iQiyi, the online video streaming service Baidu has a majority stake in, announced a film company last week. Different from conventional film companies, the iQiyi one won’t produce movies or do traditional offline marketing. Instead, the core business of it will be online marketing & publishing and film financing.
The film company will develop online movie ticketing service, and online games or other products based on the movies to be published. iQiyi plans to co-publish seven movies with domestic film companies and one from the Hollywood in the upcoming year, and test the model out, the company said.
iQiyi said they’d figure out ways to monetize online movie rights and roll out a crowdfunding site, with tech support from Baidu’s online finance services, for movie makers.
Before this film project, iQiyi had been buying rights of videos, including TV programs and movies, and featuring original content it helps contributors produce, making revenues through advertising (also sharing ad revenues with content contributors). With this new business, iQiyi will have those films as exclusive content, and make more money through selling tickets for cinemas or commissions from crowdfunding.
A handful of video sites that have survived consolidations in China, since there’s little advancement in advertising tech or business model, have been working on original content to differentiate from each other. While still buying exclusive content from traditional content providers, including TV stations and movie companies, those Chinese sites have begin producing original content, from talk shows to drama serials. Sites such as Youku-tudou have also produced some short films.
China’s feature film market is growing rapidly. Chinese online video sites now want a piece of it.
LeTV is an early mover in almost all phases of China’s online video market development, from content right purchase to smart TV manufacturing. The company signed Zhang Yimou, one of the most famous film directors in China, and has published the latest movie by the director on LeTV’s video site and smart TV.
Big players like Alibaba are more aggressive. The Chinese e-commerce giant has bought a majority stake in in ChinaVision Media — the company has been rebranded Alibaba Pictures Group, who has reached partnership with several top Chinese directors that has preferential rights to invest in their future films. Alibaba launched Yulebao, a mutual fund for its users to fund films.
The online movie ticketing is growing very fast too, as users are becoming used to buying tickets online or through apps. CatEye, the movie ticket app by Meituan, claims they have had 30% of the total movie ticketing market in China, expecting to reach 50% by year end. CatEye isn’t even an early mover in China’s online ticketing market. Movie news & info site Mtime, Douban, a social site including movie ratings & reviews service, and big Chinese Internet companies such as Tencent and Alibaba have been selling movie tickets online.