BAT seeks movie, film will be born on the Internet

Since last year, BAT has begun to speed up the traditional film industry. Ali acquired Cultural China Communications and changed its name to Alibaba Film Group in August last year. In August last year, iQiyi, with its background in Baidu, set up a joint venture with Huace Film and Television to collaborate with more diversified Internet content. Tencent also closely followed the establishment of the Film and Television Division. Over the next half year, BAT's logo appeared on the movie screen many times, and the action was getting bigger and bigger. From film and television creation to online movie tickets to offline theaters, the deeper the tentacles of BAT, the Internet has quickly changed the overall layout of the film and television industry. Why does the traditional film market quietly accept the involvement of Internet companies, and where will the future of the film and television industry go?

One of the reasons is that the film and television companies have a rough road to listing. In 2014 alone, there were tens of billions of capital flowing into the film and television circle. Under the mad situation of capital, backdoor listing became the only way for the development of film and television companies. However, it was followed by storms and storms. More than half of the mergers and acquisitions failed to materialize, and the ceiling for the development of the film and television industry gradually emerged. However, the Internet giants have strong financial strength and rely on the advantages of the platform to penetrate into various segments of the film and television market. At the same time, they have also thrown olive branches to the film and television companies. In the United States, the six major movie companies are all acquired by major media groups, and the Internet itself is the largest entertainment market. The fate of film and television companies selling themselves to the Internet giants seems to be expected.

The second reason is that the mode of the movie has changed. If you look at the movie box office alone, this is no longer the "fifth generation of directors" of the world, an IP will determine everything. Take the latest movie box office as an example, the left ear harvested more than 484 million box-offices, everything grew for more than six days at the box office, and the war wolf’s box office also exceeded 500 million. However, whether it is Su Youpeng or Wu Jing, who rely on the small era to gain fame in the film circle, Guo Jingming is a non-professional film director. The secret of these movie box office is in addition to the reminiscent of the IP, the Internet has contributed to the way of marketing. Whether it is Baidu, Ali or Tencent, there are more than 600 million Internet users. They have enough traffic, capital, and Internet marketing resources, and they understand the consumer psychology of users, especially young people. This is very attractive for film and television companies.

The third reason is that online video platforms have begun to do content. Xiaomi and LeTV tore the video content, so that the importance of the content is self-evident. In order to enrich the content resources, in recent years, major video sites have taken out billions of dollars each year to purchase movie copyrights. It is precisely because of this that video sites are not profitable. In order to reduce the cost of purchases, self-made plays have emerged, among them success. Recently, Sohu.com’s Pan Yujun’s punishing Youku Tudou did not expect to be ready to shoot a big movie and move to the screen after the crazy 1 billion hit. This gave Internet companies an opportunity to hold hands with film and television companies. The former had capital, traffic, and IP advantages, while the latter took advantage of filmmaking experience. Almost every internet product has BAT's capital infiltration, as does a video site.

The fourth reason is the rise of online movie ticketing services. In 2014, China’s movie box office reached 29.6 billion, including about 42% of online ticket purchases. According to the average growth rate of movie box office over the past 3 years, China is expected to become the world's first movie market in the next two or three years, and the impact of online ticketing on the movie market will also become increasingly significant. Alipay, Wechat, and Baidu’s wallets are still the top three online movie ticket markets. Even in the online movie ticket market, movie and TV companies cannot bypass BAT.

In addition to BAT’s interest in the film and television industry, the capital market seems to be happy to accept the arrival of Internet giants. Bona Films decided to return to the A-shares two hours before the opening of the market and surprised a lot of people, but it was also expected. The current market value of Bona Films is approximately US$816 million, which translates into less than US$5 billion in renminbi, while the market value of Huayi Brothers was 79 billion yuan, and the optical media reached 73 billion yuan. But returning A-shares will save Bona? At least Tencent was the largest institutional investor in Huayi Brothers four years ago. Ali Venture Capital spent 2.4 billion yuan to subscribe for additional shares of Ray Media. Perhaps the investment of Tencent and Ali is not the determinant of its market value, but it is an irrevocable factor. After BAT got involved in the film and television industry, the film and television market has quietly changed in three directions.

The first is the ecological development of the film and television industry. With the help of the Internet giant's platform advantages and financial capital, the film's revenue has not only concentrated on the box office. After the same IP is well-known to the public, it has extended its reach to games, literature and other entertainment fields. The same resources as online literature, online games, etc. have also been created as movie IPs. The combination of a film and television company and an internet platform has made this all the more efficient and has greatly increased the channels and ways in which movies can be realised.

Followed by the closed-loop development of the film and television market. In the past, there was no organic unity between film production methods, film production packaging and publicity, and theaters, and the relationship between the parties was simply a matter of interest. The Internet has played a role as a connector. Before the film was launched, crowdfunding, on-line ticketing on the line, and then user spending on the line led to profitability for subsequent products such as the real economy, e-commerce, and games. Baidu shares stake in SMI, the Internet began to enter the offline cinema, the closed-loop development of the film and television market gradually emerged. This mode not only reduces the production cost of the movie, but also makes the market performance of the movie predictable.

The last thing to say is that movies are becoming a part of mass consumption. The reason why BAT frequently attacks in the film and television industry is by no means a profit from the 300 billion film market. No matter whether it is Tencent, Ali or Baidu, it is no longer an Internet company, but an Internet life service platform. The film and television are undoubtedly an important part of the entertainment life of the masses. In addition to stimulating users to develop spending habits at the user level through the preferential activities, control over the upper layers of the film and television industry is indispensable. Only in this way can they ensure that the users enjoy the content they like. In order to avoid film and television become short-circuit of Internet services.

Perhaps BAT's involvement in film and television has its own ambitions, but the Internetization of the film and television industry has been unable to reverse the trend. For film and television companies, complying with the trend is a wise move. Hesitation will eventually be eliminated by the market.

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