by Mike Ellis — 23 Jun 2017
I can say without hesitation or doubt that the continued evolution of the film and television industries in China over the past 16 years has been nothing short of phenomenal to witness.
Being part of that evolution remains one of the most important items on the MPA studios’ global agendas. Though challenging, the market has also proven itself to be enormously rewarding.
A tremendous amount of hard work and visionary effort by the Chinese Government and our friends in the local industry have helped transform China into the entertainment powerhouse it is today.
The change has not come easily. It did not happen overnight. Nor did it necessarily proceed in an orderly fashion. Laws, policies, and technologies don’t usually develop at the same pace, or for the same interests or purposes.
Yet the film industry in the 21st Century depends on all of them. It’s impossible to focus on one and ignore the others. China has been a case study for this inter-dependency.
When I joined the MPA in 1999, China wasn’t yet a member of the World Trade Organization.
Only ten foreign films were allowed into the country each year on a revenue-sharing basis. There were less than 1,000 movie screens for the entire population, but pirated DVDs could be found just about anywhere.
Only about 20 million people were connected to the internet. Smart phones were virtually unknown. The iPod hadn’t been invented.
There was no YouTube or Facebook. Nor was there Youku, or Tudou, or iQIYI, or Baidu or Weibo, or WeChat.
Fast-forward 18 years and China has become the second biggest box office in the world! There are now more movie screens here than anywhere else on the planet, and 85% of them are 3-D compatible.
Today, China is the third largest film industry in the world in terms of feature films produced annually.
What’s more, there are now more than 730 million Internet users in China, with 95% using their phones to access the internet for a myriad of things, including consuming creative content.
New technologies have created new challenges – and new strategies – for our industry when it comes to protecting creators and defending creative works.
The MPA’s mission, whether in China or elsewhere in the world, is to promote and protect screen communities however possible. Technology plays a big part in that, but so do laws and policies.
In my opinion, the stage for filmed entertainment in the 21st Century was set in Geneva, back in 1996, following the conclusion of the so-called ‘WIPO Internet Treaties,’ which provided a legal foundation for the consumer innovation we all enjoy today.
The treaties essentially provided ‘road rules’ for an information super-highway.
These included protections against the unlawful circumvention of effective technologies that right holders use to prevent theft of their creations.
They also included protections against the unlawful tampering with tags and codes associated with copies of protected material that are used to facilitate legitimate distribution and licensing.
And these treaties extended or clarified rights for copyright owners. For example, they provided a right to control the distribution of copies of creative works and a right to control their communications, including ‘making it available’ to the public in an interactive manner.
What the treaties did was foreshadow that innovation would be better facilitated by enhancing protections for creative works, instead of diminishing them.
The treaties were adopted by consensus by more than 100 countries – the majority of which were developing countries. They reflected a broad international agreement as to how copyright and related rights should be handled in the digital environment.
Since then, the MPA studios and their business partners have invested hundreds of millions of dollars over the past 20 years in new and innovative technologies to facilitate the distribution of their movies and television programs to a wider base of audience than was ever imagined possible.
The array of consumer choices available in the marketplace today is staggering.
You can listen to music, or watch movies, legally, for free on your computer or your telephone if you’re willing to put up with some commercial advertisements.
Or you can pay for a subscription that lets you watch or listen to whatever and wherever you want, as many times as you want.
Or you can pay a transaction cost and retain a copy of the song or the show in your computer forever.
Or you can pay a smaller cost and have it downloaded onto your computer or your phone for a few days, after which it will magically disappear.
The reason we have all these outlets and platforms, accessible to just about anyone at any time, is because of the technological protection measures and digital rights management systems that I mentioned earlier.
Filmed entertainment in the 21st Century exists because of, rather than in spite of, the enhanced protections accorded under international treaties. Its future will continue to depend on strong intellectual property rights protections that keep pace with technology.
Given the continued migration from physical to intangible delivery of copyrighted works in China and elsewhere, and the ease with which pirates can now operate, we need effective penalty deterrents to address the worst of the worst offenders.
Because the film and television industries are worth protecting! Governments around the world, including China, have agreed that copyright and the copyright industries are, in fact, ‘good business.’
In the United States, nearly 2 million workers are supported both directly and indirectly by the film and television industry. And in a given year, our industry pays around $41 billion to over 300,000 businesses around the country for goods and services, and more than $16 billion in local and state taxes.
The value added by the total copyright industries to the U.S. GDP is roughly $2.1 trillion, accounting for 11.7% of the U.S. economy.
In China, the film and television industry contributed 396 billion yuan – or 64.4 billion U.S. dollars – to the country’s gross domestic product in 2014 alone. That year also supported over 4 million jobs overall and generated 104 billion yuan – or 16.9 billion U.S. dollars – in total tax revenues. China is also a market leader in terms of technological innovation, creating new outlets for distribution at every opportunity.
According to recent estimates, Chinese companies such as Baidu, Alibaba, and Tencent had combined annual revenue of 473 billion dollars, giving Apple, Amazon, Google, Facebook and Microsoft a run for their money.
The rapid uptake of mobile telephony and smartphones, the enhanced penetration of internet bandwidth, and the growing popularity of mobile payment systems such as AliPay and WeChatPay have all made it much easier for users to access and pay for content online.
IQiyi, as just one example, offers its estimated 25 million subscribers about 30 different types of content – including film, TV series, cartoons, sport, and news – as part of a digital ecosystem that employs around 4,000 people in 12 cities across China that creates opportunities for new types of content creation.
Intellectual property is at the heart of their business. Today, high-tech content distributors are also spending significant amounts of money acquiring content from other companies, and producing their own original content.
It should come as no surprise that governments around the world are paying closer attention to IP provisions in their bilateral and multilateral trade relations with other countries.
It’s also why organizations like the MPA place such tremendous value on nurturing a truly global film market. For our industry to see continued growth and success around the world, we must encourage the next generation of creators and artists. Regardless of the laws, or the policies, or the technology, film and television in the 21st Century will still require the creative capacity to conceive and tell a story to which an audience anywhere in the world can relate.
In the words of Jackie Chan, “Cinema reflects culture and there is no harm in adapting technology, but not at the cost of losing your originality.”
Here in the Asia Pacific region, and particularly in China, we place a great emphasis on building cooperative relations amongst the world’s film industries, and investing in human creativity.
That’s why for the past decade, we’ve run workshops, seminars, and master class sessions during the Beijing and Shanghai International Film Festivals.
Each November, we’ve coordinated with our friends on events such as the China International Coproduction Film Screenings, the US-China Film & TV Industry Expo, and the new Golden Screen Awards – recognizing excellence in China-international coproductions – held in Los Angeles.
And it’s why we partnered with the Asia Pacific Screen Awards eight years ago to create the MPA APSA Academy Film Fund, which supports the development of Asian stories annually by providing financial grants during the vital script development stage.
To date, projects from 19 different countries and areas of the Asia Pacific have been supported through the initiative. The 8th round of the Fund will bring the total number of projects funded to 32. The recipients will be announced during the 11th Asia Pacific Screen Awards ceremony on November 23rd in Brisbane, Australia.
An ancient Chinese proverb says that “If you want one year of prosperity, grow grain. If you want ten years of prosperity, grow trees. If you want a hundred years of prosperity, grow people.”
Films in the 21st Century won’t simply be created by a computer, but they probably won’t be created without one either. Films in the 21st Century probably won’t be mandated by laws or policies, but nobody might invest in them if they don’t provide some measure of protection and predictability.
Promoting and protecting screen communities will thus remain the MPA’s core objective in the years to come.
Michael C. Ellis is the President and Managing Director of the Asia-Pacific Region for the Motion Picture Association (MPA) and Motion Picture Association International (MPA-I).