China.org.cn, June 19, 2023—At a forum held during the Shanghai International Film Festival (SIFF), senior film executives discussed the future of the video-on-demand (VOD) business model and its global trends and explored the transformation and opportunities brought by digital technology to the film industry.
Speakers discuss the VOD business model at a forum held during the 25th Shanghai International Film Festival (SIFF) in Shanghai, June 12, 2023. [Photo courtesy of MPA]
Ren Zhonglun, vice chairman of the China Film Association, emphasized in his opening speech that the film industry is undergoing profound changes as the world enters the digital age. With the aid of digital technology, the barriers to art have been lowered, while the quality and artistic standards have increased. According to Ren, all art is the product of human creativity, and as long as people use their wisdom and emotions to express the essence of humanity, the source of creative inspiration will not be lost.
As digital technology and smart home appliances develop and become more popular, VOD technology has become a hot topic in the film distribution industry. VOD is an interactive TV-on-demand system that allows users to watch movies or programs on demand anytime, anywhere through their TV, computer, or mobile device, breaking the limitations of time and space. VOD has become a preferred way for many viewers to watch film and television works and a powerful competitor for theatrical distribution.
For Jack Gao, CEO of Smart Cinema, the digitization transformation has completely overturned the traditional separation between production and distribution in the film and television industry.
"Nowadays, content creators are building their own channels, while distributors are investing in content production, competing for the position of production and distribution integration. This rapid change has both excited and confused audiences. With so many choices of content and platforms, it can be difficult to make a decision," Gao said at the 9th Global Film Industry Value Chain Development Forum on June 12, an official program of the SIFF, organized by the Motion Picture Association (MPA) and Shanghai Jiao Tong University.
He also mentioned how the internet had had an impact on content creation and how, currently, user-generated content dominates the market, leading to an overload of content supply. He predicted that in the future, there will be a massive amount of artificial intelligence-generated content that will further distract the audience's attention. However, technologies like ChatGPT and Midjourney will also quickly promote the revolution of film and TV production.
Gao's company is developing a mobile film screening platform that can be accessed on phones or smart TV screens and offers mobile cinema functions simulating a realistic theater experience, in addition to personalization, socialization, and programming flexibility. He believes this is valuable for China's film industry's internationalization, digitization, and scaling up. The platform also effectively promotes Chinese cinema and culture globally, making hundreds of new Chinese films easily accessible on smartphones, computers, or smart TVs for overseas Chinese and foreigners.
The film veteran envisioned new scenarios for future viewing experiences in the film and television industry and is looking forward to devices such as Apple's Vision Pro headset, Google's Android TV, and ZEASN Information Group's Whale OS new-generation smart TV. He hopes that all parties in the industry can pay attention, participate, and innovate in a timely manner. He believes traditional cinemas and broadcast televisions' advantages are disappearing rapidly, while mobile cinemas and VOD platforms will explore new business models to support high-cost and high-risk film and television content production while maintaining sustainable development.
Cao Yali, the president of BestTV, shared data on their services at the forum and stated that VOD had become a supplement to the in-person performing arts market in recent years, with an increase in users' willingness to pay. In response to the positive developments regarding TV, BestTV is combining digital methods such as big data and artificial intelligence to enhance targeted and personalized services based on users' viewing habits and to meet the individual needs of more users.
Jiang Xiaoli, CEO of DTA (Huanyu Trust), believes that VOD technology can break the constraints of time and space, allowing users to experience the joy of watching movies in a more diverse spatial environment. Jiang has high hopes for the revenue-sharing premium VOD model, hoping to build a high-security, cinema-level content protection environment, and a trusted third-party accounting platform to help this emerging model develop sustainably and provide more choices and opportunities for both filmmakers and consumers.
Huang Dai, general manager and senior vice president of Sony Pictures Entertainment China, said that in the digital age, big data and algorithms have made audiences the main voters. The repeat consumption of digital content and the current state of comprehensive creation means that the marginal cost of digital content can infinitely expand. To face this challenge, Sony will strictly control story content, improve the accuracy of its cost and revenue calculations, and create higher-quality content based on Chinese audiences' consumption ability and concepts. She also mentioned the uniqueness of VOD, which enables content providers to make more money on the platform and expand income sources for creators through online distribution.
Ya Ning, president of iQiyi Pictures, introduced iQiyi's various attempts in the context of digital and smart development. For instance, the pay-per-view model of cloud cinema provides consumers with more high-quality movies and increases their chance of watching new and excellent films. The flexible pricing model and higher revenue-sharing ratio have also gained support from filmmakers, creating a win-win situation. Ya also discussed the release window issue, mentioning how iQiyi hoped to include online platform revenue in box office statistics. He pointed out, the release window system is a complex issue that concerns upstream and downstream of the entire film industry chain, and cinemas need to survive and are sensitive to release windows. Currently, premium VOD's window in China is approximately 30 days.
The second part of the forum also featured a panel of speakers who discussed how virtual filming technology is helping to promote the prosperous development of film and TV, as well as cultural and creative industries.
