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November 26, 2015

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Home » Business » Biz Special

Sub-culture redefines online investments

By Leng Cheng | November 26, 2015, Thursday | Print Edition

IMAGINE hundreds of comments floating on the screen while you watch a video, with real-time jokes, laughter or plot speculation going on simultaneously.

It’s one of the latest wrinkles in a youth sub-culture that’s been dubbed otaku, a Japanese term originally coined in the 1980s to describe “people who stay at home,” and has come to refer to computer-savvy youth obsessed with Japanese animation, fictional characters, South Korean variety shows or American TV dramas.

The format of bullet-style comments has captivated youthful audiences because it provides a platform for users to give their reactions in real time and share them with other viewers.

Min Baozhang, a 23-year-old clerk in Shanghai, loves the concept when watching a piece of gameplay video of “League of Legends,” hilarious animation episodes or flawed TV dramas.

“Some of the funny discussion can be seen only on the site, which I think is great,” said Min, noting that he spends nearly 40 minutes a day surfing favorite sites like bilibili.com, also known as the B Station. “I am also registered as member in order to post my own comments on the videos.”

The bullet-like comments, called danmu in Chinese and danmaku in Japanese, originated on the Japanese website niconico.com, where the concept has become an entertainment staple with the post-90s generation like Min.

In China, some 8 million registered users have flocked to the B Station, making it a popular gathering spot for otaku fans.

Where viewers go, so go investors. Some see it as the next hot trend in the ever-changing landscape of young viewer tastes – an audience that is a prime consumer market. The herd instinct of investors was demonstrated earlier this year when there was a stampede into animation production ventures following the box office hit “Monkey King: The Hero Is Back” in July.

Now the attention is shifting to so-called otaku video sites that are the new “in thing” for teens and 20-somethings. One of those sites, Acfun.com, announced that it received 50 million yuan (US$7.8 million) from Heyi Group, parent of video site operator Youku Tudou Inc.

IDG Ventures Co spent US$10 million to buy more than 20 percent in B Station, and rumors are rampant that a more recent investor is Internet giant Tencent. Bilibili has refused to comment on the speculation.

The valuation of B Station now may be upwards of US$1 billion, according to Chen Yuetian, investment director at Innovation Works, who oversees Internet and mobile Internet start-ups.

“The most valuable part of Bilibili-like websites is the ecosystem of ‘user-generated content’ in the form of danmu or self-made videos,” Chen told Shanghai Daily. “Internet giants have started to make strategic moves to invest in targets that have cultivated sub-cultures of young people.”

He added that the B Station target audience are those in their teens and early 20s. Their numbers as content users rose to an estimated 149 million in 2014, according to market data provider iResearch, and that number is expected to hit 219 million by the end of this year.

Gu Qingkan, business producer at Japan’s Dream Incubator Inc, which mainly focuses on entertainment and contents, is optimistic about the profitability of the otaku sub-culture market.

“As the birthplace of the animation and comic industry, Japan has a market scale of 60 billion yuan,” Gu said. “China is definitely bigger, with a potential of at least 100 billion yuan, let alone another 100 billion yuan game industry.”

Follow the money. Gu’s assessment appears to be on the mark. Online origin comic website YouYaoQi, received a 100 million yuan investment from China Culture Industrial Investment Fund in April 2014. Manluotuo, a e-commerce website for animation-related merchandise, raked in nearly 100 million yuan from Angel Plus Fund.

The market is further expanding into corollary products such as E-sports games videos, and offline sub-cultural experiences like Cosplay show and even concert of idol groups like SNH48.

Though industry growth to mainstream levels is somewhat hindered by copyright issues and by the State Administration of Radio Film and Television, which periodically censors content that it considers too violent or sexually suggestive ­‑ both mainstays that draw otaku fans.

Because of this, in Chen’s opinion, localized otaku content will need to rely on traditional Chinese elements before it can fully blossom as a major growth point in the near future.

“Games and comics with characters drawn from the classics will become more dominant,” Chen said.

Investors seem to be moving in that direction.

On November 19, Tencent announced it would establish the 300 million yuan Juxing Fund to support the production of original domestic animation and comics. It is promoting a new anime named “Once Upon a Time There Was a Lingjian Mountain” on five Japanese TV channels in early 2016. Its setting is the traditional Chinese world of sword and fairies, like the Chinese legend of Paladin.

“The only difference between sub-culture and mainstream culture is whether its audience has a voice in society,” Chen Rui, chief executive officer of Bilibili, said last month. “With the post-90s generation becoming a consumer powerhouse in China, it’s time for the otaku culture to go on stage.”

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