80s (those born in the 1980s) demographic in China, its success is also an example of what great marketing can do for a film.
Chinese: Year: Director: Writer: 33 2011 Teng Hua-Tao Teng Hua-Tao, Bao Jing-Jing (also original novel) Cast: Bai Baihe, Wen Zhang, Zhang Zixuan, David Wang

1) Reputation
Love is Not Blind is the 4th film by writer-director Teng Hua-Tao, who is best known for his television dramas Dwelling Narrowness and Naked Wedding, both hot topics in Chinese popular culture (especially among young women) when they were aired. Dwelling Narrowness, co-starring Blind star Wen Zhang, deals with housing slaves, young people (usually urbanites) who end up being slave to their mortgages in a society dealing with high inflation including in the real estate market). However, it was mainly its plot line about an affair between one of the heroines and a corrupted government official that attracted so much controversy that SARFT stopped the airing of the drama and forced producers to

re-edit the drama before putting it back on the air. Meanwhile, Naked Wedding, both starring and co-written by Wen Zhang, deals with post-80s who choose to marry without the money for material needs like a home or a car. The drama depicts a naked wedding couple whose marriage is broken up by family conflicts and their lack of material wealth. Even though Naked Wedding didnt attract as much controversy as Dwelling, it was also popular among young people. Love is Not Blind deals with a far less serious subject - a girl getting over her heartbreak - but its popular original novel (written by a post1985 female author in the form of a diary) and the reputation of the Teng-Wen team all created a fair amount of anticipation before its release.

Haexagon Concepts | The Asian Screen #1


2) Issues
The idea of a break-up being a major source of sorrow and sadness in ones life is something that obviously connects with youths better than conservative middle-age people. In the film, Teng embraces how seriously his target audience takes love-loss by making the idea of getting over it his heroines ultimate goal. Of course, just the idea of blowing up something as seemingly trivial as a break-up reflects the values of the films demographic. While there are politically and socially active post-80s in China, the majority of Chinese people in their 20s care about more personal issues like money, careers, their iPhones, and of course, their love lives. As a result, Love is Not Blind immediately connected to the biggest group of consumers of Chinese cinema right now - the youths.

3) Marketing
Love is Not Blind was made with the intention of being released around 11-11. In China, since the 11-11 resemble lone sticks standing on their own, its become a symbol for single people, and hence the beginning of singles day. And the best day to sell a film about heartbreak is naturally on Singles Day. In addition to picking 11-11 singles day as its release date, the marketing team also recorded a series of interviews with young people around China. These interviews are all about these peoples love-loss experiences - the pain, the suffering, the crying, and even messages to their exs. In addition, the films two stars also appeared in the video in character to talk about how they view breakups, taking the films story into the real world and selling the universality of its theme. hit,

The result was a major box office grossing over RMB360 million.

As mentioned earlier in this report, the success of Love is Not Blind and Caught in the Web show that films about contemporary topics are attracting audiences because of young audiences ability to connect to the films themes. This connection and the potential for interaction are what the marketing team of Love is Not Blind managed to capitalize on.

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Report Lead: Kevin Ma Supporting Analysts: Diogo Martins Marco Sparmberg Juergen Hoebarth Illustration photos:
(pages 1-13,19) Marco Sparmberg, Xin Zhuang (pages 14-18) Images pertaining to the films Vulgaria and Love is not Blind are in no way owned or copyrighted by Haexagon Concepts. They were only used for critique and commentary purposes and fall under the fair use doctrine.

Design and publishing: Haexagon Concepts Ltd.

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We are a creative think tank and transmedia workshop based in Hong Kong. We create new forms of immersive experiences for the entertainment industry by means of new media, mobile technology and the internet. We build a clients audience for socially interactive products that will further engage and amplify their users into faithful content advocators. While developing creative and high quality projects/entertainment franchises, Haexagon Concepts is implementing a common usage of Transmedia in Hong Kong and in the future, East Asia.

Haexagon Concepts | The Asian Screen #1