BRIC REPORT BRAZIL RUSSIA INDIA CHINA

Summary of key film/TV information per country Current status on importation of existing Nordic productions Recommendations on potential sales & promotional initiatives by Annika Pham, October 2012 2 BRIC REPORT BRIC REPORT CONTENTS PAGE

1 Introduction 5

2 Executive Summary 6 2.1 Challenges 2.2 Opportunities 2.3 Key Industry Recommendations

3 BRIC territory profiles 10 3.1 Brazil 3.2 Russia 3.3 India 3.4 China

4 Key Film Festivals in BRIC Territories 25

5 Promotion of Nordic Films and Talent in BRIC Territories 28

6 The Unifrance Approach 30

7 Acknowledgements 32

BRIC REPORT 3 4 BRIC REPORT 1 Introduction

The emerging ‘BRIC’ nations of Brazil, Russia, India and China with their combined population of 2.9 billion people (approximately 40% of the global demographics), their geographical sizes and fast-growing economies hold a formidable potential for Nordic film and television exporters.

China and Brazil are currently the second and sixth largest economies in the world and are set to keep their positions by the year 2020.

Russia and India - currently number 9 and 10 respectively - are expected to become the fourth and fifth biggest economies by 2020, according to the Centre for Economics and Business Research (Source: CEBR, December 2011).

In the global film and media industries, professionals are carefully monitoring the rapid socio-economic and cultural developments in these emerging markets where rising middle classes keen to spend their money on filmed entertainment and stimulated by a wider access of content on digital platforms and cinemas are a vast new audience on which to tap.

The BRIC nations themselves that used to rely on their domestic market for films produced and watched by their compatriots, are gradually breaking their insularity and offering incentives to foreign producers and investors to develop their own film and television industries and become an integrated part of the global film entertainment business.

Hollywood is already a dominating force and key partner to the BRIC countries and other major film nations such as France have for years, cultivated close ties with BRIC, aware of the paramount dual role of film as a purveyor of economic and cultural exchanges.

But what presence does Scandinavia have today in those emerging territories?

What is the current state of Nordic film and TV drama exported and how could it be improved?

How can the Nordic film and TV industry, in particular exporters, maximise the opportunities within BRIC and what tools or assistance are on these exporters wish lists to reach these objectives?

With this report commissioned by Nordisk Film & TV Fond and financed by the Nordic Council of Ministers globalisation pool, we address these questions and offer preliminary recommendations drawn from qualitative research and interviews with sales and promotion experts working within the Nordic region.

The report offers an overview of the current state of the audiovisual markets and growth forecasts in Brazil, Russia, India and China.

We have also detailed the key film festivals in the BRIC countries and in order to compare current and possible future Nordic strategies in those countries we have looked, at some of the initiatives undertaken by the French promotional and export support body Unifrance.

BRIC REPORT 5 2 Executive Summary

Unique economic growth potential – although challenges have to be addressed. The BRIC nations with their large populations and rapidly growing economies offer a true ray of hope amongst the gloom and doom of Western economies. By 2020, China’s economy will be the second in the world, Russia fourth, India fifth and Brazil sixth according to UK’s Centre for Economic and Business Research.

Summarised below by country are the key challenges, followed by the opportunities facing Nordic film and television productions wishing to tap into these markets.

2.1 – Challenges Brazil · Different business practises with difficulty sometimes to keep agreements.

· US films dominate market.

Russia · Piracy: According to official government figures, piracy exceeds $2 billion in value terms, representing 70- 80% of the entire film market in Russia. DVD sales are gradually shifting to illegal online downloading.

· Corruption: Non-transparent business practices still prevail among some areas of Russia’s gigantic media and entertainment market.

· Festivals: Too many smaller festivals and the main event - Moscow International Film Festival - lacks in professionalism, according to Nordic film institutes.

India · Local films supremacy: The Indian market remains self-sufficient, with local films taking around 80% of all film revenues. However the burgeoning educated urban middle-class is gradually opening up to foreign - and Nordic - films.

· Multilingual and multi-cultural society: The distribution market is split into 14 different zones, making it difficult for foreign distributors to have a national reach on Indian screens. Because of the multitude of languages, foreign films would have to be dubbed in five or six different dialects to access the mass market. “For theatrical releases, any other language than English is a major drawback” says Ann Kristin Westerberg from Svensk Filmindustri International.

· Concentration of distribution: Over the last few years, distribution has been concentrated in the hands of a few vertically-integrated (and generally larger) companies. This has led to the decline of the independent sector, who are traditionally more inclined to acquire Nordic films.

· Small fees paid by distributors.

· Censorship: Since the introduction of the Cinematographic Act from 1954, all public screenings have to be validated with a certificate from the Central Board of Film Certification. The censorship board is particularly strict regarding sex, nudity, violence and inter-religious conflict.

· Festivals: Too many small festivals that lack in professionalism.

China · Regulations: China has a wide range of restrictive mechanisms for film and TV imports of which SARFT (State Administration of Radio, Film and Television) is the main gatekeeper, regulating the country’s radio, TV and film industry.

6 BRIC REPORT · Quotas: Only 20 foreign film imports plus 14 IMAX or 3D films a year are allowed on a revenue sharing basis. The state pressure on business practices allows China to set below-market pricing for imported films.

· Censorship: Chinese censorship relies on moral and political elements and although it differs for film and TV imports it is still restrictive due to cultural differences between China and the west.

· Piracy: rampant DVD and online piracy is a major problem in China. The Hollywood body MPAA estimates that 95% of the DVD business involves counterfeit copies.

· Different Business practices: use of agents for international content transaction is off-putting for many Nordic sales companies.

2.2 – Opportunities · Booming theatrical markets. In 2011 Brazil’s GBO (gross box office) reached $790 million over 141 million admissions (revenues up 12% from 2010), Russia’s GBO passed the $1.15 billion mark in 2011, India’s GBO was $1.85 billion (up 11.5% on 2010), China’s GBO $2 billion (up 28.5%). If screen development seems to have reached saturation in Russia, there is ample space for more screens in Brazil, India and China.

· Booming TV market. Television is a highly popular and influential medium in all BRIC nations where hundreds of channels are available and giant media companies operate in a very competitive market.

· VOD with biggest growth potential. All BRIC nations are avid Internet-users and VOD service providers are aggressively acquiring content from around the world, including Scandinavia. For a closed territory like China VOD that enables foreign films to by-pass censorship rules offers serious new business opportunities.

· Popularity of Scandinavian model, culture and cinema. Scandinavia and its long tradition of assisting developing nations and promoting cooperation is highly popular with BRIC nations such as China and India. Scandinavian cinema has developed niche audiences around the world – including BRIC - that enjoy auteur films from Nordic talents such as Lars von Trier, Bent Hamer and Roy Andersson among others, as well as genre films and children’s films.

· Co-production as key to open BRIC markets. With financial rules easing up in the BRIC nations and governments trying to attract foreign investors, co-production opportunities are being championed between Brazil, Russia, India, China and other nations, including the Nordic region. Co-production is also seen as another way to by-pass quotas and penetrate the second biggest film market in the world: China.

2.3 - Key Industry Recommendations Here under is a summary of key recommendations based on qualitative interviews with sales agents and distributors.

2.3.1 Public Support Public support on a Nordic level should focus primarily on trade activities with direct support to BRIC distributors and sales agents of Nordic film and TV drama. Festival support is also essential to reinforce the promotion of Nordic film and TV dramas, and increase audience awareness in the BRIC territories.

Distribution support Public action to improve and sustain the export of Nordic films in BRIC territories should focus primarily on the introduction of Nordic distribution and market support schemes similar to successful initiatives in place for instance in Germany (via German Film Services & Marketing) and in France.

BRIC REPORT 7 · Re-introduce High Five International Cinema Distribution Support The initiative was launched in 2010 by Nordisk Film & TV Fond thanks to an additional grant from the Nordic Council of Ministers Globalisation Fund for 2010-2012 and ended early 2012.

The selective subsidy scheme offered international distributors the possibility to apply for partial coverage of marketing costs relating to the theatrical premieres of Nordic films in their home countries (see chapter 5.3 for details).

For sales agents, such a public scheme is vital to guarantee the circulation of Nordic films in the BRIC territories and to raise the awareness of audiences in the BRIC region for Nordic films.

For BRIC distributors, such a scheme enables them to increase the marketing spend (P&A costs) attached to the release of Nordic films in their territory and knowing they can take more risks when acquiring Nordic films. Such releases contribute to educating BRIC audiences about Nordic film and culture.

· Sales support A Sales Support scheme could be introduced to help sales agents attend specific events in the BRIC region and promote their films. Support could go towards advertising, marketing and subtitling costs.

· Festival support Festival Support could be earmarked towards: · Travel costs of Nordic talents and directors to help them promote their films at festivals or as part of a film’s local theatrical release and to raise audience and media attention on Nordic films. · Helping local film and TV festivals increase Scandinavian focuses. · Setting up travelling Nordic film festivals in Brazil, Russia, India and China.

2.3.2 Political Actions Industry people interviewed felt that the Nordic Council of Ministers could play a role in tackling the problem of piracy especially in China, India and Russia. Political negotiations with China and India could also ease issues linked to bureaucracy, censorship and regulations linked to the import of foreign film and TV drama.

Other Recommendations Our research clearly demonstrates that the film and television markets in the BRIC territories have a formidable growth potential and with the current wave of success of Nordic films and talents abroad, the momentum is right to build on it and develop the cultural and economic exchanges between the Nordic region and BRIC territories.

In Europe France is the leader in promoting its film culture and industry through its well-financed and structured Unifrance export film body, in existence since 1949. Germany has had a similar long term strategy for its film industry since 1954 and its current film export and promotion organisation German Film Services & Marketing has a wide range of activities and financial mechanisms to support the international presence and export of German films.

Although the scale of the markets and film industries in each of the five Nordic territories has nothing in common with France and Germany, their long term strategy and professional approach should be a source of inspiration for Nordic industry people and a joint Nordic effort spearheaded by Nordisk Film & TV Fond could have a stronger impact on increasing Nordic film and TV dramas’ visibility in the emerging markets. This was proved by the High Five International Cinema Distribution Support -operational between 2010-2012- which generated 15-20% additional sales worldwide of Nordic films.

8 BRIC REPORT A Strategic Plan over the next 3, 5, 10 years could make a long lasting and cost effective impact to build on the success of recent Nordic film and television productions.

Here under are some overall recommendations that could contribute to increasing the presence and visibility of Nordic films & TV dramas in the emerging BRIC territories.

1- Support to distribution in BRIC territories · Reinstate High Five International Cinema Distribution Support that ended in 2012. An internal assessment on the scheme conducted by Nordisk Film & TV Fond concluded that it ‘absolutely should continue to the same or greater extent in 2013 and going forward’.

2- Support to cultural events (including film/TV festivals) in BRIC territories · Provide financial support towards Nordic talent travel at key cultural events in BRIC territories and Nordic film weeks or focuses during key festivals in BRIC territories, working in close coordination with Nordic film institutes and Nordic cultural representatives and embassies in the BRIC territories.

3- Master-classes and co-production meetings · Institute master classes at BRIC film schools and universities with leading Nordic talent and co- production meetings with local professionals -organised in collaboration with the local promotional trade bodies- and tie in press coverage at the same time. Nordic talent – in particular directors - can be fantastic ambassadors for the Nordic region and generate awareness and interest in Nordic productions through well co-ordinated events that tie in with local media and local film/TV production sectors. Such events could be co-ordinated perhaps through local Nordic cultural agencies.

4- Online Nordic film festival · Nordisk Film & TV Fond launched in 2011 the High Five VOD North America film festival. A similar experience in the BRIC territories, coordinated in partnership with the major local VOD platforms and other major online film services such as MUBI could be a very efficient way to reach the young film audience that uses the internet as major source of information and entertainment.

5- Nordic ‘Stars’ – Dedicated Nordic ‘IMDB’ · Make it easier for people to be informed and entertained about Nordic films and TV productions with a dedicated updated data base/portals with photos, filmographies, biographies, contact details and clips from films or trailers.

BRIC REPORT 9 3 BRIC territory profiles

Brazil (Conversion rate May 2012: 1 Brazilian Real = US$ .50). Brazil’s economy has been soaring in recent years, expanding by a record 7.5% in 2010. Due to the crisis in the Eurozone, its growth slowed in mid-2011, but the country still managed to surpass the UK to become the sixth largest world economy according to UK-based Centre for Economics and Business Research. The Brazilian population of nearly 200 million is also the sixth biggest in the world and thanks to social, political and economic reforms introduced by former president Lula’s administration, around 40 million Brazilians have climbed from lower to middle class over the last three years, and according to researched reports, are spending their new cash on consumer goods and entertainment. With the FIFA World Cup coming in 2014 and Summer Olympics in 2016, the country is optimistic that prosperity will continue.

CHART 1 - Brazil 2011 – Admissions, Box Office, Number of Films Released

Category 2007 2008 2009 2010 2011

Total Admissions All Films 89,319,290 89,960,164 112,683,201 134,836,600 143,886,208

Total Admissions Foreign films 79,005,325 80,817,112 96,590,901 109,149,353 126,016,823

Total Admissions Brazilian films 10,310,965 9,143,052 16,092,300 25,687,247 17,869,385

Total BO (in R$) 712,623,707 729,522,782 969,782,850 1,260,372,943 1,437,801,236

Number of Brazilian Releases 82 79 82 75 99

Number of Foreign Releases 254 244 235 228 240

Source: ANCINE

Theatrical Market Brazil’s audio-visual market has enjoyed a pattern of growth similar to its economy. Chart 1 above shows 2011 figures published by Brazil’s cinema organisation ANCINE confirming the upward trend of the Brazilian theatrical market. Total admissions reached 143.9 million (135 million in 2010) and gross box office income 1.44 billion REAL (nearly US$800 million), setting new records and placing Brazil among the most important film markets in the world.

2011 was also a record year for foreign (i.e. Hollywood) films as gross box office reached REAL1.27 billion, twice the value of 2006. Ticket sales have also increased by 60% over the last five years and average ticket prices by 30%.

Hollywood dominates local screens and had an 83% market share in 2011 against 11% for Brazilian films and 6% for other films. The biggest successes on Brazilian screens last year (see chart 2, next page) were Twilight Saga Part 1 (nearly 5% of total admissions), the 3D animation film Rio and Harry Potter and the Relics of Death. The local Top 20 had 17 US films and three Brazilian films. To support the release of their tentpole films, US studios do not hesitate to fly in their stars and today Brazil is very much on the international press junket circuit.

3D films have been driving admissions and over 264 screens are equipped with the technology, out of a total 2,500 screens. With cinema construction favouring multiplexes, playing mostly US and Brazilian films, screen availability for foreign language films has been reduced over the last decade. Still, with an adult population of sophisticated Europhiles accustomed to watching films with subtitles, Brazil remains the second market in Latin America for foreign language films after Mexico.

10 BRIC REPORT Chart 2 - Brazil – Top 10 Films 2011

Rank Title (country of origin) Distributor Gross

1 Rio (US) Fox $38.5m

2 The Twilight Saga: Breaking Dawn – Part 1 (US)* Paris $35.9m

3 Harry Potter And the Deathly Hallows: Part 2 (UK - US) Warner Bros $32m

4 The Smurfs (US) SPRI $22.3m

5 Pirates Of The Carabbean: On Stranger Tides (US) WDSMPI $27.6m

6 Tangled (US) WDSMPI $22.3m

7 Puss In Boots (US) PPI $20.2m

8 Transformers: Dark Of The Moon (US) PPI $20.1m

9 Cars 2 (US) WDSMPI $18.9m

10 Fast & Furious 5 (US) UPI $18.7m

Source: Screen International March 2012 * = 2011 gross only

Theatrical market for Nordic films Brazilian distributors tend to have a sophisticate taste in European films when it comes to arthouse fare and often follow very closely European trends. Mainstream commercial titles, award-winning films, well-known directors and cast are popular with the dozen theatrical distributors that are regular buyers of Nordic films.

Among those are Imovision (Le Havre, The Good Heart, Home for Christmas, The House of Branching Love among others). California Filmes (In a Better World) and Artfilms (Kon-Tiki, Love Is All You Need). Successful arthouse titles can sell as much as 200,000 cinema tickets, such as Dancer in the Dark and Dogville, according to film distributor Augusto Medeiros (Imovision).

International production cooperation Brazil has numerous filming and co-production incentives and has co-production agreements with Argentina, Canada, Chile, France, Italy, Germany, Spain, Portugal and Venezuela.

The first Danish/Brazilian co-production Rosa Morena by Danish-based Brazilian director Carlos Oliveira won the ”Brazilian Ministry of Foreign Affairs award – the Prêmio Itamaraty – at the São Paulo International Film Festival 2010. The film starring Anders W. Berthelsen and David Dencik was produced by Fine & Mellow (Denmark) and Master Shot Media (Brazil).

Finnish director Mika Kaurismäki has had strong ties with Brazil and directed and co-produced the music documentaries Moro No Brasil (2002) and Brasileirinho (2005).

Meanwhile, the Swedish actor Stellan Skarsgård has taken the lead in one of the biggest international coproduction ever with Brazil, the film and 5x40’ TV series Red Brazil set to premiere early 2013. The $11 million co-production between France, Brazil, Canada and Portugal narrates the failed attempt made by the French, led by Nicolas de Villegagnon (Skarsgård), of conquering Rio’s coast from the Portuguese in the 16th century.

Television Television has always been a highly popular and influential medium in Brazil. There are currently around 36 free-to-air channels and more than 80 cable and satellite channels, available to the country’s 48 million TV households.

BRIC REPORT 11 The free-to-air private group Rede Globo dominates the market, attracting up to 52% of the viewers and 75% of advertising revenues (figures from 2010).

Other major commercial networks include TV Record and SBT.

The public channel TV Brazil was launched in 2007 and the second public channel is TV Cultura.

High quality Nordic children films are popular on Brazilian television, and classics from established directors or action/horror fare work well on DVD.

Pay TV Pay TV in Brazil started in 1991. Two decades later, the sector continues to grow substantially and last year it rose by 29.5% to 12.7 million subscribers according to the local Agency of Telecommunications Anatel.

The biggest pay TV operators are Net (45% of the market), Sky Brasil (26%), Via Embratel (9.6%), Telefónica TV Digital (5%) and OiTV (3%). A new regulation (known as law 12.485) imposing local production quotas on pay TV broadcasters, has introduced an industry tax fund said to raise nearly $250 million to finance local productions as well as international co-productions.

In terms of movie channels, Telecine (joint-venture between Globosat and US majors MGM, Paramount, Fox, Universal, Dreamworks) has the specialised brand Telecine Cult programming independent European films, often twice during the same week.

Recent Nordic films shown on Telecine Cult include Bent Hamer’s O’Horten and Lars von Trier’s The Boss of It All. Brazil is set to switch from analogue to digital TV by the end of 2016.

Internet/VoD Online communication is one of the key sectors of growth of Brazilian. In 2011, internet users increased by 11.2% to 47.5 million according to Nielsen Online.

The VoD market is slowly but safely gaining strength as competition has toughened over the last year.

The cable operator NET launched its VoD platform in February 2011. It offers its streaming video across PCs, Macs, smart TVs, connected Blu-Ray players, iOS and Android tablets and smartphones with plans to add video game consoles. The company has over 35,000 titles in its online content library and Nordic titles available include Antichrist, Manderlay, You, the Living, Kill Buljo, and O’Horten.

The largest video portal in Latin America TERRA also launched its VoD service early 2011 and was followed last September by the number one SVoD streaming service Netflix which launched its ‘original series’ strand with the Norwegian mobster comedy Lilyhammer.

Apple joined in last December, launching its iTunes Store with transaction VoD services offering new film releases.

Digital experts predict the Brazilian VOD market will continue to rise significantly until 2015.

12 BRIC REPORT Russia The ninth largest world economy in 2011 with a GDP of US$ 1.8 trillion, Russia has been forecast by the UK- based Centre for Economics and Business Research to climb to fourth spot by 2020.

Russia’s population that had been declining for over two decades seems to have stabilized at around 142 million in 2011 and Russians living at 74 % in urban areas are a significant driving force in domestic consumption, in particular the rising middle-class that has seen its real income rise 142% in the decade 1999-2009.

Theatrical Market Over the last two decades, Russia has gone through major political, economic and technological changes, and evolved from a state controlled film and audio-visual market to a free market.

Total box office reached a record $1.15 billion in 2011, (see chart 3 below) making it the seventh biggest market outside of North America and the fourth biggest in Europe after France, the UK and Germany.

Box office returns grew by an impressive 64% compared to 2009 while admission estimated at 159.5 million increased by around 20% from 2009.

The sharp increase in box office was partly due to the high ticket prices that grew by 12% from 2010 to $7.30 (RUB214) in 2011 according to Nevafilm research.

CHART 3 - Russia Admissions and Box Office 2007 - 2011

Box office returns (USD millions)

Total admissions (millions)

1013.6 1009.4 1156.4 800.9 705.9 548.1

155.9 152.6 159.5 103.4 118.5 132.5

2007 2008 2009 2010 2011 2011

* “Calendar year”, other data refers to “distribution year”

Source: Russian Film Business Today magazine (CIS excluding Ukraine), Russia’s estimate by Nevafilm Research.

The increase in attendance was supported and driven by the fast development of the exhibition sector (2,726 screens in 2011, up 74.3% from 2007) and technological improvement over the last decade that finally reached a saturation level in 2011. 3D screens embraced by the 18-29 core cinema audience (61.7% of cinemagoers) grew by 70.7% between 2009 and 2011, from 346 to 1,181 but then cinemas no longer focus exclusively on 3D releases and are beginning to equip their screens with digital projectors without 3D technology. In parallel, digitization of screens that started some five years ago peaked in 2010 at 944 screens (up 63% from 2009) with the release of Avatar, but for the first time, the trend was reversed in 2011 with 9% fewer screens upgraded to digital.

BRIC REPORT 13 The largest territory in the world still suffers from an absence of screens in its provinces, with 70% of modern screens concentrating in the European part of the country.

In terms of content, Russian audiences that have been deprived from Hollywood content for decades, show an insatiable hunger for US films. In return, US studios spoil them with day and date releases with North America for their biggest opening films, opting sometimes for earlier releases in Russia to counter piracy. And as a sign of confidence in the Russian market, two of the US most read trade magazines Variety and Hollywood Reporter launched in March this year their first Russian editions.

A total of 313 films were released in Russian cinemas last year, including 80 with limited releases (maximum 30 screens). Chart 4 below shows US films had 64.7% of gross returns, compared to 14.5% for Russian films and 20.4% for European and US independent films.

CHART 4 – Russia - Box Office Returns By Country of Origin 2007 - 2011

Others

Europe & independent US

Hollywood

Russia

14.4 14.5 26.4 25.9 23.9

65.6 64.7 51.4 55 61.5

21.9 18.3 14.4 19.9 20.4

2007 2008 2009 2010 2011

* Calendar year,Russia (excluding CIS)

Source: Russian Film Business Today magazine (CIS excluding Ukraine), Russia’s estimate by Nevafilm Research.

Chart 5 overleaf shows that nine US films were in the Top Ten Russia in 2011, with Pirates of the Caribbean: on Stranger Tides at number one (7.4 million admissions for WDSSPR) followed by Puss ‘n Boots (6.7 million, Central Partnership) and Transformers 3 (5.1 million, Central Partnership).

Wim Wenders’ documentary Pina in 3D (Premium Film) was the most successful film among the limited releases, selling 61,901 tickets ($740,803 gross) from 25 screens.

14 BRIC REPORT Chart 5 - Russia – Top 10 Films 2011

Rank Title (country of origin) Distributor Gross

1 Pirates Of The Carabbean: On Stranger Tides (US) WDSMPI $63.7m

2 Puss In Boots (US) Central Partnership $50.6m

3 Transformers: Dark Of The Moon (US) Central Partnership $45.2m

4 Harry Potter And the Deathly Hallows: Part 2 (UK-US) Caro Premier $37.2m

5 The Twilight Saga: Breaking Dawn – Part 1 (US) West $31.8m

6 Kung Fu Panda 2 (US) Central Partnership $31.8m

7 Fast & Furious 5 (US) UPI $29.3m

8 Vysotsky: Thank God I’m Alive (Rus)* WDSMPI/SPRI $27.9m

9 Yolki 2 (Rus) Bazelevs $26.4m

10 Rio (US) Fox $24.9m

Source: Screen International March 2012 * = 2011 gross only

Theatrical Market for Nordic films Nordic cinema has long been popular in Russia. When the Russian art film market started to emerge in the late 1990s, several Dogma films were released at that time and helped form the market for smaller European independent films.

Today, a dozen Russian independent distributors are regular clients to Nordic films and have become trust- worthy partners to international sales agents. Key buyers include Russia’s leading independent production and distribution company Central Partnership (Melancholia), Cinema without Frontiers (Play, She Monkeys, Easy Money) one of Russia’s main distributors of foreign language films, owned by major media group AR Films, as well as Carmen Films (Max Manus), Big Movie (Headhunters, Freddy Frogface), Volga Films (A Royal Affair).

According to Cinema Without Frontiers’ Swedish/Russian managing director Sam Klebanov, Nordic films are usually released with 3-5 prints but with digital screens, releases have increased to 10-12 screens spread between Russia’ key cities of Moscow, St Petersburg, Rostov and Nijni-Novgorod. Name directors such as Lars von Trier, Susanne Bier, Roy Andersson, Bent Hamer, Lukas Moodysson are popular with sophisticated adult audiences, while youth audiences favour children/family, animation, action /horror films. Thriller/horror films are popular for DVD and high quality family films for TV.

Example of Nordic films released in 2010 (source: Russian Film Business Today) Sunshine Barry & the Disco Worms (Art Pictures Media); 62,751 admissions from 149 screens The Girl with the Dragon Tattoo (Caravella DDC); 10,610 admissions/54 screens Mammoth (Russian Report); 10,205 admissions/2 screens Involuntary (Cinema without Frontiers); 2694 admissions from 2 screens Easy Money (Cinema without Frontiers); 1123 admissions from 3 screens Max Manus (Cara); 885 admissions from 1 screen Example of Nordic films released in 2011 Melancholia (Central Partnership); 132,699 from 100 screens 3D Ronan the Barbarian (Volga Films); 70,337 admissions from 181 screens Sound of Noise (Cinema without Frontiers); 9,763 admissions from 3 screens.

BRIC REPORT 15 International production cooperation Russian producers are having difficult times as support from the state and local audiences have been diminishing over recent years. Russian films released dropped from 69 in 2011 to 34 in 2011 and local films market share from 23.9% in 2009 to 14.55% in 2011. The market is mainly driven by youth audiences who want action/sci-fi movies and comedies, preferably from the US.

The new Cinema Fund which was created in 2010 allocates around $161 million to film production but Russia has co-production agreements with Canada, Italy, France and Bulgaria and since March 2011, the country’s entry at the Council of Europe’s Eurimages Fund is set to boost its co-productions with Europe.

Regarding Nordic collaborations, Russia has close cultural ties with Finland. For Petri Kemppinen, Head of Production at the Finnish Film Foundation, financing rules in Russia are changing and should enable more Scandinavian producers to access the fast-growing Russian market. One of the most active Finnish production companies working with Russian partners is MRP Matila Röhr Nordisk who has been involved in a handful of Russian co-productions in recent years, including the upcoming €2m children’s film Rolli and the Golden Key co-produced with Russia’s Media Group and the UK’s F&ME. This year’s Finnish film Naked Harbour by Aku Louhimies (93,000 admissions) was co-produced by Russian producer Sergei Seljanov.

Co-production activities with other Nordic territories remain scarce. One of the latest co-production between Sweden and Russia was the 2009 actioner Newsmakers produced by Tandem Production (Sam Klebanov & Anna Katchko) with Sweden’s Illusion Film.

Television Russia has 330 channels including 20 free to air channels and television is still the main source of news and entertainment. The top five free TV channels are Channel One (51% state-controlled), the public broadcaster Russia One, NTV and TNT, both owned by the state-controlled energy giant Gazprom, and CTC, one of Russia’s leading independent broadcaster of which Swedish media group Modern Times Group (MTG) is the largest shareholder.

MTG just increased its Russian presence by launching in April 2012 its Nordic online Viaplay pay TV service consisting of the thematic documentary channels Viasat History, Viasat Explorer and Viasat Nature, and its TV1000-branded movie channels.

Nordic scripted content is occasionally acquired by free to air broadcasters such as Channel One (which acquired The Killing), TNT or CTC. Other Danish series recently sold to Russian television include Lulu & The Bank Robber’s Wife and Borgen.

Pay TV Cable is the largest contributor to the pay TV market in Russia that is expanding at a record speed. According to media specialist iKS consulting more than 26 of the 55 million Russian TV households watch pay TV.

This level increased by 19% to around RUB 40bn (€993m) in 2011 and it should continue to grow to RUB 60bn (€1.49bn) by 2015, pushing the number of paying households to 35 million. Currently, the five largest operators account for 72% of the country’s pay TV subscribers’ base, with Tricolor being the leader of the market with 9.5 million subscribers.

Internet/VoD According the European Audiovisual Observatory, the online video market in Russia is one of the largest in the world with over 41 million people, attracting an increasing number of local players.

Almost all major Russian operators of pay TV and mobile networks (such as Rostelecom) offer on demand services.

16 BRIC REPORT Content is also widely available to all internet users via Russian connected TV services (Yota Play), video portals (such as the free services IVI, Tvingle, Zoomby) and mobile phone companies (Omlet.ru, Trava.ru).

A key player such as IVI - Russia’s largest free video portal with more than 65,000 titles - acquires mostly animation and high end drama such as the US remake of The Killing.

Giant online video streaming services Netflix and Hulu are also reported to be considering expanding into Russia.

India (Conversion rate May 2012 – INR1 Billion = US18.6 Million) India is expected to move up from its 10th position in the World Economic League Table in 2011 to fifth place by 2020 according to the Centre for Econo mics and Business Research (CEBR). Annual economic growth rates that were around 7.5% over the last four years decreased slightly to 7% this year.

The country has the second largest population in world, with over 1.21 billion people (2011 census), 50% of which are under the age of 25. The immense market is very complex, considering the 2,000 ethnic groups and 1,652 languages and dialects. Although the mass of the rural population remains impoverished, an urban middle class has started to emerge since the late 1990s, highly skilled in information technology and fluent in English, making the country highly attractive to foreign companies and their outsourcing programmes.

Chart 6 below shows the overall media and entertainment industry size which was estimated at INR728 billion in 2011 and is expected to reach INR 1,457 billion in 2016 (up 12%) according to the latest FICCI-KPMG research (March 2012).

CHART 6 - India - Overall Media and Entertainment Size in INR Billion

1500 1457 1254 1076 932 823 728 INR (Billion)

0 2011 2012P 2013P 2014P 2015P 2016P

Source: KPMG

Theatrical Market NOTE: Because of the size and complexity of the Indian film market (with distribution split into 14 different zones) and opacity of distribution practices, gathering reliable figures on the Indian film industry remains difficult. However, we have extracted key information based on a report from FICCI (Federation of Indian Chamber of Commerce and Industry)-KPMG, the Indian Board of Film Certification, the European Audiovisual Observatory and other desk research.

BRIC REPORT 17 India has the largest film industry in the world, producing more than 1,200 films annually in 12 different languages and dialects.

After several years of decline in revenues, the Indian film industry came back up by 11.5% in 2011 to $1.85 billion (INR93 billion), and it is expected to grow to INR150 billion in 2016 according to FICCI-KPMG. Despite Hollywood’s numerous and continuous attempts to crack the Indian market, local films still overwhelmingly dominate the market with nearly 80% of total admissions, leaving the majority of the remaining market to Hollywood films.

The exhibition sector is split between a large number of single screens - available mostly in southern India and programming mostly regional and national films - and few multiplexes in the larger cities of Mumbai, Delhi, Hyderabad, Bangalore or Calcutta. Multiplexes were estimated at around 200 in 2009 with 800 screens total. They are expected to reach 1,600 sites by 2013 according to KPMG. This is good news for foreign films that should benefit from wider programming possibilities offered by multiple-screen venues.

Theatrical market for Nordic films No reliable data is available on theatrical revenues for independent and foreign films in India (on a national scale). However the information from the Central Board of Film Certification - which allows all films to have public screenings, gives an idea of the number of foreign films submitted for certification. Still, this doesn’t automatically mean that the films were released.

Chart 7 below shows 244 foreign films were certified in 2011 (298 in 2010), according to the Central Board of Film Certification. Among those 184 were US films. Germany had seven films and France, Canada and Thailand six films each. No Scandinavian film was submitted for certification in 2011 and neither in 2010.

CHART 7 - India - Film Certifications for Mumbai and Chen

CENTRAL BOARD OF FILM CERTIFICATION FOREIGN FEATURE FILMS CERTIFIED FROM 1-1-2011 TO 31-12-2011 (REGIONWISE – COUNTRYWISE) (CELLULOID)

COUNTRY MUM KOL CHE BAN THI HVD ND CUT GUW TOTAL 1 USA 181 - 3 ------184 2 U.K. 3 ------3 3 HONG KONG 3 - 6 ------9 4 SINGAPORE - - 4 ------4 5 THAILAND 3 - 3 ------6 6 AUSTRALIA 2 ------2 7 UK/ HUNGARY 5 ------5 8 BANGLADESH - 1 ------1 9 CANADA 6 ------6 10 FRANCE 6 ------6 11 GERMANY 7 ------7 12 SPAIN 1 ------1 13 PAKISTAN 1 ------1 14 BANGKOK/THAILAND 4 ------4 15 JAPAN 2 ------2 16 ITALY 1 ------1 17 BELGIUM 1 ------1 18 MALAYSIA 1 ------1

TOTAL 227 1 16 ------244

18 BRIC REPORT Eight distributors were identified by Nordic exporters as potential clients, such as the major media companies Star Entertainment, Reliance Entertainment (interested mostly in mainstream Hollywood films, and shareholder of Dreamworks among other LA-based film companies), PVR (distributor and leading multiplex company in India) or smaller arthouse-oriented distributors like Picture Works. JRD Films was among the only Indian distributor reported as having acquired a Nordic film recently: the Danish 3D animation film Ronan the Barbarian.

The recent concentration trend of the market into the hands of integrated production and distribution groups has also led to the withdrawal of several smaller independent players, traditional buyers of foreign - and Nordic - films such as Alliance Media.

“Lately, we haven’t acquired any foreign language films”, observed the company’s acquisition and sales manager Jesal Doshi. “The market for foreign language (including Nordic) films was and is very niche- oriented on TV or Home Video (DVD) and it is very, very small for Theatrical. Although the market is very small, there is an interest for such films, but the economics and commerce to cater to this niche audience aren’t favourable and viable and the low return on investment makes it too risky for companies such as ours. Also there is a tremendous competition from Indian (Bollywood) films, Hollywood cinema, regional cinema, that occupy the screens, TV, etc. making it difficult for foreign films to survive. Hopefully with time, this niche market will grow, audience’s taste will mature and the demand for foreign films will increase”.

International production cooperation While access of foreign films to Indian cinemas remains restricted, co-production and content alliances are other ways to improve cultural and commercial exchanges with the media savvy BRIC nation. The growing role of India as a key player in the globalization and greater access to information via digital technology are also having an influence on the local population’s vision of - and opening up - to Western culture, especially with the young urban educated demographic group. Leading US studios are outsourcing their animation, visual effects and post-production services to India and many international producers are increasingly eyeing India’s great locations, wealth in world-class English speaking talents and low cost work force for their projects.

So far India has co-production agreements with Brazil, the UK, Germany, Italy, France (since 2010) and New Zealand (since 2011) and is negotiating agreements with Canada. To support and stimulate international partnerships, India’s National Film Development Corporation (NFDC) set up in 2008 the annual market Film Bazaar parallel to the International Film Festival of India in Goa to facilitate sales of world cinema in the South Asian region and the promotion of Indian Cinema internationally.

International projects that were submitted to Film Bazaar’s co-production market include Prakash Belawadi’s The Pollutant produced by Sweden’s Hepp Film. The project is based on a script from Swedish writer Zak O’Yeah who lives in India. Hepp Film’s managing director Helena Danielsson (Beyond) is also developing another project in India based on O’Yeah’s novel ‘Tandoori älgen’, a futuristic/crime novel about India and Asia colonising Northern Europe. “As a producer, you need great directors, wherever they come from. Filmmaking is all about storytelling and in India, there are great authors (Salman Rushdie, Amitav Gosh) and great filmmakers. It’s fascinating to see changes taking place there. India’s National Film Development Corporation is very keen to develop international co-productions. They support films at 1/3 of a budget, and you can get the rest of the financing from Europe. There are also private equity companies wanting to make independent films outside of Bollywood,” says Danielsson.

Norwegian producers have also entered co-production partnerships with India via the Norwegian Film Institute’s Sørfond (South Film Fund) which allows directors/producers from developing nations to receive top financing for their projects, on the condition of having a Norwegian co-producer and spending 70% of their budget preferably in their own country.

BRIC REPORT 19 In its first round of support announced in April 2012, seven projects received a grant including two Indian documentary films: Char-The Island Within by Sourav Sarangia and When Hari Got Married by Ritu Sarin, both co-produced by Norway’s Cinema Oslo.

Television Television continues to be the dominant medium in India and the profitable industry (more than twice the size of the film industry) is in constant shift. The sector was worth INR329 billion in 2011 and is expected to grow by 17% within the next four years to reach INR735 billion. With TV penetration at around 60% in 2011, the market has ample space to continue to grow.

The deregulation of the market in the late 1990s combined with technological revolution has led to the boom of the industry which went from a single stately-run broadcaster Doordarshan operating a handful of channels to 700 plus TV stations owned by national and international media companies such as News Corporation, Sony Entertainment, or Walt Disney.

Today, India has around 90 million cabled TV households, 30 million digital DTH pay TV services while nearly 15 million homes have opted for free to air DTH viewing via Doordarshan Direct.

Pay TV By 2015, India’s cable and satellite sector is set to cover 166 million homes including 64 million DTH and 20 million digital cable subscription services. With the government’s decision to push for a full switch from analogue to digital TV by 2015, operators are moving fast. The first phase will be completed by June this year in the main cities of Delhi, Mumbai, Madras and Calcutta, then another 35 cities with over a million residents will have digital TV by 2013 and the rest of the nation by 2015 according to World Screen magazine.

Among the major media groups are Star Media, Zee Group, Multi-Screen Media (controlling SONY TV among other channels), Sun TV Network, Network 18 (which is expanding in the factual genre), Disney India (controlling the giant Indian UTV communication group), Time Warner and Discovery India.

Import of world cinema – including Nordic-cinema - is a rather new experience for Indian broadcasters, but with the explosion of digital platforms, buyers are more aggressively looking for strong arthouse/festival- driven films and film classics. Two niche channels specialising in world cinema launched in 2008: Lumiere and UTV World Movies, controlled respectively by Time Warner and Disney. Acquisitions are usually made in packages, not on a film by film basis.

Nordic content acquired over the last five years include a Bergman package from Svensk Filmindustri and a 15 title package of world cinema titles from NonStop Sales.

Internet/VoD Around 121 million Indians were online by December 2011 (Internetworldstats) and 20 million had broadband connections. The VOD sector has experienced a boom since 2011, attracting several players (both local and international), but most of them carry only local titles.

The biggest player so far is Bigflix (part of Reliance Entertainment) which launched in January 2012. Clearly inspired by Netflix, the service offers over 2,000 titles in 11 languages, of which only a handful - so far - are ‘international’ films. Among those is Mika Kaurismäki’s The Liar from 1980.

Yahoo! India entered the market in August 2011 and TataSky (offering its DHT customers 500-1,000 titles for streaming) in December 2011.

20 BRIC REPORT China The most populated country in the world with over 1.34 billion people, China has the second largest world economy after the US and is expected to keep its second place in 2020 according to the UK’s Central of Economics and Business Research (CEBR). Despite the global economic downturn of 2009, the country’s economy was among the first in the world to rebound and go back to growth. Last year, China’s GDP grew by 9.2% and after a slowdown this year (8.2% growth). The economy is expected climb back to an 8.8% annual growth next year according to IMF’s latest predictions.

The literacy rate for people above 15 represents around 92.2% of the total population and urban people accounts for 47% of the total population (in 2010) according to the Central Intelligence Agency (CIA World Factbook).

CHART 8 - China - Snapshot of the film industry 2002 - 2010 CINEMAS AND SCREENS

Cinemas

Screens 6256 7000

4723

4097 3527 3034 2668 2285 2396 1834 2000 1545 1687 1325 1427 1019 1140 1188 1243 0

2002 2003 2004 2005 2006 2007 2008 2009 2010

BOX OFFICE REVENUE

150

120

90

60

30

0 2003 2004 2005 2006 2007 2008 2009 2010 2011e

Theatrical Market China is the third largest global theatrical market after the USA and Japan and the fastest growing major film territory in the world. The booming film industry –tightly controlled by state-run China Film Group - attracts cash-rich Chinese investors from all sectors (real-estate, game, mining, banks) who are gradually forging strategic alliances with foreign – mostly Hollywood partners.

BRIC REPORT 21 After gross box office revenues that grew by 64% in 2010 from 2009, figures continued to climb by 28.5% in 2011 to reach a record high of $2 billion according to China’s media regulator SARFT (State Administration for Radio, Film & TV). Almost half of that revenue came from 50 foreign films. The rest was split among China’s 791 domestic productions.

2011’s sharp increase in GBO was the result of Chinese growing middle class with greater income to dispose of, the surge in ticket prices (from $2.2 in 2007 to $5.3 in 2011) and the spectacular growth of the exhibitor sector. New screens have been opening at a rate of nine per day over the last couple of years, and screen count passed the 9,000 mark in 2011, up 45% from 2010. The boom in cinema construction is driven by the fierce competition in the sector, where foreign companies are invited to enter joint-partnerships with local companies.

3D cinemas have been mushrooming as well, boosting domestic admissions. In 2010, 650 new 3D screens were built, pushing the total 3D screen count to 1,350 the second highest in the world.

Digitisation is also happening at a record pace and around 90% of China’s new screens in 2010 were digital. Despite the boom in the exhibition sector, China still remained vastly under-screened. The country has only one screen for every 209,000 people and even in the cities, the screen count is at only 120,000 per head.

Looking at the 2011 box office, 3D titles took a handsome 40% of the market-share, with the number one title -US film Transformers: Dark of the Moon- grossing $172.9m.

The film Flying Swords of Dragon Gate released by China’s major private distributor and NASDAQ quoted Bona Film Group, was the first ever Chinese-language film to be released in IMAX 3D format. The film was the sixth most successful theatrical release in 2011 with a GBO (gross box office) of $68.9m.

Chart 9 - China – Top 10 Films 2011

Rank Title (country of origin) Distributor Gross

1 Transformers: Dark Of The Moon (US) PPI $172.9m

2 Kung Fu Panda 2 (US) PPI $96.8m

3 The Flowers Of War (Ch-HK)* China Film $92.8m

4 Pirates Of The Carabbean: On Stranger Tides (US) WDSMPI $73.8m

5 Flying Swords Of Dragon Gate (CH)* Bona Film Group $68.9m

6 Harry Potter And the Deathly Hallows: Part 2 (UK-US) Warner Bros $65.1m

7 Beginning Of The Great Revival (Ch) China Film $64.9m

8 Love Is Not Blind (Ch) China Film $55.7m

9 The Smurfs (US) SPRI $41.3m

10 Fast & Furious 5 (US) UPI $40.6m

Source: Screen International March 2012

Source: Screen International March 2012

Import restrictions/Theatrical market for Nordic films If the Chinese government is looking positively at the country’s screen expansion, its strict film import and censorship rules make it very difficult for foreign – including Nordic films - to penetrate the market, although small improvements were made earlier this year.

22 BRIC REPORT Film import into mainland China is controlled by the state-run China Film Group, (which also handles distribution) and the other public group Huaxia Film Distribution. Those two companies act as gatekeepers to mainland China, protecting the content of all foreign imports via the censorship body SARFT and profits - coming out of China.

Entering the ’Dragon’s’ distribution market is possible via two different routes: the flat fee system – which lets in between 40-50 foreign films each year, and the revenue-sharing system imposing a tight quota of 20 titles a year – mostly US blockbusters. Last February this ruling was relaxed, allowing an extra 14 IMAX or 3D films a year to be imported. Under the new agreement signed by the Chinese authorities with the Motion Picture Association of America, the share of ticket revenues was increased to 25% (from 13.5%).

Competition is tough for 45+ private companies that acquire foreign films via the flat-fee system, hoping that those will pass the censorship and China Film’s approval. Among those are a dozen clients of Nordic films such as Lens Media (A Royal Affair), HGC Entertainment (Ronan the Barbarian, Headhunters, Melancholia), Dark Light Media (Hamilton-In the Interest of the Nation), Enterprising Dragon Entertainment (The Candidate). Children/family films are sought after products (easier to be accepted by censors), as well as high profile action films, period films and dramas.

International production cooperation Co-producing with China is a way to bypass the restrictive quotas and censorship rules on foreign films and to increase the potential profits on a film as co-productions can keep around 47% of the GBO against 25% on imported films. Hollywood is more aggressively eyeing this option as Chinese middle-classes are gradually spending more money on cinema tickets than on pirated films on DVD. In 2011, six US films were in the Top Ten Chinese box office and the two top titles Transformers: Dark of the Moon and Kung Fu Panda 2 (both released by Paramount Pictures International) grossed a smashing $172.9m and $96.8m each.

Walt Disney’s next Iron Man for instance will be co-produced by China’s DMG group and last February, Dreamworks Animation SKG said they would build a studio in Shanghai as part of a joint venture with Chinese partners.

In the latest move by Chinese entrepreneurs keen to build bridges with Hollywood is Harvest Seven Stars Entertainment which has teamed up with Tianjin city government to build ‘Chinawood’, a $1.27 billion film and media hub over an impressive 8.6 million square feet. Set to open in October 2012, Chinawood would provide a co-production film financing platform, a co-production service centre with post facilities, a facility for 3D conversion and a distribution and marketing centre.

But other countries are increasingly investing in co-productions, such as Japan, Germany, Korea and Hong Kong. Among the European territories that signed co-production agreements with China in 2010 are France and Belgium. In 2011 at least 30 co-productions were released in Chinese cinemas according to China Film Co-production (CFCC).

Nordic co-productions with China are only a handful. In 2006, AJ Annila’s kung fu movie Jade Warrior was the first ever Finnish/Chinese co-production and in December 2010, the famous Chinese stars Jiang Yi Yan and Huang Bo were in Northern Norway’s Filmcamp to shoot parts of the mandarin-spoken romantic comedy The Pretending Lovers, a Chinese/Norwegian co-production between TIK Films Investment (subsidiary of top entertainment company Hunan TV Group) and Sweet Films. The film premiered in Beijing last summer and screened at Tromsø’s International Film Festival 2012.

Television China is the largest media market in the world. With 1.25 billion viewers and 388 million TV households, television is a popular and highly competitive sector. The government keeps a very tight control over all outlets and uses television to disseminate the Communist Party’s line. Television advertising revenue rose

BRIC REPORT 23 7.5% to $27.4 billion in 2010 and US advertising agency MagnaGlobal forecasts that the country’s advertising sector could expand to $33.6 billion by the end of 2012.

State-run Chinese Central TV (CCTV) is the country’s largest media company. It claims an average 30% audience share across its 52 channels, spanning mainstream and specialist output and reaches 96% of China’s viewers. Nordic content imports are acquired for the Chinese state broadcaster’s specialised channels CCTV-3 (Arts & Entertainment), CCTV-6 (Movie channel), CCTV-9 (Documentaries) and CCTV-10 (Science & Education).

Pay TV China is a major market for pay TV, which is almost entirely delivered by cable. The value of the digital pay TV market in China was valued at $12 billion in 2009, a figure expected to rise to $181.2 billion in 2014 and digital cable TV subscribers are estimated at 63 million. Growth in the multichannel market is sustained by the government’s policy to encourage convergence of telecom, broadcast TV and the internet. China aims to switch-off analogue TV by 2015.

New restrictions on content Of the 30 imported shows that were approved last year by China’s regulating body SARFT, the majority came from Hong Kong, Taiwan and South Korea, according to the agency. Western drama series don’t attract large numbers of viewers, unless they are in the action genre. In its latest efforts to control what Chinese viewers watch and to protect local productions promoting a ‘socialist culture’, the government’s regulating agency SARFT introduced new rules early January stating that all imported programmes can no longer air during prime time and cannot be longer than 50 episodes.Imported series are also not allowed either to exceed over 25% of a channel’s overall output each day.

In November 2011, another ruling had imposed a ban on advertisements during TV dramas lasting longer than 45 minutes. Experts say the new restrictions will keep viewers away from China’s state-controlled TV outlets and will encourage them even more to turn to pirated entertainment or online services such as Youku or You On where they can watch hundreds of international TV shows and films free from censorship.

Internet/VOD China has the largest internet market in the world with over 480 million users, and VOD distribution which is able to bypass state censorship offers exporters of foreign - and Nordic - films and TV shows an ideal direct access to this mass market. The two leading service providers and New York listed companies Youku and Tudou that had been rivals ever since their launch in 2006, announced their merger last March in a stock deal worth more than $1 billion. Once the deal will be finalized by the third quarter of 2012, the new mega group will control around 75% of China’s online video market.

In terms of acquisition practices, both companies started to purchase film and TV shows from foreign companies in 2010. Youku for instance signed a deal with Warner Bros and Lionsgate to show their titles on Youku.com.

Film catalogues are bought from local distributors or foreign sales companies via agents. Paris-based sales executive Philippe Bober (The Co-production Office), says that prices per title are set according to the potential number of users. Films are available online either on a free-to-consumer, ad-supported basis or on a transactional video-on-demand basis.

Another major player is You On which offers NVOD, VOD and SVOD services across China. The listed company based in New York and Beijing has signed a flurry of deals over the last year, with major film companies such as Warner Bros, Disney, Lionsgate, Magnolia, and most recently Miramax. The films are available to Chinese viewers via state broadcaster’s movie channel CCTV-6.

Commenting on the expanding VOD market in China, Rikke Ennis, CEO of Scandinavian sales company TrustNordisk said: “It seems like doors are opening in China when it comes to the VoD market and we have had in the last couple of months, several offers from Chinese VOD platforms. It is still too early to say whether it is a viable business plan but it sure looks like it.”

24 BRIC REPORT 4 Key Film Festivals in BRIC Territories

As non-commercial distribution platforms, film festivals play an important role in developing cultural exchanges and are essential tools for local distributors who use them to gauge audience’s reactions to their films prior to their official national release. Some festivals have parallel markets where industry people can develop and nurture mutual relationships.

Below are selected priority film festivals from the BRIC nations, as well as Nordic film weeks in some BRIC territories organised by Nordic film institutes in collaboration with national representation offices and local partners.

4.1 - Brazil Many Brazilian film festivals (including the most important ones ‘Festival do Rio’ (Rio International Film Festival) and ‘Mostra International de Cine’ (São Paulo International Film Festival) are held one after the other which means that film copies and talents can travel from one festival to the other.

Festival do Rio The Festival is held during 12 days in early October each year. It screens some 350 films from more than 60 countries at 40 venues across the city. The festival has around 14 sidebars plus a parallel industry gathering, ‘Rio Market’, offering seminars, Master Classes, industry screenings and networking events covering film and television.

Mostra International de Cine São Paulo International Film Festival is held right after Festival do Rio at the end of October each year. It screens around 300 films from different countries and sells around 250,000 tickets each year. The festival has three main sections including the competition programme for first and second time directors.

In 2010 the Swedish film Beyond by Pernilla August won a Special Prize and Noomi Rapace the Best Actress award for her performance in the film.

Other priority film festivals for Nordic films: · Rio de Janeiro Anima Mundi · Rio de Janeiro International Children’s Film Festival · São Paulo International Short Film Festival · It’s All True International Documentary Film Festival · Olhar de Cinema, Curitiba International Film Festival

4.2 - Russia Russia has several small film festivals but only one major film event part of FIAPF.

Moscow International Film Festival Headed by Russian director and actor Nikita Mikhalkov, the festival welcomes over 200 international guests each year in June. Some 200 films from 50 countries are on the programme of the main feature competition section, Perspective (for young and innovative directors) and the documentary competition programme.

The Parallel market Moscow Business Square, is the only large-scale international event for film business professionals in Russia. More than 300 film professionals from 30 countries are invited to attend each year.

Nordic films that were awarded in Moscow include Undercurrent by Icelandic director Árni Ólafur Ásgeirsson winner of the Cinema Club Award in 2011 and About Sara by Swedish director Othman Karim, Best Film in 2006.

BRIC REPORT 25 Perm, Flahertiana International Documentary Film Festival Perm is the second largest city in Russia after Moscow and the city is one of the largest cultural centres of the country. In recent years thanks to the Flahertiana Film Festival, the city has become one of the most famous centres of Russian documentary. The festival has an international competition section and a FIPRESCI award.

In 2011, the Finnish film Reindeerspotting was in competition and in 2010, another Finnish entry, Freetime Machos received the Silver Nanook Award and FIPRESCI award.

Danish Film Wave, Moscow The fourth Danish Film Wave mini-festival was held at Moscow landmark arthouse cinema Kino 35mm from May 10-15, 2012. The film event is co-organised by the Danish Film Institute, Russia’s Cool Connection and the Danish Embassy in Moscow. Six recent Danish films were selected this year, including Teddy Bear that was introduced by its director Mads Matthiesen during the opening night.

Finnish Film Week St Petersburg Established some 22 years ago when Scandinavian cinema was very unfamiliar to Russian viewers, the Finnish Film Week in St Petersburg held each year in late November, is organized in collaboration with the Consulate General of Finland in St Petersburg and the Finnish Institute in St Petersburg.

Jaana Puskala, Head of Feature Film Promotion at the Finnish Film Foundation says the proximity of St Petersburg to Helsinki (only 3h30 by train) makes it a popular destination for Finnish film professionals keen to meet with their Russian counterparts.

Eight Finnish feature films were selected in 2011.

4.3 - India International Film Festival of India (IFFI), Goa IFF is an annual film event held in November in Goa, screening around 200 films. Among the Nordic films that screened at the festival’s 52nd edition in 2011 are Volcano (shown in competition), The Good Son, A Funny Man, Between Two Fires and Stockholm East.

Since 2008, the film industry platform Film Bazaar is held in parallel to the festival. The market is organised by the National Film Development Corporation of India (NFDC). FB is aimed at facilitating sales of world cinema in the South Asian region and the promotion of Indian Cinema in the international domain. FB 2011 saw 635 delegates from across 40 countries.

Mumbai Film Festival Mumbai is the financial capital of India and the most important centre of ‘Bollywood’.

The festival’s 14th edition in 2011 selected 200 films from 60 countries. Two Nordic films were in the official competition programme: Sweden’s She Monkeys and Norway’s The Mountain.

The industry event Mumbai Film Mart is held parallel to the festival.

Kolkata Film Festival The Kolkata (Calcutta) Film Festival is an annual event held in November over an eight day period. Last year 150 films from 50 countries were selected, including Sweden’s Sound of Noise, Norway’s King of Devil’s Island and Iceland’s Mamma Gógó.

Other priority film festivals in India: · Chennai International Film Festival · Mumbai International Film Festival for Docs, Shots and Animation films · Pune International Film Festival

26 BRIC REPORT 4.4 - China Shanghai International Film Festival Founded in 1993, the Shanghai International Film Festival (SIFF), is China’s only A-category international film festival accredited by FIAPF. It runs for eight days in mid-June.

SIFF devotes itself to building up an international platform with four main programs including Competition, SIFF Mart, SIFFORUM, and International Film Panorama in an effort to promote the industry development and enhance cooperation with the rest of the world.

The 2011 SIFF event organised a retrospective on Bille August and among the 200 films screening was Susanne Bier’s Oscar-winning film In a Better World that was sold for distribution in China.

Parallel to the festival, the industry platform SIFF Mart is composed of Film Market, China Film Pitch and Catch (CFPC), and Co-production Film Pitch and Catch (Co-FPC). The Film Market is the most professional film trade platform in China. Every year, it attracts around 200 international producers, distributors and buyers. For local producers and investors, it is the place to find new Chinese filmmaking talents, while for international producers it is usually their first step of entering the Chinese market.

Scandinavia had its first major presence at SIFF 2010. Around 18 Nordic film professionals and 13 family films (including one short) attended the ‘Best Nordic Family Film Showcase’ to introduce Chinese audiences to contemporary Nordic storytelling.

Three Nordic projects also attended CoFPC: Sweden’s Betty Bangkok by Louisa Inserra and Emma K Dixgård, Finland’s Turlittan -The Girl with the Golden Hair by Kari Juusonen (Niko & the Way to the Stars) and Red Flag by Icelandic/UK filmmaker Robert Douglas (Eleven Men Out).

Beijing International Film Festival The second Beijing International Film Festival held in April 2012 was a high profile event where Hollywood talents and heavyweights such as James Cameron and Fox chief Jim Gianopoulos flew in to support co- production opportunities with China.

The festival selected 260 films from 54 countries including Norway’s crime thriller Headhunters and Iceland’s documentary Grandma Lo-fi.

NORDOX: NORDOX was established in 2006 as a part of the Dashanzi International Art Festival in Beijing. Since 2008 it is organized together with the Ullens Center for Contemporary Art (UCCA). The festival has become a platform for some of the best recent Nordic documentary films in the Chinese capital. The festival’s ambition is to spread knowledge about Nordic culture in China, as well as create opportunities for cross-cultural dialogue. The selected documentaries outline Nordic perspectives on a diversity of themes including politics, society, environmental issues, art and music.

In 2011, more than 20 Nordic documentaries were selected including The Red Chapel and Yodok Stories as part of a spotlight on North Korea. A new feature was the section “TEMPO in Shanghai”, a selection of short films provided by Sweden’s Tempo Documentary Film Festival, partner of NORDOX.

Last year, the festival’s programme was screened outside of Beijing in Guangzhou (Times Museum, Nov 19th- December 4th) and Shanghai (Rockbund Art Museum Nov 29th- December 2nd).

BRIC REPORT 27 5 Promotion of Nordic Films and Talent in BRIC Territories

Support to the export of Nordic films and talents in the BRIC territories are handled on a national level by the Danish Film Institute, Finnish Film Foundation, Icelandic Film Centre, Norwegian Film Institute, Swedish Film Institute, on a Nordic level by Scandinavian Films and Nordisk Film & TV Fond and on a European level by the European Film Promotion.

5.1 - National film institutes To sustain and develop the commercial and cultural reach of Nordic films (features, shorts and documentaries) in the BRIC region, each Nordic film institute has its own department that coordinates on- going promotional activities in close cooperation with Danish, Finnish, Icelandic, Norwegian, and Swedish cultural institutes, embassies, plus local cultural organisations, distributors and cinemas in each BRIC territory.

The national film institutes’ international promotional activities focus on national films and talents’ participation at priority film festivals (see Key Film Festivals section) and markets, as well as other film events and retrospectives in each BRIC nation. Film weeks are also organised. The festival strategy is defined in close cooperation with the film’s producer and sales agent.

Grants The national film institutes in the Nordic region support in priority · travel costs for key talent, directors and/or producers · festival prints at priority festivals.

The three major film nations Denmark, Norway and Sweden also provide selective support to marketing and advertising materials for films shown at priority international festivals and publish film magazines in the English language twice a year. Sometimes travel costs are borne by representation offices from the Nordic countries.

Promotional packages in Denmark and Norway The Danish Film Institute produces a film package with DVDs of recent Danish feature films, short films and documentaries for the Danish representations to distribute at local, non-commercial film events. The DVDs carry English subtitles and are suited for public film screening. The film package is sent by the DFI to the respective representations upon request, free of charge.

The promotional package for each film contains: stills from the film and of the director, press sheets in English with a short synopsis and credits, a Dialogue list with English subtitles, a poster and sales overview of the territories (for rights clearance).

The Norwegian Film Institute launched last February a similar initiative called ‘The Embassy Film Collection’ to help Norwegian representations abroad promote Norwegian films and culture at non-commercial film events. The initiative supported by the Ministry of Foreign Affairs, is renewed every two years.

The film package for 2012-2013 consists of 25 films (eight feature films, two collections of shorts, of which one is aimed at children, three documentaries, and two historical documentaries). Films in PAL and NTSC formats are available in original language with subtitling in English, French, Russian, Spanish and Portuguese. They are sent to the countries’ respective representations upon request, free of charge.

5.2 - Scandinavian Films Scandinavian Films is the umbrella organization of the Danish Film Institute, the Finnish Film Foundation, the Icelandic Film Centre, the Norwegian Film Institute and Swedish Film Institute.

28 BRIC REPORT In 2010 Scandinavian Films coordinated the first Nordic Family Film showcase in China during the Shanghai International Film Festival. Eighteen Nordic films were selected for the event, attended by 18 Nordic film professionals. The Nordic Family Film showcase was supported by the Nordic Council of Ministers and Consulates of the five Nordic countries in China.

5.3 - Nordisk Film & TV Fond Nordisk Film & TV Fond is supported by the Nordic Council of Ministers, Nordic film institutes and selected Nordic broadcasters. Its main role is to promote Nordic films and TV dramas by providing top-up financial support. The Fund also coordinates specific initiatives to support the export of Nordic films and culture on a global scale.

High Five International Cinema Distribution Support As part of the Nordic Council of Ministers’ Globalisation efforts and additional grant of DKK 7 million for 2010- 2012 to promote Nordic films on a global scale, Nordisk Film & TV Fond set up the subsidy scheme High Five International Cinema Distribution Support under which international distributors (outside the Nordic region) could apply for partial coverage of marketing costs related to the theatrical release of Nordic films in their home territories.

A total of 86 grants for a total of €431,500 were awarded for 38 Nordic films and the support generated additional international sales of 15-20%.

Nordic films supported by this scheme that were released in the BRIC territories include Denmark’s Submarino (Russia), Iceland’s The Good Heart (Brazil), Finland’s House of Branching Love (Brazil), Norway’s Home for Christmas, A Somewhat Gentleman (Russia), Max Manus (Russia), Sweden’s Easy Money (Russia) and Sound of Noise (Russia).

5.4 - European Film Promotion European Film Promotion (EFP) is the only existing international network of organisations promoting and marketing European cinema worldwide.

The network comprises professional organisations from 33 European countries that work together on the international promotion of European cinema and talent.

The five Nordic film institutes are part of the network and the current president of EFP is Christian J. Lemche from the Danish Film Institute.

Among EFP initiatives is the Film Sales Support (FSS) to facilitate the access of European (and Nordic) films outside of Europe. FSS helps sales companies attending key film festivals and markets cover costs for prints, promotional material, press work and other expenses related to the professionals’ presence at the festival and market.

Recent Nordic films that were supported by the European Film Promotion’s FSS scheme to increase their visibility in Asia and Latin America include Norway’s Jackpot, King Curling, Sweden’s The Crown Jewels during the Hong Kong Filmart in March and Sweden’s Happy End during the Guadalajara International Film Festival in November 2011.

BRIC REPORT 29 6 The Unifrance Approach

Created in 1949, Unifrance is the organisation in charge of promoting French cinema abroad. Funded by the government (Ministry of Foreign Affairs and Ministry of Trade) and supervised by the CNC (Centre National de la Cinématographie), the film body had an annual budget of €8.8 million in 2010. Nearly 600 film professionals are members of the French film promotional organisation.

Unifrance’s actions are split into five main areas: 1 Support to markets and distribution of French films abroad 2 Support to film festivals 3 Co-production meetings and film master-classes 4 Promotion of short films abroad 5 Information and publications

6.1 - Support to markets and distribution Sales support at film markets, includes: · Organisation of a French film market in Paris (Rendez-vous de Paris) and · the French film market in Tokyo, parallel to the Tokyo Film Festival. · Unifrance Umbrella during key international markets (European Film Market, Berlin, Film market Toronto, Filmart, Hong Kong, American Film Market, Los Angeles).

Support to foreign distributors includes: · Automatic support towards travel of talents and directors (146 trips/travel costs for 92 films in 25 countries were supported in 2010). · Selective support to theatrical release of French films abroad. 107 candidates were granted €1.56 million in 2010. - If talents/directors cannot travel, Unifrance also puts together press junkets for foreign journalists in Paris.

6.2 - Support to film festivals Unifrance organises its own festivals of French films and offers grants to existing international film festivals.

6.2.1 - Festivals organised by Unifrance Nine festivals of French films abroad were organised in 2010 of which four were held in the BRIC territories.

1- Panorama of French Film in China (April). Thirteen French features and 12 shorts were selected for the festival held in the cities of Beijing, Shanghai, Guangzhou, Chengdu, and Wuhan.

All screenings were in original language with Chinese subtitles. 20,000 Chinese people attended.

2- Varilux French Film Festival in Brazil (June) Ten films were selected for the festival that took place in Rio de Janeiro, Sao Paulo, plus nine other Brazilian cities. 25,000 Brazilians attended in 2010. An industry meeting was held with Brazil’s official film organisation ANCINE and Cinema do Brazil (promotional body for Brazilian films abroad).

3- French Film Festival in Russia (November) Eleven feature films were selected for the festival held in Novossibirsk and Krasnoïarsk that attracted 6,000 people.

4- French film festival in India (April) This is organised jointly with the French embassy in India. Seven feature films were selected in 2010. The Indian TV channel UTV World Movies dedicated to foreign films sponsored the event and the films and interviews with talents were broadcast after the festival. The event was attended by over 3,500 people. French director Olivier Assayas held a Master-class for film students from the Whistling Woods school of

30 BRIC REPORT Mumbai. The French delegation met with Indian professionals and an official co-production agreement was signed with India during the official visit of former French president Nicolas Sarkozy.

6.2.2 - Support to international festivals Unifrance invites international film programmers to view French films at their Paris headquarters, provides grants towards travel costs of selected talents and shares with key festivals such as Berlin, Venice, San Sebastian subtitling costs of French films shown in competition. Unifrance also helps festivals organise Q&A sessions and promote French films that have not secured local distribution by hiring a local press attaché.

My Frenchfilmfestival.com Since 2011, Unifrance organises the online My Frenchfilmfestival.com where ten features and ten short films compete for Best Film. The films are available in 14 languages (including Chinese, Portuguese and Russian). Films can be streamed for free on Filmstarts in Germany, Terra in Latin America and Youku in China, and against a subscription on DailyMotion and Mubi, Filmin in Spain, J:COM in Japan, KT in South Korea, Orlando VOD in Israel and SnagFilm in the US.

Youku in China was a partner to My Frenchfilmfestival.com in 2011 and registered 1.1 million downloads last year, accounting for 80% of all online viewing. This shows the popularity of foreign language films in China, where a strict quota policy restricts their access on the theatrical market.

Terra in Latin America (also partner to the festival) registered the second biggest volume of downloads (100,000). The platform myfrenchfilmfestival.com had 84,000 downloads including 12,650 from Brazil and 12,400 from Russia.

6.3 - Co-production meetings and film master-classes Unifrance organises annual co-production meetings with Germany and Spain as well as master-classes with French directors or talents in universities and film schools abroad.

6.4 - Promotion of short films abroad Unifrance provides financial support towards subtitling costs, talents travel to festivals and information on all French shorts.

6.5 - Information and publications The website www.Unifrance.org includes a comprehensive database on French film professionals, films, box office/admission results, TV ratings, as well as market analysis on foreign territories. Unifrance also published regular reports on French films abroad and promotional catalogues on French films and talents.

BRIC REPORT 31 7 Acknowledgements

We wish to thank the following industry people for their valuable contribution: Ann Kristin Westerberg (COO Rights and International Sales, Svensk Filmindustri) Augusto Medeiro (Imovision, Brazil) Chris Pickard (Brazil specialist, Critical Divide, UK) Christian Juhl Lemche (Festival Manager/Project Manager, Danish Film Institute) Espen Huseby (CEO Nordic World) Helena Danielsson (Managing Director, Hepp Film) Helene Aurø (Head of Sales, DR Sales) Jesal Doshi (Acquisitions, Alliance Media & Entertainment, India) Lizette Gram Mygind (Festival Manager, Danish Film Institute) Michael Werner (Sales Director, NonStop Sales) Miira Paasilinna (Managing Director, The Yellow Affair) Philippe Bober (Managing Director, The Coproduction Office) Pia Lundberg, Head of International Department, Swedish Film Institute) Sam Klebanov (Cinema without Frontiers, Russia) Solveig Langeland (CEO Sola Media) Stine Helgeland (Executive Director Promotion and International Relations, Norwegian Film Institute) Jaana Puskala (Head of Feature Film Promotion, Finnish Film Foundation) Tine Klint (Managing Director LevelK) Rikke Ennis (CEO TrustNordisk)

Sources General: Screendaily, Variety, Hollywood Reporter, Screen Digest, BBC, European Audiovisual Observatory, Financial Times, The Economist, Reuters, Le Monde, The Guardian, OFCOM, inaglobal.fr, CIA International Monetary Fund, MPAA, Danish Film Institute, Norwegian Film Institute, Icelandic Film Centre, Swedish Film Institute, Finnish Film Foundation, European Film Promotion, UNIFRANCE, Centre for Economics and Business Research, C21 Magazine, MIP TV News, World Population Review, World Screen, Advance- television.com, Broadband TV News

Brazil: ANCINE, Cinema do Brazil, Service Audiovisuel de l’Ambassade de France au Brésil

Russia: Nevafilm, Russian Film Business Today, The Moscow Times,

India: Central Board of Film Certification, Motion Pictures Distributors & Association of India, The Times of India, Ernst & Young, Spotlight on India’s Entertainment Industry, FICCI-KPMG report, March 2012.

China: SAFT (State & Administration of Radio, Film & TV), China News,

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