The big-budget blockbuster "Transformers 4" will be the closing night film at the Shanghai International Film Festival on Sunday, but if you want to glimpse the future contours of China's movie industry, a more modest festival selection, the offbeat comedy "Old Boys: The Way of the Dragon" is instructive viewing.
"Old Boys," about two amateur Chinese musicians known as the Chopstick Brothers trying to make it big in New York, has no big stars and a budget of about $5 million. It has a powerful pedigree, however: The movie began life as a funny if melancholy 42-minute "microfilm" on the Chinese Internet video portal Youku in 2010 and quickly went viral, garnering about 75 million views.
Based on that success, Youku decided to help bankroll the feature version – China's first microfilm-to-silver screen movie -- and it's hardly a one-off project. "Old Boys" is one of about 10 feature films that the company will co-produce this year.
In total, the company, somewhat of a hybrid of YouTube,
The increasingly fuzzy lines between China’s Internet upstarts and its conventional showbiz sector were on display throughout the Shanghai festival this year, with executives from companies such as e-commerce giant
Just as America’s mainline entertainment industry is finding Netflix Inc.,
China's tech heavyweights already attract hundreds of millions of viewers daily for TV shows and films on their computers, tablets and mobile phones. Now they are plunging headlong into creating and even financing entertainment.
Alibaba in March paid $800 million for a controlling interest in a film and TV production company, ChinaVision, which had a hand in last year's Chinese blockbuster, "Journey to the West." The company also has stakes in Youku, the Huayi Bros. movie studio and an Internet TV group, Wasu Media.
Meanwhile, Alibaba this spring also launched Yule Bao, or Entertainment Treasure, an investment fund that allows ordinary people to invest indirectly in film, TV program and online game projects. With a minimum of about $16, anyone can call themselves a producer, and within three days of Yule Bao's March launch, more than 200,000 people had bought into it, selling out the first-round offering tied to four films. A second round, with five films, also sold out.
The trend is sending shudders of excitement -- and dread -- down some spines. After listening to Alibaba executive Liu Chunning describe Yule Bao during one panel discussion at the festival this week, Ren Zhonglun, the venerable head of the 65-year-old Shanghai Film Group, declared his industry to be "in a period of revolution."
"We have to adapt to these new trends," he said. "We've been in the industry 10, 20, 30 years, but we are being replaced by amateurs who don't know much about filmmaking."
Others, though, see great opportunity in the convergence.
"The movie industry is going through a real transformation," said Zhang Zhao, chief of LeVision Pictures, which teamed up with Youku and Ruyi Films to produce "Old Boys." "That's why I told my team earlier this year: We're not a movie company, we're an Internet company. I want them to think like this because we're competing with them."
Zhang said he's optimistic that "Old Boys," which will arrive in theaters in July, can be as big as his 2013 summer hit, "Tiny Times," which made more than $80 million. He sees it as part of his strategy to win more customers for his company's online platform and smart TV service, LeTV.
"The short has 80 million viewers or so, so once you get their memory back, their attention back, I think there's no way you can lose" financially, said Zhang. "It really makes me excited."
Chen Shaofeng, deputy director of the Institute for Cultural Industries at Peking University, noted that one of the big draws to China's online video platforms these days is foreign content, including Hollywood films and TV shows. But the regulatory environment, Chen said, could change, and these platforms are wise to expand their homegrown offerings.
"Right now, there are not a lot of restrictions on how much imported content is on these websites, but in the future we may see more strict approval procedures," he said. "These players will need to make original content to compensate" if foreign content is limited.
Zhang believes that one secret for profitability for China's local film industry will be to make modestly budgeted movies for specific crowds. And the Internet is the perfect forum to discover and develop projects like "Old Boys," which was co-directed by Xiao Yang and Wang Taili, both of whom had little experience when they were discovered by Youku.
The 2010 “Old Boys” microfilm struck a chord with young adults who grew up in the 1980s. The story centers on two high school buddies who were
"The Chopstick Brothers, they represent a certain crowd, mainly 25-35, lower middle class, they remind me of people living in Philadelphia. They are not New York hipsters," Zhang said. "This is a very huge chunk of young people in China. They are trying hard to become middle class. So that's who the movie is for."
Jean Shao, a spokesperson for Youku, said Xiao and Wang were the only "grassroots" directors to emerge from a 2010 talent hunt sponsored by Youku and state-run China Film Group to find 10 fresh filmmakers; the other winners all had substantial industry experience, like directing TV dramas. But "Old Boys" turned out to be the most popular short with Youku users, and it was "quite natural" to develop a feature film from it.
For Xiao, the ride from micro-film director to making his first trip to the U.S. and filming on location in New York, to greeting fans at the Shanghai festival this week, has been an exciting and emotional journey.