On June 15, the Second Winston Baker Film Finance Forum China highlighted a panel of financiers and producers in the Shanghai International Film Festival.
Yu Dong commented on the latest changes in China’s film industry, noting Alibaba’s Yulebao, the biggest one. Here is Yu Dong’s speech.
In the past 10 years, China’s screens had fundamental growth both in big screens – cinemas and smaller screens – TV, tablets, and smart phones, etc. The recent three years has witnessed a trend towards IMAX and a hunger for better audio-visual enjoyment.
Wanda has taken 20% of the local market share while it has just invested in ￥10 billion in cinema building, let alone its mega-malls. Still, online ticket websites like Gewara sold over ￥1 billion of tickets within a year in the Yangtze River Delta region. More tickets will soon be sold online than offline.
More and more film companies are considering whether it is necessary to hire stars in their films – the box office of Dad, Where Are You Going? astonished producers as well as directors – a group of reality show people spent no more than five days in shooting and raked in over $100 million during China’s Spring Festival. Here comes the second edition of Dad, Where Are You Going? – I wonder whether or not our filmmakers are now well prepared for the challenge from the TV professionals.
One more interesting thing in China this year is there was no winner of the Best Picture or the Best Director, at the annual Director’s Guild Award Ceremony. Jury members Feng Xiaogang and Li Shaohong are both veteran filmmakers and they expressed there was no such picture or director that was eligible for the “Best” award while the nation’s soaring box office is irrelevant to the art quality of its films.
The fifth generation directors still stick to their cinematic language but the market and the young has chosen a new path. Why Dad can gain over $100 million, in a way of filmmaking that we’d scorn in the old days, perplexes me. There is no easy answer.
In a multi-screen era, a film company should put more energy on content. A sizable film group should satisfy 3 kinds of content: the fast-growing market of theatrical films; TV series, a huge platform with many professionals and hundreds of millions of consumers; web series.
It is difficult to distinguish TV series and web series nowadays. For me, if the heroine in a series dies and cannot revive, then it is a TV series. If she dies but revives, according to an online survey or the fans’ demand, then it is a web series. Interaction is the major difference.
In the future, China’s film companies will need to answer BAT’s needs – we will produce whatever BAT wants. Content diversity is key. Quite different from the current situation that once a series or film goes popular, everybody will watch it – in the future, not all platforms will screen the same show. After all kinds of platforms got built, the battle will begin again in content and talents.
The conventional way of filmmaking in China relies on agreements, shares or connections. In the future, all these platform companies will go to the field on their own and make decisions on set. There will be no middleman or distributor.
China’s top 8 film companies will be forged into 3 – BAT film groups, Baidu, Alibaba and Tencent each will have its own film group. They have already changed the discourse – before, we call our target audience “viewers”; now, the term has changed into “users”.
Then what are the remaining advantages for the current key players? The answer is: SCALE. When a film company goes big enough, it can avoid being taken by BAT, while independent production will ultimately devoured by BAT.
The next tide will be the reshuffle in the content industry. Now comes the real opportunities – the next ten years will be a decade of film industry revolution that is driven by the Internet. And it is necessary to make films that can go global, instead of only making very local ones.
Two things have made the past decade of rapid growth possible: real estate and digital tech.People like Wang Jianlin (President of Wanda) built mega-malls with cinemas; at the same time, digital copies of films enabled simultaneous screenings of a film at a cheaper price.
It is now hard to build more mega-malls in big cities in China, but in the third-tier or fourth-tier cities, plenty of space still exists. The next battle is in content. More specifically? To build rating system, to have less censorship, to allow more diversified content – being produced or imported – more than 34 imported films a year.