CatchPlay launches film investment fund
Taiwan distributor becomes more selective
Catchplay, SSG resolve licensing dispute
Fall out changed Taiwan distribution landscape
Fortissimo sells two to Taiwan
Horror and sports documentary find Taipei distributors
Sin, Son and Silence score Cannes deals
Asian films achieve key sales; region's buyers also active
Asian distribs' rush for Eng-lang titles
Pre-market deals for Cannes' Official Selection goodies
Asian distributors pre-buy Berlin titles
Midnight, Inch' Allah, Elephants, Parkland acquired
Catchplay-SSG dispute set to continue
Judge dismisses some complaints, allows others
Trade association stands by Catchplay
Taipei organisation won't provide paperwork to rival distributors
SSG lashes back at Catchplay
Rights buyer accuses Taiwan distributor of incompetence
Catchplay broadens legal action
Taiwan distributor files SSG lawsuit in US
Catchplay drops ball to the tune of $50m
Criminal charges filed against former boss
Buyers run off with Showbox's Thieves
Multi-national thriller tops FilMart lineup
Berlin titles strike early sales
Competition films claimed by Asian buyers
Busan unveils 30-title project selection
New name, new orientation for former PPP
Finecut flags new slate
Korean seller expands slate, extends sales
Corporate financial catch-up
TVB, Village Roadshow, Tsutaya, Sony
$30m CatchPlay film fund announced
Taiwan fund to invest in Hollywood and Greater China productions
TIFFCOM 2010: Market of two halves
Japanese sellers thrive on home turf, others need patience
By Stephen Cremin
Fri, 24 August 2012, 14:40 PM (HKT)
In a Chinese-language statement posted on Facebook yesterday, Wayne CHANG 張心望 rebutted the accusations made against him by his former parters at CatchPlay Inc 威望國際股份有限公司 in yesterday's issue of Business Weekly magazine. Film Business Asia's translation of the full statement follows.
Catchplay Rashomon: A Statement from the Other Side
23 Aug 2012
In 2006, chairperson Cher WANG 王雪紅, Timothy CHEN 陳主望 and I agreed to establish the Catchplay company with a 70/30% share structure. As a result, I worked hard as a founder and devoted myself unconditionally to the management and growth of Catchplay. From July 2006 to June 2012, I never minded that I didn't receive any salary, bonus, or fee, and I didn't even have health or medical insurance or a retirement fund at Catchplay. I didn't sign a contract with a non-competing clause either. In other words, my relationship with Tim Chen is that of a business partner, not a normal employer-employee relationship. When we established Catchplay, Cher Wang and Tim Chen promised to give me a 30% share. This promise was never put into writing or into a contract, but due to my respect for Wang and Chen, I trusted them no matter what. Even when I had a meeting with Wang in November 2011, she mentioned that she remembers our agreement and told her financial department to begin processing it. Although this share structure has not been set up, even until I resigned as general manager in June, I'm still grateful for Wang's support of me at the time.
In order to save Catchplay, I advanced nearly US$1 million. There are receipts, but I have not yet been paid back. Catchplay is a company I founded. In my life and daily activities, it's Catchplay and Catchplay only. I could never imagine that Catchplay would fail or fall on such hard times. So, in 2009, for reasons unknown, when the investment consultant company could not find Cher Wang to sign the papers to approve money transfers, the company was in peril for a moment. Our cheques were in risk of bouncing, and we would not be able to release a film on schedule. Therefore, in order to save Catchplay's image and the movie, I borrowed US$940,500 from my relatives, and injected it into the company in four instalments to pay for the film's minimum guarantee so that the company would operate as normal and so that the film would be released as scheduled. There are records of the wire transfer for this transaction and the event was investigated by Catchplay internally. Harvey CHANG 張孝威 met my father face-to-face twice, and admitted his knowledge of the transaction, but so far I have not been paid back.
In the cover story in Business Weekly, the things said about me are too ridiculous with too much bias and insinuation and are a serious damage to my personal reputation. The media and other people involved should take a more careful approach and do better investigation when writing up this story. For example, the article insinuates that I caused a NT$1.5 billion (US$50 million) loss. Actually, within the article, the huge numbers thrown about just cause reader confusion and create the impression that I was bad at managing money. However, after the article was published, even Catchplay's own publicist clarified that the article's claims were mistaken. This indeed proves that the article is very sloppily written, and also proves that while I was still general manager in 2012, I had succeeded in making Catchplay profitable
Before 2012, Catchplay never held regular board of director meetings. Cher Wang was always busy and I rarely met her. So the progress reports were irregularly held. The board structure and shareholders structure were managed by Cher Wang's investment consultant company. I was never authorised to understand or become involved with the board. Catchplay's decision making process was always conducted between myself and Tim Chen, and then communicated through Tim Chen to Cher Wang or the investment consultant company where a final decision would be reached. Therefore, when Business Weekly wrote that I often made decisions "without telling the board", that is not related to the facts. On the one hand Catchplay never had a regular board meeting. And also, other then knowing Tim Chen, I didn't know any other company directors. Most importantly, all important decisions were made between myself and Tim Chen.
I personally never handled any financial transactions or payments. Catchplay's company structure is different from normal companies. From its establishment until 2012, there was no financial department, only an accounting cash department. All the financial matters were handled by Cher Wang's investment consultant company. All the film rights and material costs transactions mentioned in the article, regardless of the amount, were applied by the related department, and then paid directly by the investment company; it was not myself who could decide arbitrarily. Besides, the company's bank account and seals were never handled by my hands. I never had actual authorisation to pay. When Harvey Chang mentioned the financial system of Catchplay was unhealthy, that was outside my control. In truth, for the past few years, I have often suggested to the superiors at the investment consultant company that there should be a financial/accounting system set up at Catchplay on an annual-budget basis, to replace this kind of irregular payment-application-then-approval plan. However, the investment company always replied with the excuse of "not having enough manpower" and "not knowing enough about the film industry", so my suggestion was never accepted.
AceGain is a software company I founded in the United States. After establishing Catchplay, I spent all my energy on Catchplay, so AceGain did not operate anymore. The reason that Catchplay pays AceGain $5000 [per month] is because Catchplay was established in the US at the very beginning. And it was to help Catchplay get a lower cost. We used the low price contract Ace Gain had in place at the time, which was cheaper than setting up a new contract as a new client. This fee includes AceGain's office rent. AceGain was not operating, so all its space and servers were entirely devoted to Catchplay's needs. There is a price difference between American servers and Taiwan servers. That's because in America, we use ten servers plus a firewall plus online space plus 1000Mbps fixed bandwidth. It's a very high-end facility, and not your average single server with a 10Mbps fixed bandwidth that would only cost NT$60,000 (US$2000) per month.
Studio Solutions Group Inc (SSG) is an intermediary with special connections that is able to secure better pricing. The reported overcharge of 5-8 times [for materials] is entirely fabricated. Business Weekly and the anonymous sources quoted in the article don't know enough about the movie industry. We were very careful when working with SSG in the beginning. But after a while, we found that SSG were very good at handling a few major American production companies and the prices they secured were cheaper than if we negotiated directly ourselves. Most importantly, after working closely with SSG, we increased our scale. They would often help us get hot titles very early on, so that we could avoid bidding wars with other competitors during film markets. But this doesn't mean that I only buy from SSG. I also bought directly from Japanese, South Korean, European, and other American sales agents. The 5-8 times overcharge mentioned in the article regarding delivery materials costs is a ridiculous slander. It lacks any comparative criteria and is a calculation that has no basis in fact. The numbers used are Hong Kong prices. But the Hong Kong film industry environment is totally different from the Taiwan environment. Also, material costs are different film to film, and depends on the window between the Taiwan and US release dates, whether or not there were second-hand materials available, etc. Every film's materials costs is different anyway. If you want to make a fair comparison, you should compare the numbers with other Taiwan companies who release on the same scale over a number of years.
Regarding the 1000 titles bought over four years, most were to prepare for Catchplay's movie channel. Catchplay's acquisitions are divided into new films and library titles. The library titles are bought in packages. Some packages include 100 or 300 titles. They are not meant to be released theatrically, but instead to prepare for Catchplay's future movie channel and digital platforms. To start a movie channel, you need to prepare thousands of hours worth of content. That's almost 500 titles. These titles have low individual prices but you don't negotiate a price per title, you negotiate prices per package. Of the 996 titles mentioned in the Business Weekly article, 60-70% of them are library titles in these package deals. Yes, the number of titles sounds a lot, but the deals are not that many. The erroneous interpretation by the reporter and a non-professional understanding misled readers to think that I exclusively buy from SSG. This is incorrect. Opening a movie channel is Catchplay's strategy. So, buying library titles is part of that strategy. The so-called financial people and journalists mixing up library titles with the total number distributed in the Taiwan market will create a false impression that I am a reckless buyer. Also, because the movie channel has not started operating, of course these library titles would not create income yet. To mix these up in their calculation of "distribution volume" and "average recoupment" is a total negation of Catchplay's successes in theatrical distribution and marketing.
Ezon 藝融有限公司 is a company Catchplay works with on art house and festival titles. The distribution fee Catchplay pays Ezon is within industry standard levels. Sometimes it's even lower, such as only NT$100,000 (US$3,300) per title or NT$150,000 (US$5000) for a festival programme. When film rights belong to Catchplay, all the box office and ancillary revenues belong to Catchplay. So of course, the material costs, license application costs will be charged to Catchplay. The same applies to Ezon. Act of Valor is a commercial film acquired by Ezon. Because they lack distribution skills, they authorised Catchplay to distribute the film commercially. We had a contract outlining each side's rights and duties. Because this film's rights don't belong to Catchplay — and Catchplay also had a demand for content for its digital channels — we used the digital rights license fee (NT$150-200,000/US$5,000-6,700 depending on the film's box office) on the contract instead of a distribution fee of NT$100,000). Other than the governmental license fee (approximately NT$38,800/US$1,300) paid by Catchplay because we are the legal distributor, all other costs — like production costs, cinema display, advertisement, etc — were paid by Ezon. So, of course, the box office would go to the rights-owner Ezon. Business Weekly made a total mistake without checking the facts. As for The Cabin In The Woods (2011) sending its box office gross receipts report to Catchplay staff, indeed it was the mistake of the cinema. In fact, out of all the dozens of cinemas only one cinema made that mailing mistake. I guess it is because this cinema worked for a long time with Ezon and mistakenly believed that out of habit, Ezon would be working with Catchplay. This type of error happens often in the film industry. For example, Catchplay would often receive reports meant for VieVision or other companies. Ezon's main strength was art house and festival titles, which is different from Catchplay's commercial titles. We are not competitors. Different types of films are handled by different distributors; that's normal in this industry.
When I first got in touch with the Lux Cinema case, it was because the landowner Mr. Chou was a dear friend of my father. Mr. Chou came to me to discuss working together in June 2011. I immediately reported to Tim Chen and discussed the possibility of Catchplay taking over the Lux. Tim said that at this present time, Catchplay's evaluation of the potential risks and recoupment of a cinema was very conservative, so he thought Cher Wang would not agree to this case. But, he agreed that owning a cinema might have important strategic meaning to Catchplay's film distribution business. So, to paraphrase, if Catchplay didn't have to spend money, and could get the cinema and distribution advantage, he would gladly wish for this to happen. I originally wanted to look for partners to complete this mission, but Mr. Chou felt that due to the trust between us, if I raised financing and entered as a shareholder, that would be more appropriate. As a result, Catchplay did not invest any money at all. But I still invited Tim Chen to become a director on the board, and he agreed, even until this day. So, the Business Weekly article's assertion that I did this all without letting Catchplay know is totally ridiculous. If Catchplay didn't know about this case, why is Tim Chen on the board of Lux Cinema?
The terms of the settlement were completely unreasonable. I signed a statement to protect Catchplay staff. The Timothy Chen interview in Business Weekly claimed that I cried, admitted my mistakes and signed a statement. That is all false. At that time, I tried my very best to explain to Tim Chen and Harvey Chang the actual situation and my own opinion and feelings, all for the goal of understanding why they must push the company I founded and worked so hard for — Catchplay — to such a place. I had no need whatsoever to admit to any mistakes. The statement I signed was a statement to protect the Catchplay staff who worked hard with me. It's a statement that states that Rosanna HSU 徐靜涵's assistance in Ezon's film distribution was authorised by myself, and not because she wanted to do it herself independently. That's the statement I signed. As for my lawyer and myself saying "impossible" to the terms of the settlement, that is not the whole truth. The truth is Harvey Chang and his lawyer proposed unreasonable terms of settlement. In addition to forcing me to not work for a competing company for three years, it also asked me to pay damages of a few tens of millions of NT$ and asked me to admit to things that I had never done. The article claims that they just wanted me to sort out the irregular accounting. That's a total understatement.