Commentary: There’s a silver lining in Lucasfilm’s exit from Singapore

Lucasfilm's Singapore facility, The Sandcrawler. (Photo: Lucasfilm website)

SINGAPORE: The news earlier this month that Lucasfilm will shut its Singapore operations after nearly two decades seemed only to affirm much of the bad news that has hung over the media and entertainment industry like a dark cloud lately.

Since Netflix shocked Wall Street and the media industry in 2022 with its first subscriber loss in over a decade, the outlook for the sector has been filled with uncertainty. Top global media companies from Lucasfilm’s parent Disney to Sony have implemented costs reductions and workforce layoffs.

The streaming businesses have resorted to advertising and password sharing crackdowns to increase revenues as new subscribers to streaming seem to have reached its peak. Meanwhile, Hollywood is at a standstill after actors and writers went on strike because of disputes over streaming royalties and protections against the use of artificial intelligence.

For the visual effects (VFX) and animation industry, these developments are particularly disconcerting. The economics of the industry have always been challenging. Demand for VFX services has always been seasonal and mostly driven by a handful of major players, leading studios to compete intensely for projects.

This image released by Universal Pictures shows a scene from Jurassic World Dominion. (Universal Pictures/Amblin Entertainment via AP)

But Asia is seen as a growth hotspot for the media and entertainment industry. According to PwC, demand for over-the-top streaming is expanding in the region, given the spread of mobile broadband and demand for local and sports content. China, Indonesia and India are markets tipped to grow given their size and the rapid expected growth in consumer spending and advertising.

Singapore could be well-poised to capitalise on the opportunity.

VALUABLE VFX AND ANIMATION TALENT

Lucasfilm may be leaving but it leaves behind one of its most valuable assets - its people. And therein lies the opportunity for Singapore.

The talented animators and artists who have worked at Lucasfilm Singapore should pave the way for the next generation of Asian content.

Lucasfilm’s 17 years here yielded significant knowledge and skills transfer in digital animation, with Singapore employees working alongside experienced producers on some of Hollywood’s biggest films and TV series - from blockbusters such as Jurassic World: Dominion and Marvel Studios’ Eternals to the series Star Wars: The Clone Wars.

Every country in Asia would envy having that kind of art and animation talent fuel the next generation of film, television, gaming and streaming content.

A lot of content will be targeted at Asian consumers. China, Japan and Korea were among the top five global box office markets in 2022, according to filmtech company Gower Street Analytics - and local titles dominated.

In that same year, three of the top five box office hits in China were Chinese films, according to IMDb-owned website Box Office Mojo, with the two foreign films being Avatar: The Way Of Water and Jurassic World: Dominion.

In South Korea, two of the top five were South Korean films. Japanese productions swept four of the top five in Japan, with anime smash hit One Piece Film: Red trouncing Top Gun: Maverick.

THE PIXAR OF ASIA?

The next Chinese or Korean blockbuster film could be created by Hollywood-trained VFX artists from Singapore. Or the next hit Japanese animated feature film by world-class animators from Singapore.

Japan is already home to some of the world’s biggest media franchises and Korea is making its mark with global sensations such as Hwang Dong-hyuk’s Squid Game.

Is it outside the realm of possibility that these animators and artists could create the Pixar of Asia or produce the Korean Mission Impossible?

Asia will continue to make more ambitious films and animation content and the need for skilled VFX artists and animators will grow as well. Singapore now has an advantage over other Asian countries to fill that tremendous need.

Of course, this will not happen without a vision. It will take industry, entrepreneurs and government to identify and help fuel these opportunities.

INSPIRATION FROM MAKOTO SHINKAI’S YOUR NAME

Among the many stories of entrepreneurial bets made good, an example from this part of the world could be particularly instructive. In 2007, Noritaka Kawaguchi founded a fledgling animation company that by 2016 had chosen to back a promising but new animation director.

2016 was not a promising time for the Japanese animation industry. Just two years earlier, Studio Ghibli, a stalwart of the Japanese feature animation industry, announced it was shutting down. (The studio co-founded by acclaimed filmmaker Hayao Miyazaki ultimately did not do so.)

Expectations for the new film backed by CoMix Wave were modest, with a relatively small budget of 750 million yen (US$5.1 million).

That new director was Makoto Shinkai and his film was Your Name (Kimi no Nawa). It went on to gross US$382 million worldwide and single-handedly revitalised the Japanese feature animation industry.

Imagine if a Singapore-based entrepreneur or company similarly invested in a promising filmmaker’s dreams of creating an original animated feature film. Not only would that create jobs and opportunities in Singapore but those relationships and connections could be the stepping stones for the next generation of animators in Japan, China and the rest of Asia.

BUSINESS ADVANTAGE IN SINGAPORE

As every established player in the world looks to save costs, opportunities to own valuable intellectual property will be more readily available.

Singapore can utilise its advantages for businesses - from strong corporate governance, an efficient tax regime and a well-educated and multilingual workforce - to continue creating a vibrant home for global entertainment and media companies keen to serve rising demand in Asia.

Even as all of the global media companies deal with life after the bursting of the streaming bubble, everyone knows that content is still king, and the next Your Name is out there.

David Shin is a media entrepreneur. He was formerly Senior Vice President and General Manager for Hong Kong, Taiwan and Southeast Asia at The Walt Disney Company.

This article was originally published on ChannelNewsAsia. Its inclusion on this website is solely for education purposes.