The Dream Defenders Story

When we first started to develop Dream Defenders, we have not much knowledge of IP creations and monetisation. The intention was simple. I wanted to save our crew as they were running out of work. I have invested what Tiny Island has saved over the years into creating the IP.

At that time, some companies were laughing at us for taking such risk without any broadcaster on board. Originally we have a Canadian co producer. It was just bad timing. During that period of time, the new Canadian policy makes it hard for them to get their grant. So eventually we have to break away from the Canadian company and move on by our self.

Back then, we were inexperience. We did not know what to do. The first 9 episodes were rejected when we first pitched to several broadcasters. We failed the Malaysian / Indonesian focus group reviews. Our Anchored US broadcaster (Asia branch office) who originally gave us a letter of intent turned us down.

I was devastated. Each episodes cost us USD$250k to made. After 9 episodes, most people would have given up. For me, it was a difficult decision. I still have confident in the team and believe we will improve as we continue to produce more episodes.

The team worked really hard. We spent time to review what could have gone wrong. When we reached the 10th episode, the team did not let me down. After episode 9, it becomes better and better. Through this process, not only we have gained tremendous knowledge in IP creations. But also in area of developments, monetisation, marketing, strategies and productions. This is possible because we have a team who believes in the same vision. Their passion drives them to kept learning and improving themselves. Eventually we have sold the series to 80 over countries. 5 platforms in the US which includes Hulu, Amazon Prime, Discovery Family, Kabillion, 3net. In Europe it was sold to Super RTL and Planeta Junior. In Asia, we were the only external IP from Asia / Singapore on DreamWorks TV Asia broadcasting across 19 countries.

Dream Defenders helped us build a studio of our dream. It becomes a mission to defend what we believe in.

When we finished producing the series, we have always hope that some day we will produce a feature based on the Dream Defenders IP. It was almost an impossible dream given the situation in Singapore.

In 2017, we finally signed a 10 IP deal with a major China player and also form a JV with a long term Thai partner to work on a trilogy for Dream Defenders targeting both the US and China market.

I know the challenges ahead is not going to be easy. It’s like driving a Toyota vs the Ferrari on the F1 track. If you keep believing and keep pushing yourself, you will eventually reach your dream.

With blessings, on a recent US trip, the Trailer, Story Concept, Artwork have been well received by several key studios in the US. This has been very encouraging. The Animatics and Layout are almost done. We hope this could be a breakthrough from Asia. Opening a new chapter and making history in the industry here. Hope Singapore will relook at the potential of this industry.

The road ahead is going to be very tough. But I am blessed with a team who believes in this dream. Who will keep fighting to defend our dream until we reach the finishing point. This is the Dream Defenders Story.

Whenever I watch this, it reminds us of our struggle and the spirit.

Keep Believing in Your Dream

In 2007, when we first started Tiny Island, we only have one simple dream. We wanted to create a commercially sustainable environment that allow us to pursue our passion in animation.

With no money and little knowledge, I have busted 4 credit cards to start this journey. I started running a night class in Animation Production by renting a classroom from a local polytechnic. My first batch of graduates joined us in production who eventually become the departmental head of the company. At that time, I thought we will only last for 6 months. With blessings, from a 2000 sqft office, we grew to a 10,000 sqft office after a year. From a few freelancers to eventually a 120 man team.

For the last 10 years, it has been a roller coaster ride. It has been tough. We were on our own by bootstrapping. Not taking a single cent were taken from any investor. When the crew run out of job, I decided to create jobs for ourselves by investing all our years of savings of USD$5.2M to create our IP Dream Defenders. Many people thought we were insane. What has been seen as a mistake has eventually become a global IP that has been sold to 80 over countries. 5 platforms in the US. And eventually gotten DreamWorks to be our distributor. Now Dream Defenders is heading to China, becoming our first feature film.

A few years back, our local industry climate started to change. We were hit badly by 2 crisis that almost wipe us out entirely.  I still recall that one of my ex staff told me to close down the company and find a job.

At times, I felt hopeless seeing some of our core people leaving one after another. I am forever grateful for those who stayed and fought really hard with the remaining team. Without this persistence, we will never able to turn the table around. Looking at the video brings back so many great memories and it wasn’t easy to hold back the tears.

The journey we have gone through isn’t about fame and money. It’s about a team of individuals coming together, going through thick and thin to build a dream they believe in. Many of us started as fresh grad, later got married, have kids and we grew old together. Tiny Island is all about this family culture we have built. Its this spirit that has made the company special which will last a life time. And all I hope for is a better living for our crew in the future.

For those who has been with us, I sincerely thank you for being part of this wonderful memory and journey. It’s you that has brought us to where we are. Without your support, we will never reach this 10th year.

2018 opens a new chapter. A new future. A new beginning. With the new passionate individuals joining us, together I know that we are going to make the difference.

From the Bottom of My Heart.  A Big Thank you to those who has supported us.
Happy New Year 2018.

China Market Intelligence on Animated Film 2017

I have started going to China since Sept 2015. Since then, I have made many good friends and learnt a lot about their market. So far, I have been to Hunan, Shanghai, Beijing, Shenzhen, Qingdao, Hangzhou.

This is what I learnt from my recent trips to China. Hope you find it useful.

Many investors feel safer to target at pre school content for feature film. This is rather different as compared to US.

https://entrepreneurshipinanimation.wordpress.com/2015/05/30/in-china-should-i-launch-the-animated-tv-series-or-feature-film-first/

Most of these films are of lower quality and lower budget. It is tapping on their tv series publicity.

Age group 6 to 12 is not an easy group to target as most kids are busy studying like in Korea.

In China, they do have an interesting youth market where this group is not easy to manage in overseas. The youth market is targeted at 18 to 25 age group. Your IP should probably involve more mature genre, life style, music and computer games market etc.

Example 1: 18 to 25 Age Group
Monkey King: Hero is back – Box Office: USD$153M

Example 2: 18 to 25 Age Group
Big Fish & Begonia – Box Office: USD$85,023,628M

One unusual thing that I have observed in China. Globally I thought the stereoscopic 3d market is dead. But there still seems to be a demand in Chinese Cinema. Until when, I do not know. For now, it still seems quite popular. Every movie must be in 3d.

SAFE BUDGET FOR ANIMATED FILMS
If you are targeting ONLY the China box office and want to have a better chance to recoup, the advise I have gotten is to make sure the budget do not go beyond USD$2M. Many companies who has a good TV series running in China will normally work at this budget. However, do not expect the quality like PIXAR or Dreamworks film. It is more like watching the TV Series on a big screen.

For those with budget close to USD$7M, they are probably targeting at higher quality and aiming for a box office at least close to 60M. (Last 2 years seems to get harder)

Those who dare to push the budget at 10M need to have past track record of box office beyond 100M like Monkey King: Hero is back. USD$153M

Current there are about 100 animated films in China in production or raising funds. They are paying a lot of attention to IP and globalization these days. How many will eventually make it to the cinema is still a question. Since Monkey King: Hero has hit USD$153M. Many companies are trying their luck rolling out more CG Movies. Its like the initial stage in the US when Pixar and Dreamworks have started the trend of rolling 2 CG movies a year. But in China, it is a lot more. I supposed eventually the bubble will burst. That is why opportunities is in the next 2 to 3 years.

POTENTIAL BOX OFFICE
USD$40M to USD$60M is considered to be decent box office. Anything below this is not too good.

Potential box office in China these days is close to US. Which is close to USD$400M.

In 2016 – There seems to be a chance to hit 40M to 60M
In 2017 – The numbers seems to drop in this year. Average only about 6M for Animated Films.

CHINA ANIMATED FILM PERFORMANCE AT THE CHINESE BOX OFFICE
These films have a good fan based because of their TV series.
Hence distributor are more keen to distribute them.
(Reference: http://www.boxofficemojo.com/intl/china/yearly/?yr=2017&p=.htm)

(2017)
Boonie Bears: Entangled Worlds – Box Office $76,630,780

GG Bond: Guarding – Box Office $6,649,192

FOREIGN ANIMATED FILM PERFORMANCE AT THE CHINESE BOX OFFICE

Foreign Animated Films (Normally has huge marketing dollar)
(Reference: http://www.boxofficemojo.com/intl/china/yearly/?yr=2016&p=.htm)

(2016)
Zootopia – Box Office USD$235,591,257
Kung Fu Panda 3 – Box Office USD$154,304,371
The Angry Bird Movie – Box Office USD$75,872.971
Ice Age: Collision Course – Box Office USD$66,059,140
(Reference: http://www.boxofficemojo.com/intl/china/yearly/?yr=2017&p=.htm)

(2017)
Sing – Box Office $31,379,920
The LEGO Batman Movie – Box Office $6,372,757
Kubo and the Two Strings – Box Office $6,114,589

Recently there is a lot of interest in Anime content. Tencent is investing a lot in such IP.
(Reference:http://www.boxofficemojo.com/movies/?page=intl&country=CH&id=yourname.htm)

Your Name did very well in China – Box Office $83,678,210

Survival Skills at China Animation Trade Show

At most western animation trade shows, you can arrange meetings in advance. At a recent China animation trade show I went to (one of the largest animation trade show, outsourcing & investment event for IP – tv/film, animation, games, comics, toys etc), I realise in China, they do not seems to have a practice of arranging meetings in advance at animation trade show.

It wasn’t easy for someone new like me who do not know anyone there. It’s like a fan hunting for your superstar. (The top executive from an important organization) But the best part of the game is you do not know who is the superstar. So you need to do your research. Find out which talk your superstar is attending. It could be a press conference of an animated series they have invested in. During such an event, pay attention to the host when he made an introduction to the VIP at the event. Normally the VIPs sit in front. They are part of the evaluation panelist for project being pitched. The host will announced who the VIP are. Once the event is over, you need to go straight to him asap as many will do the same. And when you meet the VIP. Getting the namecard is not enough. You need to scan his WeChat account so that you can get in touch with the top executive from these big companies. You have to do this as email is not sufficient to reach them. They hardly read their emails. At the event, many will be there, crowding around the VIP.  It’s like you are a fan hunting for the autograph of the superstar.

Another opportunity is during networking party. Walk around. See if you can hijack into others conversation. (Sorry. I know it sounds horrible. Seems like this is the mode of survival there at the market)

At the one to one business matching, I was told that Chinese companies do not like to have a schedule of appointments every 30 mins like what we used to do in Western market. So it is really like a market place. You walk from table to table to look for the buyer. (They will put a badge on the table) You do not know which company (buyer) is there at the table before hand. And the buyer is different in the morning and afternoon. So you need to walk around. When you see a good buyer, you need to circle around the table like a vulture. ha ha Once you see a vacancy, put your yourself on the seat immediately ha ha. Else someone else would.

I know it all sounds crazy. Its a world of cowboy. If you are shy, you might end up going home empty-handed. I felt uneasy at first. But there is no choice. In order to survive, one must seize every opportunity. Once you get the attention and interest, do your best as this is the only chance to impress them. I guess once you have established your connections, you do not need to do all these in future. Its all about connections and relationships.

Coming to China is really a good training for survival.

 

Co Productions with China

Something I learnt from my recent trip. If a country has a co-production treaty with China, the film made may be considered as China/Domestic film. Hence not restricted by the foreign films quota of 34 films a year. In order to qualify for the co-production treaty, 50% of the film investment and production must involve a China company。The topic of the film must have elements of China. And there are a couple more things.

So far, China has entered into film co-production agreements with 14 countries
http://www.cfcc-film.com.cn/policeg/content/id/2.html

(Singapore and China do have this co-production treaty.)

China Film Co-Production Corporation (CFCC)

Founded in 1979, China Film Co-Production Corporation (CFCC) is a special organization solely authorized by the State Administration of Press, Publication, Radio, Film and Television to administer affairs relating to Chinese-foreign film co-productions. We are always ready to provide filmmakers wishing to film in mainland China with all-round information related to co-production policies, industry landscape and co-production resources. We are committed to deal with any inquiry regarding filming in mainland China in a timely, authoritative manner.

As administrator and supporter of international co-production, we encourage domestic filmmakers to film overseas, and also support overseas filmmakers to film in China. Throughout the past decades, we have been dedicated to bringing together domestic and overseas film organizations and production houses, and enjoyed working with internationally established filmmakers including Steven Spielberg, Bernardo Bertolucci, Jean Jacques Annaud, John Woo, Wong Karwai, Ang Lee, Chen Kaige, Zhang Yimou and Feng Xiaogang, among many others. We are proud to have made our contributions to the growth of international co-production and the drive of Chinese cinema to go global.

KEY ROLES

Our major responsibility is to assess and approve international co-production applications, conduct reviews of completed co-production films, supervise the performance of co-production agreement between the co-producing parties, provide relevant services, and assist in negotiations of governmental agreement on film co-production between China and other countries. The precise roles are as follows:

1) Read and assess proposed co-production scripts;

2) Examine applying documents from co-producing parties;

3) Review completed co-production films;

4) Deal with inquiry regarding industry policies, rules and regulations and co-production procedures;

5) Bridge domestic and overseas co-producers;

6) Facilitate entry visas for foreign crews participating in co-productions;

7) Facilitate customs clearance for filming equipment, film stocks and materials to be used in co-productions;

8) Process applications and provide related services for overseas crews to shoot short films in Mainland China.

 

 

Tax Issues for Servicing Work

More and more China studios are shifting from providing outsource services to foreign companies to creating their own IP. Based on our recent observations, there seems to be more and more China studios looking at outsourcing their work.

In fact, due to the weak euros and also the decline of western economy, we might see growing opportunities coming from China than the West in next few years.

One thing to take note about getting service work from China is withholding tax.  In the past, many countries outsource their work to China tapping on its low labour cost. However things are changing now. Chinese Companies have started to look at outsourcing their work as labour cost is raising in Beijing and Shanghai. This is all new. No one exactly know how much withholding tax they must hold back if they were to outsource their work to foreign companies. So on the safe side, some will just hold back the maximum. Which is 17%. This is based on our own experience. E.g if your client ask you to do a job at $1000. They might withhold up to 17%. Meaning they might eventually pay you only $830.

If the value is high, you might want to seek a tax advisor for help. Singapore has many companies in Shanghai. Hence many of them are familiar with the tax issue. IE has introduced me to the following company who has served many Singapore companies in China. They have offices in various part of China. This is important as different province has a slight different tax regulations. http://www.sbasf.com/

What they will do is to help you look through your Chinese Contract. Advise you how to word it to protect yourself and also in a way easier for them to negotiate with the China Tax Department. You need to prove that the service work is not executed from China. From there, the tax consultant will discuss with the China tax department to lock down a rate. For my case, they help me to bring down from 17% to 6%. This is a huge saving.

Once the tax rate has been locked down, you can show the documentation to your client. So that your client cannot hold you at e.g 17%. I am not an expert in this. I can only share with you what we have gone through. Hope it helps you too.

Market Orientation for Chinese Animation Industry

This is a very interesting place in Beijing where there are many feature film, games and animation companies based here. I was told there are quite a number of places like this in Beijing.

The following cities have more companies in the Animation, VFX and Games.
Beijing, Shanghai, GuangZhou and ShenZhen.

BEIJING
In terms of investment, IP creations, feature films and computer games, Beijing seems to be leading. There are some in Shanghai too. Many head office is based in Beijing. Most of the film companies are also based in Beijing.

SHANGHAI
Shanghai seems to have more post houses that provide services for TV commercials.
Here are some interesting articles with regards to the TVC market

http://shpplus.com/insight/commercial-postproduction-in-china-part-one-landscape/
http://shpplus.com/insight/commercial-postproduction-in-china-part-two-the-china-schedule/
http://shpplus.com/insight/commercial-postproduction-in-china-part-three-talent-crisis/

GUANGZHOU & SHENZHEN
Guang Zhou and Sheng Zhen have more outsourcing services and Animated TV Series facilities.

COST OF LIVING
Beijing and Shanghai cost of living is very high as compared to other cities. In fact, their rental cost is quite close to Singapore.

STARTING SALARY
In general,  a starting salary in Beijing and Shanghai could be anything between 4000rmb to 5000rmb (S$800 to S$1000)

Other less developed cities has a starting pay of around 3000rmb. (S$600)

The market is changing tremendously. From servicing foreign companies, now more and more are looking at IP creations and globalisation. In fact, China companies are looking at outsourcing their work.

 

Outsourcing work coming from China

The CICAF/IABC event in Hang Zhou has several unique activities where we have never seen it in other overseas trade events. This particular conference focus in outsourcing. Company who wants to outsource their work will present the specification, concept and materials. Attendees are companies who are interested to provide their services. There seems to be a lot of work available in China now. There are 11 companies who want to outsource their work. Each has 3 to 4 projects. I was told that there are about 100 animated films in production now. The seminar is good for companies looking for work. In the west, it seems to be harder and harder to get work. Maybe it’s time to look east.

The only challenge for foreign companies is you have to figure out how to deal with the withholding taxes and understanding their pipeline etc.

Making Connection in China

In most market, once I gotten the name card of that important person, I will be overjoyed. Thinking I have now gotten the person contact and I can start communicating.

In China, it is very different. You must get connected with that person via WeChat. (Very often you offer to let him scan your WeChat account or you scan his) That represents one step closer. I didn’t realise this initially and lost some good contacts. This is very important.  In other markets, we seldom do that as sometimes it feels like you are going into personal space. But in China, it is different. Its all about relationship.

For email, I realise many Chinese executive seldom check it. Or your Gmail might be blocked by their firewall or their company email at times cannot send or receive email outside China. Hence WeChat is crucial.

At times if that person do not offer to connect you via WeChat account. It almost feel like your relationship hasn’t reach the close level yet. Ha ha.

The Question of Being the First Mover

A member of our group feedback to me about his thoughts on being the first mover in business. ” In businesses, first mover advantage often proves otherwise. The first one to do something usually fails. It’s more of a trap, really.

Usually, the followers observe and see what works and take out what doesn’t, then gain critical mass and soon people forget about the first mover while crowning the first one to gain critical mass. 2 cents.”

This is my answer below:
“You are right. I have another approach to this. I can only speak for my own experience.

When I said first mover, I don’t mean that you blindly go into it. One still need to evaluate the risk. My objective for being the first mover is for branding, publicity and awareness of our company. (Which is very important since we are a small company.) It is almost like jumping the queue. From no one knowing who you are to the global players pay attention to what you do.

A little case study of what we did. When I first discovered there is strong interest in stereoscopic 3D content, I start to evaluate if I should make our series into stereoscopic 3D format. There was some risk as the format at that time was not determined. Hence not many producers want to move into it.

I did some detail evaluation of the cost, the risk, the economical and technical viability before making the decision. I was weighting between money invested and potential returns.

With blessings, eventually it pays off.  With this decision, we manage to penetrate US by selling our Stereoscopic 3d series to the first 3d channel.  After we have sold our series to US, we started to create awareness. Today, Dream Defenders have sold to 5 platforms in the US in total. That deal also leads to another one with Cartoon Network where we get the chance to work on Award Winning Ben 10 Destroy All Aliens in normal format and Stereoscopic 3d format.

Now 3DTV is dead. So was it a wrong decision? Not exactly. We have achieved what we needed above which is creating awareness for the company and help us penetrate US. On top of that, it creates opportunities for some outsource projects for us.

After that we move on to work auto stereoscopic 3d content. (Stereoscopic 3d with no glasses) Then AR and now VR. Next will be MR. At every stage, the knowledge gained actually brought us forward to higher grounds.

Our current VR venture has given us an advantage. We are not just doing VR. Something more of a breakthrough that solves the current VR commercial viability issues. In the US, I have gotten many major players excited. So we will see where it lead us to next.

In conclusion, my main reason for being first mover is meant to create publicity, branding and awareness for our company.  I must emphasize that you need to evaluate the risk. In business, there is always risk.  With this move, Tiny Island has now known to be innovative and forefront; always ahead of the curve in the global market. This is useful for our future growth in consultation business.”