Why Are Most of the Faces at the Beijing Film Festival Web-Video Companies?

Will rapid expansion today produce a creative future?

Judging by the numbers alone, the 7th Beijing International Film Festival looked like a triumph: deals signed there came to 17.458 billion yuan. But the biggest of them — Dadi Cinema's 3.378 billion yuan purchase of Orange Sky Golden Harvest's China cinema business — had already been announced back in January. So had Poly Film's 680 million yuan purchase of Xingxing Culture. Which raises the suspicion that the signing ceremony really was only a ceremony, and that the deals themselves never happened at the festival at all.

The Film Market is one part of the Beijing festival: companies rent booths there in the hope of striking partnerships and deals. How much business gets done is the official measure of whether the market worked.

Another number rewards a second look. China's 2016 box office, after a fresh audit by the Film Bureau of the State Administration of Press, Publication, Radio, Film and Television, now stands at 49.2 billion yuan. At the start of the year the bureau had said 45.7 billion.

Everyone knows where the extra money came from. In late January the Film Bureau changed how box office is counted, adding the e-commerce service fee — what moviegoers pay platforms like Maoyan, Yupiaoer and Taopiaopiao when they buy a ticket — on top of ticket sales proper. Out of thin air, 2016 gained 3.5 billion yuan.

Today's film and television business is like a lot of other things: the numbers look splendid, but walk the floor once or twice and what's worth thinking about turns out to be something else entirely.

This year's Film Market is bigger than 2016's, but nearly all the new exhibitors are unfamiliar faces. "A lot of these companies I'd never even heard of," an industry visitor told QDaily at the Beijing International Hotel Convention Center, where the market was held, pointing at one of the booths. "The exhibitors this year are so low."

"Unfamiliar" would be the fairer word. Look up these companies and you find most were founded recently and make their money shooting and producing online film and video content — by current production standards, about the lowest-end product the industry has.

Yongyi Pictures rented one of the largest booths at the market. The company registered back in 2007, but its first work with any real name recognition was the 2012 web series Twenty Years of Gangland in Northeast China (《东北往事之黑道风云 20 年》). Lately it has been promoting a new project on Weibo: a web series and web movie called Notes from a Haunted House (《凶宅笔记》).

Lexiang Pictures, from Shenzhen, imports foreign films and handles overseas distribution for Chinese ones; its best-known job so far was taking Crosscurrent to Japan. On the production side its titles include the Xie Wendong (《谢文东》) series and web movies such as My Gangster Sister (《我的黑道妹妹》) and The Best Youth (《最好的青春》).

Laike Media, from Guangzhou, took a small stall as well. Its catalogue: the web variety shows The Goddess Has a Cure (《女神有药》) and Detective Awesome (《名侦探猴塞雷》), and the web series Dreams and Reality (《梦想与现实》) and Genius J (《天才 J》).

The names of these companies, and the shows they make, will mean nothing to most people. Yet companies like them — whose main product is online film and video — are the mainstream of this year's Film Market.

Which is puzzling. It is billed as a film festival, so why are the exhibitors all making web series and web movies, work that has little to do with film, from companies that sit on the far edge of the industry?

Part of the answer lies in what the Beijing festival is.

Elsewhere, a film market of this kind is attached to a festival or trade fair aimed at the industry. The European Film Market, the Marché du Film at Cannes and the American Film Market are reckoned the three largest in the world. Their job is to trade rights: producers from each country announce their slates there, and distributors from around the world buy the right to release those films at home.

China has no such setup. Neither Beijing's market nor Shanghai's can carry rights trading. Censorship keeps foreign producers from pitching their films to the Chinese market. And Chinese producers have already watched every decent project get snapped up, so they have no reason to come either. The rights business has simply been stripped out of Chinese festival markets.

What the Beijing festival can still do is gather a great many industry people in one place for a few days, which makes it a good place to advertise. Every exhibitor QDaily interviewed there, asked why they had come to the Film Market, got to the words "market promotion" sooner or later.

If the market is only a promotional exercise, it is of little use to companies that already have a place in the industry — and the traditional studios have duly withdrawn. At the 2015 Shanghai Film Market you could still find Huayi Brothers and Wanda. By 2016 only mid-sized firms such as Chenming Media and Yinrun Media were left. By the 2017 Beijing festival, the traditional companies had all but vanished.

The web movie companies that sprang up over the past two years, by contrast, badly need to be noticed. With the big players gone, they took over this year's market as a matter of course.

And not only the market. The Motion Picture Association of America ran a forum at the festival called "Web Movies and New Business Models in China's Film Industry Chain," gathering industry figures to discuss where web movies are going. Asked why they held it, the association answered as though the question answered itself: "Because online films are films too. It's this year's hot topic."

It is. Over the past year China's box office stalled, and the number of companies shooting films for cinemas fell from 553 in the first half of the year to 398 in the second.

Web movie producers went the other way, and are now the most conspicuous and most active part of the Chinese film and television business. EntGroup's China Web Movie Industry Research Report, published in October 2016, counted 64 companies shooting web movies in the first half of 2014; by the first half of 2016 there were 843.

At the MPAA forum, Chang Bin, general manager of film investment at Tencent Penguin Pictures, put the figure higher still: more than 2,000 companies across the internet have a hand in web movies. That is four or five times the number making films for cinemas.

All of which suggests web movies are the coming thing.

Given the state of the business, that is not a cheerful conclusion. Even people who have never watched a web movie have heard about the quality. The two obvious problems are vulgarity and imitation.

Of the ten films that earned iQiyi's largest revenue-share payouts in 2015, four belonged to the Taoist Comes Out of the Mountain (《道士出山》) series, together taking 25 million yuan. The series is generally held to have been feeding off Monk Comes Down the Mountain, which Chen Kaige had released not long before. And around the release of Feng Xiaogang's I Am Not Madame Bovary, video sites filled up with web movies called Madame Bovary's Revenge (《潘金莲复仇记》), Who Killed Madame Bovary (《谁杀了潘金莲》) and I Won't Be Madame Bovary (《我不做潘金莲》). Hence the label the industry has worn ever since: riding other people's IP.

Web movies mixing sex and violence are easy to find on any of the video sites, and posters and titles keep finding new ways around the usual limits. In November 2016 the State Administration of Press, Publication, Radio, Film and Television ordered more than 60 web movies taken down for vulgarity.

Quality aside, the web movie is not obviously a healthy industry either. What has driven its growth is not so much an audience demanding the films as video sites needing to fill out their libraries — fitting, since the term "web movie" was coined not by anyone who makes films but by iQiyi.

iQiyi proposed it three years ago, at a summit called "Web Movies Make Dreams Come True." The company argued that it could serve as a platform for distributing films on the internet, and on that basis set out what a web movie should be: longer than 60 minutes, with the structure and heft of a real film, released first online.

At the time iQiyi was losing the video race. On mobile monthly active users it ranked third in 2014, behind Youku and Tencent Video. To compete it needed a large supply of programming that would pull viewers in, and the web movie was invented against exactly that background.

Once more — as in so many industries — the thing turned into a money-burning contest. Tencent Video, a late entrant chasing iQiyi and hungry for exclusives, favored outright buyouts. Youku set up a web movie department of its own and bought hard, through minimum guarantees and buyouts.

Quality, though, is not the only thing the platforms weigh. Just as Hollywood's big six once had to buy up independent labels to fill Walmart's shelves with discs of every genre, video platforms now want as much content as they can get, to draw every kind of viewer and advertiser.

A web movie and the online version of a theatrical film make money the same way: subscriptions and advertising both feed the platform. But the two are plainly not of the same order in quantity. Treat them all as advertising slots — and for ad impressions, quality makes no difference — and the web movies offer far more slots than the films do.

Given how questionable video sites' view counts are, web movies and web series of every description may well be earning the platforms money in advertising and in traffic alike.

Measured by return on investment, traditional production looks worse still. For one thing, it is famously uncertain. A big director, a famous cast, a story everyone knows — none of it guarantees a film will work in the market. Wanda's The Great Wall and Huayi's New Year tentpole The Wasted Times are the recent examples everyone cites. Facing an audience directly, no filmmaker is ever sure.

Policy makes that risk harder still to read. If risk falls on everyone alike, the cheaper web movie and web series become a refuge for a lot of producers — nobody wants years of work to end up locked in a dark room.

For now it is investors, not viewers, who pay for these films. But if you are feeling optimistic, and believe that everything on the internet moves from shoddy mass production toward quality and niche, you can hope that web movies will eventually turn out something genuinely creative.

Low cost cuts both ways. Cheap experiments could make the internet good ground for genre films — the territory that, in the old Hollywood system, belonged to the independents.

EntGroup, the research firm, argues that thrillers, game adaptations and sports films draw audiences too small for the theatrical model to work. "But the preference profiles and precise marketing of web movie users can put these niche subjects in front of their target audience, greatly increasing the chance that such films make money, and at the same time widening the range of subjects web movies cover."

Zhou Liming, a film critic who has made web movies himself, thinks the form does not compete with cinemas head-on: "I think what suits the internet best is a certain kind of comedy — very down to earth, catching what ordinary people are happy or angry about right now, and probably short and tight, with something in common with short video."

Money may also draw better filmmakers in, especially when policy is tight and failing at the box office costs so much. "This year, on the web movie side alone, I've seen so many genuinely creative ideas. We live in an age with a surplus of creativity — the ideas are there, but they don't convert well. Capital can squeeze these things out fast, so everyone can see them, and I think that's a good thing," said Wu Bai, director of the web series Evil Minds (《心理罪》), at one of the festival's forums.

Judged by the companies exhibiting in Beijing, though, innovation is hard to find. Even the so-called big names can't claim to have found their footing here. Huayi Brothers' subsidiary Huayi Chuangxing led production on Constable: Blade of Blood (《捕快血之刃》); Huace Film & TV made the web movie Adult Fairy Tale (《成人童话》) with Qishu Youyu; iQiyi brought in Roger Corman, the "King of the Bs."

None of them has made a web movie that broke out. The business is more scattered than the traditional one: behind iQiyi's ten highest-earning web movies of 2015 sat Seven Entertainment, Taomeng, Lanlanlanlan, iQiyi and several others — and that is only one platform's list.

In web movies, the traditional studios and these small newcomers start from the same line. For an industry only three years old, the numbers are still the only KPI anyone is judged by.

Images in this article: Douban Movies.