This is the third in a series of posts looking at developments in China’s digital ancillaries market. Part I is here and Part II is here. In this post I comment on the impending online convergence of motion picture production and motion picture distribution in China.
Online giants Baidu, Alibaba and Tencent (collectively, “BAT”) have each recently announced forays into production. Baidu, China’s answer to Google, is even launching a crowd fund with China Film Group. Alibaba has announced a similar initiative and will be collaborating with Hengdian World Studios. Then there’s Tencent Movies Plus, said to have seven motion pictures in development. Sure, this is not without some US parallel given Weinstein’s collaboration with Netflix on the “Crouching Tiger” sequel, but the momentum and potential scale are so much greater here in China.
What will this convergence mean for the film industry in China?
- It will augment the trend to online consumption via mobile. BAT will want the programs they produce to be consumed on their platforms and their platforms are increasingly accessed using handheld devices.
- It will increase the power of the e-commerce companies in the film business. Yu Dong, chairman and CEO of Beijing-based Bona Film Group, has already predicted that all movie companies will work under BAT. He said recently: “In the future, Chinese movie companies may end up as the three movie groups of BAT.”
- It will increase responsiveness to audience tastes and demands. Huayi Brothers Media Group president Wang Zhonglei, for instance, described closer ties between the movie industry and the Internet as a “renaissance” for the film business. In his view, the center of film production has shifted from filmmakers to the people and more emphasis is now placed on incorporating the audience’s response into the moviemaking process.
In my final post in this series I will look at why developments in China’s copyright law are stimulating growth in digital ancillaries.