China’s booming online film market faces quality test
The year 2016 has seen a sharp increase in online film production with the total market value exceeding 1 billion yuan. While most productions have gone bust due to poor quality and inefficient business model, industry insiders are optimistic about the burgeoning industry and hope it would relate more to the young audiences.
It seems that overnight, online film production has become the fastest growing business, with investors rushing to give away money for scripts, directors and actors. Even some well-established directors in China’s entertainment scene have begun to embark on some online projects.
In 2015, an online thriller titled Daoshi out of Mountains achieved instant success. With merely an investment of 280,000 yuan and eight days’ shooting, the movie gained a box office of 26 million yuan through the pay per view channel of iQIYI, one of the top online video platforms in the country. The possibility of low-input and high return has thus brought large amounts of money into the sector.
Based on data from, a trade media dealing with big data concerning China’s entertainment industry, in 2016, the number of films released through online video platforms exceeded 2500, while during the same period, there were 402 theatrical movies. Bao Ran, the CEO of Emovie, said at a recent forum held by Motion Picture Association, that 3,500 online films were produced in 2016 with a total market value exceeding 1 billion yuan.
Despite the boom, most of the online film producers are actually losing money. A producer of Beijing Film and TV Culture Co. who didn’t want to be named told that although most productions cost much less compared with theatrical productions, around 90 percent of productions for online platforms could not make ends meet.
Some analysts believe besides poor quality, the key reason is that the industry is still exploring for a profitable business mode. Advertisements and pay per view could hardly guarantee good box office performance.
Dou Lili, general manager of iQIYI Online Film Development Center, said at the forum that industry insiders should focus more on producing high-quality online movies. iQIYI put forward the concept of online film ( 网络大电影) in Chinese in 2014. As a high-tech company operating in the entertainment and culture business, iQIYI has continued to push the development of China’s online film market.
Although online movies now have a threshold of at least 60 minutes long, iQIYI is now recommending productions of more than 80 minutes. “Generally speaking, it takes around 90 minutes to finish a cinematic narration,” Dou said, suggesting players in the industry to produce online films like they do with theatrical works. In her perspective, the industry has ushered in its ‘big investment’ era from last year.
Internet ‘big data’ has long been regarded as helping drive online video platforms like iQIYI into dominant positions. Since iQIYI started its online video production efforts three years ago, mass data about its viewers has been collected for analysis, which include age, sex, career, geographic position, length of watching and so on. According to Dou, viewers’ habits, likes and dislikes could be precisely inferred from the data, although she doesn’t think it should be used to lead content creation as many industry analysts have suggested. 
“We could refer to the data, but contents remain the key. We don’t want to see that people would rush to do a specific type of movie just because the data says it will be popular. Data would always lag behind content creation. We wish to see more innovative content,” she said.
Dou believes ‘big data’ will instead help with marketing online productions. “We could more precisely find out more suitable marketing channels for a specific production, and more efficiently reach its potential viewers,” she said.
Dou is bullish on the market. In her analysis, younger generations born in the 1990s and 2000s have risen to be mainstream viewers of video productions. And online platforms could cater to the group’s special needs for interaction. “Sharing and interacting with other viewers have become the primary needs of online movie viewers, and this is why online videos will become more powerful in the future,” she concluded. 

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