China’s growing footprint in foreign content
Chinese enterprises looking to acquire the copyrights to foreign programs will tend to focus on professional knowledge and technology-based ones, according to the latest report from Raine Group, an investment banking advisory firm.
Driven by a demand for content, an increasing number of Chinese companies and television channels have been buying the rights to famous overseas reality TV shows in order to recreate localized versions for Chinese audiences.
A prime example is the massively popular TheVoice ofChina, adapted from the TheVoiceofHolland, a singing competition program that originated in the Netherlands in 2010.
Star China had in 2012 acquired the rights to use the format from owner Talpa Global and the three-year rights deal had cost the Chinese company 3.5 million yuan ($540,000). The move was a highly profitable one for Star China as it has since earned more than 1 billion yuan annually from the second year onward.
“Media and entertainment is a large and robust industry that has been experiencing long-term secular growth driven by the rise of the content-hungry global middle class and increasingly large volumes of new content across an expanding number of genres,” said Deborah Mei, a partner in Raine Group.
Having witnessed the success of TheVoiceofChina, Chinese television companies started a frenzy in 2014 that saw the introduction of several shows including Hunan TV’s DivasHittheRoad, Zhejiang TV’s RunningMan and Shenzhen TV’s TheAmazing Race. The boom continued in 2015 when Hunan TV
Deborah Mei, launched another show called WonderfulFriends in January, while Jiangsu TV and Dragon TV introduced WeAreinLove in May, and GoFighting in June respectively.
Many of these Chinese shows, which content range from outdoor activities to travel and relationships, leverage the appeal of celebrities such as iconic singers, movie stars, sports figures and yesteryear entertainment industry luminaries in order to further to boost ratings.
The popularity of reality TV shows has in turn spurred online video platforms to produce their own versions rather than spend significant amounts of money to acquire the webcast rights. Leading online players such as Youku Tudou Inc, iQiyi.com, Tencent Holdings Ltd and LeTV Holdings Ltd have also sought to distinguish their reality shows by featuring everyday people instead of celebrities as the lead characters.
According to Mei, online platforms differ from the television medium as they offer more interaction with audiences, relatively more liberal censorship and a wider scope for partnerships with advertisers.
“Going online is the future in terms of attracting more audiences, who will very soon be completely internet and mobile technology users,” said Mei.
In the film sector, crossborder cooperation between Chinese companies and Hollywood filmmakers have been growing, as evidenced by The Sixth Annual US-China Film Summit, which was held on Nov 5, 2015 in Los Angeles, California at the Dorothy Chandler Pavilion. Big names from China’s movie industry, such as Zhang Yimou and Zhang Zhao, were in attendance at the event that touched on globalizing China’s film industry as well as future collaborations with its Hollywood counterparts.
Most recently, Chinese commercial property conglomerate Dalian Wanda Corp was the sole financier of the 2015 Hollywood movie Southpaw, which had a $30 million production budget. China Film Group, the country’s largest film producer and distributor, also helped finance the action comedy Pixels, while the blockbuster Mission: Impossible-RogueNation saw China’s Alibaba Group making its first-ever US film investment.
“Internet giants are transforming the industry. From 2014 to 2015, film-related investments from Alibaba and Tencent were worth $7.6 billion, equivalent to the total 2014 film and new media merger and acquisition transaction value in China,” said Mei.
“China is interested in creativity and production quality while Hollywood is attracted by the scale of China’s domestic market and its growth. Such collaborative projects form a win-win opportunity for Hollywood studios and their Chinese counterparts,” added Mei.
“Going online is the future in terms of attracting more audiences, who will very soon be completely internet and mobile technology users.”
a partner in Raine