China’s movie moguls see online video apps as complementary to cinemas

PUBLISHED : Friday, 15 June, 2018, 6:33am
UPDATED : Friday, 15 June, 2018, 7:11am


It may sound counter intuitive, but the rise of mobile video apps in China is not seen as a threat by movie executives.

The thriving market for online video apps has greatly enhanced content production which is crucial for the development of the Chinese movie industry because it helps nurture people’s movie watching habits, according to Nate Fan, president of distribution with Shanghai Bliss Media Ltd.

Although a large number of viewers may choose to watch content on mobile platforms, “watching movies in theatres is more of a social activity and people may want to eat popcorn or have a cocktail with their family and friends instead of watching a movie in their homes,” Fan said during a panel discussion on the topic “Box Office vs. Streaming” at the CES Asia show in Shanghai on Thursday.

China is currently the world’s No 2 box office after North America, with US$8.6 billion in ticket sales in 2017, up nearly 14 per cent compared to 2016, according to the State Administration of Press, Publication, Radio, Film and Television (SAPPRFT), adding that domestic-made movies contributed 54 per cent of the overall annual box office.

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Chinese cinemas generated more than US$3 billion in ticket sales during the first quarter of this year, outstripped North America’s US$2.8 billion, and analysts believe China’s will emerge as No 1 globally by the end of the year.

The fast growth of the Chinese box office is accompanied by thriving mobile video platforms in the country, with the three Chinese technology giants, Tencent, Alibaba and Baidu, stepping up investments in mobile video platforms in hopes of attracting more customers that will migrate and boost revenue growth in other business segments.

Tencent Video and iQiyi both claim that their paid subscriber numbers have exceeded 60 million this year while Alibaba-backed Youku has not updated numbers since the end of 2016 when they were 30 million. The three platforms not only broadcast popular TV shows and movies, but have started producing their own exclusive content to retain loyalty, just as Netflix and HBO do in the US.

Unlike big budget movies which secure prime spots at mainstream cinemas, online mobile platforms as well as apps like Smart Cinema allow viewers to watch new release films on their mobile devices which is broadening the reach of lower budget content, Liz Han, deputy general manager of Motion Pictures Entertainment of Beijing Culture, said at the same event.

“There should be a good opportunity for cinemas and the [online] distribution side to work together so everyone can make more money, which also benefits consumers as they are able to watch more content besides just movies in cinemas,” she said.

In May, iQiyi, a spin-off from Chinese online search giant Baidu, announced it would tap into the cinema business by letting users book private on-demand offline cinemas to watch titles from the company’s library.

Online streaming platforms are also considered complementary to China’s 50,000 theatre screens, which translates into one screen for every 28,000 people, compared with one screen for 8,000 people in the US, said Sophia Yen, a partner of Manatt, Phelps & Phillips.

“There are still places in China where you don’t have cinemas available. [Streaming] could be the way to give more content a window without being shown in actual theatres,” she said.