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Berlinale: Huayi Bros to Put More Emphasis on Chinese Tentpole Titles

Leading Chinese studio Huayi Brothers Media is shifting its production strategy as a result of last year’s sharp slowdown in the theatrical box office. It will deliver two or more massive, local blockbusters per year and put increased emphasis on quality.

The new policy was outlined by CEO Jerry Ye, in Berlin on the sidelines of the Bridging The Dragon conference. He joined the company nine months ago after a high profile exhibition, distribution and production career largely at Wanda.

“Chinese movies had a slow year in 2016,” said Ye. “We need to put more focus on making blockbuster Chinese movies. Very big ones. We want tentpoles for the four biggest periods of the year – Chinese New Year, National Day, mid-Autumn festival, and Christmas – any others will be on a case by case basis. Those big successes can be used to make franchises, TV dramas, or online series. Just like Hollywood.”

Ye says that Huayi will also aim to make 10-12 small and medium budget titles, where the screenwriting, production and budget packages have been well conceived, but which allow it to try out new directing talent.

That and other lessons learned, he believes, will turn around the fortunes at the box office. (After 49% revenue growth in 2015, last year saw a drop to just 4%.) For the current year Ye says revenue growth could be in the 10—15% range. “The new emphasis on quality means that 2018 will be a big year for Chinese cinema and the biggest year ever for Huayi.”

Ye argues that the mediocre quality of Chinese movies last year highlighted the power of consumer choice and finite time. “Chinese moviegoers, especially the young generation, now have more choices how to spend their time. Online, TV drama, alternative content, games, movie consumption is just part of their lives. And they can watch a movie at home, or online anytime, anywhere.”

“They care about high quality movies and will turn out for them when we give them a reason why to choose to watch them in theaters. Chinese New Year was broke records because cinemas were people’s first choice for family entertainment,” he said.

Streaming video is a double-edged sword. “Cinema attendance increased by 9% in 2016, but online grew by almost 200%. And online subscriptions, meaning people who paid to watch monthly or yearly, is now over 60 million. The good side is that more people will pay to watch good quality content. But time cost is a more important factor than monetary cost in deciding how to consume.” And watching a movie in a theater takes more time, due to battles with traffic, and parking.

Ye says that Huayi does not need to become the operator of an online platform to profit from the trend. “Of course we must do more online. We must invest more in content, like Tencent and iQIYI. But we don’t need to own the platform. Baidu, Alibaba and Tencent are already operational and dominant. Our role is to be a great strategic partner. The platforms still need great content.”

Ye says that Huayi will maintain its relationship with STX Entertainment largely unchanged and will invest in its newer pact with the Russo Brothers. But the company will not grow international at the cost of its domestic Chinese activities.

“STX is doing well, with successful films like ‘Bad Moms’ at the end of the year, and finding new ways (to do business.) We have no plans to change that,” said Ye. “But Huayi needs to focus first on the local Chinese market and to grasp the golden era.”

Ye admits that describing Chinese cinema as currently enjoying a golden era may sound strange coming after the rude shock of 2016. “Of course it is. That will be reinforced by the new focus on quality. Content is still king in China.”

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