Overview

Despite the global economic downturn, Hong Kong’s box office remained resilient in 2008, grossing US$140.9 million, representing an 8% increase from the previous year (US$130.5 million in 2007). The U.S. blockbuster “The Dark Knight” grossed in excess of US$7.5 million, making it one of the highest earners in Hong Kong box office history.  The U.S. is the largest supplier of films to Hong Kong, constituting over 75% of total film imports.  The gross revenue of the film industry is expected to expand in the coming years because of strong government support and the opening of new multiplexes and 3D cinemas. 

Opportunities for U.S. firms goes beyond the cinema to include film production technology, multi-media content and related services. The Hong Kong government has demonstrated support for this sector with the establishment of the Film Development Council and the recent announcement to establish a Creative Industry Office within the Commerce and Economic Bureau. The latter is intended to integrate existing policy and funding initiatives across government departments to boost the development of Hong Kong’s creative industries. Under the Closer Economic Partnership Arrangement (CEPA), Hong Kong firms in film distribution and production enjoy preferential access to mainland China as well.

Top 10 films in Hong Kong (Jan 1 to Dec 30, 2008)

Rank	Movie Title	Gross
1.	The Dark Knight	$7,545,418
2.	Cheung Gong 7 hou (CJ7)	$6,632,541
3.	The Mummy: Tomb of the Dragon Emperor	$5,002,179
4.	Journey to the Center of the Earth	$4,519,131
5.	Kung Fu Panda	$4,146,431
6.	Enchanted	$3,593,467
7.	Indiana Jones and the Kingdom of the Crystal Skull	$3,518,898
8.	The Chronicles of Narnia: Prince Caspian	$3,266,786
9.	Hancock	$3,143,626
10.	Chi bi (Red Cliff: Part I)	$3,107,595

Source: MPIA

Best Products/Services

The opening of new cinemas has helped grow box office potential in Hong Kong.  UA launched Hong Kong’s first IMAX theatre in 2007 offering a 3D movie viewing experience, with plans for a second IMAX to be built by the end of 2009.  MCL opened Hong Kong’s biggest 12-screen multiplex at Elements shopping mall and a new 4D extreme screen at the airport.  On the production side, the recent soft opening of the multi-million dollar state-of-the-art Shaw Brothers Studios in Hong Kong should provide an attractive venue for local production.  Best Prospects in Hong Kong and Macau are:

• U.S. independent feature or documentary films and videos that Hong Kong firms can distribute in Asia, especially mainland China;
• Co-productions between U.S. and Hong Kong firms for distribution in China and Asia;
• U.S. technology products used in movie theaters in China and elsewhere in Asia;
• Cooperative agreements with U.S. film education and training institutions;
• U.S. commercial advertising agencies;
• U.S. film financing and deal-structuring techniques and services.

Opportunities

Content Distribution.  U.S. exporters should consider selling content licenses to TV stations in the region, as well as to Hong Kong agents for both Hong Kong rights and rights in Asia.  For example, Hong Kong's Commerce & Economic Development Bureau is scheduled to auction Mobile TV Service in mid 2009 and to launch the service in 2010, presenting business opportunities for U.S. companies to sell films and TV programs to the Mobile TV Service Providers. U.S. companies can also consider producing programs that cater to Hong Kong viewer preferences.

Co-production and co-funded projects with Hong Kong companies offer another set of opportunities.  With the full implementation of the Closer Economic Partnership Arrangement (CEPA), Hong Kong’s position as a center for Asian co-production with international companies was reinforced. Under CEPA, Hong Kong-China co-productions are treated as local productions in China.  By cooperating with Hong Kong producers, U.S. firms can gain access to the China market.

Non-cinema production. U.S. film companies should consider Asia’s growing market for multi-media properties.  Local consumers are keen to see new content and related applications for games, comic books, cell Tel downloads in addition to films and TV programs.  In flight entertainment should not be overlooked.

3D Movies. UA Cinemas is going to build a second Imax theatre in Hong Kong in 2009.  While the first Imax screen in Hong Kong used the film-based MPX projection system, the new screen will utilize Imax Digital projection.  This will significantly reduce the purchase price of Imax film prints from US$22,000 to US$1,000.  The reduced price will likely further enhance the popularity of Imax films in Hong Kong.   U.S. film companies should consider distributing 3D versions of popular films in Hong Kong. 

Resources

Major Trade Shows

Filmart 2009
March 23-26, 2009
Venue: Hong Kong Convention and Exhibition Center, Hong Kong
www.hkfilmart.com

Hong Kong- Asia Film Financing Forum 2009
March 23 – 25, 2009
Venue: Hall 1, Hong Kong Conventional and Exhibition Center, Hong Kong
http://www.haf.org.hk/haf/

CommunicAsia 2009
June 16-19, 2009
Venue: Singapore Expo, Singapore
http://www.communicasia.com/main.htm

Cineasia 2009
December 8-10, 2009
Venue: Wynn, Macau
http://www.cineasia.com/filmexpo/photos/pdf/A_CA08_Sked.pdf

Trade Associations

Hong Kong Film Development Council: http://www.fdc.gov.hk/en/home/index.htm

Hong Kong International Film Festival: http://www.hkfilmart.com/filmart/chi/buyreg.htm

Motion Picture Association: http://www.mpa-i.org/index.html

For more information about this industry sector, please contact U.S. Commercial Service:

Fanny Chau, Commercial Specialist
Email: fanny.chau@N0SPAM.mail.doc.gov
Tel: (852) 2521-3721; Fax: (852) 2845-9800