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June 10, 2016

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Home » Feature » Art and Culture

Net video firms see boom in entertainment industry

By Zhu Shenshen | June 10, 2016, Friday | Print Edition

CHINESE Internet video firms are poised to grab market share in the booming but fiercely competitive entertainment market, tapping into intellectual property, advanced technologies like virtual reality and 4K, and the localization of overseas formats and content.

At the 2016 Shanghai International Film and TV Festival, now underway, the muscle of new investment is being flexed.

In 2015, revenue in China’s online video advertising market hit 24.3 billion yuan (US$3.74 billion), a 43 percent surge from a year earlier. By 2018, that figure is forecasted to grow to 59 billion yuan, according to Analysys International, a Beijing-based research firm.

Faced with numbers like that, iQiyi, LeEco, Youku Tudou, PPTV, and other companies are seeking to produce unique online dramas and other programs, establish new platforms, and win bigger audiences.

During the festival, LeEco announced a 15-billion-yuan investment in 54 dramas, involving about 40 producers in 2016. The investment will cover intellectual property, integration between videos and games, and interaction with LeEco’s smart TV and smartphone businesses.

The company’s “super” system, covering online video, smart TV, smartphones, film production, finance and even the automotive business, will help LeEco better utilize all of resources and reach audiences more directly, said Gao Fei, head of LeEco’s online video business.

At the festival, Baidu-invested iQiyi announced the debut of “Old Nine Doors,” one of its top self-produced net dramas this year, costing 168 million yuan. IQiyi aims to copy the success of the “Lost Tomb” broadcast last year, which attracted 3 billion clicks and views online.

Besides advertising, iQiyi plans to charge viewers directly through a VIP member system, thanks to unique resources like “Old Nine Doors” and the “Lost Tomb.” The company, meanwhile, is cooperating with Xiaomi to release a mobile game based on the plot of “Old Nine Doors.”

Youku Tudou, which is invested in by Alibaba, has unveiled plans for several dozen new dramas in 2016.

Virtual reality has become a spotlight of the current festival.

The technology allows audiences to become “part of a show.” Internet video firms like Youku Tudou are well poised to explore the new technologies, with capital and research capability beyond the reach of most traditional TV stations, said Yang Weidong, president of Youku Tudou.

“New technologies like virtual reality, artificial intelligence, and big data will change the face of the industry forever,” said Li Lan, policy and information director at the Development and Research Center of SARFT, China’s top industry regulator.

Artificial intelligence and virtual reality technologies can be used to optimize program production and distribution, and to create new formats that attract young audiences.

Big data, with information mining and analysis, can help both Internet firms and TV stations to better understand their audiences and exploit them as consumers for services like e-commerce and gaming, industry officials said.

Top firms like Sony, Canon, and Panasonic are showcasing 4K film cameras and broadcasting systems at the festival. These technologies offer users super high-resolution programs. PPTV is showcasing a naked-eye 3D smartphone for online video streams.

China has become the world’s hottest market in entertainment marketing due to the nation’s massive audience base.

Idol dramas produced in Japan and South Korea, and action and fantasy dramas from the United States are very popular in China. Re-shooting overseas content as localized versions has become an industry trend.

Suning-invested PPTV has won the copyright to the fantasy film based on the popular game “World of Warcraft” in China. The film, which debuted on Wednesday, received a warm market response.

PPTV, an official sponsor of the festival, is aiming to develop online-to-offline business models to expand its reach. Its plans include holding a “World of Warcraft”-themed exhibition and selling souvenirs from the film at the festival, said Zeng Gang, marketing director of the company.

The scope of the entertainment industry in China is also attracting overseas firms to enter the domestic market, both through TV stations and online websites.

EndermolShine, which has authorized formats of shows in China like “The Brain,” “Big Brothers” and “Your Face Sounds Familiar,” is seeking web partners to introduce more short dramas of three to six episodes each in the domestic market.

Chinese dramas, especially well-financed history dramas, also have big market potential in Taiwan, Japan, Singapore, and other overseas markets.

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