Chinese tech giants using 'fan economy' to build franchises

Chinese tech giants using 'fan economy' to build franchises

iQiyi, the web-based entertainment arm of Chinese tech giant Baidu, will start to broadcast in October, a series based on the popular crime novel Mei Ren Wei Xian that loosely translates to "beauty lies within the dumpling", in a first major exploration of its franchise-building abilities, a senior company executive says.

Written for the web by an in-house team, the 36-episode thriller would also be adapted for the big screen and as a cellphone game in the future, Dai Ying, general manager, online drama production, iQiyi, says.

Since it became a fully-owned subsidiary of Baidu in 2012, her company has purchased the copyrights for more than two dozen novels, adapting them into web series in genres such as fantasy, suspense and romance.

The Journey of Flower, a Taoist legend taken from an online script and then TV series, was among the biggest splashes on its streaming site last year.

Converting literary content to films, TV or web series, and games is a rising trend in China's entertainment world today.

Seen aggressively in the works in the past year or so, this phenomenon feeds off what trade analysts describe as the "fan economy", running into billions of yuan.

The valuation of companies is also said to increase when they buy such copyrights.

The rights of "entertainment industrial property", commonly known by its local shorthand "IP" (or intellectual property), include the copying, issuance, rental, exhibition, performance, broadcasting, dissemination, adaptation and translation of literature or art, and are generally valid for a limited period of time, according to multiple analysts.

Other than Baidu, tech giants such as Alibaba and Tencent are hiring writers to scour internet content that can be used to build entertainment franchises, targeted largely at young and wealthy Chinese. In this regard, fantasy seems to be a top theme.

One-fifth of all dramas under production at iQiyi, for instance, are from this genre.

The Lost Tomb/Photo: The China Daily

The tradition of outsourcing scriptwriting has been replaced by internal teams at such companies.

"This makes our engagement more active," Dai says.

Both young and old Chinese have shown interest in remakes of South Korean dramas and reality TV shows, encouraging Chinese companies to buy foreign copyrights, too.

Tiny Times, the film franchise on the lives of young, upwardly mobile Chinese, is probably the most successful example of the relatively new business. The four installments so far have made at least $200 million (S$2.7 million) in box-office revenues. The franchise was born from a 2008 novel written by the films' director Guo Jingming. The book was adapted into a musical last year.

The Lost Tomb and Nirvana in Fire are two recent hit web series originally taken from online books for TV.

"The investment risk of turning them (original content) into movies and TV series is quite low. That's why it has become a popular trend," says Gu Wancheng, senior vice-president, projects, Peacock Mountain Culture & Media Ltd, a private Chinese company in Beijing.

It isn't strictly fashioned after Hollywood as Chinese have always liked reading novels and playing video or phone games, she says.

Building entertainment franchises has been a longtime business in the United States but companies there have taken the more traditional approach-keeping their eyes trained on best-selling books.

The copyright business is largely driven by the market in China, says celebrated author Liu Cixin, who is the first Chinese to win top global recognition in science fiction for The Three Body Problem, his first book of a trilogy, published in 2008. The three-body problem is a concept in classical mechanics.

A startup to handle copyrights related to science fiction has also been set up in the country, the Xinhua News Agency said in a recent report.

Tiny Times/Photo: The China Daily

With a surge in the copyright trade, online communities where literature is discussed can be found at sites like Jin Jiang and Douban. Tech companies offering web entertainment are also vigorously developing phone apps that roll film-viewing and social forums into one, with Icast Show, Yi Zhibo, Meipai and Miaopai to name a few, Gu says.

That writers are reaping the riches from this trend is evident from available data.

In 2015, the market for online literature in the country touched 7 billion yuan ($1.05 billion), an increase of 25 per cent from the previous year. It is estimated to rise by 2 billion yuan this year.

Online literature has helped many writers realise their creative dreams and has given cheaper access to literature to millions of Chinese, Wu Shulin, deputy director general, Publishing Association of China, said at the annual cross-media StoryDrive event in Beijing in May.

According to Hou Xiaoqiang, founder of the Shenzhen-based entertainment company China Wit Media, 14 of China's 20 top-grossing films and 30 per cent of the popular TV series were derived from copyrighted content in 2015.

Even so, a certain amount of skepticism remains.

Liang Zhenhua, a professor at Beijing Normal University, senses a threat to serious literature from this trend but calls it transformative nevertheless.mative nevertheless.

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