Mainland's film industry enjoys 'explosive growth'

The Chinese mainland's entertainment industry is growing at an incredible rate, offering huge opportunities for investors as demand from an increasingly affluent population grows, experts told a China Daily roundtable in Hong Kong on Friday.

"We've witnessed explosive investment growth in the mainland's film industry in the first half of 2014, and we are seeing the rise of the film industry," said Wang Guowei, founder of National Film Capital.

For the first six months of this year, there were 63 mergers and acquisitions(M&As) involving film companies, with total capital reaching 55 billion yuan ($8.9 billion) said Wang, adding that among these companies, nearly 60 percent of them were acquired by enterprises from other industries.

He noted that a major part of the acquisitions were targeting the assets or copyrights of television series. "We can see that investors and capital are eager to find their way into mainland's film industry."

Wang said the rise of any industry has to be led by a large number of M&As. "And we can see that a few large and powerful companies are rounding up their territories in the movie industry," he said.

Investors who put their money into the mainland's film industry are probably making money. "Breakup Buddies" - a Chine se film released on Sept 30 - has recorded box office revenues of 1.2 billion yuan, while "The Continent" - a film directed by famous mainland writer Han Han - drew revenues of 630 million yuan.
David Chen, co-founder of AngelVest, said the company has seen many trends in the entertainment and media industries on the mainland in the past few years, and they are very similar to what they have seen in the US about two decades ago.

"From my perspective, the major difference between the mainland's movie industry at present and that in the US 20 years ago is the speed - the speed of how quickly a company can leverage their assets to grow further," Chen said.

He said the two technology giants on the mainland - Alibaba Group and Tencent Inc - are very good examples of large enterprises going into the entertainment industry.

Alibaba recently invested in sports and entertainment, content and distribution, said Chen, adding that, in March this year, Alibaba launched Yulebao - a crowd-sourced film investment fund that individuals could use to invest in movies or games starting from 100 yuan, and it managed to meet its funding target of $11.8 million in less than a week.

Karon Wan, a partner at Deloitte Consulting (Hong Kong) Ltd, said the entertainment industry on the mainland is moving rapidly, with people investing in this industry for various reasons and they are not necessarily experts themselves.

The industry is fast driven by people's demand, and people's demand is boosted by technologies, said Wan.

"Advanced technologies have enabled people to watch films, TV series on their mobile phones and tablets. Meanwhile, a lot of applications have been developed in China for people to get access to these resources, like PPTV," he said.

(Source: China Daily)