Piracy gradually fading from the radar as film industry stakes increase

Barely a decade ago, Chinese sidewalks were strewn with pirated disks, which a riff-raff of unlicensed peddlers eagerly pushed to passers-by. At that time, the annual box-office receipts of the country’s film industry was around 3.3 billion yuan, which happens to be the takings of Mermaid (2016), the reigning box-office champion in China.

It is no coincidence that the Middle Kingdom’s boom in the most glamorous industry has dovetailed so neatly with the decline of piracy. While the problem has not gone away, it can be safely said that movie piracy is no longer the rampant phenomenon that it was around the turn of the century. As a matter of fact, the purchase of disks, legal or not, has ceased to be a habit for most movie watchers. They have been mostly diverted to streaming sites and multiplexes.

This is not a simple change in viewing platforms, but rather a fundamental shift in lifestyles. For a whole new generation, movies were watched on the television screen or the computer monitor – for free. Paying for admission was an alien notion tantamount to charging for broadcast television. People of my age with movie-going memories wondered aloud why anyone in his or her right mind would pay to see a movie when so much free entertainment was available on the small screen?

Suffice it to say, it took movies like Avatar to change that mentality. Yes, you can watch the same story online or on TV, but the experience would be vastly different. Chinese filmmakers like Zhang Yimou had also realized that certain movies had a better chance at resisting piracy, namely, movies with special-effects-laden spectacles and matching sound effects. That was the rationale when he switched from art-house fare to offerings like Hero and Curse of the Golden Flower.

The limited but steady supply of Hollywood movies, mostly tentpoles, as a result of China’s quota system, has been instrumental in nudging a young generation into newly built, western-style cinemas equipped with state-of-the-art facilities. Movie-going is no longer the pastime of their fathers’ generation, but a whole new experience only the young would relish. It is chic.

Of course, if you are tight on cash and do not want to splurge on the soda and popcorn that seem to come de rigeur with the ticket, you can wait a month or two and watch the same movie online. But even online, you have to pay for the service, either five yuan per movie or a monthly subscription. The days of the free lunch are over. Sure, you can wait a year or two when it is offered free on the movie channel, but you would have missed the best time for water-cooler talk. And you won’t look cool in front of your peers.

All these forces have conspired to douse the flame of piracy. However, not all of these can be observed from a random walk along the urban overpass or underpass, where such paddlers used to congregate, or a browse through China’s cyberspace. Major efforts have been conducted by a range of Chinese and international film industry stakeholders, keen to see an improvement in the legitimate ecosystem for films and television shows. Some of this activity focuses around the countries major film festivals, where many of the key industry and government players congregate to witness the next major milestone for the fast growing industry.

At the NCAC-WIPO international forum on copyright, taking place alongside the Shanghai International Film Festival, Mike Ellis, President and Managing Director Asia Pacific for the Motion Picture Association – a long time stakeholder in the Chinese film and television market – presented the big picture on the size of the industry and the importance of promoting and protecting intellectual property: “… the future of the film industry in the 21st Century will continue to depend on strong intellectual property rights protections that keep pace with technology.”

In hindsight it might be evident that piracy hurts Chinese cinema as much as it does Hollywood imports, if not more so, but it really takes some persuasion to drive the common sense home to the right target. Also, for a group conditioned to see intellectual property as tools of propaganda, it takes a while to change the perception that a whole movie is a product and therefore should not be treated as a trailer for image-building for the nation.

A conversation in parallel to preserving IP has been the need to best develop the value of IP. Across town, the MPA partnered with the Shanghai Theatre Academy to host the 4th Global Film Industry Value Chain Development Forum. Today, there is so much more than an individual movie product at stake. IP creators have fast-tracked the ability to create entire brands around a story or character, involving merchandise, movie theme parks, video games, fashion, TV spin-offs, and the list goes on.

The unprecedented growth in the core business of the film industry has given both regulators and filmmakers a lot of confidence. Piracy remains on the radar as a threat, albeit a reduced threat. But the models for pricing are still being worked on. Revenues from streaming have not yet reached the stage of a healthy ancillary market, and those from exhibition are constantly manipulated by subsidies that are more detrimental than constructive. These are new challenges faced by China’s regulators and market players. But as so often, they look to Hollywood for inspiration. On a note of optimism, if piracy can be contained, the new bumps are just… well, just bumps.

 

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Raymond Zhou is a Beijing-based bilingual writer, prolific Chinese film critic, film industry analyst and often quoted by the Western press. He serves as a juror for many festivals and awards, and an author of 20 books, including the English-language book “A Practical Guide to Chinese Cinema 2002-2012”.