Chinese tech firms are aggressively pushing mobile technology at Filmart, carving out new space for online movies alongside traditional forms of content and distribution.
China’s online population, the world’s largest, reached 649 million by the end of 2014, and big online players such as Baidu, Alibaba and Tencent (the so-called BAT) are investing billions of dollars in boosting their presence in the entertainment sector. Much of this is in mobile tech, with nearly two thirds of Chinese people accessing content via their cell phones or tablets.
Gong Yu, founder and CEO of iQiyi, which is owned by Baidu, said the challenge will be to see how the traditional forms of distribution deal with the new technologies. “Distribution has changed for films,” said Gong. “It’s not just about making a TV show and putting it online — it’s about looking at development, and once we succeed, we will create a new industry. It used to be that online videos were just seven minutes long, and a lot of people in China still watch these, but increasingly people watch longer content.”
Tong Chen, vice-president of content investment and operation at the cellphone maker Xiaomi, which is also expanding into content and last year invested $300 million into iQiyi, said major changes were coming, and fast. “It’s come to the point where things are about to explode with mobile technologies and content,” he told a panel discussion at Filmart. “For our video audiences, the numbers have grown exponentially and people’s viewing habits have changed.”
Dramafever has over 100,000 hours of TV series, making it the biggest platform for Asian content outside the continent. Vice president Park Hyun said the rising popularity of mobile has been a game changer. “A channel catering for Asian content a decade ago would have been impossible. The device of choice is mobile. We’ve seen 16 percent annual growth since 2011. This is a landmark event,” said Park.
Wang Zhan, vice-president of the search giant Baidu, said consumption habits have changed. “There will be a lot of new forms. For entertainment, it’s not just about making money it’s about building a brand, and then making money off the brand. It’s a different business model.” The new online players in Asia aren’t simply looking for content to acquire.
Suman Wang, vice president and editor-in-chief of Tencent Video, said her company is also focusing on developing its own content. “I prefer content produced by ourselves and our current operation is just starting. Last year we saw a lot of content that wasn’t shown on TV, for example,” she said.
Changes in viewing habits are already affecting traditional release patterns in China. The Chinese video website 360 is testing shorter release windows with the Hong Kong movie Triumph in the Skies, which could give a major boost to the subscription video on demand (VOD) market in China. The race to capture the VOD market in Asia is intensifying. There is strong speculation that Hong Kong’s TVB is about to launch an online streaming service to compete with Netflix, the biggest VOD company in the world.
Earlier this month, Netflix said it was planning to go it alone in its attempt to break into China, a move which could make it tougher to get into the notoriously difficult market, but which it believed was ultimately a more streamlined option.
The tech bosses were skeptical about Netflix’s chances of getting into China alone. Said Tong: “How will they get the license? Can they speak Chinese? We’ve never seen any global internet companies be successful in China.”