Internet giants finally find golden road in film industry

By Zhang Rui
0 Comment(s)Print E-mail, November 17, 2018
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"Venom" made 1 billion yuan (US$144 million) at the Chinese box office within the first six days of its showing, which indicates the luck of internet giants such as Tencent starts to change as they explore their investment in the film industry.

A new poster claims the film "Venom" passes the one billion-yuan mark at the Chinese box office. [Photo courtesy of Sony Pictures]

The film is the second golden peak for Tencent Pictures within just two months. The first was Zhang Yimou's "Shadow", in which Tencent had invested, which debuted with good box office returns in the domestic market and rave reviews, including 12 nominations from the 55th Golden Horse Awards, whose winners will be unveiled Saturday.

It seems the luck of this internet movie company, which had been struggling previously, has suddenly changed.

Tencent Pictures was not the only one. Alibaba Pictures also gained good returns from its two blockbusters -- "Hello Mr. Billionaire" and "Dying to Survive," as well as investment in the global hit "Mission: Impossible – Fallout."

At the same time, Perfect World Pictures invested in the Academy Award-winning "Darkest Hour," "Phantom Thread" and the summer blockbuster "Jurassic World: Fallen Kingdom" through a partnership with Universal Pictures.

Internet film labels built by outsiders, such as the online video game entertainment group Perfect World, e-commerce giant Alibaba Group and the world's largest gaming and social media company Tencent, naturally have international ambitions given that the parent companies have already become international conglomerates.

For example, Alibaba Pictures announced it would strive to become an international film company making "super franchise movies." Its CEO Zhang Qiang said at the time that the "super franchise" adaptation series of films would be the main core competitiveness, becoming a stable source of profits without being heavily reliant on whether a director they hired is good or bad.

Tencent Pictures has also pursued world-class franchises, such as participation in "Warcraft", "Kong: Skull Island", "Wonder Woman" and "Ready Player One." After the latest hit, "Venom", its next project will be a new "Terminator" film next year.

Chen Hongwei, vice president of Tencent Pictures, recently reviewed the company’s progress from "Warcraft" to "Venom", noting with regret that, with "Warcraft", Tencent Pictures did not have a mature team. Although they tried hard, the available power was still limited. However, in taking on "Venom", the team had been able to meet the demands of large international studios such as Sony Pictures. "It's a growing process from a child to an adult," he said.

Perfect World chose another way. In 2016, it signed a five-year US$500-million co-financing deal with Universal Pictures, which represents for the first time a Chinese company has directly invested in a multi-year, all-embracing deal with a major U.S. studio. The deal means Perfect World Pictures will be the producer of 50 films emanating from Universal Pictures and will get a 25 percent share of most Universal films, though the Hollywood studio's biggest titles could be excluded from the deal.

In the current Chinese market, there are no real guidelines for how a film can be guaranteed to succeed, and investors have long been impatient for filmmakers to make a film for years. Hence, most productions have been low-budget and low-quality works, which flooded the market and eventually lost money, and becoming embroiled at times in money laundering scandals.

The chairman of Tencent Pictures, Tencent's COO Ren Yuzhen said film and television, as the most vivid and intuitive cultural carrier, will assume an important mission in the company's cultural creation. Tencent will make more systematic and longer-term investment in the film and television business, he pledged.

After all, even global internet giants such as Alibaba and Tencent have to balance costs and profits when they tackle the film industry. They did invest in several great franchises and projects, but the recent successes of the blockbusters they were involved in, are merely an initial indication of how they are finally being compensated for years of exploration, persistence, and accumulation.

The reality is that most internet film and television companies that entered the market around 2015 have disappeared. The executives of the remainder agree good results required patience and efforts.

As internet film labels turned back to the basic principle of content and quality, through a chaotic 2018, they should have a firmer answer to the choice about making money and keeping quality.

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