Hong Kong's leading pay-TV operator, i-CABLECommunications, has unveiled plans to move into film production by investing upto $38.5m (HK$300m) in 10-20 features over the next two years.

The company is in talks with several Hong Kong productionhouses about providing funding for a slate of productions to be selected on aproject-by-project basis. It has also sealed an output deal with one of HongKong's leading distributors, Bill Kong's Edko Films, for theatricaldistribution of the films.

The move is a welcome boost for the Hong Kong filmindustry which saw production levels slide to record lows in 2004.

Commenting on the move, Tsui Siu-ming, executive directorof i-CABLE subsidiary Hong Kong Cable TV, said he regards the present downturnas an opportune time to enter the film industry.

"First, we see the long-term prospects of Chinese film inboth the mainland and international markets to be positive," Tsui said. "CEPA[the Closer Economic Partnership Arrangement] will allow us wider access to themainland market which will have significant potential for growth as it furtheropens up, with rising living standards, increasing demand for entertainment andimproved intellectual property protection."

Tsui added that i-CABLE enjoys a strategic advantage as theonly local studio with pay-TV operations, a channel with PRC/overseasdistribution and a broadband multimedia presence.

Kong, whose production credits including Hero and HouseOf Flying Daggers, described the move as a historic alliance between thetelevision and film industries: "I am sure this co-operation will herald abrand new phase for the local film industry. I keenly look forward to the worksproduced by i-CABLE and anticipate even more eagerly the positive influencethis will bring to our industry."

I-CABLE, a listed company controlled by Wharf Holdings,is Hong Kong's dominant pay-TV operator with around 700,000 subscribers. Itoperates a wide range of channels including three movie channels and theChinese Entertainment News Channel.

Hong Kong TV companies have not been active in filmproduction in recent years although terrestrial broadcaster TVB is an associatecompany of Shaw Brothers, once a colossus of the Asian film industry. However,it's understood that TVB will soon unveil an investment in a major filmproduction.