Busan: China's Online Movie Revenues Forecast to Match Box Office in 5 Years
Senior exec at iQiyi, owned by search giant Baidu, probes opportunities in funding and 'big data'
China's online film market is growing quickly, and revenues should match box-office revenue in the country within the next five years, a vp for video site iQiyi said at the Busan International Film Festival.
China's online giants, who are launching a big push into the film business, have been a significant presence at the South Korean festival this year, popping up as buyers, sponsors and producers.
iQiyi is a Netflix-like site owned by big search engine Baidu, which recently unveiled plans to make seven local films and one Hollywood film next year.
"In five years, revenues from Internet distribution will be equal to box office in China," said Yang Xianghua. Chinese box office rose 32 percent in the first nine months of the year to hit $3.55 billion, already nearly equaling last year's total. Takings from online films are still small, and have been hampered by piracy, but a crackdown on IP theft and growing penetration of online content is reaping dividends.
The company is stepping up its plans to stream movies from film festivals to Chinese viewers, and hopes to use Busan to highlight its ambitions to work with traditional film companies in order to raise film funding, conduct market research through 'big data,' deliver marketing and promotional support, as well as operate cinema ticketing services.
"We are here in Busan to introduce the opportunities that online distribution of film, via VOD, PPV and subscription, offers in China," Yang said. "The VOD market is growing very fast, with an increase of 500 percent year to year. Due to the quota limits on theatrical distribution for foreign films, online distribution is a good choice when entering the Chinese market."
Added Yang: "In China there is no DVD market, no pay TV market. Online will make up for that missing market. The anti-piracy efforts by the government are much stronger than before, and the willingness of Internet users to pay for films is increasing."
The country’s biggest online TV company, Youku Tudou, announced a partnership with BIFF to produce short films, and signed online copyright deals with the top three South Korean film companies, CJ Entertainment, Showbox and Lotte Entertainment.
Youku also convened more than 100 filmmakers from China and South Korea at an event to promote cooperation between the two countries.
Youku Tudou is listed on the New York Stock Exchange and is 20 percent owned by e-commerce giant Alibaba, whose record-breaking Alibaba stock listing on Sept. 19 valued the company at an estimated $25 billion with a market value of roughly $230 billion.
"We are doubling down in Korea. We see a lot more closeness between Korea and China. Korea has removed the quota, so we are looking at features here. Before it was mostly variety shows and TV shows," said Victor Koo, chairman and CEO of Youku Tudou.
He was speaking at a ceremony where he signed an agreement with Yong-kwan Lee, director of BIFF, to work with BIFF to jointly produce short films and promote with the goal of promoting up-and-coming young directors in the region.
Heyi Film's first China-South Korea co-production, Bad Sister, directed by Kim Tae-gyun, has wrapped up shooting and the theatrical release is just months away. Heyi Film has also finalized a second China-South Korea film production deal, which will be announced soon.
The web companies are all keen to build on the film co-production agreement signed in July that means China-South Korea co-produced films are treated as Chinese films, and are thus exempt from quota rules.