Silicon Hutong Archive

Is the future of film about Relativity?

The Silicon Hutong Suite
Overlooking Orchard Towers, Singapore
1409 hrs.

As China's film industry struggles to turn itself into a real industry (rather than a government-sponsored propaganda tool-cum-art form,) producers and filmmakers are searching for near- and long-term sources of finance and distribution. Seeking new models with which to finance China's growing film biz, the gaze of mainland producers naturally turns to markets outside the mainland.

A Bunch of Cash Holes

What they find is that the entire global industry is engaged in the quest for new sources of cash. Even people like Steven Spielberg and Ron Howard, bankable filmmakers both, are finding that it is harder than ever to get the money they need to make their films. Spielberg has not only had to cut a long-term distribution deal with Steve Jobs' crew over at Disney, he has had to go to India's Reliance BIG Entertainment for cash as well.

Spielberg's hunt for production money is a symptom of a wider contagion that has affected the film business. Production costs continue to rise, digital revenue is not ramping up as quickly as is we had all hoped, and younger audiences are spending more time online or playing games. More immediately, the financial crisis has meant that the usual sources of cash have either slowed or evaporated.

All is not gloom, though. For several years now, a new crop of film finance companies pairing hedge funds and private equity directly with producers has not only given Hollywood a much-needed new conduit of cash, it has in some cases brought a more bottom-line approach to production. (Full disclosure: my brother-in-law is an executive at one of these companies.) 

A New Kind of Mogul...

At first glance, one of the most intriguing examples of the type is Relativity Media, profiled in this month's Esquire magazine. The article sounds a hopeful note, positioning Relativity and its 34 year-old leader, ex-venture capitalist Ryan Kavanaugh, as honest water merchants in an increasingly dry land.

Relativity appears to do some smart things. They focus on getting movies made, not optioning a hundred properties and turning one into a film. They ensure costs remain in line with good business sense. They try to earn profit by being sensible about costs and distribution, not trying to make blockbusters.

...Or Just Another Old Quant?

I was really prepared to put Kavanaugh into my pantheon of people who are building the future of Hollywood. But when I got down about two-thirds of the way through the article, things started to go a bit awry. I think this was the paragraph that set off the alarm bells:

"Before Relativity commits to financing a particular movie — either through its slate deals with Sony and Universal or on its own — it's fed into an elaborate Monte Carlo simulation, a risk-assessment algorithm normally used to evaluate financial instruments based on the past performance of similar products."

Now, I am nobody's idea of a "quant," but neither am I the anti-quant. I like playing with spreadsheets and plugging in assumptions and variables a lot more than I like to admit in polite company. I also think there is a dearth of analytical, quantitative thinking in creativity-driven businesses.

So I like the fact that Kavanaugh and Relativity are trying to bring the sensibilities of management accounting to Hollywood. The future of film is not the subordination of art to business, but the quest for an equitable balance. Kavanaugh's bottom-line focus while rising above gratuitous bean-counting is a step forward in this regard.

Yet while Relativity would protest that only a part of their decision-making is driven by their computer models, I see cause for concern. Basing investment decisions using computer modeling based on past performance or market behavior is a riskier proposition than the quants might have you believe. Long-Term Capital Management leaps to mind, as do a half-dozen major financial organizations that have similarly vanished into clouds of hubris in the past year.

The Black Swan Cometh

In the entertainment industry, where tastes and media consumption are in the throes of massive change, common sense demands we be especially selective about using the past as a guide. What is the half-life of a set of audience assumptions in a single market like the US, then multiply that across the worlds markets, from whence comes 2/3 of the average film's revenue.

If, on the other hand, the company's investment decisions are driven by the knowledge and instincts of its executives, it is likely making decisions on a basis little better than anyone else in Burbank, Santa Monica, or points between.

Relativity may have convinced themselves that the modest goals of their approach  ("don't lose your shirt") are enough to stave off an unforeseeable catastrophe - a major box-office flop, or even several in a row. If so, I think they are kidding themselves. The recent history of the finance industry has proven that betting your money on the mathematical rationalization of the irrational behavior of millions of decision makers is pure folly.

All of which is why I hope that, despite Relativity's apparent success to date, we in China decide to eschew such an approach to film finance, at least for the time being. There are far too many more fundamental steps that the industry here could be taking to improve its bottom line and its box office performance.

CORRECTION

Seeking Alpha reader and film executive Andy Almay noted that I my characterization of Spielberg going to Relativity was in error:

"Spielberg didn't go to Reliance.  It was the other way around. Reliance wanted to buy into Hollywood.  They also made deals with a number of name performers and down the line they may rue the day.  Performers have been notoriously bad at picking successful projects."

The point, though, remains. When the man who is arguably Hollywood's most successful and esteemed producer needs to turn some of his creativity to fundraising, all producers will need to do more of the same.

Chinese Film and Those Pesky Foreign Audiences

In the Hutong

Glued to CNBC

1804 hrs.

The New York Times does an amusing little story about a hush-hush crash course at the UCLA film school for young Chinese entertainment industry suits, aiming to instruct the PRC execs in the way Hollywood does business ( China’s Media Moguls Tutored by Masters of Hollywood).

Why can't you people just read the words?

The executives, all in their "20s and 30s," were given lectures and workshops by some of the leading lights in Hollywood, each clearly motivated as much by a desire to crack China as any thought of helping the youngsters.

But the money quote was not delivered by Dan Glickman of the MPAA, Mike Simpson from William Morris, or even Gareth Wigan, the former vice-Chair of Sony Pictures and one of Hollywood's leading globalizers.

No, the quote of the day was delivered by one of the young Chinese executives:

"When the floor opened for questions, the Chinese had questions of a different sort...Another wondered how Chinese films could find a global audience when American viewers continue to reject subtitles. 'Americans are spoiled,' the questioner complained."

Moviemaking would be great if it weren't for that darned audience

Without arguing the speaker's point, he calls our attention to the real core of China's global box-office problem.

The gap in quality of material and production values between Chinese films and big-budget western productions is still significant, but it is declining. The quality of China's leading productions easily matches that of some of the more popular independent films in the United States.

But for all of the improvements on the production side, Chinese film executives have a lot to learn about marketing - especially international marketing. Rule one, of course, is that blaming your target customers for your failings is a fig-leaf for incompetence.

One of the core differences between the film business in China and that in the United States is that the US industry is at least nominally driven by what people want to pay to watch. The result is a lot of dreck, of course, but dreck that at least has a shot at making some money.

Chinese film, on the other hand, is dominated by the creative conflict between filmmakers and regulators, the latter acting on behalf of party ideologues. There is precious little room in that clash of power and ego for the voices of executives speaking on behalf of the ticket-buying audience.

So despite the best intentions of Robert Rosen, dean of the UCLA School of Theater, FIlm, and Television, and China Film Group's urbane vice-chairman Jiao Hongfen, one does not hold out much hope for improved prospects for Chinese film in with significant masses of non-Chinese moviegoers.

At least, not until marketers start having a say in the product.

The Youku Gambit

In the Hutong

Is it mist, or is it fog? YOU decide

1402 hrs.

Youku's public relations team are pumping out a release claiming bragging rights as the most popular video site in China, based on a survey by the Data Center of the Chinese Internet under the China Internet Society, a government-sanctioned trade group.

I question the impartiality of surveys that come out of trade groups singling out a paying member as a market leader, especially when those surveys just happen to use the success metrics advocated by the company in question. Given that iResearch, Baidu Index and Google Trends apparently confirm Youku's position, why bother leading with the weaker statistic?

But let's leave that aside for the moment, and grant that Youku may in fact be in the lead. What is more important is why, and what that means for Youku's future.

Quick, get the popcorn - Youku is loading

Youku is particularly happy about that the statistics suggesting that people spend more time on Youku than on its competitors' sites. There is a good reason for that, as Senior Analyst Elias Glenn at Pacific Epoch pointed out on Twitter today. Youku acknowledged in its release the importance of "professionally produced" long-form content (i.e. movies and TV shows) to the company's performance.

What is unclear is whether some, most, or all of that long-form content is being show without prior permission of the copyright owners.

There are two possibilities.

Is that the Union Jack or the Jolly Roger?

First, that Youku has reached agreements with all the copyright holders of the content on its site, including 20th Century Fox, the distributors of the Cameron Diaz movie "What Happens in Vegas" that I was enjoying on Youku (sponsored by 51jobs) just a few minutes ago. Or Universal, who kindly allowed Youku to show me "Leatherheads" with George Clooney, and this year's blockbuster, "Iron Man," courtesy of the generous folks at Paramount.

If that is the case, they are to be commended, and I will happily join the line of people seeking stock when Youku goes public. Somehow, I don't think that's happened yet.

The second is that Youku has not reached those agreements with all of the copyright holders, that its vaunted filtering systems are failing to pick up the pirated videos (despite being able to filter politically objectionable content), and that Youku is building its spectacular user numbers based on its role as a pirate multiplex.

That is going to be a concern to both investors and advertisers.

While China may not enjoy a reputation as an ardent defender of intellectual property rights, the time where a company with Youku's profile can openly operate as a copyright scofflaw are rapidly coming to an end. Baidu and others have learned that China's intellectual property laws are slowly growing teeth, and Youku, laying claim to the mantle of the most popular site of its type, would be an ideal chew-toy.

There's something happening here

As discussed in a post at the beginning of the month ("The online video Hail Mary"), it would be unwise to discount the collective wisdom of Victor Koo, his advisors, and his investors. These are not foolish people. They knew their license was in the bag, and they invested more money.

Similarly, I believe they know that a rights reckoning is coming, that at some point Youku will cross an invisible line in the sand and battalions of television copyright attorneys will descend from the sky, spewing paper death in the form of cease-and-desist letters, or worse.

There is a strategy afoot, one that could never work in the U.S., but can work in China because of the very restrictions the government has placed on conventional media.

I'm not sure what the strategy is, but here is my scenario:

The aforementioned regiment of airmobile copyright attorneys shows up at Youku, girded for battle. Victor Koo opts to parley. Koo suggests that the two sides are in a position to help each other. Content providers - especially the foreigners - need a way to provide access to their content to Chinese people that will help undercut DVD piracy. Youku needs content offered in a format that does not overtly threaten the broadcast powers-that-be.

Youku has the audiences, a decent relationship with regulators, and growing advertising revenue. For a cut of the revenues earned on their content, the copyright owners agree to hold off for a period of time on pressing any claims. Meanwhile, Koo and company engage in a vigorous four-way discussion involving Youku, regulators, advertisers, and content owners to evolve into the country's leading online TV outlet.

Youku then cuts similar deals with the local broadcasters, very few of whom have had much success building their own online offerings, and would be just as happy letting Koo do all the work in return for a cut. After all, 50% of something beats 100% of a cost center.

This would never play in the U.S.

But here? Where legal music goes for $0.15 a track and where Batman can't make it past the censors?

It might just work.

The Education of a Mogulette

In the Hutong
Ignoring American Idol while the Party Secretary watches
0001 hrs.

Wendi Deng has told Vogue that she will be collaborating with her pals Zhang Ziyi and Florence Sloan to establish a new film production company based on the DreamWorks model. The first project of the unnamed venture is apparently an adaptation of Shan Sa's novel The Empress, and Ms. Deng dropped the name of Ridley Scott as a possible director.

Let us set aside for a moment the fact that DreamWorks SKG was built on the collective talent, track records, and Hollywood street credibility of Steven Spielberg, Jeffrey Katzenberg, and David Geffen. Ignore for a moment that whatever the strengths Deng, Zhang, and Sloan bring to the table, they are simply not in the same league as the the DreamWorks founders. All of that doesn't matter: with the support of Rupert's money and Zhang's screen success, they will likely get some movies made.

You may also remember that MySpace China was publicized as Ms. Deng's deal. From Joseph Kahn's piece in The New York Times last June:

Wendi Murdoch has stepped up her role in China. She plotted a strategy for the News Corporation’s social networking site, MySpace, to enter the Chinese market, people involved with the company said. The News Corporation decided to license the MySpace name to a local consortium of investors organized by Ms. Murdoch.

There is a pattern to all of this, an internal logic.

Ms. Deng is not a News Corporation executive. She plays no official role in the business. When she helped put together the MySpace China deal (assuming, of course, that her participation was real and not some form of positioning), she was basically doing it as The Boss' Wife, as News Corporation laobanniang. That would probably rankle anyone who had an MBA from Yale and a little ambition, so it probably rankled Ms. Deng.

The venture with Zhang and Sloan - let's call it QueenWorks - gives Ms. Deng more than a project on which to occupy her time. It is her first real job since marrying her husband, and her first shot at running her own gig. It is also her shot at a lasting piece of the action, a legitimate business she can build independent of News Corporation that she can use as the foundation of her own media organization. It makes her something more than Mrs. Murdoch, and yet she carries that cachet into every meeting she walks into.

Providing she is serious about it, providing it is not simply a toy for a bored wealthy housewife, she could actually make something out of the organization. Either way, what we will have will be a litmus test: given a wealthy backer (her husband) and interesting partners, is Wendi capable of running a successful business?

This is an important question to News Corporation. If Wendi can prove herself an able executive in her own Hollywood operation, it gives her considerably more credibility at a later date when the complex issue of Rupert's succession comes up. It is one thing for the spouse of the boss to seek a role in the business. It is another entirely when that spouse also has made her bones as a successful businessperson.

This new venture will bear watching.

Hollywood Icon Comes East

In the Hutong
Rolling with the changes
1842 hrs.

The Hollywood Reporter, long essential morning reading for the entertainment industry in the United States, Europe, and elsewhere, has had permanent roots in China for a couple of years now, with an official bureau led by Jonathan Landreth. The THR staff have provided a much-needed addition to the coverage of the music, film, television, and new media industries here in China. With occasional exceptions, however, much of the fine reporting coming out of THR in China has been trapped behind a firewall.

That all changed today, when THR launched The Hollywood Reporter Asia, a website that not only allows us to see the superb coverage coming out Jonathan and his team here in China, but also regional and global industry news. One other thing I really like about THR-Asia is that it is edited right here in Beijing, underscoring Beijing's growing role as the media center of the region.

Give it a look. Personally I'm adding it to Danwei.org as part of my daily routine. If I have one quibble, it is the lack of an RSS feed, but I understand that with THR offering their content for free, they want you in the site for the ads. A small price to pay.

A Tale of Two Actresses

In the Hutong
In search of a pain reliever
2027 hrs.

Whatever you may think about the relative merits of entertainers leaping from the screen and onto the world stage, we were treated this week to a profound contrast in the styles and approaches of two young actresses.

Exhibit A is Marion Cotillard, the 32-year-old French actress who won the Academy Award for Best Actress a little over a week ago for her apparently inspired performance as Edith Piaf (yes, I too am a philistine and had to Google it) in La Vie en Rose. In an interview from a year ago broadcast on a French website, she proclaimed that the 9/11 attacks were a hoax manufactured by the US government for political ends, and that the twin towers were demolished because they were obsolete.

Without supporting or debating the veracity of Ms. Cotillard's claims, suffice to say that we here in the Hutong appreciate a good conspiracy theory in the same way we appreciate good science fiction - great stuff with which to tickle the frontal lobes, maybe even ask a few hard questions. But as most bloggers learn fairly quickly, when one takes a public stand that is in direct opposition to popular perception, one had best be very, very sure of one's facts and be prepared to support one's stand through effort and action. Sadly, Ms. Cotillard goes no further than voicing an opinion that begs for support.

Exhibit B is Angelina Jolie, also 32, also an Oscar winner (Best Supporting Actress for 1999's Girl, Interrupted) who in her capacity as goodwill ambassador for the United Nations High Commission on Refugees decided that rather than snuggle up to the armchair activist crowd, she'd hop on a plane and head for Iraq and see what was going on. From her Thursday op/ed in the Washington Post:

"My visit left me even more deeply convinced that we not only have a moral obligation to help displaced Iraqi families, but also a serious, long-term, national security interest in ending this crisis."

She continues:

"As for the question of whether the surge is working, I can only state what I witnessed: U.N. staff and those of non-governmental organizations seem to feel they have the right set of circumstances to attempt to scale up their programs. And when I asked the troops if they wanted to go home as soon as possible, they said that they miss home but feel invested in Iraq. They have lost many friends and want to be a part fo the humanitarian progress they now feel is possible."

Her conclusions are hardly those of an expert, and her focus is exclusively on the issue of the 2.5 million Iraqi refugees for whom she seeks repatriation. More than one pundit has questioned her qualifications to speak on behalf of all of the troops deployed in Iraq. Nonetheless, they are startling because they come from an unexpected source, and because of the inevitable reverberations they will send through celebrity salons on both coasts - not least the circles in which she and husband Brad Pitt circulate.

(For the record, I don't feel qualified to make a call on Iraq either way, so I won't.)

Again, leave aside your own opinions on the specific matters at hand. To me what is germane is the difference in approach. Two young women, each given the opportunity because of fame earned on the screen to voice their opinions on larger matters to their audiences, chose to make use of their bully pulpits in incredibly different ways. One chose to make the kind of flippant, uninformed remark more appropriate to a conversation with close friends. The other chose to take the time and risk to journey to someplace she could learn more, then share her thoughts and findings - whatever they're worth - with others.

Regardless of what you may think about Ms. Jolie, her motivations, the appropriateness of her remarks, or her qualifications to even make them, you must applaud her quest to learn a little something of the subject before volunteering so public an opinion.

A wise old sergeant once told me: "Wolf, opinions are like a**holes: everyone's got one, and they all stink."

The only way I would dare to correct that is to say that the more informed your opinion, the less it stinks. That is the lesson I will take from Ms. Cotillard and Ms. Jolie.

Indiana Jones and the Temple of Heaven

In the Hutong
Asking for a "do-over" for my CNY break
1035 hrs

This morning brings us another noble but empty gesture in the long history of political activism in Hollywood.

I regard Steven Spielberg as as one of the greatest filmmakers in the history of the craft, a fine humanitarian, and, really, one of the good guys. I understand what motivated him to turn down the invitation of the Beijing Organizing Committee for the Olympic Games to join Zhang Yimou's team charged with creating the opening and closing ceremonies for the Olympics. I applaud him for following his conscience in the matter.

At the same time, I cannot help but wonder if his gesture, however noble the intent, will do any real good.

A Little Trouble with Big China

If there is a single lesson to be drawn from history, it is that the Chinese government has a passive-aggressive streak that is both wide and deep. Public efforts by governments, organizations, or individuals from outside of China to coerce or embarrass Beijing into a policy change on matters either foreign or domestic do not work. Instead, they consistently provoke a visceral negative response that is often seen by outsiders as disproportionate or even extreme.

There are cultural, historical, and political reasons for this. One need only review with a measure of empathy the past two centuries of China's international relations, its serial humiliations at the hands of the European powers, Japan, Russia, the United States and even, briefly, Vietnam to understand why no Chinese leader, government, or party could be seen to cave to a foreign demand.

And it is not that the Party will not stand for it - the Chinese people will not. A little time in Internet chat rooms in China or actually speaking to people here would tell you as much.

None of this, of course, a justification of unconscionable policy - a history of conquest and oppression or a national or cultural inferiority complex does not excuse bad behavior in any form.

But it calls into question the competence - or sincerity - of self-appointed diplomats who ostensibly set out to change such behavior when they do so without considering the medium, the messenger, and the delivery as carefully as they do message. Failing to do so may make good copy, but it does not lay the groundwork for change.

The Spielberg Ultimatum

For the sake of argument, let us grant Mr. Spielberg, Mia Farrow, and the other well-meaning luminaries of the Save Darfur Coalition the highly questionable assertion that the warlords in Khartoum would play the lickspittle toadies and do whatever Chinese diplomats told them to do.

Building the necessary consensus within the Chinese government and among Chinese policy-makers in order to get China's envoys to issue those orders requires navigating not only the currents of international relations, but more critically the byzantine politics of the Communist Party and the Chinese government.

Either Mr. Spielberg, Ms. Farrow, and the Save Darfur Coalition do not know any of this - which calls into question their competence as activists and public advocates - or they are ignoring it, which makes them insincere and suggests other motives are at work. I believe in these people, so I think the problem is the former.

Mr. Spielberg certainly deserves credit for making an effort: for sending a letter (publicly - oops) to Hu Jintao; for stepping out of his director's chair long enough to meet with China's special envoy to Sudan and the Chinese Ambassador in New York last September; and once again with diplomats in Los Angeles a few weeks ago.

Alas, Mr. Spielberg's prodigious talents as a filmmaker and his huge compassion for the suffering people of Darfur are not matched with talent in international relations. Ten months later, things are still bad in Darfur, so in Mr. Spielberg's assessment, the Chinese carry the full blame. No credit for the effort, mind you. No appreciation for efforts followed by encouragement to do more. This is Hollywood, folks. If you can't make a miracle in 10 months, you're out.

A pity, then, that the world does not work by the rules that govern filmmaking.

As a result, all of Mr. Spielberg's efforts with Beijing have come to so much less than they might have. How wonderful it would have been to have Mr. Spielberg as a genuine public ambassador, someone with credibility and real pull in China who could help make things happen. Or, indeed, to see China active in the resolution of the Darfur situation, finding out later that Mr. Spielberg and Ms. Farrow played critical roles in driving the process.

It could have worked that way. But that won't happen now. Instead, Mr. Spielberg has slammed the door on China.

And, rather than rethink their position, the Chinese will certainly return the favor. In fact, it is entirely possible that Mr. Spielberg's gesture will undo much or all of the good that has been done to date.

The Third Way

It is useful to remember that the implicit in the concept of diplomacy - whether conducted by governments or activists - is the idea that reaching a mutually agreeable outcome need not entail either appeasement or coercion.

Making strident pronouncements and issuing public ultimata is as odious - and, ultimately, as ineffective - as being nice to the big dragon (or bear, or falcon) and hoping that it will do what you want. Effective diplomacy demands determination, but it also requires tact.

I am a great admirer of Mr. Spielberg, Ms. Farrow, George Clooney, Don Cheadle, and many of the people involved with the Save Darfur Coalition. I sincerely hope they understand that if things are worse there now than they were a year ago, perhaps a change in tactics is in order, because pumping up the volume is certain not to work, despite the great hopes of those good people to the contrary.

And I sincerely hope that whoever replaces Mr. Bush, Mr. Cheney, Dr. Rice, and Mr. Gates next November understands that as well.

For the sake of the people of Darfur.

Maybe the difference is Star Trek

In the Hutong
Damn if winter isn't finally here
2104 hrs.

In June of this year, Wil Wheaton, who played the teenage nerd-cum-Starfleet officer Wesley Crusher in the science-fiction television series Star Trek: The Next Generation, spoke at a ceremony to induct the late Star Trek creator Gene Roddenberry into the Science Fiction hall of fame.

Whatever your personal feelings about Wil, Wesley, Star Trek, or the citizens of Trek Nation, you have to give credit to Wheaton for hitting what made Star Trek the single most successful science fiction franchise ever (40 years, 11 motion pictures, 5 separate TV shows, and so many books, magazines, stories, conventions, clubs, and fans that they defy counting).

Ensign Crusher Speaks

What struck me was how he captured both the lure and the powerful socio-political value of science fiction as a genre:

"There are countless examples here of the real power that science fiction has to address current events in a way that's safe and acceptable for most audiences, while speaking very seriously about them to those who look beyond the spaceships and rayguns to the ideas behind the stories. Whether it was written one hundred years ago or just published last month, science fiction can give us warnings about the future, hope for the future, or just blissful escape into the future, visiting fantastic worlds that are light-years away – and as close as our bookshelves and televisions."

He then put the 1966 premiere of the original show into its historical context - a nation falling deeper into a war it didn't understand, locked with another rival in a staredown contest with civilization at stake, while the country tore itself apart at home. He then explained what the show did - something the suits at NBC did not expect:

It wasn't a particularly optimistic period for our nation, and there wasn't all that much going on to feel good about. Then, on September 8, 1966, a new show debuted. The network thought they were buying ‘Wagon Train to the stars,' but just two commercial breaks into the show, it was clear that this was something new and different. As episodes aired over the following weeks and months, it was undeniable that this show, set in the future but reflecting so much of the contemporary world, was breaking new ground each week. Like all great science fiction, it held up a mirror and showed us our failings and triumphs – not by beating us over the head with a message, but by making that message easy enough to discover for those who cared to see it. Star Trek dared to do this during an incredibly turbulent time, when it was risky to even acknowledge that the mirror existed, much less hold it up on network television.

Popular science fiction in America found its birth during the nation's most desperate hour - the Great Depression - and has seemed to be most robust when the times have been the most confusing. The genre is infused not so much by powerful optimism as it is a literary haven allowing us to ponder our fears without wallowing in them. What comes out is a belief that the future is ours to create.

Boldly Going

As an avid fan of science fiction and China, it has been a lot of fun watching the growth of Chinese science fiction. There are a half-dozen magazines, probably a half-million hardcore fans, and a growing interest in the genre.

But political overtones are tough to avoid, and a lot of science fiction is a allegorical social critique. In "Sci-Fi Ascendant" in the September 2006 edition of Seed magazine, Mara Hvistendahl wrote:

But this tendency to propose new ways of living—what James Gunn, director of the Center for the Study of Science Fiction at the University of Kansas, calls an "inherent critique of society"—means that the genre's position could still be somewhat tenuous in China. Certain subject matter is off-limits; one of Gunn's novels was translated into Chinese but couldn't be published because it dealt with student protests. The censors have reason to be wary: Much of Chinese science fiction has been inspired by political events, from the Cultural Revolution to the 1978 Democracy Wall to the Tiananmen Square protests.

None of which means that the growth of science fiction in China will slow - on the contrary, I suspect writers will simply use more care in their words. If the Science Fiction World website and the links from it are any indication, there is a lot going on.

But unlike the US, what I suspect will drive interest in science fiction in China will not be film or television, but games.

If you've ever played a game - I mean, really played it to the point where it begins to intrude on the edges of your reality - you find that it begs to be explored in other ways. Books, stories, fan fiction, illustrations, manga, and even the funky new art of machinima (stories told in the context of a game, and recorded as animated shorts - check out Red vs. Blue) grow from such immersion, and have this remarkable tendency to lead one off to explore other areas of "speculative fiction."

Watch what happens when Blizzard drops World of Starcraft II into the gaming world in the coming months. I suspect that will bump Chinese science fiction up another notch.

I don't see the next Star Trek movie making it into China, though. Here in China, the underlying messages of Trek, Star Wars, and much of the western science fiction canon would likely be considered borderline subversive.

eKarma: Have a little Virus, Pirates

Third Ring Road East
Breathing deep the inversion layer
1022 hrs.

Steven Schwankert of Village Grouch fame wrote an excellent piece for IDG (picked up here in The Washington Post) describing how Chinese fans seeking to download illegal copies of Ang Lee's excellent film "Lust, Caution" are finding on their hard drives not a copy of the film, but with software that pops a nasty little trojan virus into their systems.

There are several interesting aspects to this story.

Virus? What Virus?

First, it was apparently found and addressed by Kaspersky Lab and Rising Software well before it came up on the collective radar screens of Symantec, McAfee, and TrendMicro. One wonders why this is the case, particularly given that Symantec and McAfee tout the value of their software in part based on their global scanning for viral threats. I am especially concerned about TrendMicro, who have a huge presence in China and who make a great deal about their expertise as an "Asian" security company.

It also suggests that the malware threat in China is growing and diversifying. From dorm rooms filled with budding software engineers, to the challenges facing the country's law enforcement teams, to the quiet but rapid growth of China's cyberwar military-industrial complex, the country has become as much a haven and spawning ground for creators and distributors of Malware as the United States or any other country. This would seem to argue for greater investment by the computer security vendors in local labs who can not only find but anticipate new threats.

As an aside, it would also seem that companies like Symantec are destined to become major defense contractors. But we digress.

The Empire Strikes Back

Second, it seems that Hollywood (including the music and TV people as well as the film side of the business) and the software industry may have inadvertently discovered a way to slow online piracy and perhaps even the growth of downloaded content. All the studios - or, better yet, the MPA and the Business Software Alliance - need to do is hire a few good hackers to come up with some particularly nasty viruses and spread them around online disguised as illegitimate digital copies of random applications, movies, and music files.

Sure, the viruses would not deter the most determined or careful downloaders, and the anti-virus companies would inevitably come up with fixes. But imagine, for a moment, the fear, uncertainty, and doubt this would wreak among the less-expert. The mere possibility that these files would include viruses would be enough to drive a lot of marginal downloaders away from illegitimate downloading (and probably a few away from legit downloads as well).

Naturally I would expect clearer heads in the PR and legal departments of these organizations to prevail, ensuring that neither Hollywood nor the software industry would ever actually subsidize - or even publicly condone such practices. But you can easily imagine how such an option must tempt some people in places like Redmond and in the Black Tower.

Indeed, if the matter of digital rights management has proven anything, it has proven that Hollywood and many large software concerns believe that extremism in the defense of intellectual property is no vice, and that goodwill is readily sacrificed in that battle. If anything will keep hackers from high-powered lunches at the Ivy or the Fulton Fish market, it is the fear of court costs.

Nonetheless, it is fascinating, if not a bit disconcerting, to think that there is a commonality of interest between the creators of malware and the creators of movies.

Engineer, Engage the FUD Pump

What I do expect is that the IPR-driven industries will kick into gear a semi-coordinated propaganda effort to ensure that stories like the "Lust, Caution" become as widely known as possible, so that the threat is seen as being far larger and more serious than it really is. This costs them little, supports their goals magnificently, and enables the studios and developers to position themselves as defenders of the public interest.

Which, frankly, is the smarter way to handle it. You steal, you pay. Or, you pay, we protect.

For all the failings implicit in Hollywood's approaches to the IPR issue and digital entertainment, let's not lose sight of the most important fact - downloading illegal files is theft, theft is wrong, and anyone who does so willfully probably deserves a hard drive filled with malware.

A Blade Runner Shows His Age

In the Hutong
Digesting Subway
1830 hrs.

Director Ridley Scott has in his career delivered a body of work that includes some of my all-time favorite movies (Alien, Blade Runner, Black Hawk Down) and some movies that I enjoy as occasional guilty pleasures (Black Rain, Gladiator, Matchstick Men). He is the unapologetic master of the high-end Guy Flick. (And let's be honest - even his Thelma & Louise was just a gender-bent buddy movie.) And, of course, he directed the commercial that introduced the Apple Macintosh to the world.

So it is particularly disturbing to hear the aging auteur getting all medieval on people who watch movies on their mobile devices. In an article in today's Sydney Morning Herald, Scott is quoted from the Venice Film Festival as saying that the shift to the small screen would kill cinema.

"I'm sure we're on a losing wicket, but we're fighting technology," Scott, the force behind Alien, Thelma & Louise and Gladiator, said.
"While it has been wonderful in many aspects, it also has some big negative downsides."

I'm Not In the Business. I Am The Business.

Now, filmmakers have been pulling their hair out over technology destroying cinema since the introduction of talkies, but here we are, eight decades after he introduction of sound, sixty years since the introduction of television, and thirty years since the first VCRs began landing in homes, and each one of these "horrible" developments with their big negative downsides has only brought more opportunities to filmmakers and more revenues to Hollywood.

The ugly fact is that the movie business is in grave danger, but to blame mobile phones is the reddest of herrings.

Because, you see, the problem is not technology. It is Scott and people like him, people who really like Things the Way They Are, because Things the Way They Are have made them rich and famous and lets them make expensive movies and take home little trophies. These folks do not particularly like technology (watch Scott's movies - he hates tech), do not understand people who do, and are deep down in places they do not talk about at Malibu parties they are just plain scared of anything with a microchip.

They see all of this change happening and are smart enough to understand that it means The End of the World As They Know It. And they are terrified. Hence Ridley's mobile device fixation.

The fact is, technology will save the motion picture industry.

Would you...like to be upgraded?

The movie business is beset with problems that could fill a library. Films have become too expensive to make. The industry is structured - from finance to production to distribution - to quash all but a small number of entrepreneurs carefully screened (pardon the pun) and selected at film festivals. The business is overwhelmingly American in an increasingly global/local culture. The cinema experience is outdated, overpriced, and of little or declining relevance in much of the world.

None of this is to suggest that movies are going away. Something is, however, very wrong when people (especially young people) are spending far more money and time on other forms of entertainment, and those alternatives are growing - and fast. Cinema is losing its share of our wallet, but equally important it is losing our attention. (Hell, I'm an old guy, but I've spent more on games for my Sony PSP this year than I have on movie tickets for my entire family.)

Technology, in its different forms, is getting set to bring about a cinematic renaissance. More people can make films, make them cheaper, and get them in front of audiences faster and easier today than anytime since Mayer, Zukor, Laemmle, Cohn, Fox, Warner, and Disney showed up in L.A. and started buying orange groves. Green screens, cheap gear, and powerful software means that you don't have to spend $200 million to make an epic - you just need a script, a camera, and a Macintosh.

Starting to see what's bugging Ridley?

I have the choice of watching movies in a theater, on my big-screen TV, on my desktop, my laptop, my PSP, my iPod, or my ROKR E6. I can buy a film from a store, order from Amazon, or download from iTunes, not to mention the illegal channels. In short, I'm in control of how I decide to experience a motion picture, not the National Association of Theater Owners.

The future of Hollywood is lean, streamlined, personal, and technology based, and there are dozens if not hundreds or thousands of filmmakers who are following this road. Today they may be uploading 5 minute clips to YouTube. Tomorrow?

Do you like our owl?

Nowhere does technology offer a greater opportunity to build the film industry than right here in China, if for no other reason than there is less legacy infrastructure to stand in the way. There are other reasons, of course.

Technology substitutes for mass in China the same way it does elsewhere. Despite being the most populated country on the planet, there is a dearth of talented people both in front of the camera and, more critically, behind it. Stars may get all of the attention, but a pool of talented craftspeople - from the director down to the make up girl - is essential to sustain a traditional movie industry, and China's pool is frustratingly shallow. The good people are expensive, and their lack forms an artificial bottleneck. The technologies that substitute for talented and experienced crew are the only way forward in the near term.

Production finance is another constraint to the growth of China's film business, and the value of technology as a substitute for cash cannot be overstated. As with Hollywood, big budget flicks might get the attention, but the future will come from people who make films with a small handful of people.

If technology is important for production, it is essential for distribution, because without those small screens, the movie will probably be seen by a tiny number of people - if at all.

China has one cinema screen for every 466,000 people. (By contrast, the U.S. has one screen for every 8,000 people.) There are around 300 movies released each year in China, meaning that these films are all fighting for screen time, not just audiences. Even at the current rate of production, the only way many of these movies is going to be seen is on the small screen.

Real estate prices and personal habits in China further inveigh against the movie theater experience becoming as common as it is in the US. In short, mobile phones aren't going to kill movies in China: they - in combination with other "small screens" - are going to give them their only possible market.

A tortise lays on its back, belly baking in the sun....

Ridley Scott will celebrate his 70th birthday on November 30 of this year and look back on a 42 year career of achievement that is the envy of many others who have sat - or dreamed of sitting - in the director's chair. As he celebrates his septuagenarian status with friends and loved ones, perhaps he will pause to consider that Louis B. Mayer, the founder and longtime steward of MGM studios, found himself sidelined by Hollywood days short of his own 69th birthday. Louis B, once the most powerful studio head in a day where the studios ran the show, couldn't change fast enough when the change started happening.

Ridley won't be going away soon. He's got a film in the can and at least four projects in development. But the Hollywood that created him is going away, and if he is not prepared to accept the changes that are driving Hollywood and the world's film industry, he'd better start planning a career change.

Cross-post: Off Topic: Chris Rock, Race, and Movies

Way off topic, but I had to include it.

Elvis Mitchell and Chris Rock have a superb discussion on KCRW's The Treatment about Hollywood and race that is deeply informative and insightful without getting into angry rhetoric or politics. I learned a ton about the issue in this half-hour podcast.

Chris also talks about his new film I Think I Love My Wife, from the folks at Fox Searchlight.

Give it a listen here.

Shuttleworth Joins Anti-DRM Chorus

Africa's first astronaut and open source supporter Mark Shuttleworth, the man with the money behind Ubuntu Linux, has added his voice to the growing choir of senior executives calling for the end of digital rights management.

It is a good piece and worth the read, even if there is not much new.

Diagnosis Correct. Cure?

Mark Shuttleworth is a can-do, solutions oriented kind of guy. I greatly admire what he is doing (making Linux, formerly The OS Only A Geek Could Truly Love, into The OS that You Can Love if You Hate Windows But Can't Stomach OS X). Truth is, I've got Ubuntu running alongside OS X on my Macintosh for no better reason than to support what Shuttleworth is doing.

What I would have expected from someone with his entrepreneurial drive and technical acumen is something more than "DRM sucks - deal with it, entertainment business." I would have hoped he'd at least start to focus on possible ways for artists - and maybe a few entertainment companies - to continue making a living in a world where they're being asked up their last stitch of property protection.

No Pay, No Play

Nobody really likes DRM. Nothing pisses me off more, for example, than the fact that all of the DVDs I purchased in Australia are unreadable on my region 1 encoded computers. Note, if you will, that I (or someone) paid full retail price for every DVD I own. I'm fine with not buying pirated DVDs here in China, and I'm even okay with avoiding DVD shops here because you really never know what's legit and what isn't. But I'm pissed off that if I go to an HMV in Hong Kong or Singapore or Japan and buy legit DVDs there, I can't play them.

But I understand why those things are there. And I also understand that if you walk up to an artist or an entertainment executive and say "look, you need to throw all of your work out into the public domain, like shareware, and put everyone on the honor system to pay for it," they're going to throw you a right hook, and rightfully so.

Stop the Posturing

When people get scared - or feel threatened - the automatic reaction is to put the wagons into a circle, or create what the voortrekkers of Shuttleworth's native South Africa once called a laager. The entertainment business is scared. The wagons are in a circle, the lawyers at the ready.

What needs to happen is for somebody with vision and intelligence to step forward and start talking about transition, a way to put the entertainment industry on a path to wean them from DRM, but at the same time to come up with other stuff that lots of people will pay for around the music, television, film, and other works that are no longer protected.

There's going to be no silver bullet. It's going to be a lot of different business models in the end, but you aren't going to get from here to there by waving a scary future in the face of everyone in the entertainment industry around the world.

Great post, Mark. Nice Op-Ed, Steve Jobs. Get DOWN on your bad selves.

Now, enough with the posturing - and that goes double for the suits at the RIAA and the MPAA. It's time to start building bridges to the future.

Let's get on it.