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China’s Role in Hollywood is Changing, Says Alibaba Pictures’ Zhang Wei

Former News Corp. executive Zhang Wei heads the Los Angeles office of Alibaba Pictures, the film making arm of Chinese e-commerce giant Alibaba. With China’s digital economy developing so fast, the company has expanded to become a major player in film distribution and marketing, as well as investment. She spoke to Variety ahead of her presentation Tuesday at the Asia Society’s U.S.-Asia Entertainment Summit.

What is the role of Alibaba Pictures’ Los Angeles office?

Alibaba is known for e-commerce, but we think of ourselves as building the future infrastructure of commerce. This doesn’t just mean physical products; but digital ones and services as well. We have an office in L.A. to be close to Hollywood, allowing us to build networks among filmmakers and learn from great artists.

How is Alibaba Pictures involved in script, project and film development?

Alibaba Pictures is not a traditional movie studio. We leverage the whole of the Alibaba ecosystem for the benefit of our partners in the entertainment industry. There are four key pillars for Alibaba Pictures:
* Content production: We use data to inform content development so that film and drama series can tap into current market trends/interests.
* Digital marketing distribution: We leverage Alibaba’s entire ecosystem to reach target audiences both online and offline.
* Online ticketing: A critical asset of Alibaba Pictures is Alibaba’s online ticketing platform, Taopiaopiao, which currently covers 99.5% of China’s theaters. It boasts almost 300 million users and about 40% of China’s online ticketing market share. The app is interwoven across our platforms and is easily accessible via Taobao and Alipay. In China, over 90% of movie ticketing is purchased online, giving us unprecedented access to Chinese moviegoers.
* Merchandising: We can leverage Alibaba’s ecommerce platforms to market and distribute film-related merchandise. Alifish is the cross-platform brand management and licensing business of Alibaba, which connects filmmakers and other IP holders to merchandise makers to create products for fans.

Is Alibaba Pictures’ focus more on development, or more on scouting and negotiating the Hollywood movies Alibaba might acquire or invest in?

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In LA, we are focused on finding the right partners and the right films to bring over to the Chinese market. Our partnerships are not just about getting a few extra American movies into China, it’s more about finding a way to bring the best content to global audiences in tandem. We work with Hollywood studios in a number of different ways. With Steven Spielberg’s Amblin Partners, we made an investment in them because of the importance they put on the development of the China market, and we work with them on their business in China.

Other studios may have teams in China, but need local partner to help with marketing and distribution in China. We can co-finance if there is an opportunity but we can also work on them with marketing and distribution. We also help them commercialize IP – we do, after all, come from an e-commerce company, and have more than 700 million consumers and 10 million sellers on our platforms.

How much editorial influence and advice is offered to the Hollywood studio films?

The way we work with Hollywood studios is by helping them figure out which movies will work in China and where in the Chinese film market their films will work. For example, with the movie “A Dog’s Purpose,” Alibaba Pictures used analytics to market the film to pet owners, families and female moviegoers on Alibaba’s e-commerce and media platforms.

Has digital distribution, marketing and measurement aspects made Alibaba Pictures more attractive a partner for Hollywood companies?

Alibaba understands Chinese consumers behavior. We have data-driven insights to individuals’ activity in commerce, digital media, film tickets and beyond. We also tap into Alibaba’s wider ecosystem, including the video streaming site Youku, and Taopiaopiao, our online ticketing platform, to market and sell tickets to films.

Green Book” was a great example of this. There was no data that predicted this movie would be successful in China, but we knew the Chinese consumer and their evolving tastes, and could localize everything from approach, to marketing, to content, to distribution.

How do you understand and describe Chinese audiences to your US interlocutors?

China’s film industry has undergone explosive growth over past decade, and is expected to surpass the U.S. film market in 2020. In the U.S. it’s getting challenging to get people to the theatres, but that is not the case in China. Between 2008 and 2018, the number of movie screens climbed from 4,000 to more than 60,000, and most are new state-of-the-art theaters. You also see a trend of box office growth in lower tier cities, not just urban areas.

While there has been a huge amount of growth in Chinese-produced movies, there is a huge amount of opportunity for Hollywood in China. Chinese audiences have always loved Hollywood movies, and they even prefer watching movies in their original languages with Chinese subtitles.

Chinese audiences want more than the special-effects laden action or sci-fi movies that have been traditionally packaged and shipped off to the Chinese market to score extra box office value.

Nowadays, the Chinese audience’s tastes have evolved to become more sophisticated, and they appreciate stories that are relatable to them – not necessarily through subject matter, but through universal values and great stories.

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