POST-COVID WORLD SPECIAL “ 5G WILL BE THE NEXT GREAT THING IN THE MOVIE INDUSTRY”

Interview with Alex Zhang, independent film producer specialised in China and Hollywood feature films and television

F L X I Alex Zhang is an independent packaging, distribution and production film producer specialised in China oversight. Recent films he executive and Hollywood feature films and produced include Greyhound (2020), television. He was previously an starring Tom Hanks, Midway (2019) executive at Alibaba Pictures where directed by Roland Emmerich, and he was involved in its film financing the upcoming Resident Evil (2021) and distribution business. During his franchise reboot film directed by time there, the company invested in Johannes Roberts. Mission Impossible 5: Rogue Nation (Misión Imposible 5: Nación Secreta), In 2016, Alex Zhang took part in the Teenage Mutant Ninja Turtles: Out of 10th edition of the Chinese Future the Shadows (Las Tortugas Ninja II), Leaders Program (CFLP) about the Star Trek Beyond (Star Trek: Más Allá), film industry, organized by the Spain The BFG (El gran gigante Bonachón), China Council Foundation. The CFLP is A Dog’s Purpose (Tu Mejor Amigo), a visiting program that once per year and made a strategic investment into invites 5 to 6 brilliant experts to join in Steven Spielberg’s company, Amblin a series of activities, such as seminars, Partners. After he left Alibaba in late roundtables, and networking events, 2017, he started a private producing around a strategic topic for both China business centered on my strong and Spain. background of film finance, talent

F L X I Why do you think China has homogenous implementation of The reopening of reopened its cinemas so much law. In addition, the accountabiliity “ cinemas, and most faster than other countries? and responsibility placed on local notably the speed at officials to minimize Covid cases China has implemented one of was taken to the extreme. You see which they reopened is the strictest pandemic protection entire municipal and sometimes just another byproduct of policies in the world, and both province-level administrations fired the general recovery of public and private sectors, and the overnight for any mishandling of China’s economy. general public were deeply adherent protection measures. It also is worth to this policy. This is why you see noting that China is one of the most China recovering in the second internet and mobile-connected quarter of 2020 with a net GDP countries in the world. Local growth, which includes the fast- governments utilized the power It took China, now reopening of Food & Beverages and of big data and location tracking the world’s second- public entertainment venues such technologies to quickly create a as cinemas. To give an example of national risk-assessment program largest film market, the extreme measures used here that tracks each individual based less than 10 years to prior to the recovery, me and my on their exposure risk. In short, we grow its box office wife were stuck in our homes for sacrificed in the short term, and almost 60 days without ever leaving made a bet for the long term. The revenue from 1 billion our immediate neighborhood reopening of cinemas, and most yuan (about $145.66 enclosure. Not even courier services notably the speed at which they million) to over 60 could enter our neighborhood reopened is just another byproduct billion yuan. compound. The deeply centralized of the general recovery of China’s decision-making of the Chinese economy. government allows for rapid and massive logistical mobilization and

F L X I In China however, How do you think the Covid crisis Millions of Chinese people have “ audiences remain has changed the cinema industry? enjoyed watching movies online committed to supporting What are the main consequences during cinema closures thanks that the Coronavirus will have for to a wide range of streaming the theatrical experience, the cinema industry in China? services. What movie platforms with the recent 800, or streaming services have gained directed by Guan Hu China is very different from the traction during the pandemic in earning more tan 3bn yuan rest of the world. In general, Covid China? Is the future of cinema has shifted viewing habits to be online? in theatrical box office. more online-centric. In terms of film finance and production, Covid Ironically, streamers in China have Ironically, streamers has created a new world order been and are still struggling to “ in China have been centralized around the issue of Covid become profitable despite the lift in and are still struggling to and infectious disease insurance, business they got from Covid, but which has become crucial for closing that is for historical reasons around become profitable despite completion bonds and acquiring the initial pricing of TV on Demand the lift in business they bank financing. In China however, and Subscription Video on Demand got from Covid, but that audiences remain committed to offerings, which were far too low. is for historical reasons supporting the theatrical experience, In a sense, the streaming business with the recent 800, directed by model has never fully recovered around the initial pricing Guan Hu earning more tan 3bn yuan from the huge discrepency in of TV on Demand and in theatrical box office. This is truly consumer tolerence for paid content. Subscription Video on shocking, to even local analysts We may see that change as local Demand offerings, which who thought audiences would have content increases in quality, but that grown accustomed to watching from is a longterm process. Currently, were far too low. home or on mobile devices. I believe Hunan Network and its streaming service Mango TV are

F L X I If the movie theatre experience were to disappear, “ it would not be due to competition from streamers, but rather the failure of filmmakers and film financiers to supply the world with fresh, exciting and brilliant content. by far ahead of iQiyi, Tencent Video Do you think the Coronavirus crisis and Youku platforms, owned by the will trigger the disappearance of so-called BAT (Baidu, Alibaba and the movie theatre experience? Tencent). Bytedance made a surprise move during Chinese New Year’s I firmly disagree with that when Covid first hit by acquiring Xu hypothesis, and China has disproven Zheng’s movie “Lost in Russia” for a that loudly. For the rest of the world, huge price, but has yet to follow up the recovery of the cinema business with a longterm business plan for will be directly linked to the general scripted content (and I am skeptical recovery of the economy, and overall if they ever will). That said, online health and safety conditions. People platforms specializing in shortform have an inherent wish to consume or medium-length content like great content, and the better Douyin (Bytedance’s local version of the quality, the more demanding TikTok), Kuaishou, and Bytedance’s they will be on the venue. If the answer to Youtube, Xigua Video, movie theatre experience were to have been doing great. I think there’s disappear, it would not be due to There are now more than 12,000 a bright future for user generated competition from streamers, but and “pro-user generated content” in rather the failure of filmmakers and cinemas in China, according to China. film financiers to supply the world market research firm IBISWorld. with fresh, exciting and brilliant content.

F L X I Cooperation between Chinese I am already seeing things pick and foreign filmmakers has up, because there will always be greatly suffered because of the visionary individuals and companies Covid-19 pandemic. Do you think who see market downturn as cooperation between countries will opportunity rather a warning to run pick up again next year? the other way.

This is what I am working day in Do you see specific opportunities and day out on. In general, film of collaboration between China and companies in China have been hit Spain in this area? hard by Covid, and while theaters are recovering, film distibuters are There are so many wonderful still suffering from a range of issues Spanish filmmakers, storytellers, from debt, lack of bank financing, animation artists, and beyond. to a backed up catalogue of un- Me and my wife have been lovers released films. So naturally, the of Spanish cinema for years, and heavy hitters of the industry are not we particularly enjoyed catching engaged in cross-border dealmaking, up (finally) on La Casa de Papel so it’s more up to the individuals. during the Covid lockdown. I believe

In general, film companies in China According to Chinese media, the number “ have been hit hard by Covid, and while of coproductions between China and other theaters are recovering, film distibuters are countries in 2020 will be far fewer than the 95 still suffering from a range of issues from coproduction applications received in 2019. debt, lack of bank financing, to a backed up catalogue of un-released films

F L X I There are plenty of great opportunities “ here, and learning how 1.3 billion of the world’s population feel and react to story is certainly a valuable proposition. I believe there is quite a lot of “ opportunity for filmmakers and production companies in Spain to get involved with China

there is quite a lot of opportunity a film financing company, I would Experts say that 5G technology for filmmakers and production genuinely encourage you to take the is going to revolutionize the companies in Spain to get involved bold move of exploring investing in whole film industry, with certain with China. Chinese filmmakers are Chinese cinema. There are plenty aspects developing like cloud always open to partnerships with of great opportunities here, and transmission, real-time rendering, foreign filmmakers, and Chinese learning how 1.3 billion of the world’s intelligent distribution, efficient companies are very open to cross- population feel and react to story is data capturing and collaborative border partnerships. And if you are certainly a valuable proposition. production in different locations

F L X I 5G will be the key catalyst to the growth in quality of around the world. Do you think 5G “ content. Whether it will change viewing habits depends will be the next great thing in the on the creative excellence of the content creators who weild movie industry? this technology, and not the technology itself. It absolutely will, for all the reasons you mentioned, and more. Filmmakinig in a digital world requires huge amounts of bandwith and data transmision. And with the growth of live streaming, and on the other side of physical production, the hugely probable scenario of virtual sets (like what they used in the production of The Mandalorian) becoming widely used, the problems of latency and packet loss become critical. And whether it be the application of native 3D production or Virtual Reality technologies, to live streaming of sports events at 4-8K, 5G will be the key catalyst to the growth in quality of content. Whether it will change viewing habits depends on the creative excellence of the content creators who weild this technology, and not the technology itself.

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