In Last June's Shanghai International Film Festival, the boss of Bona Film Group has predicted that in the future, all the TV series and film companies will work for the leading Internet companies BAT (short for Baidu, Alibaba, and Tencent).
This speculation results from the penetration of BAT in almost every aspects of traditional film industry. Not only does Internet changed the consumption of content, where online ticket-booking made up almost 60 percent of the total sales, but also act as producers, distributors and exhibitors.
Take the biggest Internet company Alibaba as an example. Alibaba obtained a majority stake in ChinaVision in 2014, renamed as Alibaba Pictures Group; it is also one of the biggest stakeholders of Enlight Media and Huayi Brothers Media Corp, taking part in content creation and distribution. For the company itself, Alibaba owns the crowdsourcing platform YuLe Bao for movie-making and online ticket booking service Taobao Movie. Moreover, it has taken a stake in the biggest online video platform Youku Tudou and the biggest movie-ticketing site Maoyan.com.
In the fields of film production, promotion, distribution, tickets selling and screening, it seems that Internet giants may soon seek to cut the traditional studios, distributors and cinemas out of the equation altogether. Will the future of film industry be taken by these Internet companies?
Personally, my answer is NO, at least not in the near future.
The resource of production needs long-term cultivation
The biggest strength of Internet companies is their media platform and massive user base. However, they lack the hardcore of the whole industry chain -- resource of content production. For the traditional movie companies, they have long-term contrasts with film makers such as directors，scriptwriters and producers, they also have abundant resource of actors. So when it comes to content creation, it takes a pretty long time for Internet companies to switch this situation, and cultivate their own production resource.
Online movie-ticket sites damage the ecology of cinemas
Online movie-ticket sites changed the way of film consumption. In 2014, more than half of the ticket sales come from the online platforms. With long-price strategies, these online services introduce huge amount of consumers to the cinemas. However on the other hand, these Internet companies may infringe cinemas' profits.
Take the biggest online movie-ticket site Maoyan.com as an example. Its low-price strategy attracted a lot of users, however it may not long-term beneficial. Consumers are price-obsessed; it would be hard for cinemas to develop their own member system and maintain long-term connection with their consumers. Moreover, Maoyan Movie started to sell spin-off products, which is the main income stream for cinemas, somewhat seize the existing market.
In fact, I once worked as the user researcher of Maoyan Movie and conducted a research about it, finding that cinemas are very sensitive to the relationship between online ticket services. They need them to increase sales, however they still try hard to maintain and protect their members from online movie-ticket services. So when it comes to building member system and selling spin-off items for online services, cinemas are always very reluctant to cooperate and sometimes even terminate their relationship.
As a result, cinemas, especially these owned by traditional movie giants, still have their monopoly positions and it is hard for Internet companies to change.
Development of traditional film companies �also include Internet and technologies.
For traditional film companies, the rapid expansion of Internet is more of a challenge rather than a taking-over. Being threatened by the Internet, they put much effort in maintaining existing strengths, for example superior film makers and actors, and staying focused on content of quality. They also engage in the process of "Internetiolization", for example make use of the big data technologies to arrange production and distribution, and build their own online platforms to sell tickets or products.
Enlight Media has its own online platform "Xiankan", providing online video resources. For instance, before the website established, movies are only available online one mouth after being off in cinemas. However Triumph in the Skies, which co-distributed by Enlight Media, was online just the day next to its being off in the cinemas.
So, all in all, I think BAT as well as other Internet companies will not take over mainland movie industry, at least not in the near future. These companies are more like innovators rather than subverters. Using their unique advantages of online marketing, big data technologies, social media and so on, Internet brings much opportunities and possibilities.
However, a good eco-system is where every participant can monetize. The existing movie giants still get their monopoly and Internet companies are those enriching this ecology. And I think it is the most healthy way for both companies to better develop.