Shanghai Film Fest: China's Tech, Entertainment Industries Rapidly Converging

Youku founder Victor Koo

As top Internet video company Youku Tudou unveils a slate of over 20 original TV shows, Internet giant Alibaba continues to made bold steps into the country's booming entertainment sector.

China’s leading online video company Youku Tudou has unveiled a slate of over 20 reality and drama shows by its in-house production unit, part of the company’s strategy of offering its viewers original entertainment.

The shows will be released during the second half of 2014 and will include reality shows, talk shows and drama series, the company said.

China has the largest online population in the world, and most people access content using their phones or tablets, so it’s a ripe market for the marriage between tech and entertainment.

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Youku's announcement is the latest sign of the growing closeness between the online world and the entertainment industry in China, something that has become a major talking point at the Shanghai Film Festival.

“In the future, the changes brought by the internet and online technology will blur the dividing line between media,” Zhu Huilong, Youku Tudou’s senior vice president, told a forum at the festival.

Advances in Internet technology and the coming-of-age of various forms of technology are transforming the traditional channels of promotion and distribution, and also strongly reforms the chain of upstream sectors such as financing and production, he said. 

“Today, you can say you are an Internet company and tomorrow you can say you are a film company, because most websites have made their own micro-films,” said Zhu.

Youku Tudou has 500 million users on both computers and mobile, and attracts more than 70 percent of Chinese online video viewers, according to the China Internet Network Information Center (CNNIC).

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Youku Tuduo began rolling out the new programming earlier in June with the release of the Internet reality show Searching Divas, which garnered more than 10 million views, and 10,000 comments within the first two days of its debut on June 6.

The show, modeled after the popular Korean reality show Running Man, features contestants who compete against each other to win challenging tasks and missions. Winners are able to meet their favorite Chinese celebrities.

Other releases include four talk shows, including Logical Thinking, Macroview, a program focusing on financial issues.

The shows also include Tiny Times, a drama based on the hit movie of the same name about upwardly mobile Chinese youngsters. Midnight Taxi, a Tudou original drama series co-produced by the Japanese director of Shinya Shokudo, will also be released soon.

“Our customized content in the emerging online entertainment industry is vitally important to Youku Tudou's continued leadership in the Internet television space,” said Zhu Xiangyang, Youku Tudou’s chief content officer. “To create a multi-screen, entertainment ecosystem is one of our most important strategic initiatives.”

Internet giant Tencent has been beefing up its online video arm to take advantage of its strong social networking business. It is working hard to commercialize its hugely popular instant messaging tool, WeChat.

Ann An, president of the Desen International Media production company, said she likes to work with the video websites because the platform is limitless, and with 10 times the audience that theaters can offer.

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“It can reach some areas that a company like us, or traditional means of promotion, cannot. With their support, we can expand wider,” she said.

The online retail giant Alibaba, which is working on a New York IPO that could be the biggest tech listing in history, has begun expanding into the entertainment industry with the registration of a film company in Hong Kong.

Alibaba, in which Yahoo! has a stake, has partnered with Yunfeng Capital to buy an 18.5 percent stake in Youku Tudou and has been building up its film business through its ChinaVision unit.

Liu Chunning, CEO of Alibaba Digital Media Group, told industryites in Shanghai that Alibaba was “picking up the impetus in the digital culture industry.”

Alibaba Film Group will invest in eight to 10 films every year, three to five TV drama shows and the same number of web-only dramas. The group's board includes action star Jet Li, who is close to Jack Ma, the former English teacher who founded Alibaba in 1999.

The company has plans to sign big-name directors, such as Wong Kar-wai, Peter Chan and Stephen Chow to its new film unit.

The company also set up a film investment fund called Yulebao, which is similar to crowd-funding but different enough not to fall foul of Chinese regulations. Yulebao met its funding target of $11.77 million after just five days and could have raised tens of millions more had it not capped its initial investment round. A second round was also recently funded, Liu said in Shanghai.