Hollywood magic put to work in China

The first project China's Galloping Horse will work on with Digital Domain, the leading Hollywood visual effects company it acquired two months ago, will be Ender's Game, a film based on the popular American science fiction.

Digital Domain will hold a 37.5 percent of the stake in the film, investing both technology and money.

About 60 percent of the film, focusing on conflicts between humankind and aliens in the Earth's future, features special visual effects, according to Ivy Zhong, vice-chairperson of Galloping Horse.

Galloping Horse America and Mumbai-based Reliance Mediaworks acquired the company, which created visual wonder in Titanic and the Transformers series of films, for $30.2 million in September. Galloping Horse, based in Beijing, holds 70 percent and Reliance 30 percent of the financially strapped special-effects company.

Florida-based Digital Domain filed for bankruptcy protection from creditors under Chapter 11 of the federal bankruptcy code in September. The company was suffering from fierce competition in the increasingly global business, fewer film projects and rising expenditures.

Galloping Horse and Reliance acquired all of the businesses of Digital Domain, including feature film and advertising visual effects, commercial production, and studios in California and Vancouver.

The acquisition transforms Digital Domain from a service provider to content owner, which has been a "dream from the very beginning", says Digital Domain CEO Ed Ulbrich.

"We started as a service business, which is very limited and competitive," he tells China Daily. "If you look at companies like Pixar, who has transformed from a pure service provider to studio and content owner, this is really something that changes the business dramatically."

The transition brings challenges, but Ulbrich hopes the cooperation with Galloping Horse will offset them.

"It's difficult and there is risk, but you have to balance that risk with opportunities by picking the right films, distribution and creative partners."

Galloping Horse has signed a number of senior Chinese filmmakers, such as Zhang Yimou's frequent scriptwriter Liu Heng and veteran director/producer Zhang Yibai.

"Galloping Horse's assets will enable us in so many ways to access to the Chinese market," says Ulbrich.

China is widely seen to be emerging as the largest film market, with its box office growing at an annual rate of 30 percent since 2003, reaching 13 billion yuan ($2 billion) in 2011. The number of screens is expected to grow to 12,000 this year.

But the industry has suffered from the absence of a good local visual-effects company, says Ivy Zhong.

"For a long time, our filmmakers have had to find overseas special effects companies if they want to make real blockbusters," she says, adding that the joint venture with Digital Domain is a game-changer.

Galloping Horse will have the best visual artists at Digital Domain to train local talents, including some from local studios it plans to purchase. "There are many people who are smart enough in China, they will grow fast," Zhong says.

What worries her: How to transform local filmmakers' philosophy of production. While Hollywood blockbusters usually will spend 30 percent of the budget on visual effects, not all local directors want to spend that much.

"It takes time for local filmmakers to change their mind," says Zhong. "But with the combination of the world's best visual effect technology and the cost of local talents, we are very optimistic."

liuw@chinadaily.com.cn