Filmmakers look outside the box office
Chinese mainland filmmakers are increasingly turning to derivative works instead of relying on box-office earnings as an additional means of securing revenue amid fierce competition in the digital age.
Liu Kailuo, president of Heyi Pictures, told China Daily on the sidelines of a China Daily Roundtable Forum on Friday that pinning their hopes on ticket sales was a risky strategy.
“For traditional mainland filmmakers, box office earnings account for 70 to 80 percent of the revenue — that is very unhealthy because they rely too much on ticket sales, which is highly unstable, but if we could make more money from derivative works, the risks will be significantly reduced,” he said.
Creating derivative works is one of the exclusive rights of intellectual property (IP) in film, so the development and protection of IP is crucial to recreating works. Heyi Pictures originates IP itself, and also adapts existing novels and screenplays into movies or internet dramas.
“One of our most successful original IP films is Surprise, with a profit margin exceeding 300 percent. Only 40 percent of the revenue came from ticket sales, while the remaining 60 percent was made up of derivative works, such as authorizing video games and peripheral productions,” Liu said.
Surprise was actually an adaptation from an internet drama, the 20-year entertainment veteran said.
“We designed the content of Surprise ourselves and turned it into an internet drama, which was well-received. After a while, we adapted the internet drama into a movie while selling some T-shirts or figures with the characters in the movie,” he said. “So, we started to make money before the movie came out, just by selling peripheral products.”
Formed in 2014 by Chinese online video giant Youku Tudou, Heyi Pictures soon became a driving force in the entertainment sector after e-commerce giant Alibaba’s $4-billion takeover in April. Heyi has invested in more than 40 movies in the past two years, with total ticket sales reaching 9 billion yuan ($1.2 billion).
“As we are still a young company with only two years of experience, it’s difficult for us to be perfect in all the procedures in creating a film, so we just focus on the designing of the content and the film promotion stage. We are the ‘Apple’ in the film industry,” Liu said.
Liu said he is confident about the Chinese film industry, and emphasized that as the world’s second-largest film market is rapidly growing, it is foreseeable for China to surpass the US in the near future.
Liu has also produced popular films, including Saving Mr. Wu, Monster Hunt, Lethal Hostage, Guns and Roses, Love on Credit Reign of Assassins.
exchanging views on the business potential arising from adequate intellectual property protection in China’s entertainment industry. Right: Xiao Fei (center), board chairman and CEO of Beijing UP Picture Group, believes that intellectual property incubation is more important as a long-term strategy.
Guests stay tuned to the panelists as they expound their views on securing intellectual property rights in China’s film and creative industry.