Hong Kong’s Film Business Struggles to Make Comeback

At the old Kai Tak International Airport here, speeding sports cars bear down on four teenagers standing at one end of the broad concrete runway that juts into Victoria Harbor. One teen, Nicholas Tse, flashes a defiant, fearless sneer at the approaching Ferraris, which brake to a stop just short of the unflinching youths.

Hong Kong’s movie studios, desperate to find a new star to save their struggling industry, are hoping audiences will come to know and love that sneer.

The runway scene was filmed as a promotional trailer for the upcoming Hong Kong film “Gen X Cops.” The movie stars 18-year-old Tse, who spent his boyhood in Vancouver, Canada, and went to high school in Phoenix, and a band of young cohorts, most of them also reared or educated in North America and projecting a transoceanic, bicultural hipness.

The film’s producer, Media Asia Group, hopes the grungily dressed brat pack will be Hong Kong’s stars of the future, succeeding idols such as the charismatic Chow Yun-fat, who has moved to Hollywood, and the legendary Jackie Chan, who is getting a little too old for the action film genre.

In fact, it could be said that the speeding cars on the Kai Tak runway are racing to save

the once-mighty Hong Kong film industry, which is reeling from a recent series of potentially lethal blows.

Plagued by rampant video piracy, a depressed regional economy, interference from local gangsters and competition for consumers’ entertainment dollars from karaoke clubs, Hong Kong’s movie industry is facing its biggest crisis since World War II, when Japanese occupiers melted down local film stock for the silver content. These factors have humbled an industry that, in its heyday, rivaled Hollywood and Bombay as a movie capital.

From the early 1980s through the early ‘90s, Hong Kong produced thousands of commercially successful films that thrilled audiences from Tokyo to Tehran. Celebrated directors John Woo, Wong Kar-wai and Stanley Kwan made stylish movies that were widely admired and emulated in the United States and Europe.

Theater Admissions Plunge by 50%

But a film industry that in 1993 produced 234 films is expected this year to make only 40, many of them falling into the exploitative genre, such as the recent series of rape fantasy films, “Rape I,” “Rape II” and “Raped by an Angel.”

The Hong Kong Motion Picture Industry Assn. reports that over the last seven years, the number of theater admissions to Chinese-language films here has dropped by more than 50%, from 33 million in 1992 to less than 15 million last year.

Because of the ongoing Asia economic crisis, Hong Kong’s dominance of movie markets in South Korea, Thailand and Malaysia has, for the most part, also receded.

Taiwan, which used to be one of Hong Kong’s biggest markets, is now dominated by U.S. and Japanese films. This development dates to 1994, when the Taiwanese government removed its quota on foreign films. Hong Kong, benefiting from the “one-China” policy embraced by both China and Taiwan, had been exempt from the quota and was Taiwan’s main source of films until the limit was lifted.

Another factor in the decline could have been taken from a Hong Kong movie script. Films here have always featured--in many cases, glorified--local gangsters, mostly members of secret societies called Triads. But beginning about a decade ago, when profits were at their peak, the industry suffered as Triad dons became directly involved in filmmaking, intimidating stars and turning out hundreds of hastily made formula movies that destroyed the industry’s reputation for quality.

This created a gap that has since been filled by Japanese film and television studios, which produce high-quality made-for-television dramatic serials that are wildly popular across Asia, including Hong Kong. The cubicles and lockers of young secretaries and other workers in Hong Kong are often adorned with the faces of Japanese stars rather than Hong Kong talent.

The convergence of all these woes has turned a city where making a movie was once a license to print money into one where a handful of films must be depended upon to pay back investors.

“The situation is the worst it has ever been,” said Hong Kong legislator F.K. Ma, a movie producer who serves as vice chairman of the industry association. “Producers say no one has been able to recoup their investment for the past 24 months. The only reason they keep going is the industry can’t just cease to exist. In reality, nobody is making a profit.”

Diminishing Loyalty to Domestic Productions

Even worse, from the local industry’s perspective, Hong Kong movie makers find they can no longer compete with Hollywood.

In 1997 and last year, box-office receipts here for American movies greatly exceeded those for films made in Hong Kong.

This reversed a decades-long trend of local audience loyalty to homemade products. As recently as 1994, Hong Kong films outgrossed their Hollywood competitors by a 2-1 margin here, taking in $127 million compared with $57 million for films produced outside of Hong Kong, mostly in the United States. Last year, the Hong industry association reported, local films grossed only $56 million domestically compared with $72 million for the mostly American films.

Industry people here say U.S. films, with their bigger budgets and sensational special effects, are still able to attract audiences to the big screen.

“If you want people to watch on the big screen,” said Thomas Chung, managing director of Media Asia Group, “you have to give them the big-screen experience.”

But however much of an advantage it may enjoy in that respect, Hollywood still has its problems in Hong Kong. The American film industry needs theaters in Asia to show its products. For years, these theaters--dozens of which are owned and operated throughout Asia by Hong Kong’s Golden Harvest film studio--have depended on a steady flow of Hong Kong films to fill the seats and pay the bills. Now two of Hong Kong’s five main theater chains have been forced to close down. The three remaining chains, including Golden Harvest, are struggling to stay afloat.

Moreover, the same rampant piracy--involving cheaply produced video compact discs, or VCDs--that is killing the Hong Kong industry has also seriously cut into the return American studios get for their big-budget films. Disney’s “A Bug’s Life” was out on pirated disc in Hong Kong and China before it opened in theaters in Asia. Movie industry executives in Asia estimate that the number of pirated copies of “Titanic” circulating in the region exceeds 50 million.

In protest against widespread piracy, Hong Kong theater operators last week closed for one day while some of the territory’s top stars, including Jackie Chan, led about 1,600 actors, entertainers and others in an anti-piracy march on government offices.

Louisa Chan Yee-nor, local representative for several U.S. film studios, said box-office returns here for U.S. films in January and February were down 39% compared with the same months in 1998, mainly because of growing piracy.

According to Ma of the Hong Kong industry association, the center of pirated VCD traffic has moved from China, where authorities closed down more than 240 VCD production lines over the last two years under pressure from the U.S., to Hong Kong and the nearby Portuguese enclave of Macao.

The VCD--a cheaper, low-tech version of the DVD videodisc--has replaced bulkier videocassettes as the main medium for watching movies at home in Asia. The discs, which are the same size as music CDs, cost about 25 cents each for pressing and packaging and sell on the streets for about $3.

One infamous local video pirate in Hong Kong, Ma said, operates 60 VCD production lines, each churning out several thousand discs a day. The impact of this illegal market can be seen at video rental stores in Hong Kong, where, according to Peter Lam, another official with the movie association, annual rental receipts have dropped from more than $60 million in 1993 to less than $7 million last year.

One local movie maker was so frustrated by the piracy, Ma said, that he produced a batch of badly made “pirated” discs of his own film, hoping that their poor quality would send people into theaters. When police tracked the “pirated” discs to their source, they were shocked to find that the pirate and the movie maker were the same man.

Premiere, Pirated Copies on Same Day

Manfred Wong--a producer whose big-budget film “Stormriders,” based on a popular Hong Kong comic book, was the most successful Chinese-language film here last year--recalled that on the day his film premiered, local shops were already advertising pirated discs. Video pirates with hand-held digital cameras attended the opening and had produced crude copies on disc later that evening.

“I just went to the China mainland,” Wong said during an interview in his office in Hong Kong’s Kowloon district. “One director told me they had already printed 6.8 million pirate copies of ‘Stormriders.’ In Shanghai, every two blocks you see a VCD stall.”

Wong and two partners in BOB, their production group, have been able to stay in business by producing films that are heavy on video graphics, which work best on a large screen and appeal directly to the booming teenage market.

By targeting teens, Wong and his group may survive the crisis. The main victims so far are the independent filmmakers who until recently brought Hong Kong international awards and artistic glory.

In the magic three-year period of 1985 through 1987, for example, Hong Kong produced dozens of artistically praised films. Jackie Chan, recently seen in the American hit movie “Rush Hour,” released “Police Story,” which broke the actor out of his traditional kung fu roles. John Woo released his classic “A Better Tomorrow,” starring Chow Yun-fat. Mabel Cheung came out with “An Autumn’s Tale,” also starring Chow, who is often described as Hong Kong’s Cary Grant. Stanley Kwan released “Rouge,” a ghost story starring Anita Mui as a courtesan in a 1930s Hong Kong brothel.

Many Industry Stars Go to China, Hollywood

In those days, people flocked to theaters here, sometimes seeing five or six films a week. On Saturday night, 2% of the Hong Kong population, about 125,000 people, packed into the midnight sneak previews. Gamblers wagered on box-office returns.

“In the 1980s, when I first came back to Hong Kong,” recalled Cheung, an award-winning director who studied at the prestigious New York University film school, “it was a great time for films in Hong Kong. All the stars were eager to make movies. Despite my mother’s warnings about actors and directors, I had the impression that all the intelligent people in Hong Kong were in the film business.”

Since then, Cheung said, Hong Kong has suffered a terrible talent drain. Some of the stars and directors have been chased out of the business by the Triads. Others moved to work in China or Hollywood.

“Those who speak English go to Hollywood,” Cheung said. “Those who can speak Mandarin go to China.”

In fact, a number of Hong Kong writers and directors have found work in China, mainly in that country’s booming television market. But the Communist Party still exercises censorship: Historical works and love stories are generally accepted, but films that are overly violent or sexual are usually banned.

This presents a problem for talented young directors such as Fruit Chan, who won accolades for his recent “Made in Hong Kong,” a graphic portrayal of alienation in the Hong Kong underclass.

“No one wants to invest in independent filmmakers like me,” Chan said. “My films have a political edge. Our new bosses in Beijing don’t like political films. These guys are Communists.”

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Under Fire

Competition from abroad, video piracy, a depressed Asian economy and even interference from gangsters have plagued Hong Kong’s once-highflying film industry in the 1990s. Producers hope new young action stars will revitalize their industry.

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Film releases have fallen . . .

Number of Hong Kong films released:

Estimated 1999 releases: 40

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. . . as foreign films make big gains in box-office market share:

Percentage of box-office receipts in Hong Kong, adjusted for recent higher ticket prices for foreign movies:

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Films from Hong U.S. and Kong other Year films countries 1989 64% 36% 1990 66 34 1991 77 23 1992 79 21 1993 73 27 1994 69 31 1995 58 42 1996 53 47 1997 47 53 1998 44 56

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Source: Hong Kong Motion Picture Industry Assn.

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Jennifer Wang in The Times’ Hong Kong Bureau contributed to this report.