Film­mak­ers look out­side the box of­fice

China Daily (Hong Kong) - - HK | ROUNDTABLE - By LIN WEN­JIE in Hong Kong cher­rylin@chi­nadai­

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.

Left: Panelists

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.

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