The Asian film biz should avoid over-supply and ensure that the interests of distributors and investors are aligned, said panellists at a seminar on Asian film funds at Pusan's Asian Film Market (Oct 3-6).

The seminar, co-hosted by Screen International, also examined how film financing has become more difficult due to the credit crunch, and more specifically, the glut of product that has slowed business at recent markets such as Cannes and Toronto.

Ben Waisbren, CEO of New York-based Continental Entertainment Group (CEC), explained how a flood of capital resulted in an over-supply of films in Western markets. And how the financiers that backed Hollywood slates had not cut themselves the best deals.

'The guys you're doing business with should not make money while you lose money,' Waisbren said. 'You should prosper together and lose together.'

Waisbren also explained how financing has become more difficult in the US due to macros issues and used The Weinstein Company's Asian Film Fund, for which CEC arranged senior debt, as an example.

'That deal wouldn't get done today,' said Waisbren, adding that the inter-bank lending rate was 3% back then compared to the current 4.21% while spread has more than doubled. 'The cost of financing one year ago was dramatically less than it is today.'

The credit crunch has had less direct impact in Asia. However,Yasushi Kotani, CEO of Tokyo-based Entertainment Farm, spoke of the need to diversify funding sources in Japan where most pics are financed via risk-averse production committees: 'We need to diversify through funds and bank financing, although film funds are not fully stabilised yet.'

Harry Kim, CEO of Seoul-based Boston Investment, said the same was needed in Korea for the further development of the industry: 'It will take time, but we need mechanisms like mezzanine finance and funds to enable us to better manage risk.'

Both explained how too much capital had also resulted in a production glut in their respective territories.

The causes were different - too much studio and TV broadcaster investment in Japan and too much stock-market money in Korea - but the outcome was the same: too many pics of which very few turned a profit.

Both investors are now turning to other Asian and international markets due to the limitations of their home territories.

However Boston Investment executive director Anna Lee emphasised that Korea should not be seen as a new source of silly money: 'We're not German insurance money and we're not Wall Street money. Our aim is for the Korean film industry to grow.'

Nansun Shi, managing director of Irresistible Films, outlineda very different picturein China, where box office is still growing but the market is chaotic.

'There's a lot of money in China for Chinese-language film, but it's not quality money,' Shi said. 'There's no infrastructure, no legal concepts like chain of title, and not much marketing. Somefilms are hits by accident and some by design, but it will settle down in a few years.'

Shi also spoke of the potential of the internet to widen distribution of Chinese films, both in China and overseas.

The seminar was held as part of Pusan's Asian Film Funds Forum, held in response to the wealth of new funds that are springing up across Asia, and which also aims to help revitalise the recently ailing Korean film industry.

The forum continues today and tomorrow (Oct 4-5) with presentations from funds including The Weinstein Company's Asian Film Fund, Irresistible Films and Singapore-based RGM Entertainment.

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