Prominent film executives gathered in the Chinese capital on April 22 during the 14th Beijing International Film Festival (BJIFF) to examine and find solutions for the financial difficulties that the industry is currently facing.

Film executives discuss topics on film project financing and investment during a forum held at the 14th Beijing International Film Festival in Beijing, April 22, 2024. [Photo courtesy of BJIFF Organizing Committee]

Yu Junsheng, president of Beijing Radio & Television Station and vice chairman and secretary-general of the BJIFF Organizing Committee, pointed out at a BJIFF forum on investment and financing that film investment and financing are crucial and fundamental components of the film industry chain. "They are the source and the key factor in film project development and market expansion, which determine the efficiency of industry resource allocation and the level of high-quality industrial development," he said.

"The financial system determines investors' confidence. Establishing an open, transparent, fair and well-functioning investment and financing system is a challenge we need to address," noted Zhang Pimin, chairman of the China Film Foundation.

"Currently, successful movies need to have two important characteristics: they must either be really exceptional or have quality to go beyond boundaries to reach broader audiences. So, we need to exert greater effort, dare to invest in production, dare to make big films and dare to make films with unique features," said Yu Dong, chairman of Bona Film Group.

Yu also pointed out that the industry is currently facing a problem with funding reliability within the production chain. "The biggest issue in the industry in recent years is cash flow," he revealed, "Many film and television companies tie up their cash flow due to long production cycles." In response, he called on financial institutions to help the film industry recover and overcome its most significant difficulties through measures such as reducing interest rates and providing subsidized loans.

Wang Yibing, CEO of Dirty Monkey Studios, expressed that the industry's main concern in the past two years has been the "lack of money." He emphasized that helping young filmmakers gain investors' trust is crucial as well as assisting investors in managing production standards. 

As a film director, Zhang Mo asserted that "the demand is capital, and the pain point is time." In her view, while there is no shortage of scripts circulating in the market, the number of completed projects is scarce. This is mainly due to the inability of small and medium-budget films to secure financing. Zhang said that the lack of funding will lead to shorter production cycles, compromising quality and impact a healthy development of the industry. She also advocated for embracing new technologies like artificial intelligence to minimize costs without compromising content creation.

Gillian Zhao, a film producer and former president of Warner Bros. Discovery China, identified two main reasons for the current financing challenges: investors who haven't seen returns and lack of confidence among those holding funds. She suggested diversifying income sources beyond the box office, such as merchandise and theme parks. To ensure both investment safety and support directors' creativity, Zhao also highlighted the importance of shifting from high-risk single film investments to overall investments in directorial series.

Additionally, she proposed establishing a completion-guarantee mechanism with Chinese characteristics as well as setting up a third-party film-completion-guarantee policy trusted by the government.

Dai Wei, vice president of the Bank of Beijing, emphasized that film financing relies on the entire enterprise, not just individual films. He noted financial institutions' preference for reliable entities and teams to mitigate risk. He believes that only when the film and finance sectors have a more complete industry chain guarantee can they trust each other better and go further in their collaboration. During the forum, Dai Wei’s bank unveiled an innovative financial tool to offer film companies flexible and personalized financial support.

Besides dialogue between financial institutions and the film industry on potential funding resolutions, a highlight of the forum was the launch of the Beijing Film Industry Investment Fund Plan. This funding initiative covers various film companies and financial institutions and will see several upcoming projects receiving financial backing. A China film investment and financing report was also released, indicating a significant appeal in integrating cultural tourism with movies.