In all industries, Chinese consumers represent a large and growing market with plenty of disposable income. So what’s that mean for Hollywood movie studios and the broader entertainment and media industries?
It means it’s time to start paying serious attention.
Executives gathered at the 2017 Fortune Global Forum in Guangzhou, China to discuss how the burgeoning Chinese market is already changing the face of industries once solely dominated by the United States. In a panel discussion moderated by WndrCo managing partner Jeffrey Katzenberg, China Media Capital chairman Ruigang Li and STX Entertainment CEO Robert Simonds agreed that the changing landscape presents ample opportunity.
“We’re the new audience,” Li said of China. With a trend toward urbanization and high penetration rates for Internet access and mobile devices, China can create myriad opportunities. Consider: Most demand for content used to come from top-tier cities. But now? “The huge demand is coming from lower-tier cities,” Li said. Cities with 300,000 people are investing in this area. And their residents “are creating a lot of demand.” Young and empowered by new technologies, “they become the new mainstream for content consumption,” Li said. “Especially the younger demographic—they’re willing to pay.”
Simonds added that several things have shocked him in the Chinese media market. “What I find really fascinating is how quickly it changes,” he said. “It’s the fastest changing audience base anywhere in the world. The Chinese consumer—they learn, they adapt, they move on at a pace that I don’t think anyone is doing.” In China, you’re constantly trying to keep up with audience. In America, you’re playing to the audience by hitting beat over and over. “That’s a really cool and exciting opportunity,” Simonds said.
Plus, as China’s standard of living increases, “We’re gonna clearly get a much larger insistence for even better entertainment and more entertainment,” Simonds said. The Chinese adopt new technology in a way wholly unlike Americans. Things like online ticketing and virtual reality? Americans see it as the next big thing, a future technology. In China, “it’s just amazingly fast” adoption, he said.
Soon—perhaps in another year or two—China will be the biggest movie market in the world, Katzenberg said. It wasn’t so long ago that Hollywood’s ambition was to bring Western storytelling to China. What certainly did work in the ensuing years is the creation of successful, ambitious blockbuster films made in China for China. “They have succeeded on their own terms and their own merits,” he said.