Insights

Deloitte Consulting is the Marché’s new leading Summit partner at Cannes Film Festival in 2015

16,18,19 May 2015

Session Summaries

Po Hou, Deloitte Consulting Partner and China Technology, Media & Telecommunications (TMT) Industry Leader, served as panelists at the Cannes China Summit, gave introductory speeches on the Chinese film market overview, video-on-demand market opportunities in China and international production with China.

Po Hou, Deloitte Consulting Partner and China TMT Industry Leader

Cannes China Summit

The first ever Cannes China Summit which supported by Deloitte aims to help film industry professionals learn more about China and to enable Chinese professionals to get in touch with their peers and provide a platform that promotes international business connections. Po Hou, Deloitte Consulting Partner and China TMT Industry Leader, gave three introductory speeches at this event throughout the Summit.

Round Tables

With the great development of the Chinese theatrical network, China strengthens its position as the world's second largest box office market. Po Hou used "Bigger, Faster, Smarter" as the theme to illustrate the Chinese Film Market. 

The session key points that emerged were:

  • China is the World's 2nd largest box office and the biggest contributor to global growth.
  • China film market witnessed significant growth in box office, ads revenue and screens.
  • Online ticketing reached over 50% for the first time, the trend is expected to continue in the future.
  • Domestic film consistently took over 50% share, but 2015 onward could be different.
  • Romance (34%), Comedy (21%) and Action (14%) demonstrated diversified taste of the audience. Compared to the U.S market, 45% of its Top 30 are Sci-Fi films.
  • Value chain is fragmented overall; upstream is the most fragmented and weakest.
  • Internet giants may change the face of the industry.

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Video on Demand (VOD) Opportunities in China

Due to its rapid growth, the Chinese VOD market attracts the attention of worldwide professionals from the world over. Po Hou pointed out that "Searching for Profitability" is the key point of the issue.

The session key points that emerged were:

  • Internet video is youngsters' love; most commonly viewed on mobile device.
  • New ads slow down and ads revenue increase.
  • In spite of high concentration, most video portals are still losing money. Turning traffic into revenue is the common problem for all Internet video portals.
  • Internet video portals will still be in "red" until new sustainable business model emerges.
  • Lacking subscription fee income, local VODs still rely on ads revenue.
  • VOD portals actively expanding non-ads revenue sources: BAT cooperation, original production…
  • 8 key trends are pushing the Chinese Internet video industry in 2015 and beyond.

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International Production with China

International co-productions come under different arrangements. How is it with China, under a co-production treaty or not? Po Hou used ". Good Days Ahead?" as the theme to illustrate the future of International Production with China.

The session key points that emerged were:

  • Co-produced films enjoy higher status and create a “win-win” situation for both parties.
  • But coproduction between two countries is filled with obstacles along the production line.
  • Despite potential difficulties, more countries in major box office markets are signing up.
  • Coproduction films accounts for 10-20% of title but accounts for over 50% of box office revenue.
  • Hong Kong gradually eclipsed by western.
  • Coproduction between China and Korea is deepening.
  • Coproduction between China and U.S. is expected to strengthen in the future.

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