Video websites eyeing big screen

An increasing number of Chinese online giants are teaming up with filmmakers to produce full-length movies.

As the main sponsor of this year's Venice International Film Festival, China's online giant iQiyi is licensed to stream 23 nominations from previous festivals, including six award-winning Italian productions that will run exclusively on the video website.

CEO of iQiyi Gong Yu says the website has established long-term and close relationships in the Asia-Pacific and America, and is now looking for new collaborations in Europe. China has around 500 million online video viewers, and over 60 percent of the content they watch is movies. The Chinese government has a quota system that limits the number of foreign films screened in Chinese cinemas, but so far it hasn't applied to online distribution.

International festivals offer an opportunity for Chinese video websites to approach brand new productions, Gong tells US entertainment magazine Variety.

His company iQiyi was authorized in June by Shanghai International Film Festival to screen 30 movies, including the festival's winner, Greek director Pantelis Voulgaris' Little England. The website also screened 20 films from the Hong Kong Summer International Film Festival.

During the 11-day Venice film festival, Gong is scheduled to participate in a series of China-themed meetings and symposiums. On Wednesday, the website hosted a China Night event in which industry icons and movie stars were invited.

As iQiyi has transitioned from making only short videos to traditional-length feature films, in July the company launched its own production company. On Aug 27, the video website founded a joint company with Huace Film & TV, one of China's largest content makers, to produce movies and television shows.

An increasing number of China's Internet giants are setting foot in the film industry. During the Shanghai International Film Festival, Tencent Video announced its expansion into the industry by investing in six films including Zhong Kui: Snow Girl and the Dark Crystal, a highly anticipated and star-studded 3-D fantasy.

By purchasing a 60-percent stake in China Vision Media Group, Alibaba Group has also established a movie company, reportedly with Jet Li as an independent non-executive director.

Baidu has also set up a Los Angeles studio. With a reported investment of $40 million, the company's first production will be the 3-D animation Kong, which was adapted from the Chinese fantasy classic Journey to the West.

The latest Internet company to joint the trend is Youku Tudou, which announced the establishment of its film company Heyi Film on Aug 28. Heyi is to work with China's major film companies by jointly investing in at least eight feature films a year, which will be released in cinemas nationwide. Its first five projects include The Golden Era and a 3-D adaptation of the war epic The Taking of the Tiger Mountain. The films will premiere on Oct 1 and Dec 24.

Heyi will invest in nine "Internet movies" each year, which will be released online. The company will also continue to provide financial support for new filmmakers and bring online hits to the big screen. For example, Old Boys: The Way of the Dragon, the sequel to a popular 2009 short film on Youku, secured a nationwide cinema release in July.

Over the last three years, Youku Tudou has jointly produced eight movies, including writer-turned-director Han Han's debut film The Continent, which grossed more than 630 million yuan ($102.53 million) nationwide.

Film companies want to work with Youku Tudou because of their advantages in big data mining and analysis, which identify the viewing habits and interests of audiences and make it easier to market films, says Zhu Huilong, Heyi Film's CEO.

Video websites like Youku Tudou have mature online marketing strategies and multimedia including trailers, documentaries and promotional music and videos made based on audiences' preferences. Their advantages in big data are also being used during the production of films.

The producers of Old Boy, a movie that initially had a sad and dark ending, changed the ending after a survey showed audiences preferred a happy and warm closure.

Victor Koo, founder of Youku Tudou Inc, says the video website will also begin selling movie tickets and creating products related to the films.

In a recent interview with the Beijing-based The Economic Observer, Koo describes his company as a combination of Youtube, Netflix and Disney. He says there hasn't been a company like theirs in China, so Youku Tudou has an opportunity to do something unique.