Hollywood has much to learn from China, “which is essentially leapfrogging over the West” in terms of film and TV innovation, founder-producer of Lavabear David Linde said at a Toronto panel session Tuesday.

Linde reminded the audience that China is the second-largest market for film and is growing so fast that it will be No. 1 within a few years. The film companies cater to a digitally-savvy movie audience, while the boom in high-tech multiplexes has helped spur the growth.

He also said that it’s difficult for Americans to understand that Hollywood films do not dominate the film biz in China, as they do in the rest of the world.

Max Michael, head of UTA Asia business development, added that it’s been fascinating to watch marketing evolve. Five years ago, promotion began a month before a film debuted. Now it starts as soon as production gets underway, with lots of social media involved. A big marketing budget is $3 million as the Chinese have learned from Hollywood what to do — and what not to do. The Chinese ignore billboards and expensive TV ads in their marketing plan, he said.

Andy Li, VPof iQiYi and president of iQIYI Motion Pictures, said significant developments in China include the speed of the digital progress, the vast scale of it, and the digital interaction for filmgoers.

The Internet had featured one-direction action for film fans, but now it’s multi-dimension interaction, offering them ticket-buying potential, talkshows centering on current film stars, and other developments through the eventual sale of a DVD or video-on-demand. Li’s company is tops for VOD: 150 million users a day, with 70% from mobile devices.

An Xiaofen, Desen Intl. Media president-chairman, said China has a new-generation audience, born since 1990, that is completely different from the previous generations. They grew up with the Internet and have more digital goals in communicating and getting information, “and are more in synch with the rest of the world” than their elders. She reminded that film and TV companies have to be very aware of which segment of the market they’re targeting. It’s no longer valid to think of China as one market.

The four-person panel (with a translator) was moderated by Variety‘s Patrick Frater. The panel was dubbed “Clearing the Hurdles of the China Film Industry” and was part of the festival’s day-long Asian Film Summit.