Goodbye ice-cream, hello I-stream

As movie theaters offer more bells and whistles for screenings, it's time for filmmakers to take a serious look at streaming-enabled platforms

Video websites used to be a hotbed for pirated content. But with the infusion of big capital, they are turning into an alternative venue for mass viewing.

In the sizeable Chinese contingent at the just completed 71st Venice International Film Festival, one company stood out. It was not a film production company per se, but it hosted China Night, and the number of participants it drew hinted at its gravitas. It was iQiyi, a video streaming website that few outside China have heard of.

IQiyi did not produce any of the Chinese-language films either in competition or otherwise being shown on the Lido. It scored another kind of victory: it licensed 23 films from the festival, which it offers as a video-on-demand service to 15 million of its daily users.

This sounds like a step-down for filmmakers who crave a piece of the fast growing China market, worth $3.5 billion (2.7 billion euros) last year. But the film exhibition market (i.e. showing movies in cinemas) is a tough nut to crack. Not only are foreign films restricted by quota, but even domestic releases face stiff competition. Last year, a total of 305 films got theatrical distribution, of which 60 were imported. That means more than half of the 638 Chinese films that obtained licenses for screening during the year failed to make it to the cinema.

And of those with the lucky break, most found the darkened halls a place of humiliation rather than one of exhilaration. So few people showed up that most releases barely registered a blip on the box-office radar. If you care to study a detailed chart for China's top-grossing films, you will realize that the cinema is far from a democratic venue that welcomes all kinds of works. It discriminates against most titles in favor of a very select few Chinese and Hollywood hits, movies with either eye-popping special effects or jokes and narratives that click with the local audience.

The trend for domestic films in the past few years has skewed toward low comedy and so-called fan-based fare, i.e. works by new directors who have already built a massive fan base elsewhere. This has worried a lot of experts, such as Professor Yin Hong of Tsinghua University, who argues that box-office success does not exempt a film from criticism. Earlier he sparred with the creative team of The Breakup Guru, a slapstick comedy that raked in 666 million yuan ($109 million; 84 million euros) at the box office during the 2014 summer season. Last year, in the capacity of a film critic, I found myself in an even worse standoff with the huge fan base of The Tiny Times franchise. Yin and I were arguing these are not paragons of film art, but their supporters invariably used box-office figures as the yardstick of excellence.

Movies on the festival circuit are exactly the opposite of what most Chinese filmgoers want. Or more precisely, China's cinemas would not want to screen the kind of titles favored by film festivals around the world. Just look at the results of The Artist and The King's Speech and you will understand that festival or award gold does not translate into box-office gold, at least not in China.

Yet, these movies are watched by many people in China. The problem is that they watch it online and from websites unscrupulous about the legitimacy of licensing. China has the world's largest Internet user base, 632 million people, and the largest mobile user base, 537 million people. As of June, most of these people, or 438 million and 293 million respectively, were in the habit of watching streaming video content. For a whole new generation, a movie is something you stream or download, unless you have sufficient reason to trek across town and buy a ticket.

I have always believed that, with a proper licensing and payment structure, the online platform could be ideal for arthouse titles that have a loyal but geographically dispersed following. Even though cinephiles cherish the theatrical experience, it is a lot to ask in a country like China to gather a crowd of a certain size at a specified time and place. The biggest stumbling blocks, as I see it, lie in the elitist mentality of some filmmakers and the potential threat posed by the shifting quicksand of regulation.

If one has to choose between 2,000 viewers for a release, a respectable number for a couple of festival screenings, and 100 times that number of online viewers, many would pick the former as it embodies prestige. In China, theatrical distribution also bumps a film to a higher asking-price bracket for television broadcast. Last year, iQiyi crossed a milestone when it achieved the highest ratings ever recorded for a television series when it streamed You Who Came from the Stars, a South Korean soap opera that garnered two billion clicks, twice the ratings as the highest rated broadcast series of the same time.

Because websites offer serial programming with commercials, which is the same model as television, and offer films for a fee, especially for premium titles, the former is fast replacing traditional TV while the latter is still gaining traction. IQiyi had previously licensed titles from the film festivals in Shanghai and Hong Kong, and its best result was with Little England, the biggest winner of the Shanghai affair. Executives at iQiyi reveal the difficulty of negotiating deals with each participating film, sometimes obtaining a limited license (for one week or so). Most of the titles it secured the rights for were known quantities that had already been amply screened and awarded.

China's regulatory body is realizing faster than filmmakers the great potential of the online platform. It has just decreed that a permit has to be secured to stream imported movies and television series starting from next April. Many filmmakers may regret that they held their noses at the wild-west possibilities when they existed.

No matter how volatile the regulatory environment, the building of a pay-per-view model, which many of China's video content providers are striving for, will benefit both filmmakers and film lovers. Films screened to an empty house may not boost anyone's ego, but films clicked by an online viewer may bring in real revenues. And the retail price is unbeatable. At 5 yuan a pop, the same as buying a low-quality pirated disk, or 20 yuan for a monthly subscription, it will lure users not from cinemas, but from pirates. Besides, you don't have to put up with the small image on your mobile gadget or notebook computer. With a set top, you can watch it on your sitting-room giant screen.

Now, the next milestone will be a movie that makes a decent profit from online streaming alone. With iQiyi and other video sites jumping into the fray of film production, the day will come when one of their own movies, rather than an imported one, will get this honor.

The writer is editor-at-large of China Daily. Contact him at raymondzhou@chinadaily.com.cn

(China Daily Africa Weekly 09/12/2014 page30)