Uniquely defined as the leader in linking Hollywood and Asia in producing high-end quality feature films with top-notch talent attached. Belltower paves the road into the fastest growing film market in the world, China. With its first feature Little Treasure to star Academy Award winner Forest Whitaker, Belltower is poised to become the “go to” company for development and production of international films which appeal to a world market, not only in North America. Belltower’s strategic partners and alliances in China allows the greatest exposure and access to a mass audience of 1.2 billion while utilizing cost-effective budgeting alongside the most experienced production crews within the country. Any story that can be told with a global appeal, Belltower develops the screenplays from inception to delivery with critically acclaimed writers, emerging/auteur directors and prolific actors. The company creates intellectual film properties that allow revenue streams averaging 15 years from theatrical distribution, DVD/video, pay TV, broadcast TV, airlines, and web/internet for its shareholders and project investors.
Team: Belltower is headed up by film producer Nina Yang with over fifteen years in the entertainment industry. Nina spent the last ten years between Hollywood and China in film and television, and has garnered strong business and government relations within the region to effectively produce and distribute content to the ever growing Chinese economy. She balances art and commerce to assure the sustainability and shelf life of each product produced by Belltower and continues to build a well-rounded film slate with modest and realistic budgets with her finance partner Donald K. Bell.
WSR: Good day from Wall Street. This is Jack Marks, Senior Analyst with The Wall Street Reporter and today I’m speaking with Nina Yang, she’s the CEO of Belltower Entertainment, stock symbol is BTOW trading over the counter. Belltower is a film production company that’s focused on publishing films, which have an international appeal with a specific focus on the Chinese domestic market. Nina, thank you for joining us.
Nina Yang: Hi Jack. It’s very nice to talk to you.
WSR: Why don’t we start off with, maybe if you can share with our investor audience Belltower’s unique niche in the film entertainment industry?
Nina Yang: Belltower was set up with a unique goal of linking the Hollywood film market with the Asia entertainment market. As we know, Hollywood is the Number 1 producer of entertainment media, film, television, even things in the new platform of content and since Hollywood is the Number 1 exporter of entertainment, we are linking it to the fastest growing film entertainment market, which is China. China’s entertainment film market has been growing at 67% a year. It is the only market in the world that is able to do that in this economy. So, we set up the company –
WSR: What was that number again?
Nina Yang: 67% just as of last year, the growth of their film entertainment market. With this year’s launch of Avatar in China earlier this year, I’m sure the numbers are going to go up even further. That’s just the buying power of entertainment media in China. So, Belltower is really capitalizing on the relationship that we have in the Chinese market to work on international films between Hollywood and China and that is our special niche that we are focused on.
WSR: It wasn’t clear if it was 57% or 67%, but either way that’s a pretty impressive number for what would be considered a mature industry. Is that in theaters or is that DVD, where are those revenues coming from?
Nina Yang: That’s coming from actual box office, theatrical. What has transpired for the last ten years in the Chinese film entertainment market is we had Crouching Tiger, Hidden Dragon ten years ago that was made for $15 million and grossed $209 million worldwide. In China alone, it grossed like over $70 million so that was a breakthrough and ever since that film, the Chinese market started opening up, but not till about five years ago where it truly opened up to international collaborations. So, we are positioned to be there in the beginning of all where now the US productions are shooting there just like us and to be able to capitalize with the Chinese government and the theatrical owners there on actual international films for distribution. We are talking about the 67% growth that’s purely from their box office sales. Another thing that has been happening in the Chinese market is that there is a major growth in multiplexes, cinemas that’s been building on a weekly basis. So, if you think about it —
WSR: I want to ask you in terms of some of the numbers you mentioned, what are the ticket prices for getting into a theatre?
Nina Yang: The ticket prices depend on the different cities and the province. They range from $3 to $5, which is considered pretty expensive for some of the smaller cities. But what’s amazing is Avatar was able to charge up to $30 a ticket for their 3D version and people lined up and waited for days to get pre-sale tickets two weeks ahead, three weeks ahead, or a month ahead and they were paying $30 per ticket.
WSR: What are some of the cultural differences? I understand like you have censorship issues with the governments, I guess they are looking for stuff that’s more family-friendly. What are the types of films that really work in that market?
Nina Yang: That’s a really good point. The Chinese government has a say in what will be distributed and they do favor romantic comedies, family pictures, some action films. The only thing they avoid is horror films. So, we think that has a political spin on it. So, those are the two subject genres that we avoid, horror or political, but everything else is pretty much open. We work with the Chinese film group in the very beginning of a collaboration what we call a co-production and they would give us notes on our script and development process and that way they are a true partner from the very beginning. So, we are very aware of anything that has to do with censorship issues, but like I said it’s usually pertaining to horror or political stories, those aren’t really made for international production. International productions for example, the most recent large studio collaboration would be the remake of the Karate Kid. So, that was like $80 million film produced by Sony and it’s fully collaborated with the Chinese government and the story is revised to work with Jackie Chan as the star of the movie with Will Smith’s son. So, that’s like a huge example of a recent collaboration.
WSR: So, I guess working with that, the films that you’re doing, they are going to have a large mix of Chinese actors who have significant box office draw in that domestic market combined with the US actors, is that right?
Nina Yang: Our goal at Belltower, what differentiates us from a studio film is one, we can make a film at 10% of what a studio will cost to make a movie. So, instead of being an $80 million film, Belltower is able to deliver a picture that has an A-list star at $8 million. So, what we do is we package in-house; we create a script, when we find a screen playback that we love, we develop it and we option the rights. Once we option the rights, we hire a director that has value in the US market or the international market. Once we get the director on, we go to a star that would be perfect for the project. When we go to these stars at these different agencies, we go to them with a different perspective going in and saying we’re not a studio film, I know our budget is a tenth of its cost, but read the story, tell us if it compels you. So, that’s the approach. We’ve been fortunate where an actor comes in and says, “Gosh, this is a great script, I understand it’s an independent film, but I would love to do a film in China,” and that’s our angle. We go in, we make that movie for a tenth of the cost of a studio, and with that modest budget we are able to do what we call presales, which is foreign estimates of 200 different countries that would buy your film by territory. So, by that alone, we are able to make up more than the budget itself and then we still have the North American distribution on top of it. So, we are in good shape already before the film even starts.
WSR: To be clear, you’re really focused on shooting the films in China so they are all on location in China.
Nina Yang: Yes, we do. We have a well-rounded film slate. Our focus is China to ensure that we will have one movie there every 18 months, but in between we would like to also produce a movie here in the United States to take advantage of the tax incentives that are offered in different states like in Pennsylvania or Louisiana or New Mexico. Those states are offering good incentives that make us a well-rounded company. So, we will continue to produce movies here in the US, but at the same time ensure that we always have a foothold in the Chinese market by producing one movie there every 12 months to 18 months.
WSR: Why don’t we talk about some of your current projects and what stage of production they’re at?
Nina Yang: Currently, our project that’s in pre-production is called Little Treasure. Little Treasure is about a bi-racial couple that goes to China to try to adopt a kid and then during the process of heartache, racism, prejudice, and a lot of humor; they meet a street kid that actually changes their life. So, instead of adopting a baby out of the orphanage, they meet a street kid that they fall in love with. We’ve been so fortunate to have Forest Whitaker, Academy Award winner for The Last King of Scotland, he’s attached to Star as the lead of Little Treasure. We are in current pre-production and we plan to start principal photography, which means the start date of the movie, on May 6 and we will be shooting in China for six weeks and that’s our current film.
WSR: So, you’re going to start shooting May 6 and do you have a distribution lined up for the film?
Nina Yang: Currently we have a foreign distributor lined for it, which gave us a minimum estimate of $12 million worldwide sales and that’s a very, very conservative number that they gave us, the company’s cost on bridge. That’s a minimum number without seeing any footage yet. As soon as we start the cameras, once things start rolling, once the distributor sees footage, she’ll be able to increase that number by twofold to threefold. She will be at The Cannes Film Festival this year in the first part of May and we will be sending over footage from China to her so her distributors will be able to increase the numbers for the sale. That’s the distribution we have currently attached. William Morris Endeavor, which is one of the big three agencies here in Hollywood, is representing the film for North America. So, we are in.
WSR: Are you serious?
Nina Yang: Yes, this is a serious deal.
WSR: So, you have William Morris Endeavor in North American distribution. Who are some of the other stars in the film and what’s their sort of recent box office success?
Nina Yang: The elements for the film is very interesting. Besides Forest Whitaker, we have a very veteran legendary cinematographer who is the Director of Photography for our movie whose name is Rey Villalobos. He was a cinematographer for Risky Business, A Bronx Tale, American Me; he has done some amazing legendary films so he is part of the element in the package. We have Edward James Olmos who is the Creative Consultant for us on this project and he himself has quite an influence on the Latino market in North America so he is our Creative Consultant. Then we have an actress named Vivian Wu who is our lead actress and she is currently in China, just finished a movie with Wayne Wang, and she is a very respected Chinese actress who speaks English fluently and so she is our lead. Our director is Michael Olmos. Michael Olmos is Edward James Olmos’ son, but the interesting part is Michael is actually adopted, he is from Jamaica so this story falls very close to his heart.
WSR: What are some of the box office estimates that you have for this project and how would that impact Belltower in terms of what would the company’s share of any of those profits be?
Nina Yang: Let me go over the basic structure. The budget of this film is at a modest $6.8 million, very modest; most people get shocked at how can you do a movie for that low a price with an A-list star. We can because shooting $6.8 million in China is equivalent to about $20 million film in the US. So, going on $6.8 million budget, how we recoup and how our investors see their return is one, by foreign sales. Foreign sales alone right now is at $12 million. Once we start selling the territory back at The Cannes Film Festival and months thereafter, our investors will see the money rolling in from the territory sales of the picture. So, within six months we will able to see the full budget returned already and this is before it’s even released in the theaters around the world and in North America. During this process, we also sell to North America. For example, if a signature division of a studio comes in and says we’ll take on North America, this is of course through William Morris Endeavor, and they will give you a minimum guarantee of 2,000 screens and $2 million upfront as an example and what that does includes right into the waterfall of recoupment of its cost to film, which is the $6.8 million. So, by then say we sold $12 million and another $2 million in North America, we are already at $14 million of recoupment on a $6.8 million film. Once it goes into the box office, so our estimate for low-end box office for North America we’re thinking $12 million, $15 million box office at the low-end, high-end $45 million. So, they’re pretty modest numbers to regular folks out there growing $1 million. But think about it, it’s a $6.8 million film; if we hit $45 million, we are really in great shape not only have we recouped our costs. After paying distribution fees and bonuses to our actor and a little bit of bonus to our director, at the end of the day Belltower is going to be able to retain about 30% to 35% of the profit and that’s where it goes to our shareholders. $45 million, if it’s a breakout hit; the number can double or triple. Also, I’m talking about 45 million for box office, it doesn’t account for DVD sales, pay TV, on-demand; all those ancillary sales that could be less of the box office.
WSR: What are some of the other projects that you have? I know you have a whole slate of film in the works.
Nina Yang: Yes, we do. We have two more projects actually at this point. We continue to develop more projects and bring them on as we discover them and need talent. The second project we have is called Dance the Green. Dance the Green is a true story based on golf legend Moe Norman, the script is beautiful and it’s written by Barry Morrow who won an Academy Award for Rainman, and that project is we’re fast tracking it for this fall. We have Giovanni Ribisi attached, he had a role in Avatar and he such a fantastic actor so he’s attached to star. That film is to be shot in Pittsburgh, Pennsylvania and we have an equity party that came in with a commitment upfront for the film and we’re also going to be able to take advantage of the Pennsylvania tax incentive and also work with Mogul Mind Studios in Pittsburgh to produce the film. So, that’s our second film and it’s pretty much about a golf legend who was ostracized from the PGA in the ’60s because he was a little odd, but he was one of the best players that came out of golf that was what my director calls a beautiful loser.
WSR: This is like Rainman on the golf course.
Nina Yang: Correct. Yes, Moe Norman created the most amazing single plane swing and he has been called by Tiger Woods that there are only two players that truly owned their swings and one is Ben Hogan and the other is Moe Norman. So, the story is about Moe Norman and that’s our next film, that budget is at $10 million, very modest once again $10 million all-in budget and I think 5% from Pennsylvania.
WSR: You have that funded right now, yes?
Nina Yang: Yes, right now we have set it out for September of this year. The process of funding is very interesting. When people say do you have that fully funded, it’s actually a work in process because what happens is you get different pieces of investment into a film. For example for $10 million film, nobody goes in to fully finance the $10 million because we want to take advantage of soft monies in the country or internationally and also some gap as well as some foreign territories that could be presold. So, on $10 million budget we can have for example $4 million of cash equity that’s committed to it and then we can sell another $2 million from foreign presales, maybe sell off England or Japan and Canada, and then you get another $2 million to $2.5 million from the state tax incentive which is what we call soft money and then you gap the rest like the 15% from the bank that will come in for a loan when they see that you have 85% of your film packaged. So, that’s how we fund an independent film and I hope that makes sense, but that’s just a gist of it. So, that’s our second movie and we are fast tracking it. As we are taking care of Little Treasure currently, we have a team that’s been taking care of Dance the Green as the next picture. So far, the company has optioned a book called Smokescreen. Smokescreen is a true story about a documentary filmmaker in the ’70s who was searching for money to make his documentary film and ended up becoming the Number 1 marijuana smuggler between South America and the US. It’s an action adventure movie about a guy Allen Long and the book is written by Robert Sabbag and it was the Number 1 best seller in the time so that’s our third movie. What we did was we optioned the rights to the book, what we call literary rights and life rights, and hired a screenwriter and the screenwriter comes on to adapt the book into a screenplay and that’s our third project. So, those are the three projects right now we have under Belltower. We continue to discover new projects because as we are moving forward with projects, a lot of talent; writers, directors, agents; come to us saying you guys should take a look at this project so we will be able to fulfill more into the slate as we move forward with our current projects.
WSR: It looks like you have some really good stories.
Nina Yang: Yes, we have some great stories and really pooling resources. I’ve been in the entertainment business for about 15 years and the film business, 12 and part of those in the music business; but in the 12 years of working with different talents and agents and reps, we are pooling every resource we have so we can attract A-list writers, actors, directors to these modest budgeted films and that’s our advantage.
WSR: Why don’t we talk about like I mean your background and also some of the key members of the Belltower team?
Nina Yang: My background is I actually started in the music business in Asia out there in Taiwan in ’95 and ever since, I worked out there for a few years, came back, and entered the film business. Went to USC and studied film and entertainment management and stayed at Warner Brothers for a little bit of time to understand the corporate world. Thereafter I joined a Hong Kong team of filmmakers, a guy named Stanley Tong with the Jackie Chan Group. So, I actually came from action films and joined them for several years. The films that they’re known for are Rumble in the Bronx, First Strike, Super Cop; so I —
WSR: Worked on all those Jackie Chan movies.
Nina Yang: Yes, with this director named Stanley Tong and learned the production side of the business on how to put a film together, what not to do on a production, and what to do on a production. So, I actually spent several years out in Shanghai with this team from ’99 to 2002 to work on a couple of action projects. So, that’s my background and then later on started working with a fund out of Taiwan, the Taiwan government, and government institutions that funded US crossover films. At that time the films were a lot smaller, even more modest budgets than what we’re talking about, and I did that for several years and traveled between Asia and here between 2002 and 2007. So, that’s why the focus of Asia I think is quite important and when the growth of it and the emerging market of China came into play, I felt it was really important for Belltower to get involved. So Belltower, we started in 2008 and with a partner named Donald Bell. Donald came from the stock market and helped me structure the business side of it and what I do is structure the actual film side of it, the creative side and help them financing works and what works best where investors actually make their money back. You may hear of stories of investors going into film and not knowing what had happened. So, for us what we do is we make it very clear to our investors that we do modest budgets and this is the way you’re going to make your money back. We own the screen rights to these films and these films continue to generate revenues for the lifespan of the film, which is about 15 years. So, that’s my background so about 12 full years in the film business alone and coming from the action film world.
WSR: How are you taking advantage or how are you going to position Belltower to capitalize on some of these new digital distribution platforms that are coming out like we’ve seen Netflix as the broad band distribution? There is a lot of real new platforms emerging and also like social medias being used to really drive audiences to film. What kind of opportunities do you see in those areas?
Nina Yang: I think there are huge opportunities in those areas. What’s interesting is prior to Belltower, I actually worked on two Internet platform content series with Paramount Digital and once again it ties into China because of that market being extremely wired. What we do is we bring in sponsors from different territories that are interested in our film content. For example for Little Treasure, I work with the local advertising companies that are actually multinationals that are localized in China, they’ll come in and say, “Listen, China Mobile is interested in working with you guys on this project, how do we tie it in into the social networks in China and then how do we tie it back here?” So, those are really great opportunities of not only products that are willing to put in some funds towards the movie, but what they do is they market your film through the different platforms. For example, Facebook is really popular here, but in China it’s actually MySpace that’s bigger or this varies from country to country. So, we do work with local marketing communication companies on taking advantage of these opportunities and it’s opened up a wide market in bringing in additional revenues especially through sponsorship money. For example imagine China mobile wants to get into an international film, they’ll come in because they are a local Chinese company; but if they come into Little Treasure, its an international film, they’ll be seen worldwide. So, that’s an example of taking advantage of the multimedia platform of crossing over. Also, someone like Forest Whitaker is extremely interested in working with the multimedia platforms, the social networks, what’s going on in China, how do you utilize the film to work with the youth there, how do we appeal to them. So, we’ve definitely explored that. It does take a separate decision to really tap into the multimedia platform, but Belltower has its eyes on it and we are integrating it with our films.
WSR: What is the big picture for Belltower like where do you see your company three years from now? What will Belltower look like?
Nina Yang: The big picture for the company is to build its library of films because our library will be worth tenfold within a few years. So, the goal is to continue creating content that therefore Belltower owns the copyright, in three years to have ten movies under our belt, that ten movies will be considered a library where they could be packaged and resold to additional platforms maybe in three to five years, I think there is going to be a movie distribution platform on the Internet that’s easier to use than Netflix or Blockbuster. So, those are all the different outlets that will come about in the near future and owning a library for the company will create new revenue streams for us. As we were saying earlier, each film has a shelf life of average of 15 years of generating income.
WSR: So, you’re being relatively conservative with a focus of doing three films a year considering that you already have two that are scheduled to start filming in the next couple of months.
Nina Yang: Yes, we are being conservative because we want to be realistic. Unless our company expands our immediate team that we can take on more pictures per year then we will be able to increase those numbers, but we’ll be realistic and also be very hands on. It’s very easy for a film company to dabble in 30 to 50 movies and say we have a slate of all that, but when you dabble in it you become passive investors. That person’s film or whoever’s film that comes to you and you dabble in it by putting in 10% of their budget, 15%, 20%, but you don’t end up owning the copyright. You can say that your company has been involved in 20 movies, but how many do you really own the copyright. So, that’s not the way we want to structure the company. We want to structure where we own the property, we are hands on, and we have control of the development process all the way through distribution.
WSR: What are some of the key milestones that investors can look forward to over the next six or 12 months? What kind of news events? What are some of the things that people should look out for?
Nina Yang: They look out for one, we achieved a successful movie in the Chinese market, proven that model to people that it can work in China; many people are afraid of it, but we will pave the way to say it can work, we can do a modest film in China and make money from not only that market, but the world market and create strategic alliance with the Chinese market, between Hollywood and China. We’ll be able to have proven that model and continue to go on that path where we’ll be a go to a company when people want to produce movies out in China, which we’ve already become because we have actually several projects available to us as the Chinese element English language film. So, that’s one thing to look at and also our investors will be able to see that these sales numbers are real. They will be coming in and through the six months, they’ll see the income from the sales of the film and we’ll be able to prove that on paper for our investors to see that. They’ll see that we’ll be in our second production this fall and see how we package that film with a US tax incentive within the United States. So, they will be able to see how the company works on an international level and also on a North American level. So, those are short-term milestones and then long term is that we continue on this way to produce quality films with A-list stars at modest budgets.
WSR: Nina, thank you for joining us and we look forward to following the company’s story over the next months as you guys develop.
Nina Yang: Thank you so much Jack. If any of your listeners have any questions, they can always call our Investor Relations firm team at Leiden Communications.
WSR: Thank you Nina.
Nina Yang: Thank you Jack.