Hand in Hand with China
Showbox Mediaplex Co., Inc. a major film distribution company in South Korea, signed a 3 year partnership agreement with Chinese film production company Huayi Brothers Media Corp. to co-produce six films. Showbox, which is the film investment, production and distribution branch of Mediaplex, Inc., and which is in turn the entertainment arm of Orion Group, yesterday announced that it will establish a Chinese unit “Showbox China” under the partnership deal. The Chinese unit of Showbox will receive funding to produce a maximum of 6 films with Huayi Brothers until 2018. The distribution and marketing of the co-produced films in the Chinese market will be in Huayi Brothers’ hands.
In terms of production capacity and distribution networking ability, the Huayi Brothers seem to strengthen the wheels of a Showbox that is trying to get intimate access to inner China, the key Asian market. The Chinese film production company now produces and operates movies, TV shows, talent agencies, music labels, and movie theaters through comprehensive expansion into the media industry. It aims to create the largest TV and film studio complex in East Asia.
Head of Showbox Yoo Jung-hoon expected this partnership deal to help build a positive image for Showbox in China and be a foundation for making profits in the future.
China’s increased commitment to Korean media and entertainment has forced Chinese companies to use their financial clout in South Korea's entertainment industry. In 2013, Alibaba announced a 100 billion won (US$907 million) investment in Korean films. Chinese media and content company Huace pledged US$50 million to become the second largest stakeholder of Korean movie studio NEW. Moreover, China's Juna International bought 3.4 million shares of Chorokbaem Media, Korea's largest drama production company.
Nowadays, Chinese investors are trying a more aggressive play with Korean partners to co-produce content, rather than to buy company stakes outright. Huayi Brothers invested 25 percent in Showbox's production of the 2012 movie “Mr. Go.” Chris Jung, chief operating officer of Showbox Mediaplex, explained in more detail by saying, “Showbox accepted the partnership, not because we needed the money, but because we wanted to make this film into a Korea-China co-production, so that this movie can be released in both markets.” Now that they are working together, both are learning how to be a global player in the media universe.
The FTA between South Korea and China is expected to raise the speed of Chinese investment in Korean media. The trade deal clarifies film production and copyright terms that will help remove investment barriers. A film co-production deal was also signed by the two countries last September. According to the pact, Korean films funded by Chinese investors will be acknowledged as China-produced films. The agreement will also allow Korean companies to avoid China's import quota limits.
“This would increase the speed of partnerships between Korean companies with film production skills and Chinese companies with abundant investment budgets,” said Lee Kee-hyun, head of the policy research division at the state-run Korea Creative Content Agency.