Internet Film Industry: Distribution Channels Can Be King, but Content Production Is Still a Layman

Wang Jianlin probably didn't expect that the understated words "set a small goal, earn 100 million first" would accidentally go viral. It is said that at Wanda 's speed, the small goal of earning 100 million can be achieved in 1.2 days.

However, Wanda's ambitions clearly go beyond this. Wang Jianlin recently made another bold statement: there is no upper limit on investment in sports and entertainment, and he even wants to buy the six top American film production companies.

This idea has actually been seen through by the Internet. Internet companies such as BAT have already made extensive layouts in the pan-entertainment industry. Jack Ma 's strategy for Alibaba is "health and happiness", and for this purpose, Alibaba has made a series of organizational structure adjustments.

In the pan-entertainment sector, the most intense competition is in the film industry, where Wang Jianlin wants to buy, buy and buy. From 2015 to 2016, in addition to Internet giants, Internet companies in sub-sectors such as online video and online games also joined the battlefield. Even "slow companies" such as Douban.com also hope to get a share of the ever-expanding film market.

The mushrooming of Internet films is stirring up the film market. Online distribution channels saw a trend of integration in 2016, with more companies beginning to get involved in content production.

However, some industry insiders are concerned that the so-called disruption brought about by Internet companies may have a more negative impact on the film industry itself. Will this slow and meticulous content industry fall into fast-food and short-sightedness due to the influx of capital? Although many Internet film and television companies have IP and sufficient funds, they are still outsiders in film and television content.

Dozens of Internet companies are planning to enter the film and television industry

After three years in Shanghai, Wang Fan returned to Beijing. After studying in Beijing for four years, she went to Shanghai and joined a well-known online game company. In the first half of this year, the game company decided to set up a film and television company in Beijing to develop film and television for its game IP. Although she worked in a game company, Wang Fan was not a game enthusiast. Out of curiosity about the film and television industry, she applied to be transferred to Beijing to continue to be responsible for marketing. This newly established film and television company has only dozens of people and is still in the stage of staff expansion.

Talking about "World of Warcraft" which was released in June this year, Wang Fan is full of confidence in the future. In her eyes, the high box office of "World of Warcraft" proves that the road of game-adapted movies can be successful and even successful.

In fact, before the release of World of Warcraft, some gaming companies had already explored the film and television adaptation. In January this year, Perfect World announced a restructuring plan to acquire the gaming company Perfect World for 12 billion yuan, combining its film and television and gaming businesses through a listing platform to achieve "film and gaming integration." At the end of March, gaming company Linekong Interactive also announced the establishment of a film company; in June, Giant Interactive announced the establishment of Giant Pictures, a subsidiary for its film and television business.

At ChinaJoy, the largest exhibition in the gaming industry, gaming companies participating in the exhibition this year are no longer willing to talk about games, and "film-game linkage" has become a hot new topic.

This crossover into the film and television industry is not just for gaming companies. According to incomplete statistics from Sina Technology, in the two years since Alibaba acquired shares of China Culture Media and established Alibaba Pictures in June 2014, more than 10 well-known Internet companies have established film subsidiaries, including not only Internet giants such as Tencent and Baidu , but also online video companies such as iQiyi and Youku, gaming companies, and even online travel companies and hardware companies such as Xiaomi.

The boom in the film industry this year caught many film industry professionals off guard. Yang Lei, vice president of Alibaba Pictures, lamented to Sina Technology that last year, there were less than 20 special events per day at the Shanghai Film Festival, but in 2016, the number of special events per day exceeded 40, and he saw many familiar Internet companies at these events.

Internet distribution channels affect box office

In fact, Internet companies have had a profound impact on the film industry. It is difficult to be separated from the Internet in terms of scheduling movies and choosing tickets. In 2015, among the top ten domestic box office films, nine were distributed by online ticketing platforms. Internet film and television companies have huge online traffic and funds, and are integrating with the film industry.

According to data released by iiMedia Research, in the second quarter of 2016, online ticket purchase revenue accounted for 69.4%. In addition to purchasing movie tickets (44.3%), Chinese mobile Internet users also use online movie ticket purchase platforms to learn about the latest movies (29.5%) and check movie schedules (17.1%). One-stop online ticketing platforms have become increasingly important to ordinary audiences.

At the same time, online ticketing platforms are also consolidating, gradually becoming a battlefield for BAT. Maoyan, Baidu Nuomi, Tao Piao Piao and Wei Piao account for 22.1%, 20.8%, 12.1% and 10.8% of the total box office market share respectively, and together they have already occupied half of the market.

The massive subsidies provided by online ticketing platforms led by BAT to grab the market have also pushed up the box office to a certain extent. A popular practice in the film industry is that film distributors and online ticketing platforms attract audiences through group buying activities such as low-priced movie viewing, while the box office subsidies are borne by the distributors and film producers, which actually pushes up the total box office to a certain extent.

As subsidies were reduced, movie box office revenue also showed a shrinking trend. According to statistics, the mainland box office closed at 24.686 billion yuan in the first half of 2016, a year-on-year increase of 21.2%, which was far lower than market expectations. In the first half of last year, the growth rate was as high as 48.67%.

Wang Changtian, chairman of Enlight Media , previously told the media that the national ticket subsidy was expected to be 4-5 billion last year, while this year it is about one-third of last year. Correspondingly, the box office has become "dismal" since February this year. The box office scale of the highly anticipated summer movie season is only basically the same as last year's 12.47 billion yuan, and the growth rate has hit a new low in nearly 9 years. In particular, the combined box office in July and August showed negative growth for the first time in 5 years. This situation shocked the industry and the box office went into a cold winter overnight.

The Internet may turn movies into fast food

If the poor box office performance is not enough to calm the excited Internet companies, industry insiders have sounded the alarm many times.

At the end of last year, Wang Changtian said in an interview that the film and television industry is very risky and blindly crossing borders will not be able to compensate no matter how much money you have. Because movies have nothing to do with background, money, or even big data, but with past wisdom, judgment, past experience and mentality.

If online distribution channels can be monopolized by Internet giants, Internet companies actually have no advantages in content production.

For a successful movie, every link is indispensable, from script to content production to distribution, but content is the root. Zhang Qiang, vice president of Alibaba Pictures, believes that excellent film works are the result of the cooperation between screenwriters and directors, and high-quality works even require the right time, place and people. He did not deny that even with huge funds, Alibaba Pictures has not yet launched its first work in two years since its establishment.

In fact, it is difficult to make a highly acclaimed movie if you only have IP and celebrity resources but lack recognition and understanding of the film industry itself. Alibaba Pictures has learned a profound lesson in this regard. In December last year, Xu Yuanxiang, vice president of Alibaba Pictures, said that he would "no longer invite professional screenwriters", which put him on the opposite side of many well-known screenwriters. "Movies are manual work that requires craftsmanship, and talents such as professional screenwriters are also indispensable," Yang Lei also reflected, "People who can produce high-quality content are the biggest barrier to the film and television industry."

Compared with talent, money is the most abundant resource in the film and television industry. Yang Lei believes that many Internet film and television companies currently participate in film production only for financial investment, and their only in-depth participation is in publicity and distribution. "There are only a handful of Internet film companies that are truly involved in content production, and most are still in the project stage."

At the same time, the production cycle of a movie, which often takes 2 to 3 years, and the high investment, are incompatible with the fast pace of the Internet. Data forecasts cannot keep up with the rapid changes in audience tastes. In Yang Lei's view, the IP strategy that Internet film industry must talk about has a greater destructive significance: those popular IPs are essentially consuming sentiments, and more Internet companies hope to obtain high box office through short-term marketing means, and then obtain share and profit from it, which is of no benefit to the entire film industry.

"If this continues, the film industry may be led into fast-food and short-sightedness by Internet films and TV shows," said Yang Lei.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.