Now American film producers are bringing those tricks to Asia, which many in the United States see as the next great film frontier. Taking centre stage is an old but surprisingly simple technique for transferring risk.
Completion bonds are, in effect, sureties written by insurance companies for banks.
The insurance companies guarantee that a film will be completed on time and on budget. That means some of the risk of lending money to a production company is transferred from the bank to the insurance company. A third film, soon to begin production in China, is also expected to make use of completion bonds. Worldwide, completion bonds are in vogue as movies become increasingly expensive to produce. That has changed the way movies are financed.