Busan: Heyi Pictures President on Hollywood Co-Productions, New Business Models (Q&A)

Matthew Kailuo Liu P 2015
Heyi Pictures

The head of the Chinese giant, which will premiere experimental works by Asian masters and newcomers online, also discusses piracy and differences between the U.S. and local industries.

During the first three quarters of this year alone, Heyi Pictures marketed 14 Hollywood movies, including the co-production Outcast starring Nicholas Cage, in China, earning a cumulative $1.4 billion (8.9 billion yuan).

The company, barely a year old, reaped 27 percent of the total box-office revenue during that period.

The film arm of Chinese online video giant Youku Tudou is also making headlines at the 20th Busan International Film Festival (BIFF) with Color of Asia, a joint project with the South Korean festival that funds star Asian auteurs Apichatpong WeerasethakulIm Sang sooNaomi Kawase and Wang Xiaoshuai, as well as young emerging filmmakers, to create films for the Internet and the big screen.

Heyi's president Matthew Liu, a veteran of the Chinese film industry — his grandfather is the respected filmmaker Sha Meng, whose 1956 film Triangle Hill, about the Korean War, remains a classic of Chinese cinema — has been introducing new business models amid the constantly evolving local industry.

The Hollywood Reporter sat down with the executive on to learn more about the company's rapport with Hollywood, its outlook for the world's No. 2 film market and strategies for distributing films, online and offline.

How has Heyi been involved with Hollywood projects and what is your road map for international partnerships?

We co-produced Outcast, a period fantasy starring Nicholas Cage, and also handled marketing for the film in China. We are the go-to platform for movie marketing because we have several of our own shows on movies that are available online.

We have partnership deals with Paramount and [five] other Hollywood studios, which are great for their global outreach. We are discussing co-production deals with several Hollywood studios. However, working with Hollywood is not the only way to embrace the global market.

English-language movies are the most widely accepted content worldwide, but we believe that Asian content and culture will have a bigger chance to be represented in cinema. I am personally a big fan of movies like The Dark Knight but also regional films like [Korea's] Miracle in Cell No. 7.

It's important for us to identify what resonates with the Chinese audience and to work with other Asian studios for projects like Color of Asia, which involved joint collaborations from as early as the script development.

What are some of the latest Chinese audience trends?

The Chinese audience has changed a lot. There are different sub groups now. Those born after the 1980s, for example, have their own ways of receiving information and expressing themselves. This is reflected in how some of our most successful titles are based on web cartoons that are popular among the younger age groups, and the film versions were also created for the Internet.

Interestingly, the single-day box-office earnings for one such project, Goodbye Mr. Loser, is almost doubling the big-budget film Lost in Hong Kong. Usually big films like the latter have a big opening and then the scores taper off, but the case has been the opposite for Goodbye Mr. Loser. Earnings are growing.

In light of such changing distribution models, Heyi has announced new online initiatives...

Yes. We cover different formats from short videos and web original series to standard 90-minute feature films, which are predominantly for viewing online.

We are experimenting with different business models, such as subscriber-based movie distribution.

How big is the piracy issue?

In general, piracy is becoming less of a problem in China. Currently the movies we're bringing to screens are shown simultaneously on- and offline, but we may window that such as by granting early access for paid subscribers.

This is all very new to China, and we are exploring what works best for us. We are bringing Internet movies to all screens ranging from TV broadcasting via CCTV to advertising on outdoor advertising screens with Air Media.

Heyi's parent company Youku Tudou has been dubbed the Chinese version of YouTube. Are there any U.S. media companies after which you model yourself or your business plans?

The Internet industries in China and the U.S. are developing in parallel, so it's difficult to match one to the other.

There are huge differences between the two markets, so that dictates the industry development of each. The U.S. has a long-established media market, and China has so many new models, but I believe it's important to find what works in China.

Do you think online film distribution will exceed traditional offline platforms in the near future?

It's hard to say exactly, but only 200-300 Chinese domestic movies hit local theaters, while a whole gamut of online content debuts every day. The Internet is limitless. It's something for now and the future.

The key is to produce good content and deliver it to audiences in a convenient way. But the cinema provides the setting for a more social experience, and in China, even popular TV shows are shown in theaters so that fans can watch something they love together.