On a macro level, the credit crunch is only just starting to bite in Asia, a year after North America and Europe, but is not expected to have the same impact. Most pundits agree the major economies of the region will continue to grow in 2009, albeit more slowly than in previous years, while Japan remains flat as it has for decades.

China, which relies heavily on exports, may see its GDP growth slide into single digits but it is still likely to hover around 9.5%.

Deal-making across the region has slowed but capital is still available for media and entertainment assets. At the recent Asia Media Summit in Hong Kong, Alex Harvey, who heads media and entertainment for Macquarie Capital Advisers, told delegates he believes it is an exciting time to be in Asia, due to the region's impressive growth, as long as you are prepared to take the long-term view.

'(Investors) will continue to place bets on media assets - although they won't all pay off in the timeframe some people want,' said Harvey, who oversees a portfolio that includes Taiwan Broadband Communications and Korean exhibitor Megabox.

At the level of the film industry, confidence is also relatively high, with jitters created by problems specific to the region or local industries rather than by macro issues.

Due to rapid multiplex expansion, China's box office was up by 26% to $459m last year, but the market is not growing as fast as it could due to censorship and import restrictions, which were particularly heavy around the time of the Beijing Olympics. South Korea, which has an annual box office of around $953m, is grappling with the next step in its development now the market has peaked after a decade of impressive growth.

As the most mature market in the region with box office of around $1.9bn, Japan is more likely to be hit by macro concerns - most likely a downturn in advertising revenues for the powerful Japanese broadcasters which have underwritten the local production boom in recent years.

But the overall picture for the Asian film industry is one of growth and innovation. Underpinning that growth is the strength of local product, which has a market share of at least 45% in the major territories, continuing multiplex development and the high penetration of broadband and wireless networks.

There is certainly no slowdown in investment as conglomerates, both from within and outside the region, move in to tap expanding markets and local talent. Most of the US studios and larger independents are now involved in production across the region.

Most recently, Twentieth Century Fox and its sister broadcaster Star announced plans for a pan-Asian studio, Fox Star Studios, to produce and distribute local-language movies under the News Corp umbrella. Starting in India, the joint venture will also take in China and South-East Asia. Following its tie-up with India's Eros Entertainment, US-based Lionsgate will soon announce the launch of East Asian operations, encompassing film and TV production and two TV channels.

Venture capital is also starting to enter the industry, although in East Asia this is focused on distribution platforms. 'Content production of both film and television is quite talent-driven in Asia - so this is a volatile area - investment and debt financing are quite challenging,' says Ella Li, director of media, communications and entertainment at GE Capital.

The rapidly expanding Indian industry, where box office grew by 12% to $1.6bn last year due to multiplex development, is another story. The growing ranks of vertically integrated entertainment companies, such as Reliance Big Entertainment, UTV, Zee Telefilms and PVR, are all attracting strategic investors and private equity. While some of this is down to the booming TV industry, film stands to benefit as a popular form of content to supply both the multiplexes and mushrooming TV channels.

'There's room for growth because the (Indian) film industry is still quite small and will grow 10%-15% a year for several years,' says Vivek Couto, executive director of consultancy Media Partners Asia, which organised the Asia Media Summit. 'Investors are getting a little bit wary about film financing in other parts of Asia - not totally turned off - but it's a tough business and people are wary about investing in it.'

Meanwhile, with impeccable timing, money is also flowing in the other direction from the Indian film industry. The Hollywood ambitions of companies such as Reliance, which last week finally sealed its estimated $600m deal to buy DreamWorks, along with the rise of Middle East petrodollars, is shifting the compass eastwards following the retreat of the Wall Street hedge funds.

As in East Asia, there are local challenges in India. In particular, the new breed of conglomerates face accelerating talent costs as too much money chases too few stars and ideas.

On a macro level, many of these companies, which have tapped the London and Mumbai stock exchanges for expansion, are experiencing falling valuations as stock markets slump.

Boom at the box office

The good news for anyone investing in Asian film is that box-office revenues across the region are expected to keep growing, especially in China and India, where the expanding middle class is likely to outrun global recession.

Inflation is certainly having an impact across the region, leading to rising food and fuel prices: 'Over a prolonged period, inflation will squeeze discretionary spending which of course includes cinema attendance,' says UIP's Singapore-based vice-president, sales & marketing, Asia, Kurt Rieder. 'We've seen some evidence of this in India and Indonesia, especially following the reduction of fuel subsidies over the summer.'

But on the whole, inflation is not expected to have a negative impact on cinema-going in the richer territories or among the middle classes.

'In the more affluent territories such as Korea, Hong Kong and Singapore, we're less concerned about a potential impact as cinema remains relatively inexpensive when compared to travelling, dining out or live-entertainment options,' Rieder says.

And while cinema tickets are not cheap in China, consumers are expected to keep flocking to shopping malls, most of which have cinemas as an anchor tenant. With tickets selling at around $7 (rmb50), China's new multiplexes are not aiming at the low-income bracket.

'Most modern cinemas are targeting the expanding middle class - which is about one fifth of China's population - and they will still have money to go to the cinema,' says Screen Digest's head of cinema David Hancock.

China's consumer boom will also benefit companies involved in areas such as theme parks and merchandise. Speaking at the Asia Media Summit, Disney's managing director of Greater China Stanley Cheung said he looked forward to rising box office, but that the studio's strategy in China was really about promoting the Disney brand.

'China has a growing number of theatres, so that will help us capture audience and revenue, but we're really focused on building the Disney brand over the long term,' said Cheung. 'A great movie can carry the Disney brand across China.'

The right strategy

While box-office revenues are expected to remain healthy, there is more uncertainty around the exports side of the business. Now that the Chinese martial-arts epic and J-horror booms have subsided, it is already difficult to sell Asian content to the US and Europe, and this is expected to become tougher as Western markets go through a period of upheaval and correction.

Intra-Asian sales are also expected to have a bumpy ride, but for reasons peculiar to the region, as markets focus increasingly on local product and tentpole Hollywood titles.

This is resulting in new strategies from the leading producers, who are focusing on co-production and collaboration as a way to expand the market for their product. Leading the way are companies such as Japan's Avex, Korea's Showbox and Hong Kong-based Media Asia, which are joining forces to find product that can work across the major markets (for more, see the Asian Film Finance '08 supplement).

Likewise, selling Western content into Asia is a tough business, but only due to local factors such as the strength of local-language product and market saturation in developed territories such as Korea and Japan.

Indeed, Asia as a whole is likely to withstand the current global uncertainty - and even continue to grow - but for those from outside the region considering investment, it is vital to have the right strategy. This includes focusing on local-language product, exploiting digital platforms and being prepared for tough local competition.