Artists often emerge from the cultural underground and, taken from a geographic and historic perspective, it's hardly surprising that the land of Down Under has bred a rogue population of self-sufficient innovators and creative types. Today, acentury after the dawn of its commonwealth, Australia boasts a film industry internationally renowned for locations, production value, talent, and increasingly, for work in the pan-Asian market.

With its proximity to the highly populated yet volatile consumer markets of Singapore, Japan and Malaysia, andcomparatively inexpensive production costs, Australia and its slightly cheaper production neighbor New Zealand ($1 AUD = $1.1 NZ) seem uniquelypositioned for growth at a time when North American and European markets are shrinking. Australasia is coming to the forefront as a global production hub, with New Zealand in particular gaining a rep as a low-cost production center.

"More and more we're seeing international companies set up shop," says Paul Prince, MD at Auckland-based chic boutique The Sweet Shop, citing @radical.media and Fox Studios as two major interests that have put down roots in the wake of 2000's advertising boom (an Olympic year that saw Australian agency billings reach an estimated $692 million AUD). @radical, with its inter-national operating philosophy and global reach, saw Sydney in particular as an irresistible location for a satellite office.

"We set up shop two and a half years ago because we recognize production as a global business," says @radical's co-proprietor and president FrankScherma. "We were also affiliated with some great directors in Sydney; and the area offered value, talent and a lot of shoot locations in one area."

While @radical has established a physical presence, others, like Partizan, have opted to forge representation deals with local shops. Prince is one producer who has welcomed such a relationship, establishing a co-representation deal with Partizan last August. With a roster that includes talents such as Sweet Shop founding director Melanie Bridge and Vincent Ward (What Dreams May Come), the Partizan deal is but a part of Prince's business strategy.

Prince has been aggressively marketing The Sweet Shop in Asia. "I've been practically living [there] for the past year. It provides more choice and I'm finding that there are more companies marketing themselves to Asia, where 10 or 12 years ago, they would have approached a UK [agency]," says Prince, citing Motorola's foray into Hong Kong, which cost an estimated $350 million AUD.

His approach seems to be on the nose. According to the Australian Film Council, the market value of commercials produced for overseas markets is on the rise - accounting for 14% of the $243 million spent on TVC production between 1999 and 2000 alone.

Expansion strategies like Prince's are necessarysafeguards, partly because Australasia is becoming lessa European country in Asia, than an Asian country with European heritage. Though remote geographically,Australasia has not been immune to the market tumult experienced by its North American and European counterparts. As a consequence, its production industry has faced similar challenges. Agency mergers and submergers, the increased presence of cost controllers, and the 1992 deregulation of the industry (an influx of foreign commercials is reportedly responsible for an average 40% decrease in business) impacted budgets and made the competition for boards stiff.