Mayfair Media Club “Where Creativity meets Business”

Presentation to World Cinema Fund Opportunities for Nigerian Investors

World Cinema – Business Case

  • Recognition of the creative and commercial opportunities of foreign based stories and local language films for the local and global marketplace.
  • JJ: Act Global, Act Local and Know the Difference
  • Invest in cross cultural films from Asia, Africa, Latin America
  • Attracting international talent

World Cinema – Emerging Markets

  • Crossover films: Bend It Like Beckham, Crouching Tiger Hidden Dragon and Spirited Away
  • New voices of international cinema are appearing from China, South Africa, Korea, Brazil, India and Mexico amongst others.
  • Global box office success: Crouching Tiger, Hidden Dragon($209m global box office), Spirited Away($239m global box office), Kung Fu Hustle($100m global box office) and House of Flying Daggers($93m global box office).
  • International Themes in Hollywood:  Kill Bill($178m global box office), and The Last Samurai($455m global box office).  Taiwanese director Ang Lee moved from the Chinese-language worldwide hit Crouching Tiger, Hidden Dragon($209m) to direct Hulk($245m) and Brokeback Mountain($178m) for Universal.  Zhang Ziyi, star of House of Flying Daggers and Hero($177m) was given the lead role in Sony’s English-language Memoirs of A Geisha($161m).
  • Indian films in UK:  accounted for over 16% of all UK releases in 2004 taking £12m at the UK box office although these were largely Bollywood productions playing to Indian audiences.
  • Indian Crossover: Bride & Prejudice, Bend It Like Beckham,Monsoon Wedding, and East is East have shown that ‘Indian centric’ content can be effectively marketed to mainstream audiences.
  • Latin America has produced a number of low-budget, break-out successes such as Y Tu Mama Tambien ($34m global box office) and The Motorcycle Diaries ($58m) and City of God ($27m).  Hollywood has embraced Latin American talent such as Alfonso Cuaron, the director of Y Tu Mama Tambien, who went on to direct Warner’s Harry Potter and the Prisoner of Azkaban($790m).

World Cinema – Emerging Economies

  • World’s fastest growing economies:  Goldman Sachs forecast that the BRIC economies (Brazil, Russia, India and China) will be larger than the G6 (US, Japan, UK, Germany, France and Italy) by 2050.
  • China and India are the world’s two most populous countries with over 2.4 billion people (37% of the world’s population) and both have economies that are currently growing at over 8% per annum.
  • Revenue from the international box office first overtook receipts from the US in 2003 and has remained ahead since.  Most of the studios are expanding their presence in the emerging markets through investment in local-language film and in distribution capabilities. Warner, Sony, Paramount presences in China, Japan and Korea.
  • China’s film market is forecast to double in the period 2005 to 2007 according to ChinaeCapitalinvestment bank.  Screen Digest forecasts that the Chinese box office will grow by 85% from 2005 to 2009.
  • The Indian entertainment industry has become one of the fastest growing sectors of the Indian economy and is forecast to grow at rate of 18% to 2009.  Hollywood, in the shape of Paramount, Sony, Disney and Fox have been increasing their ties with Bollywood by establishing production and distribution businesses in India to create and acquire original Indian films.
  • Significant investment is being witnessed in the overhaul of the movie theatre networks in the emerging markets with multiplexes being developed to offer consumers more volume and choice.  In addition the growth of digital cinema (in 2004, China announced plans to build more than 2,500 digital cinemas in the country (both urban and rural) within 5 years.  This growth will enhance distribution capabilities of filmed entertainment in these markets.

World Cinema: Investment Criteria

1 Building Data Bank of Projects

  • Sourced from an existing network of relationships with:
  • Established film producers; independent production companies with diverse film slate, National Film funds and film commissions.
  • Sales and Distribution companies; Talent agents and managers who represent writers, directors and actors;
  • Financiers, banks, completion bond companies, film finance, media lawyers and accountants – vital network for sourcing potential projects.

2 Project Evaluation

  • Project evaluation: selecting the projects and conducing a financial assessment and creative evaluation of the script, talent attached, production crew, budget, schedules, sales estimates and finance partners.
  • Finding Co-Production Partners: Broker relationships between local and UK producers and create partnerships with key players in film production, distribution, international sales, marketing, broadcasting, banks, completion bond companies, film commissions, film funds, private investors, media studios, talent agents and managers in the co-production territories.

3 Packaging Projects

  • Work with the co-producers to get the project investor ready and help put in place the missing elements of the package such as:
  • Adding talent – cross border casting, director, executive producers.
  • Local distribution and international sales company, who can get behind the project, offer an MG and P&A in the emerging markets and UK.
  • Broadcasters for TV presales.
  • Banks who will discount pre-sales, subsidy and tax credits in the UK and the co-production territories.
  • Completion Bond Company – local and global to consider projects.
  • Others – insurance company, a collection agent, post production company who can provide competitive quotes.
  • Marketing and PR for pre and post publicity.

4 Raising Finance

  • Present the fully packaged film projects and its partners to potential investors, leveraging key relationship with:
  • Top level financiers, including managers of entertainment finance in financial institutions, high networths, accountants and lawyers with an interest in film and media financing.
  • Individuals, professionals and institutions from culturally diverse backgrounds who view film as an asset class for investment.
  • Partner with international financiers who can bring equity, gap and debt financing to the film project
  • Relationships with government funding agencies and grant bodies in co-production territories and UK/Europe.
  • Private equity companies looking for investment opportunities in the Indian film and media industries.

Opportunities for Nigerian Investors

1 Infrastructure:
  • Digital cinemas
  • Digital distribution
2 Services Business:
  • Post Production
  • Special Effects
  • Animation
3 Attracting International Talent
  • Bollywood
  • Europe
4 Media and Entertainment Report on Nigerian Media and Entertainment Industry:
  • FICCI- Frames
  • CII Big Picture Conference
  • Abu Dhabi The Circle
  • Dubai International Film Festival
5 Education and Training:
  • Links with Media Business Schools
  • Media Schools such as Goldsmiths Media and Communications
6 Content
  • Local and International
  • Leveraging Nigerian diaspora
7 Government Funding:
  • Soft Funding
  • Broadcasters
  • Live Music
  • Mobile
  • Games
  • International Brand Association
  • Awards