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International Series on Computer Entertainment and Media Technology

Patrice Poujol Online Film Production in China Using Blockchain and Smart Contracts The Development of Collaborative Platforms for Emerging Creative Talents International Series on Computer Entertainment and Media Technology

Series Editor Newton Lee Institute for Education, Research, and Scholarships Los Angeles, CA, USA The International Series on Computer Entertainment and Media Technology presents forward-looking ideas, cutting-edge research, and in-depth case studies across a wide spectrum of entertainment and media technology. The series covers a range of content from professional to academic. Entertainment Technology includes computer games, electronic toys, scenery fabrication, theatrical property, costume, lighting, sound, video, music, show control, animation, animatronics, interactive environments, computer simulation, visual effects, augmented reality, and virtual reality. Media Technology includes art media, print media, digital media, electronic media, big data, asset management, signal processing, data recording, data storage, data transmission, media psychology, wearable devices, robotics, and physical computing.

More information about this series at http://www.springer.com/series/13820 Patrice Poujol

Online Film Production in China Using Blockchain and Smart Contracts The Development of Collaborative Platforms for Emerging Creative Talents Patrice Poujol Run Run Shaw Creative Media Centre City University of Hong Kong Kowloon Tong, Kowloon, Hong Kong

ISSN 2364-947X ISSN 2364-9488 (electronic) International Series on Computer Entertainment and Media Technology ISBN 978-3-030-02467-3 ISBN 978-3-030-02468-0 (eBook) https://doi.org/10.1007/978-3-030-02468-0

Library of Congress Control Number: 2018960876

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This Springer imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Abstract

The entry of China in the World Trade Organization (WTO) in 2001 marked its growing integration into the global economy. After its WTO accession, the central government, some selected online companies and the creative industries have collaborated to form the largest online film circulation platforms in the world such as iQiyi (under the umbrella of Baidu), Tencent Video, LeTV or Youku Tudou (with Alibaba as owner) with hundreds of millions of Internet and mobile viewers. Meanwhile, China’s political-economic system has remained under the control of the Chinese Government. The monitoring of online content has increased. This has resulted in the shutdown of foreign competitors (such as YouTube) and local pirate online platforms. While replicating almost all of the successful Western startup models such as Google, Facebook, YouTube or Amazon, China has nurtured its own champions including Alibaba, Youku Tudou, Baidu and Tencent. China has also been developing cutting-edge blockchain and smart contract- decentralised technologies such as NEO at a rapid pace. Blockchain and smart contract technologies have increased tenfold over a few months from a total market capitalisation of US$10 billion to over US$100 billion in July 2017 (Shin 2017), mostly through crowdfunding.1 This unprecedented phenomenon has contributed to generate dozens of creative concepts, raising between US$30 million and over US$300 million in initial coin offerings (ICOs). However, despite all these converging developments, the Chinese creative industries and the central government have not yet developed and supported an independent creative crowdfunding/crowdsourcing system like US-based Kickstarter or Indiegogo to finance, produce, promote and circulate film and creative works online. In this context, the present study will answer the following key research questions: Can there be a distributed online-based participatory system of independent creative production in China where the government, the industry and the audience can all contribute and benefit? Are platforms such as Youku Tudou (YT), NEO, Alibaba’s Yulebao and Zhongchou preliminary steps in this direction? What are the

1 Since then, the total cryptocurrency market valuation has reached a peak of c. US$700 billion in early January 2018 (Martin 2018).

v vi Abstract basic characteristics and key issues of such a system, especially in relation to the Internet and mobile film circulation and the involvement and interaction of the young urban audiences in China? Beyond this, how can such notions as IP, piracy, value and collective creativity be redefined in the networked economy? This book also proposes to discuss key questions about the development and the adoption of new digital platforms – such as the implications for the future of copyright and the production of creative content which circulates on these distribution windows in China. Beyond these points, this research observes the change in media consciousness amongst the young urban Chinese audiences’ and the emergence of a participatory and creative online community. These key questions will be studied through primary data collected from urban China and case studies on film production and online platform.2 In the end, this research proposes solutions on how these young local creative talents can be identified and supported early on, particularly within new disintermediated and distributed crowdfunding/crowdsourcing online ecosystems.

References

Martin, Will. 2018. “Cryptocurrency Market Passes $700 Billion on January 3, Bitcoin Rises - Business Insider.” Business Insider, January 3. http://www.businessinsider.com/ bitcoin-price-global-cryptocurrency-market-capitalisation-january-3-2018-1?r=UK&IR=T. Shin, Laura. 2017. “The Emperor’s New Coins: How Initial Coin Offerings Fueled A $100 Billion Crypto Bubble.” Forbes. July. https://www.forbes.com/sites/laurashin/2017/07/10/ the-emperors-new-coins-how-initial-coin-offerings-fueled-a-100-billion-crypto- bubble/2/#33af01a1b2cc.

2 These findings are occasionally combined with relevant and targeted elements of comparison with Hong Kong, Europe and the USA. Keywords

China; Alibaba Pictures; Youku Tudou; Yulebao; Zhongchou; P2P; Blockchain technology; Smart contracts; Tokenisation; Bitcoin; Cardano, Ethereum; NEO; Cryptocurrencies; Distributed production systems; Decentralised production systems; Creative audiences; Emerging creative talent; Creative industries; Censorship; Copyrights; Intellectual Property (IP); Crowdfunding; Crowdsourcing; Digital technology; Digital filmmaking; Film finance; Film production; Film distribution; Film circulation; Film production chain; Online media conglomerates; Platformisation; Piracy; Political economy; World Trade Organization (WTO); Young urban audiences; Value in creative productions and filmmaking; Initial Coin Offering (ICO); Security Token Offering (STO)

vii Acknowledgements

I start this book as a celebration to my mother, Rosita Ruiz, who gave me life, unconditional support, love, taste for creativity and the world; to my grandparents, George Geneste, Eugenio Ruiz and Pilar Manzanas, who survived two wars and have been a great example of courage, wisdom and compassion to follow throughout my life; to my family and, particularly, my cousin, Eric Lagarde, who supported me and advised me since I was a child, like a real brother; to my cousin, Jean-Paul Florenty, and his family for their professional advice; and to my father, Bernard Poujol, who finally learnt how to accept my life choices and not to be so anxious about my future: Qui vivra verra… I am reserving a very special place to my dear friend, Prof. James Francis Kenny, for his precious personal and academic advice not only throughout the PhD but since I first met him 10 years ago. He gave me the inspiration and the will to reach for my dreams and helped me build strong foundations to make it happen. He largely contributed to get me back on my feet when I got knocked down along the way; this I will never forget. I don’t think that I would have succeeded to finish this work without his help and advice. To Winnie Leung who gave me the strategies and the strength to go through the past 3 years of my life. To Brett Westwood for his honesty, courage, and creativity. To Dr. Robert Ellis-Geiger for his loyal and continuous faith in this project. To Prof. Damien Charrieras for his outstanding advice and help. To Prof. Maurice Benayoun who was also part of my PhD supervision panel. They all gave me regular and expert support: this book draws extensively on the PhD research. Many thanks to my fellow PhD colleague, Nicolas Mendoza, former editor at Bitcoin Magazine and groundbreaking journalist, who made me discover blockchain technology as a potential modifier of value and a disruptor of traditional production models. I have cited him in the text, as he is to this day one of the earliest followers of blockchain technology that I have had the opportunity to meet. I have a special thought for Aarya Venugopal for her incredible copy-editing and reviewing skills. To Susan Johnston and Newton Lee who showed interest for my research and greatly helped the publication of this work.

ix x Acknowledgements

To Prof. Michael Ingham for his help and reassuring advice throughout this journey. I would also like to thank Prof. Michael Berry for taking me on board as his mentee at UCLA, Prof. Stanley Rosen for his generous time and advice and Prof. Richard Allen and the Centre for Applied Computing and Interactive Media (ACIM) at City University of Hong Kong’s School of Creative Media for their kind support throughout this research. I am grateful to Mr. Adrian Lee at the Dr. Lee Memorial Foundation Limited for his ACIM fellowship. I am grateful to Prof. Jenny Lau, Prof. Jasmine Trice, Prof. Michael Curtin, Prof. Denise Mann (Head of the Producers’ Master’s Program, UCLA TFT), Roger Garcia, Li Cheuk-To, Soo Wei Shaw, Patrick Lee, Lloyd Chao, Leonhard Weese (Bitcoin Association of Hong Kong), Jehan Chu (Kenetic Capital), Ryan King (Emurgo Hong Kong/Cardano), Ed Kim (Gameflip), Diego Roman (Pelotea), Prasanjit Dey, Martin Naithani (Pelotea), Kabir Rajput, Aaron Shershow, Maarten Melchior (Fintage House), Amit Jumani (Krisco Media FZC), Graham De Barra (Festy), Huichi Man (Provenance Events), Remy Jun- Young Kim and Snake (Blockchain Korea), Prof. Antoni Kapcia, Prof. Kristian Feigelson, Dr. George Whitfield, Aymerick Pilarski, Sélim Oulmekki, Prof. Emilie Yeh, Prof. Darrell Davis, Prof. Louisa Wei, Robert Buckham (Oceana Films), Dr. Alan Peatfield, Othmane Benlafkih, Prof. Marko Skoric, Edwina Forkin (Zanzibar Films), Padraic Moyles (Riverdance), Rowan Dempsey, Micheal Doorley, Shigetsugu Okabe, Dominick O’Cruadhliocht, Liam McGlinchey, Paul Pic, Claude Laroche, Tiby Irani, Laurent Labit, Alexandre Raimbault, Frédéric Ménez, Maysam Mortazavi, Amir Ashrafi, John McCann (University of Ulster), Bernard Andruccioli (IUT Tech de Co), Stephen Logan, Tarek ‘Taz’ Jamali, Julie O’Yang, Fernando Eloy, Dr. Abdulkadir Alkan, Robin Aditya Sharma, Jules Guerra, Père Antoine, Patrick Sarrut, Nadine Le Beherec, Pascal Avril, Bob Rendall (Eric Liddell Centre), Prof. Paul McDonald, Prof. Julian Stringer, Adrian Lugol (Cinemarket), Florian Glatz (Cinemarket), Alejandro Miranda (Versus Entertainment), David Doepel (Demand Film), Alan Milligan (White Rabbit), Alexandra Sun, David Suarez, Jean- Luc Bonefacino, Dr. Harald Kraemer, Wangzi, Haili, Liu Qi (Vivian), Liu Qiang, Aleksandr Parfenov, Arnaud Quenu, Frédéric Montebello, Jérôme Priol, Shigeo Kobayashi, Arnaud Rigaud, Andrew Burwell, Dr. Sanjay Parekh, Charles Chan, Maya Tong, Jim Cunningham and all the film and blockchain professionals in the interviewees list for their advice, their help and their contribution. I would like to extend my gratitude to all the young emerging talents and respondents who took part in both the qualitative and quantitative studies. The list is too long to name them all here. To my good friend (a cara mo chroi) Eoghan Harris, who taught me most of what I know in script-writing and how to never back down. Leon Conway, a model of an advisor and a man of honour who introduced me to the art and craft of film production. To the women I had the chance to connect with throughout my life; Betsy Razminas, Isabelle Gauthier, Amanda Tsetsegmandal Sangitamjid and her brilliant daughter Anu-Ujin Anuka Batmunkh and importantly Laura Muñoz Perez for their patience, their endurance, the life, the lessons and the compassion they all brought to me. To Aksiniya Larionova for leading me to the edge but not quite pushing me over. To Lena Mcguffie-Newnham for teaching me indirectly about myself. Acknowledgements xi

To all my friends who I could not name here due to logistical constraints but who will recognise themselves if they read this manuscript. I would also like to thank some artists who particularly inspired me – some of them I have met personally and others who influenced me through their writings, their music and films: Albert Camus, Alexandre Dumas (father and son), Jules Verne, Alfred Hitchcock, François Truffaut, Jean-Pierre Melville, Milan Kundera, Stephen Hawking, David Lynch, Clint Eastwood, Denzel Washington, Joel Cox, Edwina Forkin, Padraic Moyles, Colm and Ronan O’Snodaigh, Ennio Morricone, Hans Zimmer, Christopher Nolan, The Coen Brothers, John Cassavetes, Akira Kurosawa, Martin Scorsese, John Woo, Francis Ford Coppola, Ang Lee, Feng Xiaogang, Jia Zhangke, Guillermo Del Toro, Alfonso Cuarón, Alejandro González Iñárritu, Alan Parker, Ridley Scott, David Fincher, Wes Anderson, Quentin Tarantino, Spike Lee, Alejandro Amenábar, Denis Villeneuve, The Wachowskis, David Cronenberg, Abel Ferrara, Jim Jarmusch, Igor and Grichka Bogdanoff, Serge Gainsbourg, Noir Désir, Otis Redding, Eric Clapton, Queen, Pink Floyd, Iron Maiden, Iam, Freeman, Nirvana, Soundgarden, Marlon Brando, Christopher Walken, Denis Hoper, Joseph Gordon Levitt and many others that I cannot cite here due to space constraints. To all the dear ones who sadly passed away while I was conducting this research; personal connections such as my mentor Fred Gordon, General Jean Beaury, Mick Fitzgerald, Peter Walsh (from the Irish Film Centre in Dublin), Kinson Tsang (MBS), Carmen Bianco De Lozo, Gillian O’Hare, Serge (Sergio) Debest, Baltasar Ruiz, Angel Manzanas and, in no particular order, the great irreplaceable talents and artists who left this world too early such as Aretha Franklin, Harper Lee, Charles Aznavour, Rachid Taha, Maurane, Umberto Eco, Karl Lagerfeld, Stan Lee, Wes Craven, Alain Berberian, B.B. King, Chuck Berry, Ornette Coleman, Abbas Kiarostami, James Horner, David Bowie, Ben E. King, Al Jarreau, Muhammad Ali, John Hurt, Robin Williams, Philip Seymour Hoffman, Chris Cornell, Chester Bennington, Scott Weiland, Lemmy Kilmister, Omar Sharif, Christopher Lee, George Michael, Prince, Wu Tianmin, Leonard Cohen, Michael Cimino, Alan Rickman, Carrie Fisher, Patrick Macnee, Rick Parfitt, Jake LaMotta, Harry Dean Stanton, Roger Moore, Jerry Lewis, George Romero, Jeanne Moreau, Michele Morgan, Mireille Darc, Sondra Locke, Sam Shepard, Claude Rich, Martin Landau, Pierre Tchernia, Michel Galabru, Jean-Marc Thibault, Victor Lanoux, Sylvie Joly, Bill Paxton, Merle Haggard, Natalie Cole, Guy Béart, Michel Delpech, Richard Anthony, Demis Roussos, Leonard Nimoy, Sridevi Kapoor, Maureen O’Hara, Robert Vaughn, Simone Veil, Jean D’Ormesson, Johnny Hallyday, France Gall, Dolores O’Riordan, Jacques Higelin, Isao Takahata, Marcel Gotlib, Cabu, Georges Wolinski and Charb, you will all be dearly missed, but your art and thoughts will stay behind for us to learn and share. And since this is a cycle of life, many thanks to all the newborns (my relatives and beyond) for coming on board and all those who will soon take on the challenge to become the next creative and talented generation on this earth.

Patrice Poujol Contents

1 Introduction �� 1 References �� 6

Part I Theoretical Framework and Contextualisation 2 Literature Review �� 11 2.1 Political Economy �� 11 2.1.1 Foundations of Political Economy: Liberty, Equality, and Power �� 11 2.1.2 Political Economy and Technology: Process, Divide, and Power �� 13 2.1.3 Globalisation: Beyond Cultural Imperialism �� 16 2.1.4 Political Economy and Media in the Context of China �� 17 2.2 Intellectual Property (IP) �� 20 2.2.1 IP as Central Feature of the Current Film Production Model �� 20 2.2.2 Globalising IP Forces �� 21 2.2.3 The Disruptive Forces of Technology �� 23 2.2.4 The Redefinition of IP �� 25 2.3 Audience Perspective �� 27 2.3.1 Roots of Audience Research and Definitions of ‘Audience’ �� 28 2.3.2 Audience Evolution: Viewing Contexts and Audience Fragmentation �� 31 2.3.3 Creative Audiences and User-Generated-Content �� 34 2.4 Networked Participation: Online Industries Meet Creative Audiences �� 36 2.4.1 The Networked Economy: Shifting Business Models �� 37 2.4.2 Networks, P2P, Crowdfunding, and Emerging Creative Talents �� 38

xiii xiv Contents

2.4.3 Redefinition of Terms in Filmmaking �� 42 2.4.4 The Challenges of the Chinese Context �� 46 2.5 Conclusion and Hierarchy of Research Questions �� 48 2.6 Methodology �� 50 2.6.1 An Interdisciplinary Approach �� 50 2.6.2 Contextualisation: Political-Economic Changes and Media Landscape �� 51 2.6.3 Case Studies: Industrial Perspective and Ethnographic Approaches �� 52 2.6.4 Audience Evolution and Change of Media Consciousness �� 55 2.6.5 Collective Approach to a Potential Participatory Model �� 56 References �� 58 3 Political-Economic Transformations in China �� 69 3.1 Control and Reforms in a Changing Global Landscape �� 70 3.1.1 The WTO Accession (2001): Long Negotiations, IP Introduction and Political Continuity �� 70 3.1.2 Post-WTO Period (2002–2017): International Presence and Challenges Ahead �� 72 3.2 Tensions Between Communist and Capitalist Forces in China �� 74 3.2.1 The Emergence of a Hybrid System �� 75 3.2.2 The Revival of Confucianism and Chinese Cultural Identity �� 77 3.3 Political-Economic Forces and Development of Local Media: A Relationship of Tight Control, Soft Power, and Surveillance �� 80 3.3.1 Political Control and Coercion �� 81 3.3.2 The Politics of Soft Power �� 82 3.3.3 Internet and Government Control �� 84 References �� 86 4 Mapping Out the Chinese Media Landscape �� 91 4.1 Introduction �� 91 4.2 Technological Developments �� 93 4.2.1 Technological Innovation and Fast Adoption �� 94 4.2.2 A Distribution Structure with Chinese Characteristics �� 95 4.2.3 The Resilience of Television �� 96 4.2.4 Internet as Disruptor and Re-appropriator �� 96 4.3 Economic and Industrial Transformations �� 98 4.3.1 Economic Explosion Across All Circulation Windows �� 98 4.3.2 Future of the Chinese Theatrical Window �� 99 Contents xv

4.3.3 The Issue of Local Film Releases and Local Film Productions �� 99 4.3.4 Technology and Theatrical Economies of Scale �� 100 4.3.5 Chinese Market and Foreign Presence �� 101 4.3.6 Monetising IP Across All Platforms �� 102 4.4 Legal Transformations: Copyrights and China �� 103 4.4.1 Online Platforms as Disruptors of Existing Legal Systems �� 103 4.4.2 Concept of IP in China: Cultural Conflict �� 104 4.4.3 Global Lobbying Efforts �� 104 4.4.4 IP Redefinition in a Digital Context �� 106 4.4.5 Limited International Influence vero IP �� 107 4.5 Societal and Market Dimensions �� 109 4.6 Political Dimension: Piracy, Censorship, and State Control �� 110 4.6.1 The CPC’s Governmental Approach to Creative Media �� 110 4.6.2 Censorship and Quotas �� 111 4.6.3 The Online Exception: A Changing Paradigm �� 112 4.6.4 Birth and Evolution of the Great Firewall �� 113 4.6.5 The 2009 Shutdown Campaign �� 114 4.7 Conclusion �� 117 References �� 119

Part II Case Studies: Industrial and Ethnographic Perspectives 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance �� 127 5.1 Introduction �� 127 5.2 Alibaba’ s Creation and Background �� 128 5.2.1 Alibaba Group: A Multi-faceted Disruptor �� 129 5.2.2 Jack Ma: The Founding Vision of Alibaba �� 133 5.2.3 Alibaba Pictures: The Ultimate Disruption �� 137 5.3 From Retail to Media: Alibaba’s Strategy and Tactics �� 140 5.3.1 Inte gration: Alibaba as a Central Hub �� 140 5.3.2 Political-Economic Control �� 142 5.3.3 Political Compromise and Surveillance �� 144 5.4 Alibaba as a Manifestation of the Change of Business Culture and Media Consciousness in China �� 150 5.4.1 Business Cultural Changes �� 150 5.4.2 Cross-Promotion and Sales, Big Data and Change of Media Consciousness �� 152 5.4.3 Alibaba’ s Creative Ecosystem: An Opportunity for New Talents? �� 157 5.5 Conclusion �� 169 References �� 172 xvi Contents

6 Live Film Production Case Study: The Last Race �� 183 6.1 Introduction �� 183 6.1.1 Background of the Case Study �� 183 6.1.2 Methodology �� 184 6.1.3 Relevance of This Case Study �� 187 6.2 Act I: Preparation – Development and Pre-production �� 188 6.2.1 Background �� 189 6.2.2 Development �� 191 6.2.3 Pre-production �� 196 6.3 Act II: Action – Production and Post-production �� 200 6.3.1 Political-Economic Macro Challenges: Censorship and Power �� 201 6.3.2 Micro-systemic Challenges: The Emperor and His Subjects – Cultural Microcosm �� 216 6.3.3 Practical Production Challenges: Structural Issues �� 229 6.3.4 Lack of International Cultural Knowledge and Understanding �� 233 6.3.5 Production Phase: Concluding Lines �� 236 6.4 Act III: Reaction – Promotion, Distribution, Circulation �� 237 6.4.1 Promotion �� 237 6.4.2 Distribution �� 251 6.4.3 Circulation �� 254 6.5 Conclusion �� 261 References �� 262 7 The Case Study of Youku Tudou �� 271 7.1 Introduction �� 271 7.2 The Case Study of Youku Tudou as a Microcosm of the Key Forces Operating at Large �� 272 7.2.1 Youku: Prime Content and IP Emphasis �� 273 7.2.2 The Creation and Formalisation of Tudou �� 276 7.3 The Youku Tudou Merger: Economies of Scale, IP Creation, and Sector Concentration �� 278 7.3.1 Bandwidth Synergies and Increasing Use of Mobile Phones �� 279 7.3.2 The Increasing Price of Content and Economies of Scale �� 280 7.3.3 The Importance of Creating In-House and Exclusive IP �� 281 7.3.4 Redefining Product Placement and Advertising Standards �� 282 7.3.5 The Role of Creative Audiences in IP Creation �� 284 7.4 The Consolidation of the Online Creative Champions �� 286 7.5 Conclusion �� 287 7.6 Concluding Remarks of Part II �� 288 References �� 292 Contents xvii

Part III Participant Approach for a Participatory Model 8 Chinese Audiences: Evolution and Change of Media Consciousness �� 299 8.1 Audience Evolution and Chinese Urban Youth: A Quantitative Study �� 300 8.1.1 Introduction of the Survey �� 300 8.1.2 Millennials in China �� 302 8.2 Theatre, Home and Mobile Viewing Platforms: Changing Practices and Changing Industries �� 303 8.2.1 The Revival of Cinema-Going �� 303 8.2.2 Home Viewing Platforms: Traditional Versus Digital �� 305 8.2.3 Mobile Platforms Explosive Growth �� 308 8.3 New Viewing Contexts: Physically Isolated but Virtually Interconnected �� 309 8.3.1 Piracy and the Demise of the Traditional Industries �� 309 8.3.2 Film-Viewing and Social Isolation �� 313 8.4 Content Adoption and Protectionism �� 316 8.4.1 Asian Films and Cooperation �� 316 8.4.2 Foreign Films Penetration: US and EU Content �� 318 8.4.3 National and Global Political Dimensions �� 320 8.5 Audience Evolution: Towards the Emergence of Local Creative Talents �� 322 8.5.1 Creative Industries and Active Audiences: The Disruptive Nature of a Changing Relationship �� 322 8.5.2 Participatory Media Culture and Active Audiences �� 324 8.5.3 Influence of FilmAesthetics and Creative Content �� 326 8.5.4 The Rise of Community-Based Creative Audiences �� 327 8.5.5 Active Audiences, Collaborative Creative Audiences and the Emergence of Local Creative Talents �� 328 8.6 Conclusion �� 330 References �� 332 9 P articipatory Involvement and Focus Groups with Emerging Creative Talents �� 337 9.1 Introduction and Methodology �� 338 9.2 Golden Circle, Foreign Mimicry and Self-Censorship �� 340 9.2.1 Genre Mimicry and Financial Freedom �� 340 9.2.2 Government Censorship �� 341 9.2.3 Self-Censorship Through Mimicry �� 342 9.2.4 P assion Factor and Motivation �� 343 9.2.5 Financial Censorship �� 343 9.3 BF A Training, Local TV Productions, the Vicious Circle of Traditional Industries �� 343 9.3.1 Locally Bred Filmmakers �� 343 xviii Contents

9.3.2 Central Power and Micro-Authority: The Chinese TV Effect �� 344 9.3.3 The Traditional Industries’ Vicious Circle �� 345 9.4 Docu Ghetto, Local Government Support, and Financial Hurdles �� 345 9.4.1 Balancing Commercial and Independent Filmmaking �� 345 9.4.2 The Documentary Ghetto �� 347 9.4.3 Working with the Local Government �� 348 9.5 Journey to the West: Studying Abroad as a Quest for Independence �� 349 9.5.1 Learning the Ropes �� 349 9.5.2 Film Auteurship and Censorship �� 350 9.5.3 The Challenge of Film Finance, Trust, and Microfilms �� 350 9.5.4 The Challenge of Female Filmmakers �� 352 9.6 The Mini Decentralised Studio Approach: IP Ownership and Collective Work �� 354 9.6.1 A Collective Approach to Filmmaking �� 354 9.6.2 Financial Restrictions and Indirect Influence of Censorship on SARs �� 356 9.6.3 Issues for Emerging Talents with Online Distribution and Circulation Platforms �� 357 9.7 Conclusion �� 358 References �� 361 10 Proposal for a New Participatory Creative Production Model �� 365 10.1 Filling the Creative Industries’ Gaps �� 365 10.1.1 Transparency and Accountability �� 366 10.1.2 Structural Efficiency �� 367 10.1.3 Decentralised Collaborative Sphere �� 368 10.1.4 Disintermediation �� 369 10.1.5 Fair Redistribution of Resources and Rewards �� 371 10.1.6 Non-financial Values �� 371 10.2 Existing Participatory Models and Other Potential Solutions �� 375 10.2.1 Financial and Insurance Services �� 375 10.2.2 Public and Semi-public Institutions �� 377 10.2.3 On-line Platforms �� 380 10.3 The Proposal �� 394 10.3.1 Features of the Participatory Creative Production Model �� 394 10.3.2 Limitations of the Proposed Model �� 402 Contents xix

10.3.3 Model Development and Launch: Three Potential Scenarios �� 403 10.4 Limitation of Blockchain Technology �� 409 References �� 412 11 Conclusion �� 419 References �� 426

Appendices �� 427 List of Figures

Fig. 5.1 Left: Alibaba offices in Hong Kong/Centre and right: Pasadena offices. (Courtesy of Patrice Poujol) �� 137 Fig. 5.2 Current model for film distribution release sequence �� 167 Fig. 5.3 Model for digital exhibition that bypasses blocked channels �� 168 Fig. 5.4 Model for direct-to-consumer independent movies-on-demand �� 168 Fig. 6.1 On the set of The Last Race. (From left to right: behind the camera (as Patrice Poujol) and in front of it (as Louis Klein)). (Courtesy of Patrice Poujol) �� 186 Fig. 6.2 Joseph Fiennes arriving (day 1). (Courtesy of Patrice Poujol) �� 199 Fig. 6.3 The Pre-Shoot Ritual. (Courtesy of Patrice Poujol) �� 200 Fig. 6.4 Example of special effects coordinated with Mr. Ma (VFX Supervisor). (Courtesy of Patrice Poujol) �� 201 Fig. 6.5 Wangguo Bridge with traffic and first day of shooting. (Courtesy of Patrice Poujol) �� 202 Fig. 6.6 1500 extras regrouped for a night scene by Weifang Railway. (Courtesy of Patrice Poujol) �� 203 Fig. 6.7 ‘Britain is Great’ campaign. (Courtesy of Patrice Poujol) �� 207 Fig. 6.8 Making of the clock tower in Area 81. (Courtesy of Patrice Poujol) �� 210 Fig. 6.9 Solvil and Titus Ads. (Courtesy of Patrice Poujol) �� 213 Fig. 6.10 Children on set. (Courtesy of Patrice Poujol) �� 220 Fig. 6.11 Examples of crew members sleeping on set. (Courtesy of Patrice Poujol) �� 224 Fig. 6.12 The directors’ tent – state of the art equipment. (Courtesy of Patrice Poujol) �� 229 Fig. 6.13 Eric Liddell’s daughters/former prisoners and their families. (Courtesy of Patrice Poujol) �� 235 Fig. 6.14 Tianjin press conference. (Courtesy of Patrice Poujol) �� 239

xxi xxii List of Figures

Fig. 6.15 Pictures that ITV were allowed to use to promote the film �� 242 Fig. 6.16 From left to right and top to bottom: Patricia and Heather Liddell, former prisoners and their families, and The Weifang War Museum. (Courtesy of Patrice Poujol) �� 245 Fig. 6.17 Beach press conference with kites promoting key corporate sponsors. (Courtesy of Patrice Poujol) �� 246 Fig. 6.18 The Filmart booth and The Beijing IFF press conference. (Courtesy of Patrice Poujol) �� 247 Fig. 6.19 69th Cannes film festival: Palais Des festivals’ entrance. (Courtesy of Patrice Poujol) �� 248 Fig. 6.20 Hong Kong Premiere: 17th of June 2016. (Courtesy of Patrice Poujol) �� 251 Fig. 6.21 Solvil and Titus’ Kiosks in Hong Kong. (Courtesy of Patrice Poujol) �� 251 Fig. 6.22 Mr. Shin mentioned as sole director of the film on Mtime. (Screenshot courtesy of Patrice Poujol) �� 258 Fig. 6.23 Beijing ‘Informal’ DVD store: 5 July 2016. (Courtesy of Patrice Poujol) �� 259 Fig. 10.1 The circles of censorship. (Courtesy of Patrice Poujol) �� 374 List of Graphs

Graph 8.1 Population per screen in 2008, compared to SARFT estimates for 2014. �� 304 Graph 8.2 Proportional use of pirated film on DVD/VCDs and internet. (Courtesy of Patrice Poujol) �� 309 Graph 8.3 Comparative use of the top 10 internet viewing platforms between Hong Kong and Mainland Chinese respondents. (Courtesy of Patrice Poujol) �� 311 Graph 8.4 Pros and cons of internet (piracy) as a film-viewing platform: 2009. (Courtesy of Patrice Poujol) �� 312 Graph 8.5 Frequency of diffusion of internet film platforms per media (in %). (Courtesy of Patrice Poujol) �� 324 Graph 8.6 Reasons for content adoption by sample audience (first choice mentioned). (Courtesy of Patrice Poujol) �� 326

xxiii About the Author

Patrice Poujol When he watched a re-screened version of Once Upon a Time in the West at age 7 in his hometown of Bordeaux, France – better known for its surf scene and its red wine – Dr. Patrice Poujol immediately fell in love with the cinema medium as an art and as a way to share ideas and emotions with others. After 8 years in the financial sector working on institutional and corporate projects including film finance with AIB in Ireland, he continued his professional path in creative production. Dr. Poujol completed the first PhD on blockchain and creative industries worldwide at the School of Creative Media, City University of Hong Kong. He participated in a UCLA exchange and in the intensive MEFTI programme organised by MIT. He is now continuing his research in the areas of digital entertainment, blockchain and the creative industries as a research fellow of the Centre for Applied Computing and Interactive Media (ACIM) at the School of Creative Media, CityU’s Run Run Shaw Creative Media Centre. Taking his research as a solid foundation for his future work, Dr. Poujol is currently integrating his experience, his knowledge and his network in technology, finance and media to continue his public policy research in Asia and to develop the Lumière Project with a team of experts from the tech world and the film industry. This project should contribute to make the film industry more equitable, creative and transparent. Internet Presence: LinkedIn: https://www.linkedin.com/in/pulsefilms/ Web: www.lumiereproject.io Facebook: @lumiereprojectteam Twitter: @patricepoujol and @lumingproject Email: [email protected] Academia.edu: https://cityu-hk.academia.edu/PatricePoujol

xxv Chapter 1 Introduction

According to the latest report from UNESCO, the revenues generated by the cultural and creative industries (CCI) worldwide represented US$2.25 trillion in 2015 across 11 industries (Raufast et al. 2015, 15). Almost one-third of these revenues were generated by Asia-Pacific alone. Over the same period the CCIs employed 29.5 million people, 43% of which were located in Asia-Pacific (Raufast et al. 2015, 32). Out of this workforce, the 15–29 year old represented over 19% of the global CCI creative labour (Raufast et al. 2015, 18). This outlines the core economic significance of these industries and their labour force in globalised economies as a phenomenon that needs to be observed and studied. These industries include cultural productions ranging from fashion, music, and film and they are subject to strong intellectual property regulations. These sectors use new technologies, particularly with the digital production of content, the online release of films and of related creative Intellectual Property (IP) through platforms such as Netflix, iTunes, Jaman or Youku Tudou (YT) (Cunningham and Silver 2012a, b). The entry of China in the World Trade Organization (WTO) in 2001 marked a growing integration of China into the global economy while its political-economic system remained under the control of the central government. After China’s accession to the WTO, the central government, selected startups, and the creative industries have collaborated to create some of the largest online film circulation platforms in the world such as iQiyi (under the umbrella of Baidu), Tencent Video, LeTV, or YT (owned by Alibaba) with hundreds of millions of Internet and mobile viewers. In parallel, online monitoring has increased, resulting in the shutdown of foreign online platforms (such as YouTube) and pirate websites (Cunningham and Silver 2012a, 192). China has replicated and adapted most of the US-based successful

© Springer Nature Switzerland AG 2019 1 P. Poujol, Online Film Production in China Using Blockchain and Smart Contracts, International Series on Computer Entertainment and Media Technology, https://doi.org/10.1007/978-3-030-02468-0_1 2 1 Introduction startup ventures (Google, Facebook, YouTube, eBay, Amazon)1 to the characteristics of its market. While supporting its own creative corporate champions (Baidu, Alibaba, YT, Tencent) and keeping foreign platforms away from its market through protectionist regulations (Priest 2014, 482–83), it has also developed blockchain and smart contract technologies with platforms such as NEO. Blockchain and smart contract technologies increased tenfold from a total market capitalisation of US$10 billion in spring 2016 to over US$100 billion in July 2017 (Shin 2017).2 This unprecedented phenomenon has contributed to generate dozens of creative concepts, raising between US$30 million to US$250 million in Initial Coin Offerings (ICOs). However, these converging trends do not seem to have supported yet the creation of a local independent creative ecosystem based on crowdfunding/crowdsourcing. In Western countries such as the US, Kickstarter and Indiegogo offer funding opportunities to finance film projects or Wreckamovie to source skills and collaborative talents from the online audience (Baranova and Lugmayr 2013). Except for the early attempt from Alibaba to set up such a model through Yulebao, crowdfunding and crowdsourcing have so far remained largely dedicated to cater to traditional investors, established filmmakers and production companies. This type of crowdfunding is a commercial type of crowdfunding (C2B). For instance, one of Yulebao’s initiatives funded a slate of 12 Jackie Chan movies (Coonan 2015). Another example of crowdfunding platform initiative is Zhongchou, but it was also created by executives from the online platform: Tencent.3 Given the sheer size of online video users in China estimated between 460 million to over 500 million individuals (He 2015; Tsui 2013) and its 640 million Internet users (Keane 2016, 343), it could be argued that an independent participatory model à la crowdfunding/ crowdsourcing could support the making of independent films and promote emergent filmmakers in China. The Chinese box office (BO) and the online industry4 currently seem to be dominated by foreign content, which jeopardises the development of local talent to sustain a rapidly growing and changing industry. While China has been trying to harness its propaganda at home and soft power abroad through the development and promotion of champion brands such as Alibaba or YT, opportunities for young emerging talents do not seem to have developed in the same planned and consistent way.

1 The Chinese Government has occasionally used these foreign online platforms outside of China to increase its own soft power abroad. 2 Since then, the total cryptocurrency market valuation has reached a peak of c. US$700 billion in early January 2018 (Martin 2018). 3 Baidu, Alibaba, and Tencent – also known as BATs (Keane 2016) – are the larger online groups in China. They correspond respectively to Google, Amazon, and Facebook in the US. 4 The Chinese box office or ‘BO’ as coined by the film industry concerns the release of films theatrically, whereas the online industry concerns the release of content on other screens such as (but not limited to) desktop computers, laptops, tablets and mobile phones for instance. 1 Introduction 3

This situation poses a certain number of key questions: Primarily, why has China not developed such a system yet? To what extent are platforms such as YT, Alibaba’s Yulebao, or Tencent’s Zhongchou a series of preliminary steps in this direction? Could an independent participatory model of crowdfunding/crowdsourcing model exist in China where the government, media industries, and audiences would all contribute and benefit? If so, what would be the key features of this model and how could it be implemented? Can blockchain technology and platforms such as NEO facilitate this implementation? How would such a project redefine the power structures of filmmaking and how would it position itself in regard to the notion of value associated with collaborative and creative works? Beyond this, how can notions of IP and piracy evolve in the context of the networked economy in China? Based on case studies and collected evidence from urban China, this research proposes to discuss important questions about copyright, the adoption of new digital platforms and what this means for the finance and production of films that circulate on these distribution windows in China.5 Beyond these points, this research is an attempt to assess the evolution of business cultures of Chinese online film champions and their global positioning as national brands. Another element connected to the evolution of corporations that will be assessed is the change in media consciousness amongst young urban audiences, particularly those who create content and the phenomenon of disintermediation that tends to be the result of such creative practices. We will study an urban section of the local young emerging creative audiences to see if this phenomenon manifests in China. Ultimately, this work contributes to reposition social and political-economic notions of rewards, value, and power relations. This study explores how IP is being redefined in the context of China. Therefore, it makes a contribution to knowledge in the field of the creative industries and contemporary Chinese studies. In the concluding parts of this study, I sketch the principles that should inform the reader about the feasibility of a participatory creative production model6 in China. Throughout this work, I seek to describe the emergence of new ways of producing film that transcends financial rewards as a unique instrument of valuation of creative works to one that integrates other values such as professional and personal recognition as well as passion factor. While there may be occasional but necessary references made outside of this scope, this research takes a 16-year time frame starting from China’s WTO entry in 2001 (when China started to open its economy internationally and to develop its online presence) to October 2017. This end point marks an important step in the

5 Platforms such as YT were initially content distribution platforms but they started offering finance since 2010 (this aspect will be further developed in Chaps. 5 and 7). 6 While most of my observations focus on feature filmmaking, the scope may sometimes expand to other creative industries: as I describe in the following chapters, these are increasingly intertwined. 4 1 Introduction consolidation and the restructure of the online sector in China.7 It is also marked by the start of Donald Trump’s presidency after his inauguration just a few months earlier. Trump’s ruling has had a significant influence on the Sino-US political- economic relationship and its impact on the two countries’ nascent collaboration in the creative industries sector and the creation of joint ‘brandscapes’ as described by Kokas (2017, 40). This work is anchored in the growing field of study of the creative industries. The use of CCI is important in the Chinese context, where the terms ‘creative industries’ and ‘cultural industries’ have been used with different connotations. For example, ‘creative’ is used in Shanghai and for more conservative reasons ‘cultural’ is used in Beijing (Li 2011, 87). One of the emphases of this work is to demonstrate the use of online companies as branded businesses to promote soft power abroad,8 with arguably a limited emphasis on cultural content – although Beijing-based government’s promotion of its cultural identity could sometimes be termed as cultural content (Li 2011, 87). I will, therefore use the terms CCI and creative industries interchangeably throughout this research. This project is by nature interdisciplinary: it integrates elements of political economy (Graeber 2001), political economy of the media (Wasko 1994, 2013), industry studies (Napoli 2003, 2011), CCI in China (Curtin 2007; Hartley 2012; Keane 2007, 2013, 2015, 2016), piracy and IP studies (Lobato 2009, 2010, 2012; Montgomery 2010; Wang 2003, 2010) alongside audience studies (Mosco and Kaye 2000). This approach emulates a methodology already used by Thomas Austin in the study of blockbusters from their creation to their point of circulation (Austin 2002). It also uses elements of research related to the cultural aspects of digital media and networked economy (Jenkins 2006; Jenkins et al. 2013), particularly in relation to the development of collaborative online communities (Yeh and Davis 2017; Meng 2012), of P2P networks (Bauwens and Kostakis 2014), blockchain, smart contract, and cryptography as the emerging driving forces of the Internet of value and the Internet of trust (Szabo 1997). Methodologically, this research makes a balanced use of desk research, interviews of experts, industry research, participant observation, quantitative and qualitative methods (including to a smaller degree some textual elements regarding films observed and metadata used for their promotion).9

7 This is 1 year after the restructure of Alibaba’s creative industries division reshaped into Alibaba’s Digital Media and Entertainment division in October 2016. After one calendar year, the two entities have had time to start integrating their economic and strategic synergies. 8 Soft power here is used to describe the promotion and influence of China driven by the government through media outlets in the same way Nye (1990) first used it and Keane (2013b, 2015) and Rosen (2017a, b) described it. Rosen makes a recent nuance to it, by arguing that this power is not soft as originally described, but rather coercive. 9 In regard to interviews of industry experts, I had to change the names of certain interviewees to prevent any possible retaliation from the professionals that they mentioned and any potential negative effects in terms of their careers. I also had to interview them informally at times and therefore could not hold a precise account or record of the interview dates and times. This process that is 1 Introduction 5

I have separated my study in three distinctive parts. Each of these parts is subdivided into three chapters: Part I provides the necessary context to the study and includes a literature review, a chapter about the political-economic evolution of China, and a chapter on the creative industries’ transformations in China from 2001 to 2017. This last chapter sheds light on the evolving definition of IP, the disruptive nature of technology in the creative industries, the changing nature of audiences, and the new concept of value in film production. It serves as a macro contextual part, which explains how large platforms and corporations such as Alibaba and YT came into existence and rapidly developed. In Part II, I observe and analyse the evolution of one of the giants in the creative industries sector in China: Alibaba. Alibaba is one of the three key components of the largest Chinese online conglomerates that are Baidu, Alibaba, and Tencents (BATs).10 This part includes three case studies connected to Alibaba Pictures Group, the film arm of Alibaba Group. Each case unfolds according to the chronological order of the production process, starting with film finance, continuing on with film production, and ending with online film distribution and circulation, drawing on the methodology of study of creative industries developed by Austin (2002), Ortner (2009, 2010), Caldwell (2008), Keane (2007, 2013a, b, 2015), Lobato (2009, 2010, 2012), and Montgomery (2010). Firstly, I start with a chapter on Alibaba Pictures Group in which I analyse the recent involvement of Alibaba as a financier and a potential creator of talent in the Chinese media landscape. This mirrors the film production process where the financing activity is followed by the organised production of the creative content. Secondly, a chapter on a film production driven by Alibaba and entitled The Last Race (Shin and Parker 2017) provides an in-depth and first-hand participant observation of the mechanisms of the creative media industries and their relationship with creative talents. It also outlines the changing relationship between traditional film industries and online creative industries. Thirdly, the distribution and circulation of a film directly follow its production activities. Therefore, the case study of YT, an online circulation platform recently integrated within Alibaba Group, illustrates the potential role of digital companies in the platformisation of China and the development of emerging creative talents. It describes YT’s evolution from a set of pirate platforms to a legitimate government controlled entity. It highlights how financing, production and distribution are even more tightly connected in the online system than they are in the traditional one. This chapter also engages with the initiatives implemented by YT to identify, support, and promote local emerging filmmaking talent who are becoming an intrinsic part of the online model. connected to the ethnographic nature of my research explains why no interview table was made available. However, interviews that were performed in a more formal context are mentioned as such in the footnotes. 10 Baidu is primarily a search engine the Chinese equivalent of Google in the US, Tencent is a social network platform similar to Facebook. Alibaba is an online marketplace equivalent to Amazon. 6 1 Introduction

Finally, Part III is also divided into three chapters: The first chapter in Part III is dedicated to the evolution of audiences in Mainland China and Hong Kong since the years 2008–9 until 2017. The years 2008–9 were pivotal points in terms of China’s soft power initiatives,11 the evolution of technology, the creative industries, local audiences, as much as the overall macro-political context. All these components of the Chinese creative sector have deeply and rapidly changed through to 2017. These changes have often been intertwined and have manifested the emergence of active and creative audiences. The second chapter focuses on one section of these creative audiences; the urban millennial audiences, which I choose to call emerging talents. I have conducted interviews with emerging creative talents from Mainland China and Hong Kong over 3 years. In these interviews I sought to understand their creative aspirations, type of content that influences and inspires them, viewing context that they generally watch this content on, and the main obstacles that separate them from achieving their artistic dreams. The third chapter of Part III (and last chapter of this research) integrates all the provisional conclusions of the previously mentioned chapters and uses these conclusions to craft a proposal of a participatory collaborative model (or non-model), a decentralised online platform that integrates blockchain technology. I chose to name this platform The Lumière Project ([芦明] Lúmíng in Chinese)12 for the purpose of this exercise (it is also a model that I intend to develop in the real world conjunctly to this book). While the body of this research is descriptive and analytic, these findings are used to suggest the design and the creation of a new model that could potentially be implemented in China to change the way films are financed and produced as well as to support the next generation of local creative talents.

References

Baranova, Darya, and Artur Lugmayr. 2013. “Crowd Intelligence in Independent Film Productions.” In Proceedings of the 17th International Academic MindTrek Conference., edited by Artur Lugmayr, Heljä Franssila, Hannu Kärkkäinen, and Janne Paavilainen, 182–86. Tampere, Finland: Association for Computer Machinery (ACM).

11 Starting with the Beijing Olympics in the summer of 2008. 12 A tribute to the name of the famous brothers, pioneers of film, Auguste and Louis Lumière who patented the cinematograph, this model aims to shed a different light on the film industry. Lumière means ‘light’ in French and its Chinese name evokes clarity and transparency. Lumiere or Lumière [芦明] (c) 2016 was based of an idea developed by the author from 2014. Not to be associated or mistaken for copycat name Lumiere Token (lumiere.blocktoken.ai and lumieretoken.io), which has recently emerged in 2018 while this book was published. It seems that Lumiere Token have been trying to take the opportunity to raise funds through an ICO first before switching to STO mode during the bear crypto-market. References 7

Austin, Thomas. 2002. Hollywood, Hype and Audiences: Selling and Watching Popular Film in the 1990s. Manchester, Vancouver: Manchester University Press, University of British Columbia Press, Palgrave. Bauwens, Michel, and Vasilis Kostakis. 2014. Network Society and Future Scenarios for a Collaborative Economy. Basingstoke; New York: Palgrave Macmillan. Caldwell, John. 2008. Production Culture: Industrial Reflexivity and Critical Practice in Film and Television. Durham, NC: Duke University Press. Coonan, Clifford. 2015. “Alibaba to Invest $16 Million in Jackie Chan’s Upcoming Film Projects.” February 2015. http://www.hollywoodreporter.com/news/alibaba-invest-16-million- jackie-772149. Cunningham, Stuart, and Jon Silver. 2012a. “Appendix I: Timeline – On-Line Distribution of Feature Films.” In Digital Disruption: Cinema Moves On-Line., edited by Dina Iordanova and Stuart Cunningham. St. Andrews: Dina Iordanova. Cunningham, Stuart, and Jon Silver. 2012b. “On-Line Film Distribution: Its History and Global Complexion.” In Digital Disruption: Cinema Moves On-Line., edited by Dina Iordanova and Stuart Cunningham. St. Andrews: Dina Iordanova. Curtin, Michael. 2007. Playing to the World’s Biggest Audience: The Globalization of Chinese Film and TV. London, Berkeley, Los Angeles: University of California Press. Graeber, David. 2001. Toward an Anthropological Theory of Value: The False Coin of Our Own Dreams. Basingstoke, Hampshire; New York: Palgrave. Hartley, John. 2012. Digital Futures for Cultural and Media Studies. Chichester: Wiley-Blackwell. He, Huifeng. 2015. “700m Hits in 24 Hours: A Legend in the Making.” South China Morning Post, December 4. Jenkins, Henry. 2006. Fans, Bloggers and Gamers: Exploring Participatory Culture. New York: New York University Press. Jenkins, Henry, Sam Ford, and Joshua Green. 2013. Spreadable Media: Creating Value and Meaning in a Networked Culture. London, New York: New York University Press. Keane, Michael. 2007. Created in China: The Great New Leap Forward. Media, Culture and Social Change in Asia. Abingdon: Routledge. Keane, Michael. 2013. Creative Industries in China: Art, Design and Media. China Today. Cambridge: Polity. Keane, Michael. 2015. The Chinese Television Industry. London: Palgrave Macmillan. Keane, Michael. 2016. Handbook of Cultural and Creative Industries in China. Cheltenham, UK; Northampton, MA, USA: Edward Elgar Publishing. Kokas, Aynne. 2017. Hollywood Made in China. Oakland, CA: University of California Press. Li, Wuwei. 2011. How Creativity Is Changing China. Edited by Michael Keane. London: Bloomsbury. Lobato, Ramon. 2009. “Subcinema: Mapping Informal Film Distribution.” PhD Diss. Melbourne: University of Melbourne. Lobato, Ramon. 2010. “Creative Industries and Informal Economies.” International Journal of Cultural Studies. 13 (4):337–54. Lobato, Ramon. 2012. Shadow Economies of Cinema: Mapping Informal Film Distribution. London: Palgrave Macmillan for The British Film Institute (BFI). Martin, Will. 2018. “Cryptocurrency Market Passes $700 Billion on January 3, Bitcoin Rises – Business Insider.” Business Insider, January 3. http://www.businessinsider.com/ bitcoin-price-global-cryptocurrency-market-capitalisation-january-3-2018-1?r=UK&IR=T. Meng, Bingchun. 2012. “Underdetermined Globalization: Media Consumption via P2P Networks.” International Journal of Communication. 6:478–83. Montgomery, Lucy. 2010. China’s Creative Industries : Copyright, Social Network Markets and the Business of Culture in a Digital Age. Cheltenham, UK; Northampton, MA: Edward Elgar. Mosco, Vincent, and Lewis Kaye. 2000. “Questioning the Concept of the Audience.” In Consuming Audiences?: Production and Reception in Media Research., 31–46. Cresskill, NJ: Hampton Press. 8 1 Introduction

Napoli. 2003. Audience Economics: Media Institutions and The Audience Marketplace. Chichester; New York: Columbia University Press. Napoli, Philip. 2011. Audience Evolution: New Technologies and the Transformation of Media Audiences. Chichester; New York: Columbia University Press. Nye, Joseph Jr. 1990. “Soft Power.” Foreign Policy. 20th Anniv (Autumn):153–71. Ortner, Sherry. 2009. “Studying Sideways.” In Production Studies: Cultural Studies of Media Industries., edited by Vicki Mayer, Miranda Banks, and John Caldwell, 175–89. New York: Routledge. Ortner, Sherry B. 2010. “Access: Reflections on Studying up in Hollywood.” Ethnography. 11 (2):211–33. Priest, Eric. 2014. “Copyright Extremophiles: Do Creative Industries Thrive or Just Survive in China’s High Piracy Environment?” Harvard Journal of Law and Technology. 27 (2):467–541. Raufast, Vincent, Hugo Alvarez, Joséphine Druesne, Mehdi Echiguer, Danielle Attias, Bonnie Olivier, Louisa Melbouci, and Graeme Harrison. 2015. “Cultural Times.” http://en.unesco. org/creativity/sites/creativity/files/cultural_times._the_first_global_map_of_cultural_and_cre- ative_industries.pdf. Rosen, Stanley. 2017a. “Lessons From China’s Unexpected Year In Film.” HuffPost. https:// www.huffingtonpost.com/entry/wolf-warrior-2-chinese-hollywood_us_59a058d5e4b0821444 c2f056. Rosen, Stanley. 2017b. “Stanley Rosen: The Dangerous Double Game of Dalian Wanda’s Wang Jianlin.” Nikkei Asian Review. https://asia.nikkei.com/Viewpoints/Stanley-Rosen/ The-dangerous-double-game-of-Dalian-Wanda-s-Wang-Jianlin?page=2. Shin, Laura. 2017. “The Emperor’s New Coins: How Initial Coin Offerings Fueled A $100 Billion Crypto Bubble.” Forbes. July. https://www.forbes.com/sites/laurashin/2017/07/10/ the-emperors-new-coins-how-initial-coin-offerings-fueled-a-100-billion-crypto-bubble/2/ #33af01a1b2cc. Shin, Stephen Kei-yin [冼杞然 ] and Michael Parker. The Last Race. US: Alibaba Pictures, 2017 Szabo, Nick. 1997. “Formalizing and Securing Relationships on Public Networks.” First Monday. 2 (9). Tsui, Clarence. 2013. “China’s Youku Tudou, Sina Weibo Strike Content Deal.” The Hollywood Reporter. June 7. http://www.hollywoodreporter.com/news/chinas-youku-tudou- sina-weibo-564487. Wang, Shujen. 2003. Framing Piracy: Globalization and Film Distribution in Greater China. Lanham, MN: Rowman & Littlefield Publishers. Wang, Shujen. 2010. “Piracy and the DVD/VCD Market: Contradictions and Paradoxes.” In Arts, Politics, and Commerce in Chinese Cinema., edited by Ying Zhu and Stanley Rosen. Hong Kong: Hong Kong University Press. Wasko, Janet. 1994. Hollywood In the Information Age. Cambridge: Polity Press. Wasko, Janet. 2013. Hollywood in the Information Age: Beyond the Silver Screen. John Wiley & Sons. Yeh, Yueh-yu Emilie, and Darrell William Davis. 2017. “Zimuzu and Media Industry in China.” Media Industries Journal. 4 (1). Part I Theoretical Framework and Contextualisation Chapter 2 Literature Review

In this chapter, I review and analyse the literature from various fields under study and I integrate these respective bodies of work for the purpose of this project. The chapter is organised in five sections. Section2.1 studies the political-economic angle of the research through foundations of political economy, political economy of the media, media and technology, the globalisation discourse and the context of China. Section 2.2 specifically addresses IP literature, its central position within the creative industries field, and its recent evolution. Section2.3 reviews the tradition of audience research and identifies bridges to integrate this separate body of work with the fields of political economy, creative industries and IP. Section2.4 formulates a framework that integrates the above disciplines in the context of Peer-to-Peer (P2P) production and crowdfunding/crowdsourcing. Section 2.5 maps out and justifies the use of the methodologies and methods used throughout the research.

2.1 Political Economy

2.1.1 Foundations of Political Economy: Liberty, Equality, and Power

Marx defines one of the key principles of capitalism as the productive use of resources (capital, material and human) as a way to generate personal value and profits through the division of labour. He argues that such a system would inevitably create capital accumulation and social classes with varying degrees of wealth. At the core of his philosophy is the idea that the wealthiest classes would dominate and eventually exploit other social classes. To break away from the capitalistic logic of accumulation, he focuses on the idea of equality that leads to the notion of collaboration rather than the idea of liberty leading to individualism (Fowkes 1976).

© Springer Nature Switzerland AG 2019 11 P. Poujol, Online Film Production in China Using Blockchain and Smart Contracts, International Series on Computer Entertainment and Media Technology, https://doi.org/10.1007/978-3-030-02468-0_2 12 2 Literature Review

In the context of media and communication, the notion of equality highlights issues of power and tensions at a micro-level (within the process of film production), at a macro level (between the industry, technology and the audience) and at a global level (between nations). Political economic scholars such as Mosco and Curtis cautioned that philoso- phers from the eighteenth century (such as Petty, Steuart, Hume, and Smith), influenced by a rationalist and classical liberal movement, were concerned about the idea of liberty and freedom of expression rather than the idea of equality (Mosco 1988, 3–26; Curtis 1988, 95–107). This gave rise to media research geared toward the idea of social shaping (Jenkins 2006a, b; De Sola Poole 1983) with the notion of freedom of the audience at its core, rather than the idea of equality defended by Marxist theories (Murdock and Golding 1977, 1991; Curtis 1988; Mosco 1988; Mosco and Fuchs 2016). Political economy scholars influenced by the theories of the Frankfurt School such as Murdock and Golding have supported this argument by informing the field that economic forces cannot be disregarded in the study of film and its circulation (Murdock 1989b; Murdock and Golding 1991). British culturalists (Bennett 1982; Fiske 1986; Hall 1973) reject this inclusion of economic forces that they see as reductionist. Political economists make a nuanced argument that these forces should be articulated with ideological and cultural notions (Murdock 1989b). Political economy which is central to the field of creative industries also indicated the growing importance of privatisation in the institutionalisation of media and its progressive detachment from the state as a contributing area of tension in the power discourse (Garnham 1983; Mosco 1988; Curtis 1988). In the late 1970s and early 1980s, Garnham had adopted this frame of thought when he made a political economic critique directed at cultural studies, in which he claimed that ideological and social issues should not be considered as autonomous spheres, as they are, in fact, integrated to the entire media process (Garnham 1983). Noting that media was getting increasingly privatised in the UK, Garnham reinforced the argument in a seminal text in defense of the media public service that the political and cultural logic of communication was as essential as the economic logic. Myerscough and Caust nuanced the importance of economics as a prevailing force in the arts and culture and paved the way for the idea of arts as industry (Myerscough 1988; Caust 2003). Pramaggiore and Wallis converged with this view by expressing that: Aesthetic and cultural concerns in film studies are inextricably tied to industry’s structure and technology. Analysis of a film as an art form should not discount its status as an industrial product. (Pramaggiore and Wallis 2005, 397) In the context of cultural globalisation, Jameson concurs with this view when he points at ‘the becoming cultural of the economic, and the becoming economic of the cultural’ (Jameson 1998, 60). Other scholars including Creton have strengthened this argument and defined film as a product which lies at the intersection of art, economy and politics (Creton 2005, 11). Creton defines film as a product that has been commoditised, reinforcing the idea that the industry has the upper hand over the public sphere in the power debate (Creton 2005). 2.1 Political Economy 13

2.1.2 Political Economy and Technology: Process, Divide, and Power

The Film Production Process

From a political economy and creative industrial point of view, Petrie demonstrates that financial revenues and rewards have been the prime concern of the film industry in the implementation of technological advances in film and it has largely defined these power structures (Petrie 1998). Wasko develops this argument by asserting that Fordist capitalistic logic of optimisation applied to the technological evolution of the filmmaking process has quickly changed production methods as well as financing structures, and circulation channels of the film industry (Wasko 1994). Several scholars have highlighted the linear and industrial nature of the film process not only in Hollywood but also in Asia (Wasko 1994; Ellis-Geiger 2007; Baranova and Lugmayr 2013). This process involves distinct phases: A development phase (script review, creative and production talents attached and finance raised for the production), a pre- production phase (planning of the production), a production phase (filming), a post-production phase (sound, music and film editing), a commercial phase (marketing, sales) and a circulation phase (distribution). Wasko and Montgomery argue that lines of tension and issues of power appear during these phases of film production within the creative and production teams, between the production and other industry stakeholders (investors, distributors, press, government), and between the mechanisms of distribution and promotion as well as the produced texts during the circulation phase (Wasko 1994, 2003; Montgomery 2010). Van Dijk supports this argument by asserting that mass media (to which film belongs) cultivates processes and structures of power (Van Dijk 1989). The media industry’s areas of tension and issues of power reflect its constant adaptation to political, economic and technological changes. They have accentuated pre-existing issues both locally and globally (Wasko 1994; Montgomery 2010).

Access to Technology: The Digital Divide

A recurring theme that appears in the scholarships related to the political economy of media and new media is the notion of technology and information access. Although details of this particular discourse fall outside the remits of the present study, it cannot be ignored since an integral part of this research will look at online platforms.1 Scholars have often taken entrenched positions in regard to this matter. The debate is polarised between scholars who think that the advances of technology have given increased access and freedom to individuals (De Sola Poole 1983;

1 The important topic of information inequalities falls outside of the remits of this work because most of the focus of the research at hand is on individuals who already have access to Internet and who are sufficiently literate to navigate it. 14 2 Literature Review

Jenkins 2006a, b) and scholars who believe that the advances of technology, combined with the commoditisation of the media, have on the contrary widened the gap or digital divide between the information rich and the information poor (Mosco 1988; Bates 1988). Pierre Bourdieu goes further so as to define ‘cultural capital’ as a product of economic inequalities and supports the argument that culture and knowledge are unevenly distributed (Bourdieu 1979, 81). Gartman undermines this thought by asserting that Bourdieu’s theory centres too much on class and education and that each class is not necessarily homogeneous.2 Gartman also argues that Bourdieu’s ‘ahistorical structuralist’ approach does not take into account historical changes induced by capitalism over culture (Gartman 1991, 421). Montgomery adopts a different angle in regard to issues related to the digital divide. She recognises that digital or computer literacy have not been pushed as much by the government as print literacy. However, she argues that the information poor organised themselves either as individuals or collectives to learn by themselves giving rise to a ‘DIY culture’ (Montgomery 2010, xii). In the context of China and from a technological point of view, it has also been argued that the rapid developments in terms of providing the population access to technology have been quite significant, and therefore somewhat contributed to limit the gap between information poor and rich (Qiu 2004; Montgomery 2010).

Issues of Technology and Power

Another fundamental discourse exists in regard to structures of power related to technological advances. On the one hand, social shaping theorists defend the position that society drives technology, (MacKenzie and Wajcman 1985; Williams and Edge 1996; De Sola Poole 1983) on the other hand, technological determinists (Roe Smith and Marx 1994; Bimber 1994) argue that technological advances drive changes in many aspects of society, politics and economics. De Sola Poole (1983) argued that technologies confer more power to individuals in society while Murdock and Golding (1989, 1991) reposition the debate by defining individual users of technology as citizens: a collective of individuals aspiring for equal rights. They challenge simultaneously the social shaping views and the idea of ‘technologies of freedom’. Marshall categorises rights into civil, political, and social rights (Marshall 1950): While, civil rights are associated with freedom of action and property rights (or liberty) in Marxist terms, political rights are associated with the level of information of citizens that allows them to make political decisions, for instance, to make informed choices to elect members who will pass laws under which they will be governed. Social rights relate to the well-being of individuals and allow them to be integrated into society as full participants. The latter two categories relate to what Marx defined as equality to ensure a sustainable society. One of Golding’s critiques

2 Bourdieu does not take into account cultural resources or gender differences, for instance. 2.1 Political Economy 15 of Marshall’s definition is that Marshall’s categorisation is purely descriptive and it does not provide any prioritization over these three dimensions, nor does it address the complexity of the changes regarding the privatization of the media (Murdock and Golding 1989, 1997). One of the most notable aspects that took place in parallel of the adoption of technology in media was the process of privatisation already mentioned in Sect. 2.1.1. This process occurred both in the West (Garnham 1983) and China (Keane et al. 2002; Keane 2013a, 2015; Montgomery 2010; Li Wuwei 2011). It had two immediate effects: firstly, it displaced the production of content from the public to the private sector; secondly, it addressed people primarily as consumers and displaced their identity as citizens. Golding and Murdock claim that market driven media distribution and diffusion do not guarantee civil, political and social rights, and therefore go against the idea of liberty. Privatisation, they argue, aims to give more power to market institutions at the expense of the public sphere (Habermas 1962; Murdock and Golding 1991, 1997; Gimmler 2001; Blumler and Gurevitch 2001). This view induces aspects of surveillance which are beyond the scope of this work and have been covered, for example, by Mattelart, Montgomery and Gandy (Mattelart 2010; Montgomery 2010; Gandy 2014). Mattelart (2010, 8) and Montgomery (2010, 12) refer to Foucault’s ideas of governmentality and the online environment acting as a modern ‘panoptic’ sphere. Montgomery mentions the role of the Chinese Government as a patriarch who uses surveillance as an element of control for long-term political and economic stability. She argues that Internet platforms are attracting ‘consumers’ into ‘controlled spaces’ in China and abroad that again goes against the idea that technology is providing means of freedom, instead the result is quite the opposite (Montgomery 2010, 57–59). Sonia Livingstone invokes the idea of ‘soft determinism’, which, she argues, illustrates the grey areas of power wherein technology is defined as text (Livingstone 2005, 14–16). Used in a particular social context, these texts can open options and close others. Neale prefers to assert a status quo and claims that ‘there are no real determinations’ in relation to ‘technological determinism’ and the extent to which society is driven and ‘shaped by technology and vice versa’ (Neale 1985, 158–59). He argues that technology and society seem to interact with each other without any predictable patterns. Bauwens and Kostakis (2014) transcend this argument by indicating that positive changes in the interconnectedness of the networked society and economy do not take place overnight. This reflects Mattelart’s reference to Butler (in Erewhon), that they are subject to ‘the slow metamorphosis of human subjectivity’ (Mattelart and Mattelart 1998, 14). Bauwens and Kostakis discuss the notion of power in regard to the ideas of equality and value; they argue that in light of the weaknesses of the capitalist system in place, there is a potential to reshape our society through the use of media and creativity outside of market and commercial logics by harnessing a transitional collective and preferably global action (Bauwens and Kostakis 2014). 16 2 Literature Review

2.1.3 Globalisation: Beyond Cultural Imperialism

From a global perspective, political economy started to develop as a discipline in the 1960s and questioned the unbalanced flow of information and cultural productions between countries located at different stages of economic development (Montgomery 2010). The concept of world economy initiated by Marx envisioned the international division of labour, which is exemplified in film production by the Hollywood system (Wasko 1994, 2003). Marx defined the concept of ‘commodity’ as products to be traded in a marketplace (Graeber 2001, 31). He also advocated that the ruling class was seeking the accumulation of capital through such trade activity and coercive action to increase their influence and to remain in power (Fowkes 1976). McDonald supports this argument by indicating that the economic and technological developments of film were geographically driven with the US as the ‘instiga- tor and leader’ of these trends (McDonald 2007, 20, 39–41). Acting at the centre, the Hollywood system has developed unequal exchanges of information and cultural productions as well as the exploitation of human resource beyond its borders (McDonald and Wasko 2008). Film and media have therefore mutated from an industrial sector to a global society enabled by electronic communications, whereby reducing space and time and sourcing labour internationally for greater cost management (McDonald and Wasko 2008; Pendakur 2008). This corporatist move is thought to diminish local politics and contribute to increase the potential for power of the US through Hollywood and the Silicon Valley driven information economy (Mosco and Foster 2001). This exploitative and unequal exchange in the flow of images and information has started the North-South debate in regard to media. The notion of cultural imperialism (Preston et al. 1989) had originally described this phenomenon but was replaced by ‘transnational commercialization’ (Griffin 2002), which indicates that peripheral countries still have a participatory angle in the global economy and the ability to self-regulate. While global integration and unequal exchange still characterise the global landscape, China is trying to address this power imbalance by using two core strategies (Li 2011; Keane 2013a, b, 2015). The first strategy is to push its cultural and diplomatic influence agenda abroad by developing ‘soft power’ strategies (Nye 1990, 1). The second strategy is the Chinese Government’s adoption of protectionist measures such as quotas on foreign media content and the exclusion of foreign Internet startups and online portals,3 which are also considered an element of foreign surveillance (Montgomery 2010; Keane 2013b, 2015; Garner 2015). Garner argues that this situation has created global areas of tension between the US and China,4 which involved numerous disputes regarding market related issues and IP on one side (US) and the preservation of culture on the other side (China)

3 These themes will be developed in Chaps. 3 and 4. 4 Notably, the dispute ended in 2009 through the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions (Garner 2015). The same year, a US equity firm was investing US$75 m in Alibaba on its tenth anniversary. 2.1 Political Economy 17

(Garner 2015). Garner asserts that these disputes had less to do with the divide between market logic and ‘cultural security’ but more to do with the reality that culture and creative industries have become a strategic sector in the global networked economy (Garner 2015, 75). This example illustrates the global importance of the creative industries as a key sector characterised by areas of tension and power.

2.1.4 Political Economy and Media in the Context of China

China’s political system has remained in place and managed to federate one of the largest (and growing) population in the world estimated at c. 1.3 billion people in the early 2000s (Xin 2006, 1; Qiu 2004, 103; Montgomery 2010). The Chinese film industry has taken a fast transformation path since 1949 and more recently since its WTO entry in 2001. Policymakers have tried to manage conflicting priorities between propagating a positive image of China at a local level and globally to diffuse its ‘soft power’ (Nye 1990, 153–171; 2004) while ensuring a transition from state driven activities to a commercial film industry which creates jobs and wealth for the country. Some scholars have attempted to move away from the purely national perspective of analysing the ‘state vs. market’ binary relationship (Xin 2006, 1), to a broader international or global context, employing a multidimensional approach for exam- ining the relationship between political, economic and social forces taking place in China (Chan 1993, 2003; Lee 1990, 2003; Zhao 1998, 2003, 2008). Other scholars have documented the institutional changes which took place in Chinese television and the news (Chin 2007; Guo 2003; Hu 2003; Xin 2006, 2010, 2012) as well as its increasing relationship with online platforms (Curtin 2007; Keane 2015; Meng 2012; Montgomery 2010) or the use of mobile platforms by Chinese individuals (Qiu 2013). But very few studies have conducted an in-depth analysis of the theatrical window or the fast growing and converging online viewing contexts (PC, tablet and mobile based) in China. Xin Xin also notes that there are methodological, theoretical and ideological common issues in regard to the recent political economic studies of China. She argues that as scholars are mainly trained in the US and the UK, they have ‘inevitably turned and returned to Anglo-American literature’ to pose their questions or conduct their analyses (Xin 2006, 1). She cautions that ‘most established theories in sociology, media and communications are based on the cases derived mainly from the US and the UK,’ and argues that these theories cannot be readily applied to other geographical and cultural areas such as China (Xin 2006, 4–5). Instead she calls for a way to balance Eastern and Western literature perspectives on the topic to limit 18 2 Literature Review cultural bias.5 Keane supports this argument when he outlines that the importance of cultural traits and characteristics specific to China in the interpretation of politics, economy and media (Keane et al. 2002; Keane 2013b, 2015). This is why I will develop a contextualisation of the political economy and media sector specific to China in the next two chapters.6 Aside from methodological issues, Xin argues that there is also a theoretical uncertainty from Western scholars to define and position China in the globalisation discourse; whether it should be viewed as non-Western or de-Westernised (Curran and Park 2000) or as an emerging or developing market (Sparks 2007). From an ideological and political point of view, she identifies three views on the development of media in China: ‘The positive’, ‘the negative’ and ‘the middle ground’ views (Xin 2006, 1–2). The positive view claims that the entrance of China into a market economy will result into a democratisation of the system (Dickson 2003, 2007, 2008; Lansdowne and Wu 2009; Laliberté and Lanteigne 2008). Supporters of the ‘negative view’ argue that commercialisation will take place without democracy (Chan 1993; Zhao 1998, 2003), and some declare that nothing has changed and the government still maintains firm control over the media (Su 1994; Lu 1994). ‘The middle ground view’ opposes the negative view that very little has changed and argues that the change in media diffusion will eventually influence the political system with a smooth transition. Although current changes are mainly economic, they are believed to change the structure of media and politics slowly and incrementally (Wu 2000, 46). The middle ground has in the end a rather optimistic view, but advocates that the change may take longer to eventually reach the same outcome (Xin 2006). For the present, instead of taking a speculative stance, Qiu claims that in China there is ‘no direct economic logic’ (Qiu 2004, 110) but that the political power in place is central to every decision regardless of its level of privatisation. This goes against the argument seen earlier (in Sect. 2.1.1) and defended by Garnham (1983) that there is a globalised privatisation of media separating the public and the state from the private sector. In China, Keane argues that politics and economics are tightly intertwined and that political decisions prevail over economics (Keane 2007, 2013a, b). Xin goes further in regard to the level of control that the government exercises in China as to assert that the marketisation of Chinese economy induced by its WTO entry has only impacted the economics of China and not its politics, which saw a resurgence of propaganda (Xin 2006, 2010). She also strengthens this position by asserting that the public sector is given more power than the private sector, therefore global forces driven by foreign investments are limited (Xin 2010). Curtin undermines this argument and expresses the idea that there are global trends affecting China that confirm an economic logic, such as media corporate consolida-

5 At this juncture, it could also be argued that the present book, about China, which is delivered mostly in English, could place its argument automatically in a Western cultural stance. However, in order to limit this cultural bias I made a balanced use of scholarships both from Western and Chinese scholars. 6 In Chaps. 3 and 4, I will take a historical approach to the political economy of China to frame its context for the purpose of this research. 2.1 Political Economy 19 tions, driven primarily by the political power (Curtin 2007, 2010). To this extent, Curtin shares his uncertainty in the case of China that state-driven development over private capital might become an issue (Curtin 2010). Two years later, Xin nuances her first statement and admits that global forces have had an impact on the Chinese media sector (Xin 2012). Xin, for instance, comments on the difficulty for the Chinese creative industries to be effective vehicles of soft power outside of China (Xin 2010). She mentions the doubts of the Chinese media industries when they want to export their cultural and creative products outside of China. Montgomery transcends the discourse by referring to the dual dichotomy state versus market and global versus local by calling these issues ‘areas of tension’ (Montgomery 2010, 40–41). She argues that these areas of tension between the economic and the political as well as the local and the global are only a temporary feature of the current changes taking place in China (Montgomery 2010). As a microcosm of the macro political economic forces at play, Chinese creativity and its media industries are subject to the same tensions. This complex situation is happening while China is trying to move away from heavy blue-collar manufacturing – mainly because of associated pollution and to reduce its reliance on raw materials (White 2012; White and Xu 2012; Keane 2007, 2013a, b; Li 2011). The creative industries have therefore become strategic. They are expected to provide potentially for a durable source of revenue and job creation, which in turn should induce social and political stability. In reference to the discourse engaged in regard to power, value, and equality, the creative industries could potentially contribute to harmonise these three notions (Bauwens and Kostakis 2014). Keane outlines the efforts of the Chinese Government to develop its soft power and a stable society through creativity. He identifies key areas of attention as the three Ts: ‘Technology, Talent and Tolerance’ (Keane 2007, 27). ‘Technology’ is already developing. ‘Talent’ is harder to identify, particularly because on the one hand, the film industry is averse to economic risk, and on the other hand, education that is public and politically driven by the state tends to increase barriers to creativity from a young age. However, Meng argues that Internet acts as a decentralising power in China and a creative distraction to the system in place: he explains, for example, that transnational media consumption is taking place outside of the institutional environment. He argues that decentralisation undermines both, local government and global trends (Meng 2012). Lobato and Montgomery support this argument that the disruptive nature of the Internet through piracy can generate creativity (Lobato 2012; Lobato and Thomas 2015; Montgomery 2010). Keane advocates that to be able to nurture creativity, the state will have to apply ‘Tolerance’ and reduce its censorship and propaganda exercise (Keane 2007, 27). His argument in regard to fostering creativity is therefore aligned with the notion of liberty rather than equality. According to Keane and Montgomery this situation gives Intellectual Property (IP) a rising importance in China (Keane 2007, 2013b, 2015; Montgomery 2010). 20 2 Literature Review

2.2 Intellectual Property (IP)

2.2.1 IP as Central Feature of the Current Film Production Model

In the creative industries field, IP is a central element, which lies at the crossroads between the value of creative products7 and power dynamics that take place in the production and circulation of these works. Wasko and McDonald advise that event movies are cultural products that promote IP protection as a central feature of their business model (McDonald and Wasko 2008). IP is also at the centre of notions such as liberty and equality. IP supposedly alternates between, on the one hand providing more equality for the individuals willing to access creative works, while on the other hand, it can be seen to reduce individual freedom and creativity. Traditionally, Hollywood system has embedded and integrated IP throughout the entire film process not only in terms of creative elements such as script, narrative or music, but also in regard to meta-texts used by the press and brands (Grainge 2008; Wasko 2003; McDonald and Wasko 2008). To that extent, Hollywood is vertically and horizontally integrated with an array of various activities that do not all relate to film (Barker and Austin 2000; Austin 2002). The horizontal integration of IP related activities has forged links between major studios and other media such as newsgroups, hardware, television, music, publishing, theme parks, consumer products, videogames, and interactive entertainment (Austin 2002; Grainge 2008; Wasko 2003). Therefore, film has become a commoditised product that is part of the IP portfolio or package. Dale reinforces this argument by explaining that in the context of the Hollywood system, the true financial value of media activities does not lie in the revenues generated by films, but cross-sale with other areas (Dale1997 ). Film is central to this process because it advertises and contributes to a large extent to maximise the financial potential of all the other activities surrounding IP (Austin2002 ; Dale 1997). This aspect of the filmmaking business has only been studied recently in academia by creative industries and political economy scholars such as Wasko (2003), Austin (2002) or Grainge (2008), but it is not a new phenomenon; the franchise of toys and other merchandise started in the 1970s with Star Wars (Austin 2002). This set of business practices aims at maximising revenues for a particular set of IPs, while simultaneously minimising risks related to the trading and financial aspects of film, but Austin argues that it can never be totally ‘eradicated’ (Austin2002 , 10). According to Lobato and Thomas, the centric position of IP in the media industry has polarised the discourse on copyright and film circulation beyond the academic world (Lobato 2012; Lobato and Thomas 2012). The debate occurs between the pro and anti-piracy partisans. On one side of the spectrum, the pro-piracy side claims that the studio and distribution system exploits the masses and that creative and cultural products should be freely circulated (Lessig 2004), while on the other side

7 Including labour, technology and processes needed to produce these creative products. 2.2 Intellectual Property (IP) 21 of the spectrum, the anti-piracy rhetoric side, led by institutions like the Motion Picture Association of America (MPAA),8 claims that acts of piracy are directly connected to criminal activities. Other scholars take intermediary positions in this heated debate. Boyle advocates that IP and copyright protection are essential for the harmonious development of creative and artistic works (Boyle 2004). However, Dale argues that in the light of Internet and technological developments, institutions in charge of defending IP such as the World Intellectual Property Organisation (WIPO) ‘must work with the new medium’ (Boyle 2004, 10). Montgomery identifies this point of view as a ‘copyright rhetoric’ (Montgomery2010 , 7, 108). According to Montgomery (2010), IP regulations can support creativity, but in some cases, they may hinder the creative process and the diffusion of innovations whereby creating areas of tension at the local level. In the context of China, she identifies three key areas of ‘tension’ in the process of transformation of the country’s political economic structure and its influence to global proprietary regulations (Montgomery 2010, 40–41). Firstly, post WTO entry this communist system developed from a centrally planned economy into a market-driven economy with the two theoretically opposing each other.9 Secondly, Chinese media is regulated by a stan- dardised set of values that are designed and enforced by the Department of Propaganda.10 Thirdly, in terms of IP protection, the integration of China into the world economy has put pressure on the country to comply with supranational institutions such as the WTO, the MPAA, the Organisation for Economic Cooperation and Development (OECD), and other international lobby groups for global trade. She refers to the way the IP agenda is currently globally driven by the West and does not defend the notions of liberty or equality, which it was supposed to protect in the first place (Montgomery 2010).

2.2.2 Globalising IP Forces

Wasko surmises that the distribution and circulation of film and IP largely define the commercial success or failure of a film (Wasko 2003; McDonald and Wasko 2008). Pang and Wang reinforce this point by identifying distribution as a key element of Hollywood penetration in international markets (Pang 2012; Wang 2003a, b, 2010). In that regard, the global lobbying attempts from Hollywood at defending IP have kept increasing since they have relied significantly on foreign markets in terms of revenue generation (Wasko 2003; Napoli 2003, 2011). Since the creation of the WIPO in 1970, the global IP protection has continuously expanded its range and terms (Boyle 2004; Montgomery 2010, 107). Montgomery argues that these changes

8 The MPAA is a lobbying group representing mostly Hollywood based studios’ commercial interests. 9 As seen in Sect. 2.1.4. 10 The Department of Propaganda has been in place for 67 years and cannot be transformed overnight. 22 2 Literature Review may have influenced the readjustment of the Chinese regulatory landscape, particularly in terms of copyrights and Intellectual Property Rights (IPR) that are closely connected to market and capitalist ideologies. In 2001, the Trade-Related Aspects of Intellectual Property Rights (TRIPs) required China to align itself with the Western framework for its WTO entry. On this front considerable progress was made, particularly given that the copyright legal framework is quite recent in China,11 and the rate of piracy was estimated to be consistently around 90% (International Intellectual Property Alliance 2011). From a legal point of view, Grinvald and Alford both admit that IP protection in China is still a very difficult terrain (Grinvald 2008; Alford 1995). Montgomery supports this argument and identifies the reasons to be the failure of foreign governments to take into account the Chinese historical, political and cultural characteristics as well as the aims and motivations of China’s policymakers in creating an IP system. Scholars such as Qu and Dimitrov assert that under Communism, the idea that individuals or companies could acquire exclusive rights over creative products collided with the concept of common property (Qu 2002; Dimitrov 2009). In the same vein, Grinvald points that Mao’s Communist economic system did not ‘con- ceive of trademarks’ which was viewed as ‘a type of property right’ (Grinvald 2008, 75). Drahos and Braithwaite highlight that the complexity of implementing IPRs is more challenging for developing countries than for the Western powers that drive this agenda (Drahos and Braithwaite 2002). Some even argue that in some cases this IP alignment process can slowdown the development of emerging economies (Drahos and Braithwaite 2002; Chang 2008). Maskus acknowledges the extra cost of developing countries in complying with IPR, but he argues that in the long-run it can benefit emerging economies in terms of their ‘marketing network’ and the ‘quality’ of their products (Maskus 2000, 240). Montgomery contrasts this argument and outlines that global regulatory frameworks surrounding the trade of cultural and creative goods have influenced the Chinese legal framework. Likewise, she argues that China’s audiences are now ‘integrated into a global system of creativity and consumption’ with a centric IP commercial logic which evades the country’s original collective intent regarding property (Montgomery 2010, 34). Hollywood studios have been flooding the Chinese market with technology (such as VCDs) since the mid-90s (Wang 2010). This technology that was relatively cheap and flexible was later used as a pirate format, which helped propagate foreign films in China before its accession to the WTO. Wang argues that it provided access and accustomed a large segment of the Chinese market to a certain type of cultural content (Wang 2010). Both Pang and Wang imply that piracy may have worked in favour of the Hollywood system by creating certain expectations and an acquired taste to the content (Pang 2012; Wang 2003a, b, 2010). To that extent, Rosen, McNeal, and Yeh confirm that Chinese media users are aware that Western content is accompanied by the promotion of Western lifestyle, but only a minority negates such products (McNeal and Yeh 1997; Rosen 2009, 2017). To support this point,

11 This legal framework did not exist until 1990 (Montgomery 2010). 2.2 Intellectual Property (IP) 23

Rosen uses a survey conducted in March 2006 with more than 6000 Chinese participants born after 1980 in which he indicates that more than half of the respondents identified themselves with ‘American cultural concepts’ (Rosen 2009, 366). The argument of globalised Chinese audiences mirrors the tensions between the central government trying to protect its legitimacy, economy and society against the globalising effects of the IP agenda. However, Mertha has undermined this globalisation argument by asserting that transnational forces in China have not been as influential as speculated (Mertha 2005). Wang suggests that despite the Chinese IP legal framework being one of the best in the world in terms of protecting the rights holders,12 when it comes to the actual enforcement of IP regulations, the decentralised power of the provinces ren- ders the efforts of the central government impractical to implement (Wang 2003b, 2010). Mertha supports this point and explains that the sheer size of the country and the population made any attempts to implement such complex IP regulations challenging (Mertha 2005). He also surmises that this aspect of the integration of China into the world economy was not a priority and argues that China mainly adopted the regulations progressively as a mean to integrate itself into the worldwide economy. Mertha and Lobato both point to how the informal economies of distribution of films cater for employment, revenues and efficient access to entertainment for the mass audience, which may not otherwise be economically viable if these types of enterprises were formally conducted (Mertha 2005; Lobato 2012). The Chinese Government considered the formalisation of the media sector primarily as a way to maintain economic and political control over its media industries in the short term, and secondarily as a way to create, promote and monetise its own IP in the longer- term (Mertha 2005). The areas of tension discussed above raise the importance of IP in regard to the valuation of artistic and creative works such as film. They also highlight the power dynamics that are tied to these values. Nonetheless, these power dynamics are being redefined through the appearance of new technologies.

2.2.3 The Disruptive Forces of Technology

McDonald claims that technological changes occur sequentially in the realm of sound and music before being deployed onto film. Indeed, the Telegraphon and later the Magnetophon preceded the VCR. A decade later, the CD preceded the VCD and DVD introduction (McDonald 2007, 19–24). In the same vein, and applying this logic to the online circulation of creative products, Napster preceded Pirate Bay. Film studios and the media industry were traditionally able to adapt to these technological changes13 and expand their revenues through them. Despite the innovations of the VCR, a medium that allowed the user to control time, and the case of Napster

12 This was one of the prerequisites of the entry of China in the WTO in 2001. 13 Sometimes they tried to initiate these changes: see Sony’s Betamax case (McDonald 2007). 24 2 Literature Review in the early 2000s,14 the studios came to realise the potential of the Internet15 as a vehicle quite late. Lobato (2012), Iordanova (2012), Cunningham and Silver (2012) highlight that in the case of the circulation of films online, the studios did not anticipate the succession of market disruptions. Scholars have referred to the Hollywood Studios’ ‘Schizophrenic attitude towards video’ as a major cause of this demise (Pang 2012, 131; McDonald 2007, 109; Wasko 1994, 129). On the one hand the film industries have strong IP concerns with the potentiality of Internet as a vehicle for piracy, on the other hand, they know that this technology can potentially extend the life and maximise film revenues long after their theatrical and video circulation (McDonald 2007; Anderson 2006)16: Anderson referred to this new opportunity as ‘the long tail’ (Anderson 2006, x). Gubbins adds that all the subsequent attempts of the traditional film industry and the studios at monetising the Internet platforms failed17 (Gubbins 2012). Despite revenue growth, the online distribution window is still economically marginal compared to the theatrical window (Cunningham and Silver 2012; Iordanova 2012). This paradigm of convergence also meant that the media markets were no longer exclusively in control of the vertically integrated studios and consumer electronics manufacturers.18 Instead, they integrated other sectors such as ‘the computer industry’ (McDonald 2007, 55) and the information technology start-ups, which formed the networked economy (Hartley 2009, 2010). This new paradigm goes beyond the depleting revenues of the traditional film industries alone. It also goes beyond the notion of piracy since the online circulation of films has reduced the need for physical formats globally, whether legitimate or pirate (Lobato 2012). Pirated DVD/ VCDs sales, for example, have suffered from Internet pirate networks that are cheaper to maintain and present fewer risks of legal action and enforcement (Wang 2003a, 2010; Lobato 2012). IP dynamics show that relations of power are central to the circulation of films. These dynamics seem to place IPs against the very notion of liberty and equality that they are supposed to promote. Montgomery (2010) explains that this situation has created numerous areas of tension between art and commerce, politics and free market, between pro and anti- piracy, between traditional distribution practices and digital practices in China and elsewhere. However, instead of exploring these tensions, purely as areas of conflict that have already been debated, I chose to explore their space of interactions which may be more balanced than some of the highly polarised literature of film distribution might suggest. Shujen Wang (2003a, 2010) refers to Latour’s Actor Network

14 Refer to the legal case: In A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (2001). 15 More recent cases are mobile phones and mobile devices for example. 16 In the same way as technological disruptions take place, it is worth mentioning that some of the largest IP rights holders were once pirates themselves: Hollywood was created on the back of technologies stolen from Edison who himself owed a lot to the Lumière brothers, Méliès and Tesla (Johns 2010). 17 See Appendix 2 for the case study of Movielink. 18 These manufacturers sometimes merged horizontally such as Sony or Matsushita with Columbia and Universal. 2.2 Intellectual Property (IP) 25

Theory (ANT) as a way to frame the complex topic of pirate circulation that involves deeply intertwined socio-economic and political consideration as well as regulatory and technological factors. Lobato (2012) uses a different approach. He defines ‘formal’ and ‘informal’ economies as intertwined. The terms ‘formal’ and ‘informal’ had already been used by Castells, Portes and Benton in a broader context than the political economy of the media (Castells et al. 1989, 2). In that context the terms ‘formal’ and ‘informal’ had to do with the degree of formalisation of the redistribution of capital rather than its production. Lobato uses the definition of formal and informal economies to describe both film production activities and their associated value or financial redistribution. Lobato identifies the ‘formal economy’ of film as institutionalised and regulated industries that seek to monetise and maximise all potential revenues derived from the IP they own. By ‘informal’, Lobato describes a space that does not encompass solely piracy and IP infringement, but economies that are not subject to the formalised system, models that are not systematically taxed or monetised. These systems are not necessarily criminal, but they tend to evade the IP centric model, its valuation and its power dynamics. One common example could be the posting of IP regulated song or video on YouTube which infringe copyrights even if they are taken down later or compensated by advertising revenues: these practices would fall under the informal category. They could also describe a street hawker selling pirated DVDs among other products, which may be legal (Lobato 2012). That dichotomy in itself is a departure from the customary discourse on IP. It helps redefine the notion of IP in a technologically changing networked economic landscape.

2.2.4 The Redefinition of IP

The framework surrounding IP focalises several lines of tension created by the forces at play: global, cultural, technological, economic and political forces collide and contribute to redefine the notion of IP (Iordanova2012 ). In regard to China, there is a local issue with the IP centric approach, which is promoted by the West in a creative landscape subject to rapid transformations. State organisations in China used to be able to initiate and control the production and distribution of content through all the circulation channels (Montgomery 2010). This role and position are increasingly challenged by the emergence of ‘unauthorized’ channels including online networks (Montgomery 2010, 1, 112). The Chinese Government has displayed consistent and repeated efforts at trying to eradicate both physical (DVD/ VCDs) and online piracy, but independent hustlers and shops still cater for this market. Several Internet channels, although some of them have been blocked by SARFT and later SAPPRFT, still provide illegal content (Lobato 2012; Lobato and Thomas 2015; Dimitrov 2009; Johns 2010; Keane 2015). As mentioned briefly in the previous section, the IP debate appears to be central to this situation. It also defines the notion of power and financial value to which IP is ascribed. Unfortunately, most of the IP literature seems to fixate on a dualistic 26 2 Literature Review argument between the ‘anti-piracy’ industry rhetoric and the ‘anti-copyright/pro- piracy’ partisans (Lobato 2012, 6). Although Lobato does not provide definite answers to reformulate the discourse, he opens the debate to a new perspective; one where it would be important to study the informal economies of cinema and the formal ones as well as the interaction, that is the space in-between, whereby the two intersect. In that sense one of his most significant contributions to the field is his redefinition of piracy, which also redefines the notion of IP. He maps piracy along six axes or ‘faces’ (Lobato 2012, 69–94): ‘piracy as theft’, ‘piracy as free enterprise’, ‘piracy as free speech’, ‘piracy as authorship’, and ‘piracy as access’, and ‘piracy a resistance’. While piracy as ‘theft’ and as ‘resistance’, position themselves at opposite sides of the spectrum, they are carriers of ideologies. The former is mostly grounded in the MPAA and rights holders’ capitalist rhetoric and the latter defines piracy as an anti-capitalist act (Bettig 1996, 2008). Both promote the notion of freedom through the acceptance or non-acceptance of IP and its framework. The most interesting facets in the context of this research are the intermediary redefinitions of piracy and IP. ‘Piracy as free speech’ supports Lessig’s view of free culture as a means of expression (Lessig 2004, 2008). This stance promotes again the idea of freedom through acts of piracy but it fails to reward the intrinsic value of creative works (Lobato 2012). ‘Piracy as authorship’ is also of interest as it implies that each author is closely or remotely a pirate since he/she may have consciously or unconsciously appropriated or built upon existing ideas (and IPs) to create a new IP. ‘Piracy as free enterprise’ and ‘piracy as access’ both emphasise the realities of piracy. Lobato, Thomas, and Mertha argue that piracy and the redefinition of the IP framework provide jobs and access to cultural and artistic content to those who need it (Lobato 2012; Lobato and Thomas 2012, 2015; Mertha 2005). This view helps rebalance the IP discourse, and thereby, move away from the ideological debate that has characterised the field. In this context, it also confers to both piracy and the redefinition of IP as the idea of equality defended by Marx.19 Following Lobato’s mapping, piracy as ‘access’ redefines IP as an example of participatory use of the Internet to share films as a community or a collective. It also combines aspects of authorship with the case of User Generated Content (UGC) (Lobato et al. 2011). Chinese audiences sometimes have to use pirate networks to be able to access creative content because they either cannot afford to pay the price on other circulation channels as it is either censored or simply not available (Lobato 2012; Lobato and Thomas 2012, 2015; Lobato et al. 2011). Iordanova (2012) suggests that the voluntary payments system, whereby the audience of an online film offers a reward according to their means and to the value that they place on that work, redefines the concept of IP as a more flexible and viable one. She advocates that it engages the audience into a collective activity that transcends the financial value defended by the IP framework. She also surmises that the system is viable and equalitarian since a small group of people who can afford to pay for the creative content allow it to be shared with a majority of individuals who cannot afford to pay for it.

19 As seen previously in Sect. 2.1.1. 2.3 Audience Perspective 27

Gubbins argues, on the one hand, ‘the altruism of consumers has been severely tested’ in the past and the creators were not necessarily rewarded fairly for their work (Gubbins 2012, 90); on the other hand, he admits that the system of Creative Commons (CC), in which the creators retain ownership of their work while allowing it to be shared to the wider audience, is a good balance between protecting the author of the creative work while giving access to the wider audience. Gubbins highlights that this system is only at a stage of experimentation, but that it redefines the IP framework as a potentially viable, equalitarian and flexible rights industry (Gubbins 2012). Montgomery reinforces that ‘The future of business models based on the ownership and controlled distribution of expert-generated copyrighted material is far from assured’ (Montgomery 2010, 20). Lobato and Thomas argue that the demise of the formal film industries should not be taken for granted, as piracy has created alternative revenue streams. They refer to this alternative stream as ‘the business of anti-piracy’ that contributes to both the creation of jobs and a parallel economy in contrast to the strict trade of IP through media and merchandising within the institutional framework (Lobato and Thomas 2012, 606). In this regard, Hartley acknowledges the existing tensions between the traditional creative industries and the social network market in the light of copyright and IP (Hartley 2010). He takes a different angle and defines the social network economy as ‘the economy of attention’ and ‘an economy of signals’ and at the same time one of ‘monetary values’ (Hartley 2010, vi–xxv). He adds that the new consumers are not real consumers, but quite the opposite, they are on social networks to increase their status and those that they endorse in a ‘socio-cultural’ rather than an economic manner (Hartley 2010, xiii). Therefore, the value derived from such activities goes beyond the notion of financial value and it is redefined as affective value. The notion of IP is being redefined. Piracy and IP are tightly linked in the current networked economy: piracy seems to be contributing to the notion of equality rather than freedom and the notion of IP is challenged as the central and only way to define the value of film-related creative works. Hartley describes the role of the audience as a key factor in this process of change and a central participant to the networked economy (Hartley 2010).

2.3 Audience Perspective

Defining the term ‘audience’ is not an easy task. This term has been used in many different ways across large bodies of work on communication research, from humanities social sciences, cultural studies, communication studies to industry research (Biocca 1988). Audience research is composed of separate bodies of work traditionally disconnected from political economy in which audiences generally appear as a commercial ensemble, passive subjects, consumers or even commodities. Miller even goes as far as arguing that ‘there is no general agreement on how to theorise audience behavior’ (Miller et al. 2001, 8). 28 2 Literature Review

I will attempt to frame and define the term ‘audience’ for the context and purpose of this research. At opposite ends of the spectrum, most of the early academic studies of audiences focused either on the reception and interpretation of the text or sponsored consumer studies focused essentially on behavioural analysis that would help promote film productions commercially. In both cases, most studies have been concerned about Western audiences. It is therefore important to clarify in which sense the term ‘audience’ will be used before applying it to this research and in the context of China.

2.3.1 Roots of Audience Research and Definitions of ‘Audience’

Throughout history many scholars have tried to theorise ‘audience’, nature of their relationship and their interaction with the media. Most concepts and debates were centred on themes that dealt with the definition of audiences (viewed as unified or fragmented), power relations between audiences and media, media effects, media gratifications, reception, and viewing contexts which seem to have entrenched academics in compartmentalised positions. These diverging views have sometimes polarised researchers conceptually and methodologically. The choice of using textual, empirical and ethnographic methodologies and methods has further divided researchers working on audiences. According to Napoli, the nature of the fragmentation of the distinct audience research strands is of three kinds: ‘methodological’, ‘theoretical’ and ‘ideological’ (Napoli 2011, 172–173). At times some of these factors have overlapped throughout history. The following is a critical thematic account of the evolution of audience research. Methodologically, audience research can be traced back to the 1930s. Sociologist Lazarsfeld was hired to head the Princeton Radio Research Project, funded by the radio industry. He developed empirical methods of audience measurement, which greatly influenced social sciences. Mainly as a result of this work, scholars in the field of humanities are of the general view that Lazarsfeld has been appropriated by the industry to serve their commercial agenda (Mosco and Kaye 2000). This largely contributed to humanities looking at social sciences’ quantitative methodologies with suspicion. Empirical approaches have also made use of ratings, which mostly took their roots from TV based research. Other scholars have instead relied on textual analysis to understand the construction of meaning between film and audiences and later between producers of texts as well as the texts and the audience. These theories also drew from TV research and were initiated by British cultural studies. This approach started with the grand theories of the 1970s that drew from philosophical theories, such as Althusserian, Freudian and Marxist theories or from the theories of Levi-Strauss, Lacan, Foucault, Derrida or Jung. These theories evolved into screen and spectatorship theories (Rosen 1986). Cultural and film studies later 2.3 Audience Perspective 29 developed reception theories which were less reliant on the grand theories and emphasised their studies on textual analysis. The third approach scholars used was ethnographic research to take into account not only the relationship of the text with the audience but also their viewing environment or viewing context (Gomery 1992; Murdock 1989a; Mosco and Kaye 2000) and the influence of everyday life on these practices (Mosco and Kaye 2000). Overall, few attempts have been made at trying to integrate all these methodological approaches. Quite recently, Austin integrated empirical, textual, and meta-textual analysis as well as ethnographic approaches in an attempt to conduct a holistic and comprehensive research of audiences in popular culture in the UK. Political economy and the creative industries also used similar approaches (Hagen and Wasko 2000; Mosco and Kaye 2000). Integrated methodological approaches have proven to be quite challenging however, because they are very often embedded in distinct theoretical traditions. Theoretically, several strands have attempted to define and construct the notion of ‘audience’. Early research, particularly grand theories, viewed audiences as an ensemble or a homogeneous mass audience in which the individual had little power and was mostly viewed as a passive receiver to the dominant message of the text and producers of the text. This situation evolved with Hall’s seminal text Encoding/Decoding that gave audiences a perceived degree of power (Hall 1973). By the late 1970s and early 1980s audiences were no longer regarded as an undif- ferentiated homogeneous mass but as group formations broken down into types which were much harder to define (Altman 1999; Dyer 1986, 1993; Neale 1980, 1990, 2000). The emergence of audience segmentation into groups such as gender, ethnicity or age also contributed to this change (Cook 1997; Gledhill 1988; Harper 1994a, b). The effects (Bauer 1964) and the User Gratifications Theories (UGT) (McQuail et al. 1972; Katz et al. 1973, 1974; McQuail 1994), based on behavioural methods were concerned about the impact of media on audiences (positive and negative). Both theories were refuted for their perceived lack of academic rigour, which further polarised audience research (Gauntlett 1995, 1997; Ruggiero 2000). While McQuail defined UGT as media consumption research, some scholars20 advocated that these theories indirectly served to promote the agenda of the film industry: indeed these theories ultimate conclusion was that film had no adverse effect on audiences (Mosco and Kaye 2000; Gauntlett 1995, 1997; Ruggiero 2000). It also gave the false impression that audiences were ‘active’, in power, and it supported the notion of audience ‘agency’. These theories failed to take into account the strategies and structures created by the film industries to rally viewers to their content and to commoditise them (Morley 1992; Maltby 1999). Austin later insisted on the importance to balance these theoretical and methodological arguments. In that

20 Ruggiero criticised the UGT, while Gaunlett criticised the effects theory in a series of essays and argued that it did not take into account viewing contexts since most research was laboratory-based. 30 2 Literature Review sense, he sought to depart from the exclusive idea of the ‘empowered’ and ‘progressive viewer’ while taking into account how the industry organises and controls the texts and meta-texts (Austin 2002, 15). In parallel, audience investigations were conducted and financed by industrial or government entities outside the realm of academia. This included test audience research with the emergence of ‘knowable tastes’ (Austin 2002, 3, 27). Wasko argued that since the term ‘audience’ was originally created by radio and TV industries, it de facto sided with the media industries, and therefore should be reviewed as it lacked academic integrity. Moores supported this argument and referred to the term ‘audiences’ as preferable recognising that audiences do not represent a homogeneous or ‘stable entity’ (Moores 1993, 1). Ethnographers Altenloh and Livingstone found that there was no single audience, but a varied set of audiences with divisions among class, gender and ways of approaching films. The viewer’s life experience influences his/her perception of the text (Altenloh 2001; Livingstone 2003, 2005). Bausinger and Radway have defended the idea that audiences are a much more fragmented media ensemble than originally thought (Bausinger 1984; Radway 1988). McQuail undermined the idealised film-viewing settings and reception described in most of the above theories and methods. He argued that they manifest in reality as a more ‘varied and messy experience’ (McQuail 2010, 398). Ideological differences represent perhaps the deepest and the most irreconcilable fracture within audience research traditions (Napoli 2011). Some scholarships have argued that audiences were powerful and supported the idea of agency (Hall 1973), particularly with the development of modern technologies (De Sola Poole 1983), whereas others considered that the industry was mostly in control of the text and its circulation (Morley 1992; Mosco and Kaye 2000; Murdock 1989a; Hagen and Wasko 2000). Certain scholars were considered to side with the industry agenda notably through their use of ratings or other empirical evidence that were perceived as texts emanating from the industry and supported the concept of ‘institutionalized audience’ (Napoli 2011, 2–3). Austin asserted that there was in fact a highly mediated relationship between audiences and film industries and that they should be both studied conjunctly. He defined both terms ‘audiences’ and ‘industries’ as plural. To this extent, new film theory redefined the industries as heterogeneous. They described media industries as a composite of different groups involving institutions of different sizes, levels of vertical or horizontal integration and activities of different nature as well as public institutions that play a role in the circulation of film (Allen and Gomery 1985; Miège 1989; Austin 2002). Austin and McQuail also argued that audiences had a degree of control and participation, in that they were producers of meaning and increasingly involved in the circulation and production of texts (Austin 2002; McQuail 2010). Austin described for example the notion of ‘hype’, which defines the expectations of audiences before a film is released (Austin2002 , 30). This manifests in terms of audiences generating intertextual messages alongside journalistic meta-texts that can actively promote or demote the film. 2.3 Audience Perspective 31

2.3.2 Audience Evolution: Viewing Contexts and Audience Fragmentation

In light of the thematic evolution on audience research, most of the audience studies are still divided along the lines of industrial, textual and ethnographic approaches. Most of the work is largely concerned about TV and theatrical screening contexts and has mostly ignored the screen evolution of the past 20 years. Attachment to such screening contexts is still reflected in some scholarship that refers to Internet film- viewing platforms as the future of television or as ‘New television’ (Hartley 2012; Keane 2015, 142). How does the current reconfiguration of the relationship between audiences and media industries position the viewers in regard to Internet based technologies? How does this inform the field of creative industries about the changing nature of the power dynamics between industries and audiences? And how can the concept of value in regard to creative content be re-assessed? According to Gripsrud, the relationship between audience and media has been marked by three evolution phases. Each phase situated, to varying degrees, the audience as ‘passive’ or ‘active’ (Gripsrud 2002, 42–44). The first phase from the 1920s to the 1940s, referred to as ‘Almighty Media’ described the audience as passive and assumes that the media could have negative effects on the audience. As seen in the previous section (Sect. 2.3.1) the ‘effects model’ was discredited in the late 1990s and early 2000s. Gripsrud sees the second phase from the 1940s to the 1970s as an era of ‘Powerless Media’ where UGT proclaimed the ‘active audience’. Audiences were also considered as producers of meaning (Hall 1973). This model was criticised because it was taking the side of the media industries’ agenda. This model also underestimated the will of the industry to persuade audiences. Gripsrud identified the third and last phase of ‘Mighty Media’ (from the 1970s to present) that describes the long-term effects of media in society and individuals who are struggling to make sense of dominant messages circulated by media industries. This simplistic evolution shows the concern of academia in the power dynamics that takes place between audiences and creative industries. Industry researchers such as Napoli have attempted to integrate the various viewing technological devices in their studies through which they identify a dynamic of fragmentation. Napoli claims that the fragmentation of media translates into a fragmentation of the audience (Napoli 2011). Barbara Klinger supports this idea of audience fragmentation for home cinema platforms and defines households as non- homogeneous and ‘fragmented’ in terms of their tastes and culture (Klinger 2006, 244). As seen previously, Austin also cautions that what is commonly defined as ‘the industry’ is no more homogeneous than the audiences and should be considered ‘heterogeneous’ (Austin 2002, 6). He encourages the use of the term industries to describe the institutions involved in the production and circulation of creative content. Napoli goes further as to integrate new viewing devices such as desktop, laptop or mobile phones as viewing contexts. He argues that these devices should not be ignored and should become part of audience research. These alternative screens do 32 2 Literature Review not yet carry the economic prospects of the theatrical window and remain marginal in terms of revenue (Iordanova and Cunningham 2012), but they are growing at a fast pace and are capturing a lot of the viewers’ attention and time (Hartley 2012; Hartley et al. 2015). Sonia Livingstone surmises that the public has evolved from ‘passive observer to active participant in a virtual world’ (Livingstone 2003, 338). It does not necessarily mean that the audience is active or free as argued by the supporters of audience agency, but that the users can find a certain level of interactivity or a degree of autonomy in a formalised virtual enclosed system (Lobato et al. 2011). Jaffe argues that ‘consumers’ are now ‘devastatingly in control’; they can alter the marketplace (Jaffe 2005, 43). Napoli, Lobato and Thomas bring subtlety to this argument by asserting that this is merely an illusion of control, as audiences now provide the industry with more refined audience data and metrics than ever (Napoli2011 ; Lobato and Thomas 2012; Lobato 2012). McQuail (2010) contrasts this view and emphasises the importance of new media and viewing platforms, which have induced different behaviours through interactivity, where the original ‘subject’ is not just a passive spectator. Finally, he asserts that the line between producers and audiences has become blurred because audiences have become both a ‘product of social context and a response to a particular pattern of media provision’ (McQuail 2010, 398). The evolution of audience has triggered great debate and new terms in scholarship. Napoli who follows a tradition in industry research defines audience as institutionalised and presents the ‘audience marketplace’ in which he includes media organisations (Napoli 2003, 11). These audiences are defined in the way the industries perceive them. They are seen as ‘raw material’ (Napoli 2003, 23–25) or a ‘commodity’ (Napoli 2003, 110–111) that the industry seeks to monetise. But Napoli later refers more frequently to audiences as ‘autonomous audiences’, not just consumers or ‘prosumers’ (Napoli 2011, 82). The viewers and users of the new technologies’ viewing contexts are also active agents in the media process; they have a degree of autonomy within the system (Napoli 2011, 66–77). This thought readjustment marks the turning point of the audience evolution. The type of audience that Napoli refers to has been defined by industry and referred to by scholars such as Ang or Meehan who used ratings methods as a socially constructed audience (Ang 1991; Meehan 1984). Mosco and Kaye oppose this definition from ideological, theoretical and methodological points of view (Mosco and Kaye 2000). Ideologically, they argue that academia should distance itself from the industry so as not to serve it directly or indirectly. Theoretically, they do not agree on the passive and somewhat reductive portrayal that is made of the audience. Methodologically, if an integration of audience studies and political economy has to take place, they emphasise that in order to be considered valid it should take into account the ‘lived experience’ of the individuals and group formations (Mosco and Kaye 2000, 42). Mosco and Kaye even consider the discourse between ‘passive’ and ‘active audience’ as a ‘dead-end’, which should be transcended (Mosco and Kaye 2000, 42–43). 2.3 Audience Perspective 33

Graham Murdock had already developed this idea and cautioned that ‘the economic determines in the first rather than the last instance, and… it is therefore a necessary starting point for analysis but not a destination’ (Murdock 1989a, 229– 30). Therefore, both audiences and industries perspectives should be balanced. In this context, Livingstone also argues that the concept of audience as a definition is potentially outlived (Livingstone 2003). Napoli balances this argument by exploring the notion of audience evolution and the idea that the term audience and its intrinsic meaning should evolve as well (Napoli 2011). Hartley departs from the industrial viewpoint and sees audiences interacting in the network economy and the realm of informational society as ‘creative users’, ‘creative individuals’ (Hartley 2009, 15), ‘creative audiences’, or ‘creative citizens’ who collaborate in groups or communities within a complex system to produce content together (Hartley 2009, 18; 2012, 51; Hartley et al. 2015, 70). Without promoting the agency rhetoric, Hartley defines these creative individuals as media educated and conscious ‘navigators’ as opposed to mere commodities played by the system (Hartley 2012, 51; Hartley et al. 2015, 58). He does not see these creative agents to be as free as agency theories would define them or as UGTs tend to characterise them (Katz et al. 1973, 1974), but rather as an interactive element connecting media industries through a mediated web of services. Hartley considers this mediated web of services as an intermediary platform between the large corporate and industrial groups and the end users. In this manner, these creative citizens are redefining an equalitarian mediated space between other users and creative industries (Hartley 2009; Hartley et al. 2015; Montgomery 2010). Hartley also sees the ‘creative economy’ not simply as a sector, but as an ‘epoch’ coming just after the ‘information era’ where creativity is generated as a collective in communities (Hartley 2012, 6, 42). This view supports the notion of transient film collaboration: throughout history film has rarely been the product of one individual but the collective and creative efforts of an entire team (Marchetti and Tam 2007, 4; Bordwell et al. 1985, 465). Media industries and audiences have followed a significant evolution over the past 20 years. In the same way, in academia, there seems to have been intents to integrate some of the (sometimes conflicting) traditions of audience research into meaningful frameworks. There have been a few attempts from scholars to bridge political economy and audience research (Hagen and Wasko 2000; Barker and Austin 2000; Austin 2002; Mosco and Kaye 2000). For instance, Austin used ethnography, empirical data as well as textual and meta-textual data in his film research, but his case is almost an exception. Moreover, validity of his study’s results could be questioned, mainly because of the small samples of his quantitative work which cannot offer much room for extrapolation and which is limited geographically to the UK. Mosco and Kaye claimed that one way to bridge the divide was to look beyond the notion of audience itself and they promoted ethnographic studies of lived experience as a potentially fresh avenue (Mosco and Kaye 2000). Hartley has taken an interdisciplinary somewhat positivist stance, which brings a novel definition of the audience, beyond consumer, ‘prosumer’ or active audience: 34 2 Literature Review

‘creative audiences’ or ‘creative citizens’ (Hartley et al. 2015, 70, 210). Napoli from an industrial perspective admits that ‘the audience marketplace finds itself in a situation where technological forces are simultaneously undermining established [institutionalised] approaches to audience understanding and opening up avenues for alternative approaches’ (Napoli 2011, 87). To balance these approaches, and to avoid the old debate between agency and industry led practices, it seems that the evolution of the media seems to give a measure of autonomy to the new concept of audience. At least, it has open new avenues for ‘creative audiences’ or ‘creative citizens’. This is a key change that redefines the dynamics of power between audiences and industries through creativity. It also brings a notion of collective and of equality through the use of the term ‘citizen’.

2.3.3 Creative Audiences and User-Generated-Content

Hartley indicates that in 2010, users who were not professionals generated more than 70% of the digital universe (Hartley 2012, 8). In the information economy, audiences become part of the creative process and interact as a collective. This trend supports the advocates of ‘free culture’ such as Lawrence Lessig (2004) who see creative activities as a free medium of expression, which should stand outside of the capitalist logic. Certain scholars contrast this view by arguing that none of these cultural and creative flows are actually free but that they are almost systematically repatriated into the industrial and corporate IP model without any tangible compensation for the creators (Montgomery 2010; Hartley 2009; Hartley et al. 2015). Terranova, Schiller, and Johnson reinforce this argument and have warned about the potential issues surrounding free labour in the information society and the digital economy (Terranova 2000, 2004; Schiller 2000; Johnson 2007). They both point at the associated risks of social exploitation. From a political economic perspective, it can be argued that audiences have, in fact, long been part of the film process. According to Austin, they are the ones who define the ‘hype’ surrounding the release of a film (Austin2002 , 30), traditionally they have also been involved in the circulation process, in acts of consumption and even in shaping creative content such as films through audience research and test audience for decades (Butsch 2000, 2008). The phenomenon has however, expanded and the industry even goes as far as to defend that ‘consumers are the new marketers’ (Vollmer et al. 2010). In the contemporary network economy, word of mouth is seen as an important element of the attention economy (Napoli 2011; Hartley 2009; Montgomery 2010). This is why Austin is cautious not to promote the return of agency, but the idea of participatory audience, which can be monetised (at times) or re-appropriated in the economy of free labour (Johnson 2007). Napoli contrasts this view and explains that the industry acts as a structure of ‘resistance’ against creative audiences who are trying to create content (Napoli 2011, 125). This manifests, for example, with film artists seeing their creative work being taken down from the network by the rights holders if they use any IP. 2.3 Audience Perspective 35

The industry uses many such tactics and strategies to resist and negotiate the evolution of the audience into what Napoli has described as ‘the autonomous audience’ (Napoli 2011, 84–87). This is an example of IP limiting creativity as it holds back the creative powers of the online communities (Montgomery 2010). Lobato, Thomas and Hunter reposition this argument by asserting that in the framework of informal and formal economies, professional producers of content and creative users do not necessarily oppose each other and are part of the same hybri- dised system. They argue that both use formal and informal degrees of interaction within that system, the intersection of which constitutes an informal or ‘grey’ economy (Lobato et al. 2011, 899). Freedman adds that content producers sometimes make elements of their IP such as the technology, creative content and brand available to the audiences. In the hope to generate more revenues, they let users experiment and create with their IP, which helps promote their products through interactive engagement. It also serves as promotion when these creative audiences spread the word in the wider community (Freedman 2005). This reinforces Terranova’s and Johnson’s arguments regarding the re-appropriation of creative audiences by the information economy industries (Johnson 2007; Terranova 2000, 2004). In the context of China, although there has been little research conducted on audiences,21 Montgomery argues that audiences have consumed creative productions ‘trans-nationally’ and through peer-to-peer (P2P) distribution (Montgomery 2010, 52). The rise of audiences’ creative use of the online platforms has also ‘blurred the boundaries between producers and consumers’ in China and globally (Bruns 2008; Montgomery 2010, 23–40; Napoli 2011, 11; Springer 1999, 153– 159).22 For Keane, this creativity has mostly manifested through User Generated Content (UGC), which plagiarises and mimics already existing creative content and infringes copyrights (Keane 2013, 2015). He adds that the Chinese Government does not know how to handle UGC and informal creative activities also called Shanzhai (Keane 2013). Keane argues that creativity can raise the perceived status of a country in its soft power agenda, which is why it is placed relatively high on the Chinese agenda. But the lived reality for many Chinese citizens involves cultural and creative curiosity, expressed as a ‘desire for new experiences and new products, as well as a desire to play and create’ (Montgomery 2010, 19). Montgomery and Mertha claim that these consumer trends are ‘challenging established business models’ and that the resulting interactions are disruptive as they fall beyond the remits of the formalised state controlled media economy and very often outside of the legal IP framework (Montgomery 2010, 23; Mertha 2005).23

21 Apart from the research conducted and commercial data and metrics collected by large online corporations such as YT, Baidu or Alibaba (Keane 2015). It is therefore paramount to collect independent data about Chinese audiences (be it surveying, ethnographic research or works on audience behaviours) to be able to measure the evolution of such trends. 22 According to Napoli, this assumes a former divide between producers and consumers of content (Napoli 2011). 23 This is what Lobato described as piracy as access, enterprise, and authorship (Lobato 2012). 36 2 Literature Review

Montgomery surmises that in this context where copyright law and the traditional industries have lost dominance, creativity, innovation, and entrepreneurship are fostered through the ‘reuse, remixing and re-creation’ (Montgomery 2010, 19). According to Montgomery, China’s experience demonstrates that intellectual property protection is not a prerequisite for the growth of the creative industries. This also proves that free access to copyright regulated and existing IP is playing a role in the creative economy that is emerging (Montgomery 2010, 22). She calls for new approaches to understanding the economic relationship between IP protection and creative industries that should recognise the entrepreneurial value of creative audiences. These two points pose an issue in terms of defining the creative audience and the risk of content mimicry or inbred creativity. Schumpeter’s ‘creative destruction’ (Schumpeter 1942, 83) connected with Lessig’s ‘remix culture’ (Lessig 2008, 14) define a space were the boundaries between, consumer and producer, amateur and expert, piracy and property, public and private spaces blend and converge. This is a space where traditional capitalist based models and informal activity take place simultaneously on a more equal basis between industries and audiences (Lobato 2012). This raises a double issue: On the one hand, the local and global industries can legally oppose much more resistance to such type of collective content by claiming copyright infringement (Napoli 2011; Lobato and Thomas 2015). On the other hand, it can be argued that the industries themselves textually influence this type of creation as they are not totally original and spurring out of independent creative talent (Gubbins 2012; Keane 2015). The current role of audiences in shaping content and inspire creativity is therefore limited. In the context of China, it translates potentially into cultural promotion and an informal invasion of Western content. Moreover, it does not translate into any displayable creative soft power vehicle for China. Quite the opposite, it could be argued to play as colonial mimicry (Bhabha 1994; Berry 2003). Gubbins undermines this argument and notes that films that are made as part of crowdfunding collectives are often politically motivated (Gubbins 2012). Hartley, Wen and Li contrast this view by expressing the idea that creative communities are not necessarily politically subversive or engaged (Hartley et al. 2015). These collaborative creative projects are intended as an act of social engagement motivated by social recognition or by the intent to create their own content (Hartley et al. 2015; Napoli 2011).

2.4 Networked Participation: Online Industries Meet Creative Audiences

In line with the previous arguments, it seems that the acts of creation by the autonomous audiences, creative audiences, or creative citizens are not necessarily politically or economically motivated or indeed powerful; but they are the manifestation of collective creativity (Hartley 2009; Jenkins 2006a, b). Audiences have become 2.4 Networked Participation: Online Industries Meet Creative Audiences 37 active in the sense that networked communities are emerging and they share their own creative works with the wider community. They sometimes re-appropriate the technology and IP regulated content that they transform (Jenkins et al. 2013). They do so to fulfil their creative and social recognition needs (Hartley2009 ; Hartley et al. 2015). Creative audiences are neither powerful nor powerless in a political or economic sense, but they exist at the very centre of the areas of tension that characterise the relationships between media industries, the state, and technology (Hartley et al. 2015).

2.4.1 The Networked Economy: Shifting Business Models

The distinctive boundaries between producers of content and audiences have been blurred, potentially transforming networked individuals into creative audiences or creative citizens (Hartley 2009, 2012; Hartley et al. 2015). In regard to film reproduction, Benjamin asserts that there is a desire in collective groups to ‘… bring things “closer” spatially and humanly, which is just as ardent as their bent toward overcoming the uniqueness of every reality by accepting its reproduction.’(Benjamin 1969, 222–223). In the key concept of network, although individuals may not be located physically close to each other, there is a collective virtual space that brings them closer (Xin 2006, 7). Network philosopher Musso sees the network as a living organism (Musso 1997). It echoes McLuhan’s own vision of the network as a society- organism, a giant and complex network where money is blood and information is compared to electrical signals within the nervous system (McLuhan 1964). In spite of the current fragmented display of the media screens and devices (also called convergence), the shifts created by the networked society and economy may have brought their participants closer affectively than theatre spectacle itself. In contrast with McLuhan’s technological deterministic vision, scholars such as Hartley (2009, 2012), Bauwens and Kostakis (2014) argue that the emergence of durable global communities could potentially be achieved through collective creativity. From 2005, when broadband technology was developed and the Internet could handle video, a profound change of media diffusion emerged. Interactions no longer followed the ‘one-to-many’ textual dynamic but a ‘many-to-many’ dynamic (Hartley 2010, xi). These interactions first gave rise to peer-to-peer (P2P) modes of film circulation and eventually film creation as well (Hartley2009 , 2012). Montgomery complements this idea and highlights three aspects of the social network market and its ability to accommodate to the nature of creative products: it is rapidly changing, socially driven and difficult to predict (Montgomery2010 ). Hartley, Iordanova, Jenkins, Cunningham, Silver and Gubbins have agreed that these characteristics contributed to disintermediate the creative process and made it more accessible and flexible for the creative audiences (Cunningham and Silver 2012; Hartley 2009, 2012; Iordanova 2012; Jenkins et al. 2013; Gubbins 2012). 38 2 Literature Review

This also meant that traditional formal industries have encountered difficulties in understanding and capturing viewers in the shifting business model of the networked economy (Napoli 2011). Levin indicates that Internet users consume ‘across screen’ and they have ‘very little loyalty towards any one screen.’ He adds that content companies are faced with the challenge to ‘meet the cross-screen needs and desires of consumers, advertisers, and content creators’ (Levin 2011). Levin argues that this creates an increasing interdependency between creative audiences and the media industries (Levin 2011). To add to this level of complexity Peterson and Anand purport, the choices that motivate the users are not determined by self-interest but by popularity and the choices of others. These decisions are status-led and have to be perceived as genuine acts (Peterson and Anand 2004). Social endorsement, recognition and popularity motivate behaviours and choices that are directly connected with the level of celebrity and appreciation of popular figures, in that way they are partly affective decisions. Therefore, social network markets do not develop out of needs like traditional markets but out of social-status and recognition (Peterson and Anand 2004, 11–34). Hartley reinforces this point and adds that the new consumers are not real consumers, but that they are on social networks to increase their status and those that they endorse in a ‘socio-cultural’ rather than an economic manner (Hartley 2010, vi–xxv). According to Hartley, the synergies between creative ‘Agents (professional and amateurs), Network (social and digital), and Enterprise (market-based and other forms of purposeful association)’ generate ‘Creative value (in an open complex system).’ He argues that this process, which involves both creative audiences and industries, can nurture the growth of knowledge (Hartley 2012, 52). What Hartley describes is the emergence of a system that transcends the notion of power: audiences and industries re-appropriate each other and become intertwined in a decentralised network.

2.4.2 Networks, P2P, Crowdfunding, and Emerging Creative Talents

As seen in previous sections related to political economy and audience research, several scholars from different media traditions (Bruns 2008; Hartley 2009, 2012; Montgomery 2010; McQuail 2010; Napoli 2011; Springer 1999) have recognised that the boundaries between audiences and producers of content have blurred. Creative audiences are bridging political economy, industry research, and audience studies. Beside work related to UGC, creating fresh content that is not subject to IP regulation is also a way for creative audiences to disintermediate from the media industries (Hartley et al. 2015). But to do so, access to networked spaces and technologies is not the only prerequisite. Aside from technical skills and creative sensitivity, most emerging filmmakers require funding to create films (Altabás Fernández 2014). 2.4 Networked Participation: Online Industries Meet Creative Audiences 39

Based on this premise, scholars have started to argue recently that crowdfunding and crowdsourcing can both enlarge the participatory role of the audience throughout the process of filmmaking by integrating them to it and fostering collective fresh artistic and creative visions (Hartley 2009, 2012; Hartley et al. 2015; Martínez Gallardo and Alberich Pascual 2013). Crowdfunding is defined as the collective efforts from audiences to fund a particular project, in this case a film, while crowdsourcing, which started from the open-source concept of software programming, is the integration of talents and skills from creative audiences to produce a film project (Gubbins2012 ; Martínez Gallardo and Alberich Pascual 2013). In summary and in Marxist terms, crowdfunding has to do with the capital (or financial resources) required to make a film project whereas crowdsourcing has to the do with the labour to realise it. Both crowdfunding and crowdsourcing models met with varying degrees of success. These models have given birth to films that were eventually circulated online. There are examples of films that were partly or wholly financed through crowdfunding and were released in theatres such as The Iron Sky (Vuorensola 2012; Baranova and Lugmayr 2013). Portals such as Wreckamovie.com in the US have managed to combine both crowdfunding and crowdsourcing, whereby they encourage creative audiences to start a film project, promote it, and ‘build a community around it’ (Baranova and Lugmayr 2013, 182). From an economic perspective, this type of model offers three benefits: Firstly, it gives creative audiences access to capital. Secondly, it reduces the costs of making the film (since the participants are working on a voluntary basis). Thirdly, it provides the film with engaged and participative audiences and creates a ‘hype’24 before the film is even made (Altabás Fernández2014 ; Baranova and Lugmayr 2013; Martínez Gallardo and Alberich Pascual 2013). This creates a strong emotional attachment to the project, which goes beyond the notion of monetary reward (Hartley 2009, 2012; Hartley et al. 2015). It also encourages word of mouth, which can potentially become viral and ensure a wide circulation of the creative work with little marketing efforts and expenses (Montgomery 2010; Hartley 2010). This phenomenon disintermediates the film process from its inception to its circulation and it redefines the notion of value attached to film. On the one hand, it reshuffles the balance of power between film financiers and film producers, and on the other hand, between producers of content and their participative audiences. Ultimately, it reconfigures this double relationship on more equal terms than with the traditional filmmaking model (Altabás Fernández2014 ; Martínez Gallardo and Alberich Pascual 2013; Gubbins 2012; Hartley et al. 2015). However, Gubbins sees crowdfunding as an emerging model with an uncertain future and few successes25 (Gubbins 2012). Altabás Fernández argues that the

24 Here ‘hype’ is used in the terms defines by Austin: as expectation and emotional engagement towards a film (Austin 2012, 30). 25 Except for Kickstarter and Indiegogo that are already established and focus their efforts on crowdfunding, for which they receive financial rewards (not from crowdsourcing), a lot of entrants have already exited the participatory arena. For instance, Wreckamovie.com whose motto was 40 2 Literature Review example of the filmCarmina o revienta [Carmina or Blow Up] (León 2012) has since proven that a film can be crowdfunded, and be both a critically acclaimed and commercial success (with more than half of its revenues derived from the Internet). It also illustrated the power of disintermediation of crowdfunding as the film was released on all the distribution windows available (mobile, online, DVD, television and theatrical) simultaneously (Altabás Fernández 2014, 396). Gubbins has posed a number of questions in regard to the sustainability of such practices in the long-term; he outlines the complexities through which IP is redefined in the context of crowdfunding and the uncertainty of the ultimate ownership of the content. Does it belong to the crowdfunders, to the producing collective or to public domain? Does it fall under the rules of the Creative Commons and how should the commercial rewards, if any, be redistributed? Murdock defines the Creative Commons (CC), born from the rise of P2P, as a creative networked community which, “… employs private rights to create public goods by persuading rights holders to allow their material to be freely accessed and used providing it is for non-commercial purposes.” (Murdock 2004, 15). In principle this model does not allow the re-appropriation of the CC creative work by the media industries.26 However, Terranova and Johnson have warned about such re-appropriation and use of free labour by the online industries to maximise their revenues by acquiring content created at a very low price or for free (Terranova 2004; Johnson 2007). Murdock reinforces this point when he provides the example of BBC, which started their BBC’s Video Nation project in the early 2000s and invited audiences to create their own content and post it online on their website using the CC rules (Murdock 2004, 16). Participative audiences and CC actually have little right of action to defend against the re-appropriation of their creative content by the industries. The traditional and online media industries have the structure and legal power to dominate the litigation (Lobato 2012; Lobato and Thomas 2015). Jenkins, Ford and Green argue that this re-appropriation is inherent to the networked economy, as creative audiences are potential emerging artists and the circulation of their works is not necessarily motivated by financial gains or capital accumulation (Jenkins et al. 2013, 58–59). Jenkins highlights the emergence of a participatory culture (Jenkins 1992, 2006a, b) formed by creative collectives that he does not define as active audiences but as ‘craftsmen’ who enjoy their work being well done and shared with others27 (Jenkins et al. 2013, 58–59). Jenkins, Ford and

‘Wreck Hollywood one movie at a time’ and which was mentioned in Baranova and Lugmayr’s article in 2013 has already disappeared at the time of writing this book. The following message can be seen on their remaining Facebook page: ‘WreckAmovie might be done but the spirit lives on!’ 26 Guédon stresses the point that CCs is ‘not equivalent to public domain’ (Guédon 2003, 192). 27 John has cautioned that there has been an increasing use of the word ‘sharing’ by the online media industries in an attempt to cover up their commercial activities into an illusion of collaborative community. This is the case for example of websites such as Facebook, YouTube, Flickr, Twitter (John 2012). 2.4 Networked Participation: Online Industries Meet Creative Audiences 41

Green claim that the issue is not so much about free labour, but the risk of their alienation; of them becoming anonymous. This goes against one of the main attractions of social networks that promote social recognition and sharing. Jenkins, Ford and Green convey the notion of ‘engaged’ audiences rather than ‘exploited’. This facilitates ‘spreadability’ in the participatory culture (Jenkins et al. 2013, 3). Meanwhile, industries may become parasites on these endeavours by deriving revenues from such practice (Lobato et al. 2011; Napoli 2011; Gubbins 2012), but ultimately if the commonly created projects have been achieved and circulated successfully this in itself is a reward, along with the credential of professional and artistic skills that these creative audiences have displayed (Jenkins et al. 2013). Crowdfunding is both a creation of the traditional craft of filmmaking and social networks. Crowdfunding/crowdsourcing escapes the notion of IP, and it is therefore difficult to categorise or study this aspect of the digital creative industries in the traditional creative industries’ frame of reference. Hartley reinforces this view and describes the new creative industries not as ‘media industries’ but as ‘social network markets’ (Hartley 2009, 231–244). In the case of crowdfunding/crowdsourcing, they are characterised by different and hybrid market dynamics at the intersection between the traditional creative industries and social networks. These creative media networks are not centrally governed and they are highly adaptable (Hartley 2009; Bauwens and Kostakis 2014). For instance, they were prompt to find ways to escape control of the Internet conglomerates, the formal media industries and government organisations when the Internet became increasingly regulated. They moved to less controlled spaces such as Megaupload or Silk Road28 and used cryptocurrencies such as Bitcoin (Lobato and Thomas 2015). Their intent can either be viewed as ideological; to break away from the formalised capitalist structure (Gubbins 2012), or a non-ideological method to develop as a collective activity without the constraints of monitored and institutionalised networks (Jenkins et al. 2013; Lobato 2012; Lobato and Thomas 2012, 2015; Bauwens and Kostakis 2014). This is a dual departure from the areas of tension seen above. Firstly, the phenomenon of disintermediation created by P2P networks and crowdfunding should provide less resistance from the media industries: without the use of IP or the finance coming from the traditional film industries, the double power dynamics between audiences-producers and producers-industries’ stakeholders (financiers and distributors) are theoretically disengaged. Secondly, this model encourages emerging talents and filmmakers to create fresh content while escaping the industry dominance. In such a model, how can the division of labour, its valuation and the redistribution of rewards be redefined?

28 Megaupload was easily accessible to the public while Silk Road was operated on the dark web as a Tor service. 42 2 Literature Review

2.4.3 Redefinition of Terms in Filmmaking

Labour and Rewards in Participatory Models

In theory, crowdfunding/crowdsourcing as a participatory model, organises the division of labour and the distribution of capital away from capitalistic power structures. In this way, it has the potential to promote equality amongst its participants (Jenkins et al. 2013; Bauwens and Kostakis 2014). In parallel to crowdfunding/ crowdsourcing, other alternative business models enabled by P2P have emerged with the network economy, such as ‘the long tail’ and ‘voluntary payments’ (Anderson 2006, x; Iordanova 2012, 16; Gubbins 2012, 90). The long tail approach promoted by Anderson in early 2000 is already well known: its basic premise ensures unlimited shelf life and circulation to the creative content (Anderson 2006) while its revenues will likely be marginal (Cunningham and Silver 2012; Iordanova 2012; Gubbins 2012). Voluntary payments imply that a small proportion of the audience would pay for a given content. This collective reward, which depends on the means and motivations of each participating individual, provides access to the rest of the audiences and rewards the producers of the work (Gubbins 2012; Iordanova 2012). This approach is quite similar to crowdfunding except that the content gets paid for after the production has taken place. In the case of crowdfunding the risks of tight cash flows and non-payment are reduced by upfront finance. Another element complicates the notion of financial rewards; it is the definition of IP rights. Followers of Lessig’s theory of free culture (2004, 2008) assert that there should be no such things as rights and that the content should be circulated freely. Terranova, Johnson and Sennett have already stressed the risk of such practices leading to Internet users being exploited and their work being re-appropriated by the industries for commercial gains and capital accumulation (Terranova 2000, 2004; Johnson 2007; Sennett 2008). This goes against the ethos of the collaborative nature of crowdfunding/crowdsourcing. The CCs have managed to protect the creative audiences from such practices in theory (Jenkins 2006b; Jenkins et al. 2013). But in practice, it has been highlighted that these rights can be bypassed by the industries (Lobato 2012). Terranova (2000, 2004), Johnson (2007) and Sennett (2008) all argue that the notion of labour associated with the network economy should be redefined and should not rest on a frame that is based on economic relations. Moreover, Gubbins argues that to make crowdfunding viable it should be considered as a complementary mechanism to traditional funding avenues (Gubbins 2012, 90). If so, then the film would de facto position itself as a commercial product that would rule out the CC framework. It also means that for the model to be sustainable in the long-term and that is, being equalitarian and fair, crowdfunding/crowdsourcing participants would need to be rewarded for their contributions. This situation prompts the importance of defining the value, which is placed on such projects by their participants. 2.4 Networked Participation: Online Industries Meet Creative Audiences 43

Redefinition of Value in Participatory Filmmaking

Bauwens and Kostakis reinforce the argument that crowdfunding/crowdsourcing disintermediates and bypasses the largest traditional institutions and players such as banks, investors and studios and uses P2P networks to create capital accumulation (Bauwens and Kostakis 2014). By the same token they argue that it creates a new digital aristocracy and place law in the faith of distributed computer processes. It provides autonomy to the participants in a disintermediated environment, but fos- ters competition between the participants of the network. In this context, Kickstarter is seen as a model of ‘parasitic capitalism’ (Bauwens and Kostakis 2014, 33–34) par excellence, where the owner of the platform extracts a commission on each transaction simply for maintaining and administering the platform. This type of model lets collective creators and communities undertake actual labour while other participants are funding it. However, Bauwens and Kostakis argue that such a model is not sustainable (Bauwens and Kostakis 2014). Using the theory of techno-economic paradigm shifts (TEPS), they foresee the end of capitalism as a system that has reached a level of maturity. Žižek reinforces this point and argues that the capitalist system in its current state is not sustainable (Žižek 2010, x). Bauwens and Kostakis therefore consider strategies for post- capitalist construction through the new political-economic framework largely influenced by the network society and its economy. Bauwens and Kostakis envisage four key scenarios which evolve between two axes: On the one hand there is the notion of capital; this axis ranges from ‘traditional proprietary capitalism’ based on the value of labour and IP to the widespread use of common licenses as a means of interaction and ownership within the network. On the other hand, they consider the notion of distribution of resources as being either centralised or ‘distributed’ (decentralised) (Bauwens and Kostakis 2014, 18). They argue that in the long-term, only the notion of ‘Global Commons’ is fully sustainable (Bauwens and Kostakis 2014, 50). What they describe as ‘Global Commons’ or ‘mature peer production’ is a globally decentralised system of production and exchange based on values other than capital (Bauwens and Kostakis 2014, 50). In his work to define ‘value’, Graeber himself admits that it is a challenging notion to frame (Graeber 2001, 1). He gives three definitions of the word: the first one is influenced by Saussure and has to do with the study of linguistics. It is largely concerned with the definition of ‘identity’ through the notion of value but lies outside of the remits of this book (De Saussure 1966, 107). The two other definitions provided by Graeber have closer ties with the topic discussed in this book. One is phenomenological and defines value as what is perceived to be good or ‘desirable’ for humans (Graeber 2001, 1, 12, 105). The other is more materialistic or Cartesian and defines value on how much one is ready to give up for a particular object. The former definition is closer to moral values and more immaterial or affective, whereas the latter is grounded in material evocation. Graeber also outlines that there is not yet any clear theoretical framework to analyse the notion of ‘value’ beyond economic or purely materialistic considerations. However, he mentions the connection between value and power, and claims 44 2 Literature Review that the most important contribution of Marxism was its ‘focus on production’ (Graeber 2001, 24). He concurs with Marxism that the definition of value should depart from the debate on distribution and exchanges fomented by functionalists and should concentrate on production. Functionalists’ concern was to understand society from the perspective on how it reproduces itself by continuous creative activities. Whereas Marxism was more attached about ways in which these activities defined a changing society. Bourdieu and Marx both considered other forms of capital than economic capital, such as cultural or artistic capital (Bourdieu 1979, 1986; Fowkes 1976; Graeber 2001).29 Crowdfunding/crowdsourcing are intrinsically based on notions of ownership that do not solely rest on economic foundations but encompass the emotional and the moral investments of the participants (Jenkins et al. 2013, 60). Lobato, Thomas and Hunter converge with this viewpoint when they indicate that creative amateurs produce ‘for pleasure and allow permissive use of their content by others, typically through Creative Commons Licenses’ (Lobato et al. 2011, 903).

Affect as Cornerstone of Participatory Film Projects

Ultimately Graeber argues that all individuals place value in exchanges that are not solely in the realm of the physical. However, they always try to ‘maximise something’ whether it is economic (financial value) or affective such as self-recognition or fulfilling desires, which then convert into pleasures (Graeber2001 , 8). Capital is accumulated mainly to be able to dispose freely of the value that individuals attribute to objects or desires. Individuals ultimately seek freedom or liberty in the fulfilment of their pleasures. The notion of liberty, undermined by Marx (Fowkes 1976), Mosco (1988) and Curtis (1988) in favour of equality, is what connects the notion of ‘value’ with power. Graeber argues that Marx’s theorisation of pleasure from a social point of view is in ‘the idea of unalienated labour’, and the aspiration that works of creativity should be a source of pleasure and recognition (Graeber 2001, 260). Graeber’s definition of pleasure which is highly connected to ‘value’ surmises that it can be derived through a state of loss of the self or referring to Mauss, ‘the delight in generous artistic expenditure’ (Mauss 1965, 67). This argument suggests that the collective (loss of the self) and the affective artistic engagement (delight) in creating a film work and sharing it with peers may just as well be a valuable reward in itself. This definition seems to be aligned with the aims of filmmaking as a collective, such as crowdfunding. In this frame of reference, reward is at one level monetary, as it allows each participant to be able to live in the material world by providing them with sufficient financial rewards; but the actual reward is the fulfilment of pleasure through an act of creation, sharing it with the rest of society, and getting social recognition for this achievement. This affective and key element of the collective art and craft of filmmaking has been referred to by

29 Although Bourdieu admits that economic capital is the dominant one (Bourdieu 1979). 2.4 Networked Participation: Online Industries Meet Creative Audiences 45

Lee as ‘passion factor’ or ‘human’ factor (Lee 2005, 16, 148).30 It is the driving force which federates filmmakers as a team and keeps them working towards the completion of a communal artistic work, beyond extra working hours, and above all to tell a story and share it with the rest of the world (Lee 2005). Lee defines this passion for filmmaking and film-viewing as shared values between producers of content and audiences, and he considers these shared values to be a ‘genuine commitment’ a positive engagement from the part of both parties (Lee 2005, 152). Altabás Fernández (2014) and Martínez Gallardo and Alberich Pascual (2013) support this argument and surmise that in the context of crowdfunding/crowdsourcing, if audiences already show a commitment by funding a film then filmmakers as a collective can meet their commitment, thereby increasing the potential for collective shared value. Jenkins, Ford and Green define affective engagement from participating audiences in the network economy as ‘stickiness’ (Jenkins et al. 2013, 6). This engagement can translate into ‘word of mouth’ (Napoli 2011, 83) and drive the completed film to higher degrees of shared circulation. Austin purports that this phenomenon enables a measure of agency (Austin 2002). Therefore, it could be argued that the non-monetary shared value between filmmakers and general audience could increase the success of a film and should be a good starting point for a ‘mature peer-production’ model (Bauwens and Kostakis 2014, 50). If such a model was developed as normal practice, it could potentially redefine two key aspects traditionally associated with filmmaking: Firstly, the filmmaking process may be reassessed as it may lose its linear nature, its intermediated features and its centralised power structure. Secondly, this situation would redefine notions of IP and piracy and make them almost irrelevant. Since the creative audiences would have financial or non-financial vested interests in the film production (beyond the notion of ‘hype’), they could decide themselves (individually or as a collective) on the level of financial reward they wish to take on the project or whether they prefer to circulate it for free. While the creative and production teams would be rewarded for their work,31 their reward would not be uniquely grounded in financial expectations but by social recognition, artistic and craft-related shared values.

Following a Post-capitalist Logic

At a micro-level this model could mark a departure from capitalism as suggested by Bauwens and Kostakis (2014) and this would be achievable within the crowdfunding/crowdsourcing P2P model. Whether this platform is re-appropriated by capitalistic interests or indirectly serves its agenda in the short term is a different matter.

30 Dr. Philip Lee is both a scholar and a renowned industry practitioner who has amongst his numerous credits: Associate Producer for Crouching Tiger, Hidden Dragon (2000), Line Producer on The Dark Knight (2008) and Executive Producer for Cloud Atlas (2012) and The Revenant (2015). 31 Bauwens and Kostakis suggest a maximum scale of 1–8 wage differential for fair capital redistribution (Bauwens and Kostakis 2014, 67). 46 2 Literature Review

This assumes moving away from structures and systems of power and concentrating on the notion of equality. A step in the right direction is a model where film talents can artistically create together on the basis of merely their passion of the process and the craft. However, Bauwens and Kostakis themselves realise that this system is not a simple task, mostly because of its global scale and the number of areas of tensions that paves the incremental steps to its genesis (Bauwens and Kostakis 2014). In practice, Bauwens and Kostakis see the emergence of a Commons Based Peer Production (CBPP) context (2014, 51) as macro-participatory system in which partner state (governments), commons and corporate spheres should interact and cooperate in a ‘triarchical’ dynamic to reach a stage of mature peer production (Bauwens and Kostakis 2014, 67). Because it transcends the debate regarding industries’ ideology and capital, Bauwens and Kostakis’ argue that such a project should not intend to fall back into the social illusions of agency or into the political utopia of Communism. Guédon supports this point when he outlines that the world’s issues will not be solved simply by the ‘ability to inform, or even to communicate’ (Guédon 2003, 192–193), but he encourages the reshaping of civil society through citizenship. This opinion was also connected to Hartley’s notion of ‘creative citizenship’ (Hartley 2009, 18; 2012, 51). Bauwens and Kostakis elaborate that this ideal scenario is actually grounded into economic practice, as commons have already generated trillions of US dollars to the US and could be seen as largely sustainable on a global scale. The crowdfunding/ crowdsourcing model which I intend to develop for the purpose of this book is quite similar in nature to the model proposed by Bauwens and Kostakis. It is a system whereby individuals can share their work and achievements as a collective with civic and positive motivations. This model is reminiscent of Marx and Mauss’ theories of pleasure and the fulfilment of ‘the need to create, learn, communicate’ (Bauwens and Kostakis 2014, 51). However, in the context of the design and implementation of a post-capitalist global model, Bauwens and Kostakis advise that ‘there is no universal ‘how-to’ … because each nation has its characteristic’ (Bauwens and Kostakis 2014, 68). To that extent, the following section (Sect. 2.5) will study the design and the implementation of a methodological framework for the specific case of China.

2.4.4 The Challenges of the Chinese Context

In 2005, 260 films were produced in China; only topped by Hollywood (425 films) and Bollywood (800 films) (Economist 2006). The box-office reached CNY2 billion in the same year, which is an increase of one third year-on-year. In 2012, these figures reached 745 films produced in China and a total box office of CNY17.1 -bil lion, displaying an explosive growth and colossal expansion of theatre screens (Lin 2013). But according to Zhang Hongseng (Deputy Director of SARFT) out of 260 films only 90 films were actually distributed in China and some of these films were only screened in the theatres for a few days (Economist 2006). While this number 2.4 Networked Participation: Online Industries Meet Creative Audiences 47 increased to 315 local films released in 2012, it only represented 42% of the total production (Lin 2013). In regard to the online production and circulation of films, there has not yet been a crowdfunding/crowdsourcing model created for China.32 Wang explains that the release and circulation of films in China is subject to a strict regulatory framework and he argues that: The thorniest question triggered by the paradigm of creative industries is that of “creativity” – the least problematic in the western context. How do we begin to envision a parallel discussion in a country where creative imagination is subjugated to active state surveillance? (Wang 2004, 13) It has been surmised that the soft power agenda of the Chinese Government may contribute to reduce its control over media (Keane 2013, 2015). However, ultimately Xin (2006), Li (2011), and Keane (2013) warn that policymakers can use the Chinese Government’s recent appropriation of terms such as creative industries and soft power, as a ploy to portray China as internationally integrated and possessing the ability to benefit economically from creativity and innovation. Therefore, it does not necessarily translate into a genuine motivation from the government to promote creativity and emerging talent in a literal sense. Keane (2003, 2007, 2015) and Montgomery (2010) have both argued that the Chinese Government’s control over the filmmaking process has translated to limited creativity. Other researchers have also highlighted the risk of ‘colonial mimicry’ and copy- ing foreign genres and film aesthetics due to the influence of Western content in China (Bhabha 1994; Berry 2003, 226). This in turn tends to create a protectionist reaction towards foreign content that the government seeks to limit through quota and the exclusive operation of online platforms by local companies (Keane 2015). Laliberté and Lanteigne (2008) have explained that this protectionism is partly due to the fast developments of technology whose effects are still unknown: the government aims to progress cautiously. Similarly to the question of piracy and the implementation of IP protection,33 the difficulty to implement nationwide measures is also due to the sheer size of the country and the large population that the government has to administer34 (Lobato 2012; Mertha 2005; Montgomery 2010). There are political-economic and cultural elements to consider which will be further explored in the contextualisation of China in Chaps. 3 and 4.35 Politically, Maoist ideology prevailed from the 1950s when China moved away from Soviet-led Leninist and Marxist ideology (Chai 1997, 1). This move illustrates the specificity of China and its distinctive characteristics both politically and economically (Lansdowne and Wu 2009). Foreign and Chinese scholars alike have cautioned that one should look at the case of China through a balanced perspective and

32 Except for Yulebao, which will be analysed in more detail in Chap. 5. But I prefer to call Yulebao a ‘VIP crowdfunding’ platform, through which only commercial films have so far been financed (Coonan 2014). 33 As seen in Sect. 2.2. 34 Refer to Sects. 2.1.4 and 2.2.2. 35 Issues of state control and censorship on creative content in China will be explored further in Chaps. 3 and 4. 48 2 Literature Review to consider it a particular case that may or may not allow for extrapolations (Dimitrov 2009; Keane 2003, 2007; Montgomery 2010; Xin 2006).

2.5 Conclusion and Hierarchy of Research Questions

Existing scholarship on piracy has focused on copyright protection, Intellectual Property (IP) policies and the circulation of pirated material, but has entirely excluded attention to audiences (Mertha 2005; Dimitrov 2009; Wang 2003a, 2010; Montgomery 2010; Pang 2012; Lobato 2012) or the disruptive force of the Internet in the paradigm shift (Cunningham and Silver 2012, 2013; Iordanova and Cunningham 2012). There is also a large literature dealing with the political economy of the media (Murdock and Golding 1977, 1991, 1997; Wasko 1994, 2003), the political economy of China (Lansdowne and Wu 2009; Laliberté and Lanteigne 2008; Zhao 1998, 2003; Yang 2013) and its creative industries (Keane and Hemelryk Donald 2002; Keane 2013a, b, 2015). Quite separately, literature on Western and Chinese film audiences centres on the legitimate consumption of media alone (Curtin 2007; Rosen 2009; Livingstone 1998, 2003; Napoli 2003, 2011). The present literature review has attempted to integrate these various separate, and sometimes oppositional academic traditions and fields into an interdisciplinary framework. These traditions include political economy, creative industries, IP discourse, audience research, cultural studies, Chinese studies, more recent literature on the network society and economy as well as a nascent scholarship on crowdfunding, crowdsourcing, peer production, and blockchain technology. This integration was possible to a degree through the traditions that offer more practical bridges with others such as political economy, audience research and creative industries. The central element of the integration of these respective bodies of work rests in the redefinition of audiences into creative audiences who are at the crossroads between the creative industries, the network economy, and audience research. Through this integration, I have identified several points of evolution. Firstly, the redefinition of the term ‘audience’ into ‘creative audiences’, ‘emerging creative talent’ or ‘creative citizens’, which mirror their participant and active role within the networked system.36 Secondly, the reframing and redefinition of IP and piracy into areas of ‘formal’ and ‘informal’ practices (Lobato 2012) – I acknowledge that both terms could potentially become redundant in the context of crowdfunding/crowdsourcing. Thirdly, in the micro-context of filmmaking applied to P2P crowdfunding/ crowdsourcing, the definitions of power, value and equality and their relationships are redefined to encompass affective values as well as capital based values.

36 As a side note, it is important to remind the reader at this juncture that this book is mostly concerned about young emerging urban talents who are trying to develop narrative feature films or Web/TV series independently as original long-form story-telling. These productions may also encompass all the related IP connected with the film such as music, books, video games, merchandising, and other related commercial items. 2.5 Conclusion and Hierarchy of Research Questions 49

In light of the above, this book should inform the field on how within a particular networked model such as crowdsourcing/crowdfunding, a redefined notion of value can circulate amongst creative participants of the film making process while increasing equality and diminishing the power structures traditionally associated with the collaborative art and craft of filmmaking. If such a model was to be implemented in the context of China, it could potentially contribute to identify and nurture local emerging creative talents. To some degree, it is assumed that it would also support the soft power agenda promoted by the Chinese Government. The following questions emerge from these considerations: how can the Chinese Government identify and promote creative audiences who produce fresh content and engage with the full creative process of filmmaking without losing its supervisory role? Are platforms such as YT and Alibaba’s Yulebao a step in that direction? Can there be an online-based system in China where the government, media industries and audiences can all participate and benefit? In that context, how would such a model be possible? If so, how would it be mediated and negotiated? And if such a model can exist, what would be its key features and how could it be implemented? Can blockchain technology and platforms such as NEO facilitate this implementation? How would such a project redefine the power structures of filmmaking and how would it position itself in regard to the notion of value associated with collaborative and creative works? More generally, how could such a system redefine the notions of IP and piracy in the context of the networked economy in China? How would it contribute to redefine power dynamics between creative audiences, media industries (traditional and online) and the Chinese Government? How could it support the balance between notions of ‘value’ and ‘equality’ in the microcosm of this new participatory film production model? Beyond this, and from a political economic point of view, how would this inform the field about the potentiality of China developing (or not) a post-capitalist system? This work makes an original contribution to scholarship on contemporary Chinese media and culture by uniting an industry perspective on filmmaking with a sense of how Chinese emerging talents can work as part of a global common to create their own films in Mainland China and Hong Kong. It is important to note that this book does not make the assumption that crowdfunding/crowdsourcing in China would or should revolutionise the way films are made in this particular geographical area. It also does not surmise that it could become a main trend in film finance and production in China or globally. But rather, that this model of creation should be explored further from an economic point of view as a viable option to identify and support local artists. Furthermore and quite separately from capitalistic considerations, this model should be viewed as a way to federate collective energies and skills toward common creative projects. In that sense, the model to be proposed at the end of this book could support the creation of collective and affective projects. The rewards would therefore draw from the pleasure derived of crafting and creating as a collective as well as the social and professional recognition that would come from these achievements. 50 2 Literature Review

The theoretical and ideological foundations explored in this chapter should help frame the design of the participatory film production model that I intend to propose in Chap. 10. A thorough analysis of the context of China, its film industry and a surveying of its creative agents should also be undertaken through a solid and coherent methodology, which is the aim of the next section (Sect. 2.6).

2.6 Methodology

2.6.1 An Interdisciplinary Approach

As mentioned in the introduction of this work, this project is by nature interdisciplinary. It is positioned at the intersection of political economy, industry research, audience studies and the collective economy of P2P (including crowdfunding and crowdsourcing). The methodology that I intend to implement to unearth the data that will allow me to draw meaningful conclusions is therefore interdisciplinary by nature. I choose to study audiences from the perspective of creative audiences and emerging talents who create as a collective. Methodologically, I am addressing my core questions with a multi-dimensional approach integrating production contexts, promotional discourses, some textual elements, and the use of surveys and interviews to explore the audience and emerging talents’ responses in terms of viewing and creative practices. This approach positions creative audiences as an instrumental part of the production process and the sector, which is also shaped by government institutions and media industries. Creative audiences (or emerging creative talents) are therefore the cornerstone helping to cross the bridge between political economy, IP and piracy, industry research, and audience studies. I take my inspiration and model from Austin (2002), Montgomery (2010), Curtin (2007), Wasko (1994), Wang (2003, 2010), Hagen and Wasko (2000), Lobato (2012), Lobato and Thomas (2015) who have already worked with interdisciplinary models including varying degrees of use of positive methods such as quantitative data (industrial or surveying), and more normative methods such as elements of textual and metatextual analysis,37 interviews, ethnography and grounded theory. This book takes a three-pronged methodological approach in order to contrast audience and industry perspectives on the realisation or non-realisation of the development of a participatory film production platform in China. Firstly, I have undertaken desk research to survey the available literature, including existing academic sources, market intelligence reports, official data on estimated trade evolution, and trade periodicals. I have been making use of industry data from sources such as Screen Digest, Ent Group, CMM Intelligence, the MPAA,

37 The occasional textual elements that I use may give the reader a sense of context. The meta-textual analysis is more focused on the promotional and marketing aspects of the film work under study. 2.6 Methodology 51 the European Audiovisual Observatory and SARFT. I have triangulated and correlated this evidence with survey findings, interviews with industry professionals, government regulators, and scholars who study the film industry. This approach is key to understanding how the Chinese film industry is coping with and trying to take advantage of online distribution channels and domestic political-economic changes because it integrates the multiplicity of expert views necessary to grasp such a complex and fast changing sector. It is also critical to assess the viability of a participatory film production model geared towards crowdfunding/crowdsourcing and whether such a model is indeed possible in the current Chinese media landscape and context. Secondly, I have conducted a series of case studies that combine industry research, ethnography and interviews. On-going interviews with experts and film industry authorities were also critical to keep track of the fast-changing digital circulation strategies and the potential emergence of a participatory model adopted by the film industry. Thirdly, through surveys and focus groups, I have analysed how Mainland and Hong Kong audiences have evolved since 2009 and how they presently position themselves as creative audiences and emerging talents. By observing young urban Mainland Chinese and Hong Kong audiences’ viewing and creative practices through an ongoing participatory dialogue with them (interviews), the research plan is to observe and identify whether a participatory model of production for young emerging filmmakers has relevance in this specific context. If so, how should this model be designed and implemented. Focus groups contribute to supplement this analysis with qualitative and detailed information regarding their viewing experience and their creative aspirations. Focus groups also provide important data about the young emerging talents’ expectations and their potential use of new participatory platform. Rather than gathering evidence from past data, as it is the case in most scholarships, this approach offers the distinctive advantage of collecting real time information that would otherwise be lost. This set of concomitant methodological approaches will be used along eight chapters contained within three parts:

2.6.2 Contextualisation: Political-Economic Changes and Media Landscape

Part I: Chaps. 3 and 4

Apart from the literature review and the methodology (this chapter), Part I includes two other chapters (Chaps. 3 and 4) on the political economy of China and the mapping of the Chinese media landscape which help contextualise my research for the particular geographical area of China from 2001 to 2017.38

38 China’s WTO entry. 52 2 Literature Review

In Chap. 3, I look at the political and economic evolution of China with a macro-lens to define the frame in which the proposed model could be applied. I use a historical approach to the developments of China’s current political-economic system immediately before 2001 and for the following 16 years after the WTO entry. This historical analysis is conducted in a similar fashion to Shambaugh’s (2008), Yang’s (2013), or Laliberté and Lanteigne’s (2008) analysis of China’s political economy. This chapter gives a macro perspective to the reader on the intertwined and complex relationship between the political and economic spheres of power in China. It describes how these two prominent aspects that have been driving China’s media developments have evolved conjunctly over more than 16 years to define the current creative industries landscape. Chapter 4 makes use of Peterson’s culture perspective (Peterson 1982; Peterson and Anand 2004), a framework created to analyse macro and micro-forces at play in a complex context, particularly in media and cultural environments. Peterson defines these forces as five fundamental trends that affect media sectors and industries: market forces, legal and regulatory forces, technological forces, career and employment, industry and organisational structures. While Peterson’s categorisation brings clarity on complex and intertwined contextual driving forces, I re-adapt this culture perspective framework by adding another aspect, the political dimension, which as seen in Chap. 3, is fundamental for China. Peterson also misses and even defends against the ‘emotional’ factor or ‘passion factor’ that arguably characterises the workers in the film industry (Lee 2005). Peterson denies that there is a unique set of factors when it comes to the arts therefore defining rewards from a sole industrial perspective such as financial or monetary incentive (Peterson and Anand 2004, 326). Such rewards are of course important, but they are not the only forms of rewards within the film industry structure (Graeber 2001). I therefore engaged with the producing audiences in the third part of this research (Chap. 9) to understand their creative motivations and affective relationship to their artistic projects. In this respect, I use the concept of passion factor theorised by Philip Lee (Lee 2005). The dual analysis of the political-economic and of the media landscapes allows me to understand the mechanisms, constraints and gaps (if any) which characterise China and its online media sector. Chapters 3 and 4 combined describe the macro contextualisation of the political economy of the media and the creative industries in China. This leads to a focused and in-depth analysis of one of the key players of the Chinese online creative industries landscape in the following part: Alibaba.

2.6.3 Case Studies: Industrial Perspective and Ethnographic Approaches

Part II: Chaps. 5, 6, and 7

Social scientist Bell (2005, 10), argues that the case study approach could be ‘particularly appropriate for an individual researcher as it provides an opportunity for an aspect of a problem to be studied in more depth’ in a relatively short amount of time 2.6 Methodology 53 and can shed light on a particular phenomenon occurring in a given geographical area. However, case studies also carry their limitations. One of the most common issue with case study is ‘the difficulty to cross check information’ (Doyle and Frith 2006, 568). Another concern when conducting case studies is the issue of ‘generalizability’ evoked by Denscombe and the ‘extent to which findings can be generalized… depends on how far the case study example is similar to others of its type’ (Denscombe 2010, 60–61). Bassey develops this argument by bringing up the concept of ‘relatability’ arguably more important than ‘generalizability’ in the sense that the case study should be judged ‘to the extent to which the details are sufficient and appropriate for someone working in a similar situation to relate his decision making to that described in the case study.’ He concludes that ‘relatability’ is more important than ‘generalizability’ (Bassey 1981, 85). He considers that if case studies ‘are carried out systematically and critically, if they are relatable, and if by publication of the findings they extend the boundaries of existing knowledge’ then they are valid forms of research (Bassey 1981, 86). The case studies that I have selected are central to the production and circulation of films online in China, in that sense they are relatable to other experiences of the same type. In this study, access to reliable information from the survey, film industry experts and scholars as well as industry reports has helped me correlate findings from distinct sources. The correlation of these various sources of information also helps minimise the possible risk of ‘selective reporting’ (Bassey 1999, 12). I conducted the interviews of film industry authorities and scholars in Mainland China, Hong Kong, Europe and US, which should give a broad range of information to work from. The perspective of the audience is also integrated and can act as a balance between the academic and industrial views of the phenomena under study. In Part II, I make use of three case studies, which I approach with different methods. Nonetheless, these three case studies are all connected to the online Chinese champion Alibaba with respective emphases on finance, production and circulation. Alibaba is one of the most active online Chinese companies in regard to creative content, particularly in terms of its finance, its production and its circulation.39 After the description of the political-economic and media contexts seen in Chaps. 3 and 4 respectively, Part II takes a more micro lens than these chapters to describe the Chinese media evolution from the point of view of one of its larger players. Alibaba is an intermediary step between the macrocosm of the political-economic, technological and creative industries forces and the microcosm of the audience and labour forces. Ultimately, Alibaba has macro effects on the creative ecosystem. Part II also answers the question on whether Alibaba in its current state of development is part of a first step towards the development and promotion of local emerging talents.

39 Tencent is Alibaba’s most notable competitor in China in terms of creative content and media production, merchandising, and blockchain developments. However, as I will explain in further details from Chaps. 5, 6, and 7 with some occasional elements of comparison between Alibaba and Tencent, these two companies are not competitors in the traditional sense. For example both corporations sometimes collaborate and own shares jointly in the same affiliated companies. 54 2 Literature Review

The methodologies of Chaps. 5 and 7 are quite similar. Chapter 5 includes industry analysis, interviews and onsite observation at Alibaba’s offices in Pasadena, CA. At this point Alibaba took over YT (2016) and it has integrated it to its Digital Media and Entertainment Group. This case informs two important themes: On the one hand, it gives critical information about Alibaba’s change in business culture, its potential role as a vehicle for Chinese soft power and its role as a growing creative corporation in the Chinese online ecosystem. On the other hand, it sheds some light on its strategy regarding the use of participatory networks to create content and identify emerging filmmaking talent. Alibaba’s subsidiary Yulebao launched in 2014 initiated a crowdfunding model that I call VIP crowdfunding (or Customer to Business – C2B – crowdfunding) through which affluent investors have already financed a slate of 12 Jackie Chan movies along with Mission Impossible 5 (McQuarrie 2015). But is this model going to remain accessible to a few fortunate investors and already established filmmakers or will it expand into a decentralised participatory model encompassing the wider audience and emerging talents? Chapter 7 presents the case study of YT, an online platform, which used to infringe upon IP until 2010. Since the merger of Youku and Tudou in 2012, this group has become the largest legitimate online and mobile provider of UGC, amateur and commercial films in China. YT is also the initiator of an annual film festival, the Tudou Video festival and it is the first website that paid for creative audiences’ content production since 2013. The case study of YT starts from the creation of both its entities in 2005–6 and it ends with Alibaba’s takeover and YT’s integration into the larger group. After YT’s take over, it remains to be seen what strategic decisions will be made about YT’s initiatives regarding the identification and the reward system of emerging talent and what future prospects are awaiting the successful Tudou Video Festival? Will it be discontinued or expanded to cater for the growing filmmaking community in China? Methodologically, this case study also makes use of trade journals, academic papers and industry reports for the purpose of industry analysis. It also involves interviews of YT representatives and professionals. During this process, I took an industrial as much as an ethnographic angle by means of onsite observations at festivals (where YT was present) and at their offices in Beijing. The case study of YT provides some answers on the nature of government control over the Internet circulation platforms, how a company like YT is both an illustration of the growing IP centrality in China (as it is a vehicle for local branding and soft power) and its role in identifying emerging filmmakers. In contrast to Chaps. 5 and 7 that are methodologically driven by industry studies, Chap. 6 takes a deeper focus on the reality of film production in China. Its methodology is defined by an ethnographic approach through participant observation. In this case study, I choose to honour the anonymity of the respondents who explicitly wished to remain unidentifiable and I have changed some of their names to protect them from risk and exposure to loss of reputation, blacklisting, and potential lawsuits. This case study is ‘live’ in the sense that I studied the making of the 2.6 Methodology 55 film The Last Race (Shin and Parker 2017) during its production process from its early development in 2011 and 2014 until its theatrical release in China in 2016 and in the US in 2017. The approach I took, involved tracking this film concurrently with its promotion process (text and inter-text) to the point of release to gather immediate evidence on the constraints on the film production process in China rather than retrospectively trying to reconstruct this context (Austin 2002). This film was initially co-produced, promoted and distributed by Alibaba in China, which provides some information about how this online corporate giant positions itself in regard to the film production process. Williams, Rice and Rogers caution that a case study ‘requires the researcher to become part of the social context to understand it more adequately’ which suggests the merits of an ethnographic approach (Williams et al. 1988, 37). I have also taken such an approach through onsite observation and interviews of experts: I collected data during the development and production phase. In the end, I studied the promotion and the distribution efforts of the all the production companies involved and Alibaba through interviews, onsite observation, and industrial analysis. I did not solely collect box office and online revenue data but I also observed the critical reception of the film in newspapers, trade journals, and social media.

2.6.4 Audience Evolution and Change of Media Consciousness

Part III: Chap. 8

Williams, Rice, Rogers, and Springer have claimed that young audiences are more accepting of adopting new technology (Williams et al. 1988, 19; Springer 1999). Rosen (2009) has also identified a similar trend with Chinese urban youth and their higher frequency of digital media use. The choice for young urban audiences arises from their status as a global target of choice for the film industry, particularly in China where the 19–27 year old urban audience is estimated at more than 50 million individuals; mostly40 only-children with a significant purchasing power compared to their rural counterparts (McNeal and Yeh 1997). The study focuses on this most vulnerable segment of the urban Chinese audience but also the most technologically knowledgeable and creative: young urban audiences. They are also considered the most commercially ‘targeted’ worldwide by the film industry (Ralph et al. 1999, 120, 147), and will shortly become the mature audiences of tomorrow and the key trendsetters in society. I make use of empirical data through quantitative surveying, which I had conducted on young urban Chinese respondents, aged between 18 and 25 in 2008 and 2009. This data was collected at a very specific and relevant moment of Chinese

40 Hong Kong is officially part of China but the One Child Policy has not affected the SARs (Hong Kong and Macau). 56 2 Literature Review modern history. It coincided with the following timeframe: 1 year after the Beijing Olympics (which was a large soft power event for China), it was the year that China officially shutdown many pirate online platforms and foreign platforms such as YouTube. This date also coincided with the 60th anniversary of the foundation of the PRC and it was the year when the ghost of Tiananmen (20 years earlier) motivated the Chinese Government to take additional security measures. Last but not least, it was 8 years after China’s WTO entry, which gives an interesting scope to evaluate the consequences of this event. This data is quite unique because it would be impossible to reconstruct today and it is central to the notion of evolving audiences and their use of multi-platforms. It is good material that will allow for comparisons and reflections on a reasonably long timeframe of 8 years. Finally, the data that was collected at the time with paper-based questionnaires (mainly to avoid biases inherent to online platforms) is deemed to be of sufficient quality to be reliable, consistent, valid, and some of its key trends should be reasonably extrapolatable although to a rather small and modest periphery. A separate and more detailed methodological section is included in Chap. 8, but the following should give the essential information needed at this point. In order to build a sample that would allow a broader significance of the findings, I considered six most reliable sampling and distribution methods: The random method, the systematic method, the quota method, the multi-stage method, the clus- ter method, and the stratified method (Waters2008 , 73–78). The stratified method was used (this is further explained in Chap. 8). The sample used for surveying acts as a microcosm from which trends emerge and can be extrapolatable to a degree at a more macro level. However, there are limitations to this survey. For example, the sample does not represent the entire 18–25 year old Chinese population (Hong Kong or Mainland based) and it is a rather small sample. But keeping these elements in mind, it is a good starting point as a comparative element to assess the evolution of audiences and online platforms from 2008 to 2017.41 These elements should help define the changes in young audiences’ media consciousness over that period of time and the emergence of a local pool of creative talent who I chose to study more in depth in the following chapter (Chap. 9).

2.6.5 Collective Approach to a Potential Participatory Model

Part III: Chaps. 9 and 10

Initially, grounded theory seemed particularly useful for the last part of this research: the premise for the research is that there is currently no participatory filmmaking model (crowdfunding/crowdsourcing) in China, and the preliminary objective of the study is to understand and explain this phenomenon without any particular theoretical bias (Corbin and Strauss 2008; Glaser and Strauss 1967). This study also

41 The date of the release of The Last Race and the take-over of YT by Alibaba. 2.6 Methodology 57 draws from several theoretical frameworks without a determined theory that needs to be tested (Corbin and Strauss 2008; Glaser and Strauss 1967). Therefore, on the one hand, it would seem to suit this model. On the other hand, the objective of this study is to seek how IP and Chinese soft power can be redefined in the Chinese context and ultimately to formulate the foundations for a new participatory creative production model. The formulation of this model makes use of abductive reasoning which is particularly relevant here. It involves a succession of inductive and deductive phases which suit this research particularly well as it integrates empirical data that needs to be analysed and qualitative methods such as interviews, focus groups and ethnography (Burks 1946; Wible 2008). All these methods are needed to propose a model of participation with the creative audience and will involve formulating a hypothesis from some general observations (such as the inexistence of a collective production model in a system oriented by communist ideology). For the study in Chap. 9, I identified 20 participants. They are all young urban Chinese filmmakers between 18 and 35 years. Five are from Hong Kong and fifteen from the Mainland (Beijing, Guangzhou, Hebei, Inner Mongolia, Shanghai, Shandong province, Wuhan) to give a broad spectrum and a variety of cultural backgrounds. In terms of gender, 10 of them are women and 10 are men. I communicated with these filmmakers by means of interviews and focus groups for 2 years from June 2015 to July 2017. My aim was to have them participate in what would be for them a usable and helpful tool to both connect with other filmmakers in China, to make a film together, and to raise funding from the audience that they intend to make the film for. This participatory approach helped me design the proposal that I describe later in Chap. 10 and it is supplemented by the data provided in Chaps. 3 and 4 about the macro political and economic characteristics of China as well as the micro mechanisms of the industry in Chaps. 5, 6, and 7. Chapter 10 draws from the participation of all key stakeholders; not just the young emerging Chinese talents selected for this study but also institutional stakeholders – the government and the industry. As such, Chap. 10 can be read as a pro- posal42 and this exercise will inform my on-going research and the field of the creative industries about the three aspects: Firstly, the overall feasibility of a participatory film production model in China in the current context. Secondly, how this redefines the ideas of IP and soft power in China. Thirdly, it may inform the reader about issues of social power as they manifest throughout the existing structures of the industry and the nature of intrinsic notions of the art and craft of filmmaking such as the distribution of ‘value’ and collective efforts, which are meant to be essential components of the network economy (Bauwens and Kostakis 2014; Graeber 2001).

42 The Lumière Project is a proposal. I am planning to submit the final draft of this project to SAPPRFT, Alibaba/YT, iQiyi, Tencent, LeTV and China Mobile for validation, rejection or readjustment. 58 2 Literature Review

Through this work, I aim to propose a model (or non-model) that could potentially help identify and promote Chinese emerging film talent. I acknowledge that this might be a way to contribute to expand the study of Chinese soft power in political economy, globalisation and industry studies. The following work should also bring elements to redefine notions of IP and piracy in the double context of technological disruptions and China. This model (if successfully designed and implemented) should contribute to reduce the areas of tension induced by power structures and political-economic forces at play in the macro and micro processes of filmmaking. In the context defined in this chapter, it should shed a new light on the values and rewards associated with filmmaking and make it a more equalitarian set of crafts and artistic activities. Ultimately, this book draws from traditionally separated media-related fields of study such as political economy, political economy of the media, audience studies, cultural industry studies, Intellectual Property (IP), studies on piracy, and nascent studies on Peer-to-Peer (P2P), crowdfunding, as well as blockchain and smart contract technologies. This integration is conducted in the context of China and therefore makes a contribution to knowledge in the fields of the creative industries and contemporary Chinese studies.

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Since 2001, when China joined the WTO in order to further develop its economy and open it up internationally, the media sector in China has become an increasingly powerful economic tool that now lies at the intersection of political power and economic development. When studying China’s contemporary media and cultural landscape it is essential to look at the country’s broader political-economic context. Since the Mao era1 (Schurmann 1968; Teiwes 1993), particularly during the Communist Revolution (1949) and the Cultural Revolution (1966–1976), media was considered as a powerful political and ideological tool (Rosen 1986; Xin 2006; Keane and Hemelryk Donald 2002; Zheng 2010). The Chinese media is a contribu- tor to political and economic stability as it generates jobs, it is a source of entertainment, and it has become a significant source of revenue for the country. In 2012, television and film alone generated over US$15 billion in China (Oxford Economics 2013). In 2014, China’s total box office revenues alone reached close to US$4.8 billion (a 36% increase year on year), while in 2017, they increased by 80% compared to 2014 to US$8.6 billion (Shaffer 2015; Frater 2017). During the recent political-economic transition of China, the media has also been used as a ‘soft power’ vehicle (ruanshili [软实力] or ruandianyuan [软电源]), both internationally and domestically (Keane 2013; Lanteigne 2008). This makes it a key strategic sector for the Chinese Communist Party (CCP) to control and shape. This control strategy had already started during the Mao era, from 1949, when the media was totally controlled by the government and officially termed ‘propaganda’2 (Zheng 2010, 110; Shambaugh 2008, 106; Wang 2008, 24–25). This approach to media control and diffusion3 has constantly evolved and it has been adapted throughout the years with the economic reforms of the late 1970s, the Tiananmen incidents

1 In 1942, Mao’s talks emphasised the importance of culture in politics at the Yan’an Forum on Art and Literature. 2 China’s Film Bureau is institutionally placed under the department of propaganda (DoP). 3 This approach is quite similar in its structure to the former USSR or Hitler’s regime during WWII.

© Springer Nature Switzerland AG 2019 69 P. Poujol, Online Film Production in China Using Blockchain and Smart Contracts, International Series on Computer Entertainment and Media Technology, https://doi.org/10.1007/978-3-030-02468-0_3 70 3 Political-Economic Transformations in China of 1989, and the WTO accession. Over this period, media has been closely related to political forces and increasingly connected to the economy. With the economic reforms implemented over the past 40 years, media in China has also evolved in its structure and approach. These changes were initiated before the reform period and implemented over a long period of time.4 In order to understand recent media transformations in China, it is therefore necessary to study the country’s political-economic developments and processes of change from a historical perspective. While this work positions itself strictly speaking in the field of creative industries, this chapter will draw on insights from the field of political economy, particularly the series of transformations and the complex situation of China from the period preceding its accession to the WTO in 2001 until 2017. This snapshot serves as a foundation for the observation and description of the media structures that currently support this system in Chap. 4. Chapter 3 sheds some light on the connection between state power, media and society in Mainland China and it aims to answer the following central question: Before and post the WTO entry, how has China been managing its political- economic series of transformations to create the current media context?

3.1 Control and Reforms in a Changing Global Landscape

The following summarised account, should provide a condensed view of China’s dynamic succession of changes that have directly affected its political-economic system, and indirectly, the development of its media sector.

3.1.1 The WTO Accession (2001): Long Negotiations, IP Introduction and Political Continuity

China’s WTO accession was not a sudden event; it was instead a long-planned move that involved a series of negotiations over a period of 14–15 years (Basu and Bandara 2009; Shi and Yu 2009). China had applied for its membership at the GATT5 as early as July 1986 (Shi and Yu 2009; Gertler 2002). It eventually obtained its conditional membership with the WTO6 in October 2001 and officially entered the WTO on 11th December that year making it the longest accession process in history (Gertler 2002). China had already committed to a transition from a planned and centralised economy to a market economy over that period of

4 Over more than six decades from 1949, to Mao’s death in 1976, to the present day. 5 GATT- General Agreement on Tariffs and Trade. 6 Originally GATT. 3.1 Control and Reforms in a Changing Global Landscape 71 time, but it is the WTO entry that was pivotal for China in opening its trade to the world and in integrating it further with the global economy. The WTO entry was contingent to compliance with five key criteria such as ‘non- discrimination’, ‘market opening’, ‘transparency and predictability’, ‘undistorted trade’ and a preferential treatment for developing countries (Basu and Bandara 2009, 2; Fewsmith 2001, 573–591; Martin et al. 2004, 3–20; Barfield and Groombridge 2002). Most economic and monetary criteria were met after the succession of reforms initiated by Deng Xiaoping in 1992. These reforms implemented for over 20 years laid the foundation for China’s entry into the WTO. However, other areas were difficult to negotiate partly because of the government’s priority to resist global forces and to keep in control further development of its own economy. The government was reluctant to lose some of its sovereignty particularly over its administrative and judicial structures. Criteria associated with transparency or administrative procedures that were paramount for WTO accession were particularly complex and challenging to negotiate, as was the development of an objective and equitable legal system that was a drastic cultural departure from the traditional Chinese system (Barfield and Groombridge2002 ). This was particularly true given the size of the country, the population that the CCP had to centrally administrate, the different nature of the Chinese legal system, and a tense relationship with the US over that period (Gertler 2002). Moreover, some of the WTO compliant procedures and legislation may have been in place, but implementing them in practice at a provincial or town level was challenging. Also new to China, the trade-related aspects of intellectual property rights (TRIPS) were introduced. The TRIPS mirrored the increasing legalisation of the global trading system led by the US, which would later have significant consequences on the development of the Chinese media sector (Ostry 2002, 10).7 By adhering to the TRIPS, China implicitly agreed to recognise the rule of law and importance of copyrights, but little was done in that area given that the very notion of private property was ideologically and culturally alien to the system in place. When it came to media and copyrights, China’s political-economic system did not function like Hollywood where IPR had been central to the contemporary development of its entire industry. Throughout the negotiation for WTO accession, the Chinese Government accepted the requirements with a lot of caution and reversed certain decisions that were reminiscent of the two steps forward one step back approach of its previous reforms. In this way, it fiercely defended its cultural identity and structures in the midst of globalisation. Transnational forces effectively acted more as lobbying efforts rather than true driving forces particularly in the realm of the media (Mertha 2007). This trait had been nurtured over decades since Deng Xiaoping’s first economic reforms. Deng had made sure that the right leaders were put in place to ensure political stability and integrity for the continuum of his vision for China. For instance, he ensured that the first generation of party members would progressively go on retirement and he subsequently carefully selected the next generation with individuals

7 This particular aspect will be developed in Sect. 3.3 of this chapter and further explored in Chap. 4. 72 3 Political-Economic Transformations in China such as Hu Yaobang, Zhao Ziyang and Li Peng who were more liberal in their opinions (Shambaugh 2008). Therefore, economic reforms were also accompanied to some extent with subtle internal political changes and this reinforces the argument that political and economic changes have been tightly intertwined. From a political standpoint, this series of transitions is illustrative of the overlapping of power between the successive generations of leaders outside of the 5-year plans framework. This approach was aimed at implementing political transitions as smoothly as possible and at avoiding purges from the past under Mao. It also helped the government retain credibility and control over China’s development and its sovereignty in the midst of strengthening global forces (Shambaugh 2008). This demonstrates the political structure of the CCP, which is organised similar to a ‘corporatist’ model8 (Kapcia 2015, 58). It does not solely rely on one leader as a decision maker, but a carefully assembled elite. This confirms the political departure from Mao persona’s ideology and regime (Zheng 2010). This transition was carefully negotiated as much economically as it was politically. While most of the new generation of leaders such as Hu Jintao and Wen Jiabao had technocratic backgrounds (engineering and manufacturing), a team of special- ists in finance, economics and law complemented them. In addition, some key leaders such as Zeng Qinghong (part of the ‘Shanghai Bang’) from the third generation ensured a smooth and consistent transition. This type of political transition would keep the core ideas of their predecessors and safeguard political, economic, and cultural integrity while preparing the government to handle international affairs (Shambaugh 2008, 152–56).

3.1.2 Post-WTO Period (2002–2017): International Presence and Challenges Ahead

Although the actual impact of China’s WTO entry is complex and cannot yet be fully appreciated, it is clear that as a result of the accession, FDIs have increased sharply (Schneider and Frey 1985; Basu and Bandara 2009). Merely a year after its WTO accession, China was the world’s first recipient of FDIs worldwide ahead of the US. By 2005, the volume of FDIs had reached US$622 billion (Basu and Bandara 2009) compared to only US$35.3 billion in 1999 (OECD 2000). FDIs and international trade have been driving Chinese economic growth and the steady transition of China into a market economy. To that extent, the creation of Joint Ventures (JVs) and the foreign Initial Public Offerings (IPOs) of local Chinese companies such as YT or Alibaba have played a significant role in raising foreign capital and propelling China into the digital age.

8 This ‘corporatist approach’ (Kapcia 2015, 58) holds similarities with the Cuban transition and reform model that allowed the country to maintain its political stability and its cultural integrity despite the US embargo over more than five decades (Dimitrov2015 ). 3.1 Control and Reforms in a Changing Global Landscape 73

While Tsingtao Brewery Co. was the first Chinese company listed overseas in Hong Kong as early as July 1993 (Wu 2011), the number of foreign IPOs (particularly in the US) intensified especially in the digital industries and start-up sectors with companies such as Sina, Baidu, Sohu getting listed on NYSE or Nasdaq, from 1998 (and throughout 2005 and 2006). In 2009, China alone represented 45% of the entire IPO volume in the US with a record high of 183 ventures launched in the stock market9 (Grocer 2010). In addition, the Chinese Government exerted control (locally and abroad) and indirectly contributed to increase the perceived value of its companies internationally in their search for foreign capital by blocking or limiting the domestic expansion of foreign competitors such as Google, Facebook or YouTube (Loveland 2009).10 Therefore, the interventionist stance of the government remained strong throughout the reforms period and to this day. The government supported key sectors such as media and technology both in China and abroad. It should be noted that post-WTO entry, the issues that the Chinese Government has tried to tackle are in fact much more structural and complex: income disparities between regions (coastal versus central and West) and between rural and urban areas, environmental issues, the aging population of China, the effects of the one child policy on demographics, or rural-urban migrations (Lansdowne and Wu 2009; Basu and Bandara 2009). These challenges combined with the seemingly overheating credit boom contributed by the shadow banking system and fuelled by human rights issues have affected the representation of China and the promotion of its soft power internationally. This media representation has sometimes tarnished the political-economic achievements of the government. This latter point has recently been revived, for example, with the case of a Spanish court ordering Jiang Zemin’s arrest for crimes against humanity (Buck and Rabinovitch 2013; Tiezzi 2014). This situation has reinforced the need for the government control of media and creative industries at a national level and abroad. It has also contributed to place the media sector in a strategic and prominent position. Despite the issues highlighted above, overall the series of economic reforms successively implemented by the CCP after Mao’s death have been smooth. They took into account the duality of the socialist political system and the transition from a planned economy towards a market economy. They also had to deal with the gigantic nature of China as a country and the large scale of its population. In terms of human rights, one should remember that the government’s reforms have also lifted millions of Chinese individuals out of poverty over the past 35 years (Zheng 2010; Shambaugh 2008).

9 As a reference point, China sold over US$50 billion worth of shares compared to US$24 billion for the US that year. 2010 was also a good year with the capitalisation of 22 Chinese companies on the NYSE including Youku, Bona Film Group and ChinaCache (Grocer 2010). 10 Glen Loveland’s article has since been taken down from the Internet. He now seems to work for Chinese state-owned China Global Television Network (CGTN). Interestingly, he published an article about the changing power of China in Global Times the same year: http://www.globaltimes. cn/content/434652.shtml 74 3 Political-Economic Transformations in China

We must keep in mind certain characteristics of China while concluding on the observation of this transition. Firstly, the transition was not planned from the beginning but was the result of careful and incremental series of adaptations to internal and external events. Secondly, the implementation of the reforms was gradual and started with sectors and areas that offered less resistance and were easier to tackle: starting with the agricultural sector and then moving to the urban sector and han- dling economic reforms before political reforms, for instance. Thirdly, the government subjected reforms to periods of trial and observation in what is commonly described as a ‘two steps forward, one step backward’ approach through which reforms were either pursued, stopped or reversed depending on their consequences11 (Srinivasan 1990; Chai 1997). This exploratory and cautious approach created a cyclical pattern of implementation of the reforms in 5-year plans. During each of these cycles, reforms were mostly initiated by the central government, but also sometimes originated from the local governments and were then adopted at national level (Chai 1985; Sung and Chan 1987). The political-economic transition (which keeps evolving to this day) has therefore followed an adaptive dynamic system. In this context, the CCP has been negotiating a progressive transformation from its original Communist model towards another type of political-economic system. Most changes in Chinese economic and social structure appear to have followed this approach, including developments in the media sector (Lee 2003; Fung 2008). Rabiger (2014) demonstrates that a documentary represents a slice of society as a microcosm of the society it depicts. This suggests that the government’s strategic decisions and its representations have deeply influenced the development of the Chinese media sector which can be considered as a ‘microcosm’ of the political forces at play (Rabiger 2014, 219–220, 223). Changes in economics and politics have manifested across all sectors, sometimes outside of the 5-year plan framework.

3.2 Tensions Between Communist and Capitalist Forces in China

The previous section has established that over the years, political power has consistently driven economic power when it came to the evolution of China and the use of its media sector. However, after China’s integration to the global capitalist economy, it seems unclear what share of power each of the systemic forces (communist and capitalist) hold in the current Chinese political-economic system. How can these forces coexist as a possible combined model in the midst of China’s economic and socio-political transformations? In order to define the context in which the media

11 Some of the reforms stopped dead in their tracks and reversed, which made the transition somewhat uncertain. This is particularly true for the media sector and the issue of censorship, which I will explore later in the third section of this chapter and in Chap. 4. 3.2 Tensions Between Communist and Capitalist Forces in China 75 landscape is developing today, it is important to analyse the relationship between the communist and capitalist forces at play in China and to study how these can coexist and be federated to ensure a sustainable and harmonious evolution of Chinese society.

3.2.1 The Emergence of a Hybrid System

The consensus is that China’s system has developed into a ‘dual’ system (Howell 2004, 6, 158; Keane 2013; Sun 2017, 530; Lansdowne and Wu 2009) where economics is driven by the market economy (under state control) and where politics (the administration and the ruling of society) is managed by the CCP and the communist state. To that extent, the current political system in place is still communist, but its economic system follows the free market logic. However, the term ‘dual’ implies a contradiction and some level of conflict due to its intrinsic meaning. It indicates the conflict of two drastically different systems that aspire to function in tandem but ultimately oppose each other. This argument is used mostly in the West as it is thought that the socialist ideology is opposed and incompatible with capitalist ideology and free market economics (Dickson 2003, 2007, 2008; Lansdowne and Wu 2009; Laliberté and Lanteigne 2008). In light of the previous sections, it appears clearly that the coexistence of these two seemingly irreconcilable structures has already taken place in China today. Therefore, instead of discussing the duality of communism and capitalism, I will apply the term ‘hybrid’, a more nuanced categorisation that takes account of and critiques the Chinese Government’s officially sanctioned term to describe its system as ‘Socialist with Chinese characteristics’ (Xinhua 2014). Since this term is quite vague, it leaves room for interpretation of the intent of the Chinese Government and how the current political economic system can be defined and evolved. ‘Hybrid’ suggests that the system works conjunctly with the two potentially contradictory elements of a free market economy under the ruling of a communist and centralised political system: ‘a one-party autocratic political system, coupled with a government assisted free market economy’ (Neigel 2000, 192). The term ‘assisted’ free market economy (Neigel 2000, 192) is important as it emphasises both the role of state intervention and its supportive, paternalistic, intent. The government operates as the centre of the political-economic system. It is involved in every step of the planned and controlled transformations. As a result, China has developed a unique model that has drawn a lot of interest: it has been able to integrate progressively free-market economic practices while maintaining an authoritarian communist political system (Yang 2013). A large body of academic research has debated on whether further development of such a system would be sustainable in the long-term due to its ideological contradictions and the ‘tensions’ it may generate in its current state (Montgomery 2010, 1; Keane 2013, b; Howell 2004, 29, 87, 100, 162). The generally accepted discourse is that under such ideological tensions and contradictions, either the 76 3 Political-Economic Transformations in China communist political system would eventually be democratised under the influence of a free-market economy or the authoritarian regime would limit and ultimately destroy economic power (White 1993; Goldman and MacFarquhar 1999; Pei 1994, 2008; Walder 1995; Zheng 1994). My view is that the current system is dynamic. It reflects the existence of a communist political system that coexists with and controls a market economy that is adapting to both external and internal forces. China’s communist political system and market economy have developed conjunctly and they contribute to the stability of the Chinese society which is subject to tensions and challenges that the government has to tackle such as the ageing population, the one child policy and its demographic consequences, environmental issues, and corruption while having to face renewed international geo-political pressure.12 The coexistence of a socialist political system with a market economy was thought to be impossible as it challenges the post-World War II Western view that economics and politics should adhere to the same ideology. Instead it shows that both forces can be combined into a stable transitioning political-economic system. This reinforces the relevance of the term ‘hybrid’ since the Chinese political and economic structures coexist and develop at the same time in a rather stable way.13 This hybrid system has developed for over three decades with a progressive economic opening and no sign of a faltering regime. It seems that while introducing economic reforms the political system has become even more permanent (McGregor 2007). Even if the coexistence of free market practices and communist ideology has resulted in areas of tension, so far, they have been contained by the state to ensure the country’s stability. The new entrepreneurs of China were identified to have little interest in political power and connect with the political sphere and its officials mainly to foster their own financial or social interests.14 This situation precludes any solid attempt to promote a democratic model or any attempt to take power (Chen 2002; Dickson 2007; Pearson 1997; Tsai 2005; Wank 1999). This characteristic illustrates the ‘hybrid’ symbiosis between communist and capitalist forces in China and how they contribute to a stable evolution of the entire system. This lack of engagement may seem to illustrate that the CCP’s influence is diminishing, whereas, in reality this situation confers more power to the Party as it points to a certain disinterest of the active population in political matters. The government is left in charge of organising social matters and to pursue its ‘patriarchal’ role without encountering significantly disruptive social events as long as it can provide stability and continuous economic growth (Du 2004; Montgomery

12 The election of Donald Trump in November 2016 and his subsequent political decisions, notably in terms of protectionism and trade, could increase the pressure on the Chinese hybrid political- economic system as seen during the recent trade conflict personified between Xi Jinping and Donald Trump. 13 As previously seen under Sect. 3.1.1. 14 Jack Ma, founder of Alibaba and one of the richest men in China has admitted that he is working with the government and that ‘one must always follow Chinese law’ (Ma 2012). 3.2 Tensions Between Communist and Capitalist Forces in China 77

2010; Yang 2013). Montgomery and Keane go to the extent of framing the current political-economic system in China and its control over the creative industries along Foucault’s theory of ‘governmentality’ (Keane 2013, 6, 12, 142; Montgomery 2010, 15, 33, 82; Walters 2012, 7, 10, 46). The CCP’s legitimacy as perceived by the Chinese society seems to rely economically on its GDP growth, while politically it relies on the stability of the system and unity of both the system and society. It uses media and the cultural and creative industries as tools to achieve this goal. Stability and unity are the defining concepts that we may explore further in this section. From this perspective, one of the fundamental characteristics of Chinese socialism and the emergence of its hybrid system can be found in its distinctive culture. The CCP represents the central power that organises and maintains the unity of the country (Schurmann 1968). Its authority cannot be contested, as this would imply that the government loses face that would in turn question its legitimacy and result in the country’s disunion, and, ultimately, instability and chaos. Stability has been one of the main promises of the government along with economic growth and both have concurrently played a role in reinforcing the CCP’s legitimacy in regard to society. This reflects the priority of the Chinese Government to provide social stability to one of the largest populations on earth (Lansdowne and Wu 2009). To put things into perspective, prior to the 1950s the Chinese Government had to focus on providing food and basic commodities to a large population and maintain economic growth. According to some, these have been the most notable achievements of the Party and also key features of its legitimacy (Gordon 1992; Lansdowne and Wu 2009; Montgomery 2010, 58–62). The government has also been using other methods to maintain its power, to strengthen its position as a leader, and to preserve social unity: the promotion of nationalist propaganda and a revival of Confucian ideas. These are reminiscent of Zeming’s theory of the ‘three represents’ and superior cultural identity of China. The theory was introduced by Zeming’s government in 2004 to promote the idea that the role of the party should be to represent ‘the interests of the masses’, ‘advanced productive forces’ and, most interestingly, China’s ‘new advanced culture’ (Laliberté and Lanteigne 2008, 7; Xu 2008; Lanteigne 2008, 162–183). This theory will be further discussed in Sect. 3.3.2.

3.2.2 The Revival of Confucianism and Chinese Cultural Identity

The legitimacy of the CCP relies on three main pillars: one economic pillar and two political pillars. On the economic side, the Gross Domestic Product (GDP) perfor- mance15 confers a sense of achievement, progress and legitimacy to the party, but it

15 The country’s economic growth. 78 3 Political-Economic Transformations in China is short-lived. Particularly since 2016, the GDP has not been performing as expected (Xinhua 2016). On the political side, the CCP’s legitimacy has mainly been about ensuring the country’s stability, and more recently, promoting nationalism and a sense of united Chinese cultural identity (Laliberté and Lanteigne 2008, 8–13). The promotion of a national cultural identity and related values in China and abroad has been instrumental in supporting these three political-economic pillars. While propaganda operates within China,16 its international equivalent is commonly called ‘soft power’ (Nye 1990, 153–171; 2004). Soft power is greatly facilitated by the Chinese media industries, which confirms that local media is closely watched and supervised by the CCP and the DOP. It has been officially expressed that Chinese films were to ‘serve socialism’ and that they should express positive values in line with those of the CCP (Global News 2016; Zhao 2016). To that extent, the government has revived some traditional cultural elements such as Confucian values (Bell 2008). Confucianism has sometimes been used to promote and strengthen the position of the CCP as a patriarchal leader. These ideas were already present during the early empire era, under the Qin (221–206 BC) and Han (202 BC–220 AD) dynasties and during the early ruling of the CCP (Bell 2008; Zheng 2010). At the origin of Confucianism (and as elementary principles of this philosophy), lie the concepts of Yin (阴) [subtle, feminine, flexible] and Yang (阳) [powerful, masculine, structural]. These principles were derived from Daoism and they have formed a significant part of the ancient Chinese cultural heritage. These beliefs and values survived the empire period, the Cultural Revolution, and they are still present and deeply rooted in modern Chinese society. Understanding their cultural and societal functions may help understand how the Chinese hybrid political-economic system can work and be maintained. With the concepts of Yin and Yang, one accepts the paradox that conflicting forces can coexist to form unity or Dao (道), the absolute, as illustrated in the Chinese philosophical book, the Daodejing (道德经), supposedly written by Laozi (老子) and used by Chinese rulers throughout history (Wing 1986). The overall concept of coexistence of Yin and Yang is understood and accepted in Chinese culture even if it is sometimes considered obscure or esoteric in the West. It implies that culturally, Chinese individuals and society in its ensemble are generally well equipped to understand and cope with change and paradox. In Chinese modern society, this paradox is exemplified both in Daoist and Confucian philosophies with the concepts of Li (理) [social conduct, ritual] and Fa (法) [law, rule] (Zheng 2010; Qian 2001). The notion of Li promotes the idea that individuals in society should be submerged in the collective and that the relationship between the individual and society should be harmonious and should follow a pre- determined structure. Society is intimately organised by following the principle of a central power taking the role of superior over a collective that in turn takes the role of subordinate.

16 Sometimes in a coercive way. 3.2 Tensions Between Communist and Capitalist Forces in China 79

In this line of thought, it is admitted that the control of society is left to the notion of Fa (the ruler, state, or central power) that takes the lead over its organisation (Chynoweth 2003). The notion of Li creates ‘emotional understanding’ and acceptance from the individual about the larger aims of society (Butterton 1996). Fa (in this case the government led by the CCP) takes the role of central power and must use this power to maintain the overall structure of the system and to create a ‘harmonious society’ (Bell 2008, 14). The state must deliver its promise of stability to society and work towards its harmonious development (Huntington 1968; Laliberté and Lanteigne 2008). This means that there is a ‘mutual accountability’ between the party and the state and between the state and society (Shirk 1993, 83) in a reminiscent fashion to Foucault’s theory of governmentality, which implies that governance must remain accountable to society. This ‘mutual accountability’ is a manifestation of the hybrid nature of the system and it is exemplified by messages that the government seeks to diffuse to society through news, television and films. The key objectives of these messages are to promote stability, Chinese unity and ultimately ‘soft power’ inside and outside of China. The theory of governmentality suggests a paternalistic approach from the government in its role of control and surveillance. There have been claims that this neo-Confucian ideology is to some extent used by the government to strengthen and promote the idea of a Chinese unified identity (Bell 2008; Laliberté and Lanteigne 2008). Neo-Confucianism seems to have been promoted to unite civilian society into revived Chinese traditions and cultural identity. These have also been referred to as ‘hinterland traditions’ (Fewsmith 2001; Cohen 1974, 141–142). This trend is accompanied by a tendency of the government to create unity in China through the fostering of a nationalistic sentiment whilst reinventing and exporting its culture abroad after the void left by the Cultural Revolution (Chen 1997; Cheng 2001, 119; Lam 2003). Scholars have identified this trend as ‘neo- nationalism’ (Fung 2008, 196–197). The Party seeks to rally its masses and the international communities to its way of thinking.17 However, promoting nationalism could easily backfire against the controlling power18 (Burton 2008; Laliberté and Lanteigne 2008; Rosen 2009). The key priority of the government is therefore to deliver on its promise of progress (economic growth) while managing social unity and political stability. The Confucian ideas seem to contribute to create a sense of pride of being Chinese, thereby, reinforce social unity and contribute to maintain stability over 1.35 billion people from different ethnic backgrounds.19 The government’s motivation to maintain unity can further be exemplified by the puzzling single time zone imposed

17 The government has banned many Western-based social media platforms such as Facebook or Twitter in China, nonetheless it makes extensive use of them to promote its ideas worldwide (Heifetz 2015). 18 The CCP could be criticised for not defending the national interests strongly enough, particularly with the recent forecasts of GDP slowdown (Xinhua 2016). 19 Even though a majority of Chinese individuals are from Han ethnicity. 80 3 Political-Economic Transformations in China across China (Beijing Time). This single time zone covers in reality five different time zones from East to West. By naming this single time zone as Beijing, China’s capital city, the government has also emphasised the centrality of its power. Given the large population that constitutes Chinese society and the enormous size of the country, some have argued that a democratic model cannot work in China (Walder 1986). This viewpoint was also expressed by Jackie Chan in 2009, when he claimed that ‘Chinese people need to be controlled’, which sparked immediate and violent criticism, particularly in Hong Kong and Taiwan (Coonan 2009; Foreman 2009). This media intervention was regarded as a clumsy lobbying and propagandist attempt from the government to legitimise its power less than 2 months before the twentieth anniversary of the Tiananmen events. It also showed how the government uses media in its attempt to maintain the stability of the system and foster unity by using its soft power and ‘soft’ propaganda messages, a practice that has become subtler with the successive but incremental economic reforms (Zheng 2010).

3.3 Political-Economic Forces and Development of Local Media: A Relationship of Tight Control, Soft Power, and Surveillance

Despite its attempts to control the developing economy and changing society, the authoritarian regime has encountered certain social challenges that in Confucian terms, could be explained as natural areas of tension between Li and Fa, particularly recently with the rise over cyber-dissidents and the fear of social unrest in 200920 and 2010.21 When it comes to the questions of media control, it is understandable under the concepts of Li and Fa that the government may take free reins to regulate and control the sector. The monitoring and strict rules under which media has been operating since 1949 seem to have loosened with Deng Xiaoping’s economic reforms in 1992, but the state still holds a tight grip on the media sector (Zheng 2010; Keane 2003; Xin 2006). The same macro-mechanisms of development, previously studied when establishing the political-economic context under Sect. 3.1, seem to apply here to the micro-context of the media where the government takes a cautious two-step- forward, one-step-backward approach. In this context, it is important not to study the Chinese political-economic system exclusively from a Western perspective and make the mistake of considering that the party’s legitimacy solely lies in its representation of the interests of social forces when the main purpose of the party is to ensure the entire system’s stability and unity (the entire system includes the ruling party, the state and society). In most

20 2009 marks the 20th anniversary of the Tiananmen incidents. 21 2010: potential influence of the Arab Spring and the Jasmine revolution. 3.3 Political-Economic Forces and Development of Local Media: A Relationship… 81

Western countries, parties represent groups of interest, whereas in China, the Party embodies the central (accepted) power and rules the state that organises society.

3.3.1 Political Control and Coercion

In theory, the CCP should cater centrally for all interest groups, with no distinctions. Some scholars have argued that the political study of developing countries should take into account a separation between the state and society. The former exists to administrate a system and to organise the latter and this is the case in state-centred systems such as China (Johnson 1982; Wade 1990). But this perspective does not take into account the mutual interactions between state and society. Joel Migdal, Athul Kohli and Vivienne Shue have addressed this gap by defining the mutual relationship of transformation between state and society as ‘state-in-society’ and the implications of social forces in political development (Migdal et al. 1994; Migdal 2001). This approach may hold a degree of truth in the context of China; however, this mutual interaction is limited by the central role of the party and the ‘top-down’ organisation of the state over Chinese society. Whether the emergence of potentially disruptive technological and transnational cultural forces is strong enough to challenge this structure and modify the nature of this socio-political equilibrium is a point that will be discussed throughout this book. There is a limit to the amount of power and influence that economic and societal forces can exert over a political system, particularly in the case of patriarchal or authoritative systems like the one that exists in China. This holds true in a system such as the one led by the CCP in China over more than six decades. In effect, the state possesses more ‘coercive power’ (the armed forces and the police) at its disposal than societal forces to retain political power (Yang 2013, 11), even if this is contingent on its ability to deliver on its promises of stability and unity as a central leader. As previously discussed, the government wants to be perceived as tackling problems such as corruption, shadow banking, slowing GDP, ageing population, and environmental issues. Xi Jinping’s controversial anti-corruption campaign which started in 2012 goes to support this strategy, for instance (Lockett 2016). In parallel, the government wants to be seen as defending Chinese interests abroad, which has been the one of the focuses of national branded conglomerates such as Alibaba and Wanda. However, it has recently created a conflicting relationship with the US, particularly since the election of Donald Trump on the 4th of November 2016 (George 2016; Frater 2016). This macro-geopolitical struggle between the US and China is exemplified and exacerbated with the recent integration of the Chinese Yuan (RMB/CNY) to the IMF’s currency basket where China is now the third largest member after the US and the EU (Aitken 2015; International Monetary Fund 2016). This geopolitical soft confrontation involves political, economic and media forces. In that sense, it places soft power in a prominent role – a role that could change the global political-economic balance of power. 82 3 Political-Economic Transformations in China

3.3.2 The Politics of Soft Power

In this book, the term soft power mainly relates to the political agenda of China and its influence abroad by promoting its online brands internationally, while controlling and shaping the media sector domestically. Since the 1989 Tiananmen incidents, the use of media changed and the use of the Party’s power became more adaptive, subtler and less coercive in its methods of control. This did not mean that the level of control has reduced, quite the contrary, different methods were used in which the media took a central place. The media in China evolved from a propaganda apparatus to a PR machine used to rally people to different media consciousness and representations of reality (Lee 2003; Fung 2008). After the Tiananmen Square incident and subsequent WTO entry, the government became increasingly aware of its international representation and the need to diffuse a positive image of China abroad as well as domestically. The sole use of internal propaganda was no longer an adequate tool. Through soft power, directed both inwards and outwards, the government would have more chances to maintain the country’s social harmony and political stability. In this context, in 2004 Jiang Zemin initiated the ‘Three Represents’ theory to promote Chinese culture and identity (Laliberté and Lanteigne 2008, 7; Lanteigne 2008; Xu 2008). This theory was intended for both the CCP’s own cadres and for Chinese citizens, trying to rally them to a single Chinese cultural identity, which disappeared with the Cultural Revolution less than 40 years earlier. ‘Three Represents’ was also directed to other nations through China’s WTO entry as a soft power tool to attempt at restoring China’s image abroad. It was also used as a means to limit the cultural influence of other countries such as the US in China by promoting China’s own cultural characteristics as being strong and resilient (Fung 2008, 193–195). The ‘Three Represents’ theory has also paved the way for more soft power slogans with Hu Jintao’s ‘Harmonious Society’ and Xi Jinping’s ‘Chinese Dream’ or more recently his One Belt, One Road initiative to support the revival of the silk road trade area (Lanteigne 2008, 177; Kurlantzick 2007, 37; Keane 2015, 117; Lee et al. 2009, 211). Hu Jintao’s policies were particularly successful and focused on three key areas of harmonious development: an effort to balance regional economic developments, more attention paid to social harmony and justice, and greater government transparency to reduce corruption (Shambaugh 2008, 157). To that end, the CCP has also looked inward to appear more accountable and to solve the pressing issue of corruption. Xi Jinping has followed on Hu Jintao’s steps and by 2013 it is estimated that 182,000 high and low-ranking officials had been punished as part of the second plan on anti-corruption (2013–2017) (Business Anti-Corruption 2013). The anti-corruption bureau, under the ministry of supervision, was introduced in 2011 during the 11th national congress of the Chinese People’s Political Consultative Conference (CPPCC). This period was particularly challenging for the government, as it was greatly concerned that the Jasmine revolution during the Arab Spring would spread to China and disrupt the CPPCC. 3.3 Political-Economic Forces and Development of Local Media: A Relationship… 83

Therefore, tight measures were taken to both ensure the safety and stability of the country, particularly in Beijing (the capital) and other cities. Police forces, either in uniform or undercover, were deployed 24 h a day in the surrounding areas of Tiananmen Square to make sure that order would prevail. Local and particularly foreign journalists were looked at suspiciously and sometimes physically bullied by local forces while the official message spread in local media was meant to diffuse positive news about the government’s initiatives towards Chinese society (Grammaticas 2011). On the surface, it appeared to be a well designed and crafted PR campaign to diffuse a message of unity and harmony, while underneath the government still worked to keep physical control of the situation. This example shows how political power uses, media diffusion and coercive tools along with economics to maintain the stability of the country. It also sheds some light on how politics, economics and media have become intertwined and connected in contemporary China. These measures contributed to reduce the risk of any major social unrest in the cities during the 20th anniversary of Tiananmen (only 2 years prior to the Arab Spring). The 25th anniversary of Tiananmen in 2014 did not raise any large and uncontrollable street protests in China either. This series of potentially disruptive events were contained rather successfully with the contribution of surveillance and control over the Internet. Quite importantly, after the WTO accession and up to the present day, China has moved away from being essentially an agrarian society to becoming an urban society at a rapid pace (Basu and Bandara 2009; Shi and Yu 2009; Laliberté and Lanteigne 2008). A rural exodus took place in the 1990s and intensified after the WTO accession with up 12–13 million farmers leaving rural areas every year to settle in the cities where prospects seemed to be greater (Lansdowne and Wu 2009). This was part of the government’s strategy to boost the country’s economy and negotiate its transition from an agrarian to an urban society. This strategy provided a flexible workforce to develop the manufacturing industries while increasing exports and attracting FDIs. It also contributed to build a middle-class that could in time become a large domestic market and would benefit the government both in terms of political and economic stability. At the same time as it widened the economic gap between rural and urban areas, the exodus created a stratum of affluent individuals who started to shape a significant internal market. This made China less reliant on trade to foreign markets (exports). This new Chinese urban social stratum was also easier to reach with the developing audio-visual media machine. Traditionally, audiences in the countryside could only be reached through traditional media such as television and quite rarely through the theatre screens. In urban areas, the media windows were far more numerous with television, theatre screens, DVDs, and online and mobile content (accessed after the development of the Internet and 3G infrastructures) to several hundred million Chinese. This paved the way to increased online and mobile surveillance, which is reminiscent of Foucault’s ‘panopticon’ as a mode of governance (Fung 2008, 193; Walters 2012, 69). 84 3 Political-Economic Transformations in China

3.3.3 Internet and Government Control

The Internet has proved to be a difficult media window to control for the government. For instance, since 1998, the central power has tried to regulate and formalise this window, by requiring licenses from online businesses, by building the Great Firewall, or by simply closing down hundreds of websites. It has recently merged two of its key media regulating bodies (SARFT22 and GAPP23) into a central institution (SAPPRFT24) so as to exert a more efficient control and administration over the Internet (People’s Daily 2013).25 As previously mentioned, film and media are still considered strategic and powerful political tools in China and they have also become powerful economic tools. The transformation of the Chinese film industry from a state-funded planned economy to a market-driven economy presents certain challenges. As a result, state intervention and domination over society in regard to the traditional and new forms of media have remained strong, rigid and frequently ‘coercive’ (Zheng 2010, 153). It is not a coincidence that the merged entity of SAPPRFT that regulates film, television, radio, press, publishing, and the Internet operates under the DOP (and since 13th March 2018 it is operating at cabinet-level). The DOP ‘system’ (xitong [ 系统]), headed by high-ranking Party leaders, has been one of the four key founding institutions of the CCP alongside the Central Organization Department, the International Liaison Department and the United Front Work Department (Yang 2013, 153). The party manages and supervises the DOP directly and this shows the strategic and political importance of media in China. The cultural and media sectors are key if the political-economic transition of China is to be conducted on stable grounds. In the case of China, ideology is also important to maintain a strong base of stability. The government must ‘find ways for resolving the tension between ideological principles and pragmatic tactics’ (Yang 2013, 154) since the success or failure of such an authoritarian regime is dictated by its ability to identify and resolve the potential areas of tension between a free market economy and a communist political system and between society and the state. While attempting to resolve these tensions and maintain power, the CCP and the state are making it a priority to develop the cultural and media sectors, while also working towards their convergence with the technological sector (Kerr 2010). Except for SARS, the government led by Hu Jintao and Wen Jiabao had in fact very few crises to handle. It asserted its power when it came to media and the

22 The State Administration of Radio, Film and Television (SARFT): Film Bureau in charge of enforcing quotas and censorship regulations in China. 23 The General Administration of Press and Publications (GAPP), a government body in charge of monitoring publishing, news groups and the Internet. 24 State Administration of Press, Publications, Radio, Film and Television. 25 On 13th March 2018, SAPPRFT was abolished and the film bureau was placed even closer to the government at cabinet-level. This initiative shows that the influence the control of the State over local media may intensify (Frater 2018). 3.3 Political-Economic Forces and Development of Local Media: A Relationship… 85

Internet in order to keep dissent under control through the use of coercive methods (Pan 2005). Generally the Hu-Wen alliance has been aligned with the WTO accession requirements, except in the realm of intellectual property rights, where China still lagged behind until 2010.26 The development of a copyright protection structure in China was largely perceived as an external lobbying force and although it was addressed eventually, the scale of the task required to realign with the WTO was enormous. The timing of this realignment corresponded to a need from the government to introduce such measures in order to develop its own creative industries and cultural agenda. The role of the government therefore has been one of maintaining control both domestically and abroad, sometimes with the use of coercive power to ensure the stability of the system and the harmonious development of society with a sense of continuity. The use of media to diffuse potential crises or enhance the government and China’s soft power inside and outside of the country has become even more visible since the Beijing Olympic Games (Polumbaum 2003, 57–75). This event acted as a global publicity campaign by diffusing a modern, open, and harmonious image of China abroad to attract tourism and further FDIs while reassuring the Chinese population that it was on the path to greater developments. The Beijing Olympics and the Shanghai Expo 2 years later further reinforced the CCP’s legitimacy and its portrayal to society as the driver of these positive changes. For instance, the Chinese film industry progressively undertook deep transformations from a centrally controlled communist system where employees from the local studios were essentially civil servants to a move where the centralised system no longer supported a permanent workforce but hired human resources on a freelance basis. The government opened the market and allowed competition from foreign- funded companies such as US-based Cinerent or more recently Raleigh Studios (Kender and Baker 2008). In 2010, over 50% of employment in film and TV was provided by the private sector (Montgomery 2010). The entire film and TV sector catered as many as 909,000 jobs in 2013 (Oxford Economics 2013). The government accepted this trend towards privatisation as a strategy to develop the media economically while continuing to control it. In doing so, it allowed some level of influence from foreign-based companies, but kept a supervisory role over the entire process in the same way that it had supervised the economic developments of the country. From the observations made in the previous sections, I can assert that China has operated a pragmatic transition from a communist centralised political and economic system to a hybrid system that is still politically communist, but has opened its economy to the private sector. The Chinese private sector has been driving the economy successfully, with an explosive growth since China’s WTO entry, but the CCP and the central government have remained firmly in power. Two key strategies used by the party have been to promote its culture as soft propaganda inside and outside of China and to strengthen its media sector while maintaining a tight grip over it. In the same way China’s political-economic system has gone through deep transformations, the Chinese media and the creative indus-

26 I will develop this aspect in Chap. 4. 86 3 Political-Economic Transformations in China tries microcosm has been subject to rapid and successive changes since the WTO entry. To assess the current evolutionary stage of the media sector in China, I chose to contextualise the key forces that have shaped its recent developments in Chap. 4 as follows.

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As seen in the previous chapter, China’s revived economic interests coincided with its re-opening to the world in the 1970s after Mao’s death and its WTO access in 2001. Since this period, the Chinese creative industries have undertaken rapid and important transformations. The potential economic opportunities associated with access to China consumer market, which is the world’s largest one, have made it a prime commercial target for most international industries and corporations, including the film industry. These changing political-economic dynamics increased transnational cooperation between the Chinese Government, its local economy and international industrial players, particularly US-based groups such as Disney, Lionsgate, Paramount, DreamWorks or Warner Bros. The negotiation of such transnational exchanges with China has coincided with a review of its regulatory landscape, notably in the field of copyrights and Intellectual Property Rights (IPR). In parallel, significant technological developments have disrupted the way IPR functions in China and abroad; it added to the political and economic pressures in a climate of fast mutations. The intervention of the Chinese Government in influencing and shaping these changes domestically has been significant. It is, therefore important to study the complex mechanisms and the evolution of these mutations if we are to understand how films circulate and are consumed in China today.

4.1 Introduction

The Chinese online media landscape has mutated at great speed over the past 17 years largely due to technological developments, changes in regard to IP protection and the redefinition of the concept of copyright. The importance of the Chinese Government in driving these domestic transformations is paramount. These changes originated in the West and the government has progressively and carefully implemented them in

© Springer Nature Switzerland AG 2019 91 P. Poujol, Online Film Production in China Using Blockchain and Smart Contracts, International Series on Computer Entertainment and Media Technology, https://doi.org/10.1007/978-3-030-02468-0_4 92 4 Mapping Out the Chinese Media Landscape the PRC. In the process, these changes have also created significant areas of tensions domestically as well as globally, mostly between governments, media industries, and audiences. Tensions have also developed between the new uses of digital technology to watch films online and the application of existing copyrights. The resulting agendas between government, film industries, audiences, technology, and IPRs have been intertwined. In order to contextualise these recent changes which took place since China’s WTO entry until the present date and to map-out the on-going complex transformations, I use a framework inspired by Peterson’s ‘Production of Culture Perspective’ (Peterson 1982; Peterson and Anand 2004). This framework is quite similar to Lemaire’s PREST model (analysis of Political, Regulatory, Economic, Societal, and Technological trends) (Lemaire and Ruffini 1993; Lemaire 2000, 2013). Both models provide a solid structure to study contextual trends in fast- transformative environments. The frameworks created by Peterson and Lemaire are based on the categorisation of key systemic forces. They help break down macro- systems into their key driving forces. This process brings clarity to the interpretation of dynamics and trends that are usually quite complex and intertwined. These two compatible models also allow for a change in perspective and an in-depth study from a macro political-economic level into individual and micro phenomena such as career and employment or organisational structure. I make use of a combination of models from Peterson and Lemaire to analyse the key forces at play in the recent changes of the media sector and the creative industries in China. I choose to integrate an additional element of a political dimension (part of the PREST model) to Peterson’s framework, as Peterson did not use this dimension in his cultural perspective, as explained in Chap. 3, the political dimension is paramount in China and mirrors a system with different Chinese characteristics.1 Following Peterson’s and Lemaire’s combined frameworks, I describe the evolution of the online media sector in China across seven factors over the next sections and chapters: These factors comprise (1) technological forces, (2) economic and industrial forces, (3) copyright policies and protection (legal and regulatory forces), (4) domestic political forces, (5) organisational forces, (6) career and employment (labour) forces, and (7) societal and market forces. In this chapter, I will focus my analysis on the first four forces (with a brief mention of macro-market forces) that relate to a macro perspective of the Chinese creative industries landscape. Micro-forces such as organisational, career, and employment, as well as the societal and market forces will be explored in Chaps. 5, 6, 7, 8, and 9.2

1 To write this chapter, I performed desk research and collected data from trade journals and other secondary sources such as academic material (papers, books and theses). I kept the book current in regard to this contextual chapter (in the same way I did for Chap. 3 and the rest of this study), as I am aware that I am studying a fast-moving area of research involving many complex interactions between creative talents, the media industry, SAPPRFT, as well as economic, legal and technological trends. The triangulation of secondary with primary sources such as first-hand interviews of experts was a critical part of this process. 2 As previously explained in Chap. 2, I add a nuance to the societal and market dimensions of Peterson’s and Lemaire’s models in Chaps. 8 and 9. This nuance operates at a cellular level and was 4.2 Technological Developments 93

4.2 Technological Developments

The technological developments that took place over the past 17 years in China and globally have facilitated the explosive growth of online film-viewing both formally and informally: it is estimated that online film piracy started in China in 2000 with e-Donkey as P2P file sharing website shortly followed by BT (BitTorrent) China, Tudou and Youku in 2003, 2005 and 2006, respectively (Cunningham and Silver 2012, 44). By 2008, it is estimated that over 300 sites were screening illegal video content online. Despite the Internet hype and many digital promises formulated over the past 20 years, Cunningham and Silver remind us that the legitimate distribution of films online is still globally marginal (Cunningham and Silver 2012, 33). However, just 1 year later, the same authors documented the rise and the growing importance of the online world in distributing films through companies such as Amazon, Apple, Hulu, or Netflix (Cunningham and Silver 2013). In addition, the Chinese context may bring a different perspective, partly because of the volumes of domestic Internet users that is second to no other nation and particular features of the Chinese market. When referring to online platforms, I will essentially focus on content delivered and screened on the Internet and web related platforms. This precludes such platforms as VOD on cable, satellite, Internet Protocol Television (IPTV), pirate street outlets or film postal services. Instead, I will focus my attention on some pirate outlets and mostly on legitimate online circulation platforms such as Alibaba’s YT, Baidu’s iQiyi, Tencent Video, or LeTV.3 I will also look briefly at the evolution of theatrical screens and TV. Following Ramon Lobato (Lobato 2009, 2010, 2012), I would like to define and distinguish between ‘formal’ and ‘informal’ practices and economies. The realm of the ‘formal’ belongs to established and traditional distribution models that are legitimate and sanctioned by law. In contrast, the realm of the ‘informal’ also defined as ‘shadow economies’ by Lobato refers to illegal practices such as piracy (via illegal download or peer-to-peer (P2P)) or other informal practices which may not be directly illegal but do not belong to the traditional formal industries. These informal activities include Internet communities exchanging files in a P2P environment, black market activities, or any practices that are in the ‘grey area’ (Cunningham and Silver 2012, 33). The International Intellectual Property Alliance’s (IIPA) most recent estimates suggest that losses through general piracy activities in China totalled US$107 billion in 2012 for the US alone (International Intellectual Property Alliance 2011). Like the MPAA, the IIPA represents the interests of the Western film industries, and mostly of Hollywood. In a recent report from Oxford Economics, the total estimated described by Philip Lee as passion factor (Lee 2005). The passion factor characterises the motivations of certain talent to work in the creative industries as much as their affective relationship with the filmmaking process. Because audiences (the market) have become Producers of content, some elements relative to labour, career and employment forces will also appear in Chap. 9. 3 Most of them used to be connected to the circulation of pirated content, but as I will describe online and offline piracy have lost ground and the sector has been formalised in China over the past 10 years. 94 4 Mapping Out the Chinese Media Landscape legitimate output of the film and TV industry in 2012 was a direct contribution of US$15.5 billion to the Chinese economy (Frater 2013; Oxford Economics 2013). Up to this point, the illegal (informal) media economic activities had been prevalent compared to legal (formal) media activities (International Intellectual Property Alliance 2011; Executive Office of the President of the United States and Office of the United States Trade Representative 2009). Piracy is not a marginal phenomenon but as seen in Chap. 2, it follows an economic logic that is less visible than the legal economy of film. Therefore, when studying the film industry and audiences’ perspectives in China we would only get a superficial understanding if we solely focused on legitimate practices. China had a proportion of film piracy activity in the territory consistently around 90% from 2001 to 2011 (Chmielewski 2008; International Intellectual Property Alliance 2011). These informal activities have been reduced with the controlled use of platforms such as YT or iQiyi, for example, the regular shutdown of online pirate platforms, and the government’s declaration of VPN protocols as illegal in 2017. Whereas the IIPA’s latest records show that there is still room for improvement in tackling illegal content on online platforms as well as set-top boxes (STPs) in Asia and illegal publishing, IIPA has generally praised China for its efforts in curb- ing down piracy over the past 5 years.4 Hence, it is important to consider pirate practices in conjunction with legal distribution if we are to understand the circulation of films and their consumption by online audiences in China. I will therefore address both means of circulation in the following chapters.

4.2.1 Technological Innovation and Fast Adoption

Before 2005 when broadband services appeared in China and the rest of the world, traditional film distribution and circulation models such as Hollywood’s or the state-owned traditional industries were not really under threat, unlike music or publishing sectors. These demanded less bandwidth for content to be downloaded and they were the first ones affected by technological developments. Extended downloading times of films were deterring a large majority of users and once the films were downloaded, the hardware offered very poor quality entertainment with small screens in lower resolution (Dhillon 2010). In addition, there was no real direct convergence between computers and television sets, except for a few Internet savvy users. There was also very little choice in terms of the content to download. The development of broadband and storage capacity in China and abroad, along with the reduction in the price of newly commercialised hardware, facilitated both the legal and pirate film-viewing activities. The creation of software facilitated convergence, by allowing the conversion of DVD content into a non-physical format, for example. This was one of the required conditions that facilitated the emergence of Peer-to-Peer (P2P) networks and the subsequent rise of pirate activity on the Internet (Dhillon 2010).

4 2016 Special 301: China (PRC) Issued 5th of February 2016, Page 14: www.iipa.com 4.2 Technological Developments 95

The developments of broadband technology and its fast penetration have primarily driven the expansion of online video platforms and the circulation of films online (Gubbins 2012). With over 700 million Internet users in 2016, compared to 564 million users at the end of 2012 (Xinhua 2013), China had the highest number of Internet and broadband users in the world. The broadband trends have closely followed the traditional Internet expansion. For instance, in June 2009, China had 338 million Internet users and already 320 million broadband users (Montgomery 2010). As a side note, it is of interest to comment that these figures tend to vary substan- tially depending on the source. For instance, trade reports and Western newsgroups have a tendency to display more conservative figures than the Chinese Government, which illustrates the importance of broadband networks and their penetration in today’s globally interconnected societies. One could argue that these figures are also used as a political ploy to describe the level of advancement between various nations and to challenge the divide between developed and emerging economies. Finally, these figures can also act as commercial ploys when a nation, such as China, seeks to attract foreign direct investments (FDI). Keane addressed the use of terms such as ‘innovation’ and ‘creative industries’ by Chinese authorities to attract capital and jobs to China as well as propagate soft power (Keane 2013a, b, 2015).

4.2.2 A Distribution Structure with Chinese Characteristics

In terms of the environment in which the film industries operate, these technological developments as described above have challenged and undermined the rigid succession of distribution window as originally established in the West. As seen in Chap. 2, the Hollywood system dictated a regimented succession of distribution window releases and associated rights with the theatrical window coming first before moving to the next distribution window (video) and television (Iordanova 2012). This model was created to maximise the profits of a particular film (IP) successively across all the circulations channels. Each circulation channel had a definite window of exclusivity during which profits had to be maximised and supported by promotion and advertising. Internet circulation disrupted this system and the exclusive timeline of the theatrical window diminished to 3 and then 2 months before a ‘day and date’ strategy appeared (theatrical and online video had the same release date across the world) (Silver and Alpert 2003). This model was never formally implemented in China where theatrical releases were supposed to follow the same succession, but were hardly enforced that gave more flexibility and priority to the television and video distribution windows and eventually to the Internet window. This flexible system has allowed the Internet to position itself prominently in the film distribution chain. This was also supported by a fast growing online audience, which reached close to 500 million online film viewers in 2013 (Xinhua 2013) and over 700 million in 2016 (Zheng 2017). In comparison, online movie viewing was5 still a rather small market in the US with 70.7 million viewers in 2013 and 108.2 million viewers in 2016 (Statista 2018).

5 Online film distribution still is an emergent market (Cunningham and Silver 2012). 96 4 Mapping Out the Chinese Media Landscape

It is thought that this situation is not just due to the smaller size of the US market but that it has been driven by Hollywood studios to protect their revenues and the theatrical window (Currah 2006). The limited progress of online economic models in the West cannot solely be attributed to piracy, it is partly due to the resilience of the analogue and traditional models which continues to provide a large proportion of the film industry’s revenues, and therefore are protected by the rights holders. Box office (BO) receipts have been maintained globally and although DVD sales have been decreasing, the application of lower prices, the introduction of high definition quality home viewing with Blu-ray and the permanence of the format through the hardware and audiences’ habits have supported the physical formats (Gubbins 2012).

4.2.3 The Resilience of Television

Television has also demonstrated a strong resilience in the US, Europe and China with the creation of exclusive proprietary content on channels such as HBO, Canal+, or Zhejiang TV. The difficulty in deriving revenues from online formal activities that could replace traditional platforms can be associated with the resilience of these platforms as well as the ‘competition for time’ from other forms of entertainment such as cinema-going, television, eBooks, physical books, gaming, or social networking (Gubbins 2012). However, by resisting the online film-viewing dynamics and by fail- ing to adapt to these new conditions, traditional distributors are now starting to lose control over digital changes and their potential opportunities (Iordanova 2012). From 2010, in an attempt to cope with the rapid changes occurring in the online circulation of films, Hollywood studios decided to reduce the theatrical window to 2 months before releasing their films to premium Video-on-Demand (VoD) (Garranhan 2011). The size of the formal online distribution was still economically small until 2010–12 with an estimated revenue of US$365 million (2012) in North America, and even when the studios tried to harness this new window, they met with failures6 (Cunningham and Silver 2012, 49). However, by 2017 online platforms have now reached US$2.64 billion revenues for a player like Netflix alone (Balakrishnan 2017).

4.2.4 Internet as Disruptor and Re-appropriator

Unlike the US or Europe, the Chinese system did not historically develop a strong distribution structure. While in the West, distribution activity was always controlled by studios, mini-majors and a plethora of intermediaries, two single state-owned players controlled the Chinese system and foreign film acquisition: China Film Group (CFG) and Huaxia. Effectively, Huaxia repurchases foreign content from CFG. As a state-owned entity, CCTV is also at the centre of acquisition for TV

6 For more details, please refer to the case of Movielink in Appendix 2. 4.2 Technological Developments 97 distribution. Recently, these rules seem to have been officially relaxed and the number of players has increased with companies driven by regional or private interests such as Shanghai Media Group, Beijing Enlight Pictures, Wanda Studios, Hi-Show Entertainment, Huayi Brothers, Bona, Hubei Studios or Zhejiang TV, to name just a few. Nonetheless, this new media landscape has a limited bargaining power compared to the situation in the US where distributors, intermediaries and lobby groups have had a significant role in resisting the ‘disintermediation’ trend (Iordanova 2012) that occurred with the circulation of films on the Internet. Internet as a viewing platform, whether it is legal or pirate, has brought the producers of content and the audiences closer to each other and it has challenged the role of traditional distributors whose business model was largely based on the physical distribution of films (Cunningham and Silver2012 ). From 2009, physical formats declined sharply with the popularity of online platforms. Even pirate physical outlets which were operating without the costly element of copyright or licensing have dramatically reduced their operations (Lobato 2012). State intervention has also largely contributed to the shutdown of a number of outlets. While in the West (early 2000s), technological developments strongly affected intermediaries and distributors, in China it created new activities connected to growth associated with the circulation of films in theatres, television and online. Examples are numerous: YT, Tencent Video, and iQiYi are thriving online film- viewing companies that did not exist 10 years ago. In 2011, as The Wall Street Journal informed that the DVD, gaming and video rental industries were some of the top dying businesses (Izzo 2011), new businesses such as Netflix emerged in the West as a result of this paradigm shift (Hastings 2011). These developments have been even more striking in China where the domestic energy was focused to develop and use the new circulation models rather than resisting the technological changes. Key online players in China were ‘invariably owned by videogame companies or search engines and benefited from cross-border investments from the likes of Hulu or from venture capital firms’; other examples include Ku6, LeTV, iQiYi (owned by Baidu), Tudou, Voole and Youku (Shackleton 2011a). These companies also benefited from large user bases originally built from pirate or social network activities, which could then be relatively easily transformed into loyal film audiences. Since the publication of these findings in 2011, Youku and Tudou merged in 2012 and Alibaba acquired this merged group in 2016, while Tencent acquired iQiYi in 2013; this shows the rapid pace at which these technological and organisational changes have been occurring. Aside from the platformisation of China, the country has undertaken a vast campaign of technological developments to rival US based Silicon Valley (Boudreau 2012). The developments of AI and big data analysis have been used to remove controversial content, to tackle piracy, and to observe audiences’ tastes in order to adapt the content to fast changing millennial profiles.7 This trend is part of a concept recently coined ‘Internet Plus’ by Deloitte (Chung and Hou 2016; Deloitte 2017). Despite their recent implementation, the role of cutting-edge technologies such as blockchain and smart contracts can potentially support this trend.

7 These areas will be developed in the following chapters: Chaps. 5, 7, 8, and 9. 98 4 Mapping Out the Chinese Media Landscape

4.3 Economic and Industrial Transformations

Film industry revenues generated in China were mainly driven by the theatrical distribution window that represented close to 90% of the total film distribution revenues in 2007 and 2008, despite the concentration of the online film-viewing sector, the explosive growth of audiences and increasing speed of broadband connections. The remaining 10% were shared between television, video and online sales (Kender and Baker 2008, 2009). With the growing importance of online revenues and ancillary IP sales, these revenues are now estimated to be around 68% (Chung and Hou 2016). The proportion of revenues between the theatrical and digital windows is changing with significant advertising revenues supporting online and the mobile film-viewing sectors.

4.3.1 Economic Explosion Across All Circulation Windows

Both online and theatrical distribution windows have been growing steadily over the past 5 years. BO receipts in China have also proven to be explosive with the fast expansion of digital screens from slightly over 4000 screens in 2008–9 to 18,195 in 2013 (Ma 2014a, b; Kender and Baker 2009). This trend intensified to over 41,000 screens in 2016 (Schwankert 2016; Lin 2016). As a result, BO receipts have increased by over 400% in 5 years from RMB4.34 billion (US$0.64 billion) in 2008 to RMB21.8 billion (US$3.6 billion) in 2013 to RMB29 billion (US$4.8 billion) in 2014 and set to overtake the US by 2020 (Kender and Baker 2009; Ma 2014a; Shaffer 2015; Chung and Hou 2016). Alongside the development of online platforms, this exceptional theatrical growth was accompanied by strong technological developments. China was able to achieve significant economies of scale thanks to the roll out of its digital screens. In the past, it is estimated that event film releases required 500 prints on average. This was another advantage for China in the re-development of its cinema infrastructure; it was immediately able to benefit from cost savings of not having to produce and transport large numbers of 35 mm prints over long distances. In parallel, the price of tickets has risen sharply from 40–45 RMB to 180 RMB in Beijing.8 It is estimated that the price of tickets increased 268% between 2009 and 2014 (Follows 2015). This trend has been accompanied by a strong development of screening technologies such as 3D and Imax that in turn justified such an increase in price and allowed faster return on investment (ROI) for investors (Faughnder and Wang 2016; Robehmed 2016).

8 However, sites such as Taobao Movie or Damai offer significant discounts to RMB45 that allow for a reduction of box office manipulations and a better management of the film screens and latest releases. 4.3 Economic and Industrial Transformations 99

4.3.2 Future of the Chinese Theatrical Window

Resilience of the theatrical window in China, particularly for local films, can also be explained by the quota system. The Chinese Government has been maintaining a tight control over its quotas on foreign films, mostly Hollywood content, which it has since opened from 20 to 34 films in 2013. Nonetheless, the domestic market share increased from 48.5% in 2012 to 58.7% in 2013 and has been stationary and maintained between 40% and 60% over the past 10 years (Cunningham and Silver 2012; Ma 2014a). Domestic productions at the Chinese BO sky-rocketed almost tenfold and increased from RMB1.96 billion (US$268 million) in 2007 to RMB12.8 billion (US$2.11 billion). This demonstrates how local government efforts in protecting and nurturing its creative industries were met with success. Hollywood’s attempts to lobby for the implementation of block-booking strategies like in most other countries are mitigated, as local films are getting greater commercial success domestically than US films at the Chinese box office. China seems to have managed to challenge Hollywood’s saturation in releasing strategies and developed its own production capacity and market. In 2007, 402 films were produced in China compared to 745 in 2012 (Lin 2013). However, the official figures provided by the government sometimes have to be interpreted with caution. To some extent, BO receipts have been artificially maintained through quotas and occasionally through theatrical release blackouts, for example, during the 2008 Beijing Olympics and seasonally over the Chinese New Year with bans on foreign films over these periods.

4.3.3 The Issue of Local Film Releases and Local Film Productions

In regard to domestic production outputs, only a small percentage of the films produced are actually released in China, typically 20–30 films make most of the BO receipts. Only 315 of the 745 films produced in 2012 (42%) were actually released theatrically (Lin 2013). This was down to the lesser number of screens at the time, the lack of independent theatre circuits and in a large part, to the lesser quality of some of these films (Lin2013 ). Experts estimate that 80–90% of the local films released theatrically were not profitable (Shaffer2015 ). Until the release of Wolf Warrior II (Wu 2017) that grossed over US$870 million,9 almost six times Titanic 3D’s BO receipts (Cain 2013), there had not been any major recent contenders to Hollywood films at the box office. While some blame censorship as a key reason for this issue, it reflects the weaknesses of an industry which commercially developed too fast without taking the time to create stable foundations like building a solid ecosystem and training quality talents to sustain it.

9 http://www.boxofficemojo.com/movies/?id=wolfwarrior2.htm 100 4 Mapping Out the Chinese Media Landscape

Such strategies are designed by the government to promote local interests and to protect key players of its creative industry as well as to give its cinemagoers a sense of pride and identity. But these initiatives have not been federated consistently within the traditional industries. BO and statistics manipulation was left as a key weapon to influence the perception of the local creative industries’ strength. Online and television may have done more for local creative content than the theatrical window. China established the China Film Foundation (CFF) in 1989, as a way to support the film industry’s developments. It was originally supposed to be a fund to help emerging filmmakers. This fund is primarily financed by a percentage of the box office receipts, but it has been argued that the CFF has not been well managed and that only a few directors in the know have been able to avail from it. Audiences are aware of this and they prefer to go and watch commercial films (since the price of a cinema ticket is the same) (Fang 2014). Therefore, it is currently very difficult for young directors to emerge in the market. The only other options for filmmakers are banks or private funding, but these would only fund bankable names. Emerging filmmakers borrow money from friends, but as Francesca Fang explains, this means that their film will be considered ‘underground’ and may not be released in theatres. A few online companies such as YT, Tencent or LeTV have tried to identify and harness emerging talents, but their contributions have mostly resulted in creative outputs such as advertising or TV dramas. Yulebao, on the other hand, has developed a crowdfunding platform but for well-established productions (I call it ‘VIP crowdfunding’). With a growing online population of approximately 700 million individuals, there is currently a missing link for filmmakers to be able to engage in collective creations through a participatory platform such as crowdfunding/crowdsourcing. As a result and beyond the BO figures, online film-viewing has followed a different trend: it was estimated that US mainstream films represented 90% of the event film content that circulated legally and illegally on the Internet in 2012 (Cunningham and Silver 2012). In that sense, it seems that the theatrical and the online windows have complementarities and may even contribute together to grow the overall film sector in China.

4.3.4 Technology and Theatrical Economies of Scale

Contrary to the US or Europe, the Chinese Government can support and decide to plan the roll out of industry-wide measures at national level and it may happen very fast. Lower audience expectations allow them not to be too sensitive about possible obsolescence of 2k for 4k (high resolution) projections. Moreover, like India (1.3k projection system), they do not feel the urge to comply with international format recommendations driven mainly by US Majors. China also has its own film fund based on similar models as France and Korea that allows it to support its film production and distribution: The Chinese Government gets revenues based on the theatrical tax 10–15% and investors on box office receipts growth by 20–30% on 4.3 Economic and Industrial Transformations 101 average per year. The digital roll out has been possible thanks to the Chinese Government support whose motivation is to provide access to film to the entire population, but also to cut costs. While China already had lower distribution costs than Europe – in Mainland China and Hong Kong it was traditionally 10 times lower than Europe (Miller et al. 2001, 297–98)10 – economies of scale for the local film industry in converting theatres immediately to digital are significant: in 2009 each blockbuster film in China generated 500 35 mm prints.11 This means that if China operated in digital screens exclusively over 13.5 million Euros could be saved per blockbuster film.12 With the increase in number of screens planned by the Chinese Government, economies of scale have been phenomenal.

4.3.5 Chinese Market and Foreign Presence

One of the reasons why the Chinese Government does not give in to the MPAA is that apart from the cultural importance of saving face, the reality is that the Chinese film industry does not need the US or Europe to sustain itself, as its domestic market is theoretically twice the size of Europe and US combined. China also has access to 60 million expatriated Chinese around the world in places such as Canada, US or Europe; a middle class expatriated population roughly equivalent to the size of a country like Britain or France, sharing the same cultural and linguistic roots (Curtin 2007, 1). But China may not be able to reach that target audience so conveniently through theatre exhibition and it may rely on online platforms instead. The penetration of Chinese films in the US is quite weak. A US driven protectionist and more commercial form of censorship is also taking place in the West, led and strongly influenced by the studios that decide what should be screened on the theatrical platforms. Studios indirectly control the exhibitors through the pressure of block-booking.13 In this case, the adoption of Internet as a viewing platform allows Chinese films to be watched in America or anywhere in the world in the same way it allows US and other foreign films to be viewed in China. Beyond the ‘push’ attempt of local and foreign film industries are the ‘pull’ and ‘push’ strategies of a government to retain its control over media: political stability, commercial (bargaining power) and cultural control. Even though China has implemented the deployment of 3G networks, broadband networks, cable TV and over

10 In 2001, for, instance the distribution of a 6–12 million budget film cost 350,000–1 million US dollar to distribute in a European country such as France or Germany, whereas the same movie would cost 40,000–100,000 US Dollar in Hong Kong and 60,000–150,000 US Dollar in Mainland China (Miller et al. 2005, 297–98). 11 Belinda Tang, Golden Harvest, April 2009. 12 One 35 mm print = 27,000 Euros (300 Euros eq. per min * 90 min). 13 Mr. Peter Walshe, Head Programmer, IFI, December 2007. Constantin Dakaskis, Head of the Audiovisual Department of the European Commission, February 2008. 102 4 Mapping Out the Chinese Media Landscape

20,000 digital screens at a rapid pace within 5 years, every step taken was carefully calculated and planned with political and social stability as an overall priority. The Chinese Government is trying to prevent a situation similar to Europe where from 1996 close to 70% of the films theatrically released were of US origin (Miller et al. 2005, 12–25). The Chinese Government also wishes to achieve job preservation and creation, a transition from communism to controlled capitalism (socialism with Chinese characteristics) through nationalism, and political, economic and social stability – this type of socio-political stability can be supported by affordable non- politically disruptive entertainment, which keeps people distracted and entertained.

4.3.6 Monetising IP Across All Platforms

In order to maximize revenues in this political-economic context, both traditional and online creative industries have developed ‘thick tail’ and ‘IP franchise’ strategies. These strategies aim to maximise a given IP and derive it into more than just a film to tap into wider audiences across various viewing and entertainment contexts (mobile and sedentary) through music, games, books, and merchandising (Chung and Hou 2016, 58–9). The mobile distribution window may also bring another perspective in regard to the monetisation of online films. The array of mobile devices including tablets and smartphones has emerged even more recently after the 3G networks were successfully implemented in China. This window was met with an explosive growth over the past 5 years from 547 million mobile phone users in 2007 to 1.11 billion users at the end of 2012 (Kender and Baker 2009; Xinhua 2013). These seemingly colossal figures need to be put in perspective since only 420 million Chinese mobile phone users were able to access the Internet with their mobile phones and 232.8 million were actually connected to a 3G network at the end of 2012. The 3G subscriptions had reached 300 million users in 2013 and increased to 700 million on 4G in 2016 (Zheng 2017; CIW Team 2016). While users can connect to online platforms via a Wi-Fi server in public areas, in order to access to a 4G network it is essential to use a smartphone. Despite Hollywood’s investments in digital technologies and its tactics to harness new film-viewing platforms and the potentiality of the Internet, the changes were mostly disruptive at home, like it was with the music industry, allowing new entrants and independent or smaller organisations to avail from new opportunities (Silver and Alpert 2003). As far as Hollywood is concerned, it seems that China may present an opportunity to showcase and circulate its productions while deriving non-negligible revenues from that market. This could explain the appetite for US fund management companies and investors to finance platforms such as Alibaba, YT, Baidu, Sohu or Sina; and their lobbying efforts to implement a fundamental element in China, a vital element that is at the core of their business model: Intellectual Property Rights (IPR). 4.4 Legal Transformations: Copyrights and China 103

4.4 Legal Transformations: Copyrights and China

According to Franklin, tensions accompanied recent technological developments, that is ‘digital disruption is understood as the conflict caused by the juxtaposition of exponential rates of change in technology on the one hand and incremental rates of change in society, economics, politics and law on the other’ (Franklin 2012, 101– 102). Technological changes cannot be solely responsible for the deep mutations of the media sector in China. The Chinese Government as well as local audiences contributed to these changes. The government took a significant role in responding to these digital disruptions and tried to harness the emergence of a new media environment. As much as technological changes have driven the online film-viewing sector, the government has kept a solid control over their pace and their trajectory. A similar trend can be observed with copyrights.

4.4.1 Online Platforms as Disruptors of Existing Legal Systems

Similar to the West, the recent technological developments (explored in the earlier section) have driven new practices regarding copyrights in China. Traditionally, distribution rights were bundled together by territory and sold on several platforms and distribution windows (Finney 2010). Nowadays, producers tend to negotiate only certain territories and partial rights to distributors whereas 10 years ago they used to sell all their rights across platforms (Iordanova 2012). These practices have generated more flows of content from the US to China, a territory that was rarely considered and sold to until the early 2000s. In terms of online film-viewing platforms, these practices can be challenging when negotiating and dealing with digital rights, as films can be virtually exploited simultaneously on transnational platforms such as a website and viewed from any territory. To solve this issue, digital solutions such as geo-blocking can help online platforms to respect the jurisdictions of the content that they have acquired (Franklin 2012). Geo-blocking is a technology currently used by Western and Chinese players such as Hulu, Netflix or YT to keep the territo- rial integrity of these rights. Despite attempts from traditional film industries to respond and formalise both digital platforms and circulation of media in emerging economies, a core issue at the heart of the copyrights and IPR protection debate lies in the definition itself of these rights in a fast changing media landscape. Gubbins identifies two dominant but conflicting discourses: One that predicts that current digital changes are nothing more than a replacement of old technologies by new ones, which in time will generate the same revenues for the film industry with digital platforms as it has with physical formats (Gubbins 2012). This discourse tends to defend the idea that the traditional models should remain in place and simply integrate the new technologies and audiences’ behaviours. 104 4 Mapping Out the Chinese Media Landscape

The second discourse claims that the digital changes should democratise the way content is made available, the way audiences make their choice and access this content. Tim Berners-Lee, one of the early founders of the Internet, even goes further as to declare that to be connected to the Web is becoming a human right (Cellan-Jones 2011). This second line of thought implies that digital changes should promote the exchange of content and make it available to all. Theoretically, the second discourse should be in line with the communist principles and ideology that which are based on the equal division of resources and capital. However, the recent changes undertaken by China tend to challenge this idea, as they seem to promote the first line of thought elicited by Gubbins. In order to gain further knowledge about the evolution of copyrights and IPR in China, it is necessary to look first at how the concept of copyright was introduced in China and to measure the implications of such a change.

4.4.2 Concept of IP in China: Cultural Conflict

From 1949, after the revolution and the proclamation of the People’s Republic of China (and even more so after the Cultural Revolution in 1966), the party-driven communist ideology promoted the idea of common property. The concept of private property was subversive and prohibited by the Communist Party. Films and any other media were originally regarded and used by Mao Zedong as strong ideological tools that would promote the spirit and values of the revolution (Xin 2003). Films, mostly sympathetic to the party, were made available to the community in theatres and later on television, more often than none, for free (Berry and Farquhar 2006). The concept of paid content on television or in theatres is quite new for Chinese audiences, which explains to some extent the success and popularity of lower priced pirate DVDs and the circulation of free content online. It also provides some understanding about how the traditional model of film circulation and its very purpose in China conflicts with the ideology and the use of copyrights in the West (Pang 2012). The idea that an individual or an organisation could gain a set of exclusive right over creative products conflicts with the concept of common property (Montgomery 2010; Priest 2006; Qu 2002).

4.4.3 Global Lobbying Efforts

From the end of the 1990s and particularly after China’s WTO entry in 2001, Western creative industries pushed the Western IPR agenda to the forefront. Hollywood film industry mostly led this initiative in regard to audio-visual content. To do so, major studios used their representative associations, such as the MPAA or the IIPA to lobby and promote their agenda with transnational organisations such as the WTO and the World Intellectual Property Organization (WIPO). It is argued that as a result of these lobbying efforts, the Chinese Government was subject to external global pressures and was prompted to implement a legal and an enforcement model that mirrored 4.4 Legal Transformations: Copyrights and China 105

Western IPR structure (Dimitrov 2009). To reinforce this point, Boyle establishes that since the creation of WIPO in 1970, the ‘breadth, scope and terms of global IP protection have expanded steadily’ mostly in favour of the rights holders (Boyle 2004). In 2002, just 1 year after China’s WTO entry, the government passed new regulations to allow private funding in local productions. The process has been carefully monitored with all the film productions required to pass the Film Bureau (SARFT) accreditation, that is to obtain a license from their development at the script level to their release on various distribution windows (Kender and Baker 2008). Following the inflow of foreign funding into production companies such as Huayi Brothers or Poly-Bona, Chinese film industry progressively undertook deep transformations from a government communist system where employees from the local studios were essentially civil servants to a move in 2007 where the centralised system no longer supported a permanent workforce but hired human resources on a freelance basis. The government allowed competition from non-Mainland funded companies such as Hong Kong based Cinerent (Kender and Baker 2008). The opening of China’s economy to certain capitalist concepts and practices worked in favour of IP protection in China. However, while Boyle advocates that IP and copyright protection are ‘crucial to the existence of an economic contribution made by creative and cultural sectors of the economy’ (Boyle 2004), Montgomery argues that this point of view belongs to the copyright rhetoric (Montgomery 2010). In fact, the rising cost of content and the perspective of decreasing revenues have been key threats to the online video sector in China. These increasing costs have largely been attributed to the evolution of the status of IPR and copyrights – they are traditionally key to the reward system of the creative sector but eventually turned films into commodities or, as specifically termed in Hollywood, properties (Finney 2010). Today, the concepts of copyright and piracy are being redefined in China and the rest of the world. The inflexible stance taken by the studios that have been trying to impose their view to emerging economies are increasingly challenged (Iordanova 2012). Antagonist views or pirate activities in societies like China are not necessarily the product of counter-cultural and anti-corporate trends, but they may simply illustrate a survival strategy. Pirate activities are tolerated, at least as a temporary measure by local governments in emerging economies such as China since they create jobs, and thereby a form of social stability (Mertha 2007). To that extent, Lobato (2012) complicates Gubbins’ bilateral discourse by redefining the complex manifestations of piracy across six facets. In the context of China, four other facets should complement the debates frequently inhabited by ‘anti-piracy’ and ‘pro-piracy’ (or ‘anti-anti-piracy’) stances. Many studies financed by Hollywood studios and associated institutions such as the MPAA have displayed unrealistic figures in respect to the actual cost of piracy to the copyright owners in the West and above all in emerging economies such as China. For instance, Cunningham and Silver mention the following: Many of these studies have been based on questionable extrapolations of consumer behaviour and assumptions that download copies can be directly translated into foregone sales. (Cunningham and Silver 2012, 59) 106 4 Mapping Out the Chinese Media Landscape

4.4.4 IP Redefinition in a Digital Context

Studios and their international lobbying groups such as the MPAA have used claims to resist digital change and maintain their dominance over the distribution windows until they can monetise the online platforms. They employed the same argument to exert pressure on emerging economies and to monetise the consumption of a growing middle-class audience. Unfortunately, several experiments in regard to major studios attempting to set up their own online film-viewing platforms (such as Movielink) or day-and-date simultaneous releasing strategies have not been met with great success until the arrival of Netflix and Amazon’s recent models.14 Some of the earlier experiments such as Movielink have highlighted the informal practices of large Hollywood groups when it suits their economic interests. Hollywood studios have made other attempts to react to the market differences in emerging economies, including China, by lowering the prices of their content. Warner Bros, for instance, was the first studio to lower the price of their DVDs in China (Wang 2010). Anderson has discussed this method and suggests that the price of content should be reassessed since it has, to date, been mainly driven by developed economies and cannot be applied to emerging economies such as China (Anderson 2009a, b). While looking at online distribution, it is important to analyse both the formal as well as the informal economies of film circulation if we are to understand the transformations that have been taking place and their likely consequences. This demands to look at other perspectives. For example, the activist stance advocated in the literature by authors as Lessig (2004, 2008) defends pirate practices as part of the ‘open- source’ or ‘creative commons’ movements whereby culture should be circulated to all for free. The issue with this model is that artists and rights holders do not get rewarded for their work. Anderson (2009a) adds a different perspective with the concept of ‘freemium’, a model whereby the rights holders can get a reward for their work by charging a premium to some of the audience and circulate their content to the rest (a majority) of the viewers for free (Iordanova 2012, 16). Lobato also explored this facet (2012) as a philanthropic, communitarian and benevolent activity aimed at sharing culture. Through this lens, the losses incurred through piracy are considered as ‘lesser gains’ (Anderson 2009a). The ancillary sales generated by such a model of circulation include merchandising or other derivative activities that supplement the revenues derived directly from the content, which is then used as a promotional tool. To some extent, this model has been developed and adapted by Chinese online film-viewing platforms such as PPS, iQiyi and YT. The platforms can afford to purchase content through advertising revenues (similar to television networks), and supplement film revenues by proposing exclusive pay-per-view screenings of newly released content to a small proportion of their audience. Some of this content is made available for free at a later stage to the rest of the film-viewing platforms’ subscribers. With this model a minority of film- viewers pays the premium for a majority of the audience (Wang 2003b).

14 Please refer to Appendix 2 for more details on Movielink. 4.4 Legal Transformations: Copyrights and China 107

This model creates an incentive for audiences to purchase titles legally, rather than downloading them illegally via BitTorrent sites, for instance (Dhillon 2010). This point of view converges with the findings of a research carried out in 2008–9 with 346 Chinese urban youth, (I will discuss this further in Chap. 8). The result of this study showed that young urban Chinese audiences were ready to pay a premium to access content provided that it was of reasonable quality and that they could access it when and where they wanted to watch it (Poujol 2010).

4.4.5 Limited International Influence over IP

Montgomery reminds us that in China, ‘The future of business models based on the ownership and controlled distribution of expert-generated copyrighted material is far from assured.’ (Montgomery 2010, 20) Gubbins reinforces this point when he suggests that The sense that the Internet is a Wild West to be tamed has been typified by the fight to impose upon it the same intellectual property rules that have prevailed in the physical business, and in the view that piracy is the fundamental barrier preventing recovery. That idea will be severely tested in both the courts and by consumer behaviour. (Gubbins 2012, 71) The concept of film distribution gradually gives way to the concept of film circulation. Copyright and IPR revenues do not solely drive the circulation of films. This concurs with the theory advocated by Shujen Wang that to understand contemporary film circulation and audience consumption, it is necessary to consider intertwined factors such as government intervention, transnational lobbying and pressure, technological changes, piracy, and regulatory developments as a topology of film. These multiple processes that take place, sometimes simultaneously, should be considered as a network rather than a linear process (Wang 2003a, b, 2010). In order to juggle with these intertwined and complex priorities, the Chinese Government had to develop a new hybrid system that seeks to promote social and political stability, while developing a market economy (Xin 2003). The definitions of piracy as enterprise and piracy as access seen in Chap. 2 and developed by Lobato, respectively, are both of particular interest in the context of China (Lobato 2012, 69). As seen previously, piracy creates jobs whether it is through the sale of physical content in VCD, DVD or Blu-ray formats in street outlets or whether it is through the activities of an online platform that generates advertising revenues. In a country where the average monthly salary is close to US$200 per month (Miura 2013), piracy as free enterprise can create a form of socio- economic stability. To this extent, Slater indicates that in a ‘non-Western context, piracy is regarded simply as a phenomenon of the local economy’ (Slater 2007). In terms of the audience, it also provides access to content that would otherwise not be distributed locally or with a delay (Lobato 2012). Arguably, access to entertainment and culture can also contribute to a certain social stability. If we follow the example of the music industry that has often preceded the film industry in terms of adapting to new technology (McDonald 2007), the tactics used 108 4 Mapping Out the Chinese Media Landscape by the music sector and eventually the film industry have been to target directly the pirate networks and force some of them to close (Napster, PirateBay, and more recently Megaupload). The industry adopted such practices to slowdown the erosion of their revenues and to organise an alternative way to distribute and to circulate their products (such as iTunes for music or Movielink for the film studios) while geoblocking content to certain territories (Iordanova 2012). The Chinese Film Bureau took a similar stance in China in regard to both music and film when it closed down hundreds of pirate websites in 2009 (Cunningham and Silver 2012) and in subsequent years 2011 and 2016. The government requested for online film-viewing platforms to apply for a license forcing hundreds of websites to close down. As a result, a handful of websites such as Ku6, PPS, iQiYi, and YT survived to provide the service of online film aggregators and to circulate content to the wider Chinese audience while ensuring that premium content exclusively licensed for the Chinese territory is inaccessible to international audiences. This type of initiative shows that state-led reforms in a country like China can force change and consolidate a sector, which had developed erratically, into a foundation for legitimate activities. It is therefore debatable whether the external pressures from Hollywood, the WTO and other transnational institutions were the only motivator for the changes initiated by the Chinese Government in the introduction of their copyright and IPR policies and their enforcement against piracy (Mertha 2007). The Chinese Government had a double agenda in regard to formalising the online film-viewing sector and reducing piracy, a socio-political and an economic agenda. This double agenda had to do with creating a national IP centric model rather than following Hollywood’s guidance. The Chinese Government has attempted to regulate the online video sector to the point that it now has one of the most sophisticated IP legal systems in the world. This was as a result of the pressures of the MPAA, the WTO, the WIPO, and the IIPA, but mostly to protect its own film industry from piracy and to develop its own IP based industries (Wang 2010). The main issues arise from law enforcement by the central government and the penalties applied to individuals and companies. On the one hand, the scale of China, its large population and its regional differences make it particularly hard to tackle the enforcement problem. On the other hand, the penalties originally required from the offenders were quite small, particularly for the companies involved in trading pirate films. Although these penalties have increased sharply over the years, in 2002, the maximum official fines for piracy were RMB500,000 (US$71,000 equivalent) (Chynoweth 2003). This was a prohibitive amount for any average Chinese individual, but a rather low penalty for an organisation. Therefore, this type of enforcement was not necessarily perceived as efficient (Dimitrov 2009). The consolidation of the online platform makes it easier however for the government to control the sector. In 2009, there were only 13 cable operators, one IPTV operator and no satellite players offering VoD (Cunningham and Silver 2012). In this new consolidating and formalising environment, revenues for the Chinese online film-viewing platforms reached US$687 million in 2010 (Shackleton2011b ). This was twice as much as the US over the same period of time. Both advertisers and studios seem to be well aware of this trend as the online video advertising rates 4.5 Societal and Market Dimensions 109 grew between 40% and 50% in urban areas in 2011, twice as fast as the rest of internet based advertising according to ad consultancy group WPP Plc Group M Interaction (Chao and Tejada 2012). With the adoption of online platforms and the technological advancements of sound and image recognition this situation has changed with companies like Alibaba issuing stronger IP centric statements and demanding a stronger implementation of the laws and tougher punishments (Ng 2017). It seems that IP is evolving into a paradox, where most of the creative industries in China and elsewhere promote an IP centric model while they have no issues re-appropriating common based creations for their own benefits in what Bauwens has named parasitic capitalism and what Keane describes as platform capitalism (Bauwens 2014; Keane 2017). The current situation does not encourage new talents to flourish, as they are not rewarded for their creative works while they are forced to pay for everything they consume. Whether a majority of the content that circulates online originates in the US or Mainland China, one thing becomes clear; the legitimate and illegitimate platforms that release films online today cater mostly to mainstream content that they deliver to a mass audience. This means that the content screened on online formal platforms is mostly professional and tightly connected to IP and copyrights that are concepts intrinsically connected and intertwined with capitalist ideology.

4.5 Societal and Market Dimensions

While this topic will be further developed in Chaps. 8 and 9, I will outline a few key trends at this point. As mentioned at the beginning of this chapter, China has one of the largest media audiences worldwide. The rapid growth of the middle-class in China has largely contributed to this phenomenon. It is estimated that only 4% of the Chinese urban population had an annual income between US$9000 and US$34000 in 2000, the number of people in this bracket had increased to 68% in 2012 and it is estimated that 75% of the Chinese urban population will be in this middle-class bracket by 2022 (Barton et al. 2013). In regard to creative content, by 2008, a majority of Chinese Internet users were watching content online (legally and illegally): 80% of Internet users had watched content online over a period of 6 months (Landreth 2008). This trend was later mirrored at a global level as it was estimated that 80% of the worldwide Internet users were also watching films online by 2010 (Rick 2010). In China, this evolution was largely associated with the boom of start-ups that took place from 2005 to 2008: the number of Internet websites in China surged from 843,000 in 2006 to 1.5 million in 2007 and reached 2.88 million in 2008, a 91.4% increase year on year (Kender and Baker 2009). The Olympic events and promotion surrounding them contributed to attract high volumes of Chinese viewers to the television screens as well as the Internet platforms. Furthermore and several years after, the rise of China and India versus the relative decline of so called developed countries or blocks, such as the US, Europe or Japan, had geopolitical and economic implications such as the development of a wealthier middle class in emerging economies and therefore the potential for a paying audience (Cunningham and Silver 2012). 110 4 Mapping Out the Chinese Media Landscape

However, despite the rise of this financially promising middle-class, the dominant practices remained mostly associated with piracy and hundreds of online film-viewing websites operated in the realm of the informal. In 2007, ‘the local industry remained hobbled by rampant piracy, the lack of a well-developed distribution chain and strict government control’ (Kender and Baker 2008, 77). In this context, 2008 was a pivotal year with the organisation of the Beijing Olympic Games, the exponential growth of online platforms and audiences along with the increased control of the government over this new form of media. The whole industry was rationalising and becoming more professional and more formal (Kender and Baker 2009, 58). After Olympics, the surge of online providers pushed the government to issue notices to formalise these websites and to control and eliminate pirate and unauthorised content.

4.6 Political Dimension: Piracy, Censorship, and State Control

In 2007, Han Sanping, General Manager of CFG (until April 2014), the first and main government-owned film production and distribution company, announced that the group planned to give more attention to ‘realistic entertainment films that focus on common people’s everyday lives, with no difficult implications, complicated ideas or deep personal style’ (Kender and Baker 2008, 28). This comment, although somewhat cryptic, from a high level Chinese official ahead of the 2008 Beijing Olympics, illustrates that the priority of the Chinese Government was at the time, and still is, to maintain artistic, cultural and ideological control over film. By creating a new window for the mass circulation of content that originally escaped monitoring and control, the digital developments of the past decade have disrupted the government’s attempts at maintaining control over film (as an ideological tool) but also over its economy and its society. Therefore, the state had to respond relatively promptly to the digital changes in order to maintain control over the domestic production and the circulation of uncontrolled pirated content (domestic and foreign).

4.6.1 The CPC’s Governmental Approach to Creative Media

In their respective works on copyrights and IPR, both Montgomery and Keane use Foucault’s concept of governmentality (Keane and Hemelryk Donald 2002; Montgomery 2010). When attempting to describe the complex, and often conflicting, changes of the media landscape in China over the past decade, governmentality seems to apply quite adequately. With the lens of governmentality, the Communist Party is neither viewed as the driver of its own ideology and agenda, nor is it considered the driver of transnational interests, but it becomes the driver of social stability (Foucault 2002). Governmentality brings a more mature and nuanced approach to the often polarised and heated political-economic debate in regard to China’s potential transition towards a capitalist socio-economic model. As seen in the 4.6 Political Dimension: Piracy, Censorship, and State Control 111 previous chapter, China remains a socialist country, which has been progressively developing a novel hybrid system in which political and economic interests can coexist. The concept of governmentality, which mirrors some of the Confucian pre- cepts, implies that the State takes a patriarchal approach in shaping the Chinese society and its economy where social and political stability are associated to economic stability (Keane and Hemelryk Donald 2002; Xin 2003). Beyond the implementation of a copyright and IPR framework, the enforcement of strict quotas and the control of content circulation through censorship are the immediate manifestations of state intervention in the media sector.

4.6.2 Censorship and Quotas

In terms of censorship, all films (local or foreign) have to comply with a set of key rules designed by the government and implemented by SARFT in 2009 and SAPPRFT from 2014. Officially any criticism or political content aimed at the party is prohibited. Ghosts, religion, time travel and superstition are banned. The promotion of ‘bad habits’ such as smoking or gambling is discouraged (Kender and Baker 2008; Follows 2015). In practice, these rules are kept ambiguous and some ghost stories such as Painted Skin (Chan et al. 2008) or more recently stories related to time travel with Looper (Johnson 2012) or to religion with The Last Race (Shin and Parker 2017) have been authorised and released theatrically which shows the ambiguous nature of the rules (as a code of practice more than regulation) and their implementation. In regard to film imports and content circulation, it must be noted that Internet video providers are bound by a different set of regulations from theatrical exhibitors in China. As seen previously, theatrical releases have had to comply with very strict quotas from the Film Bureau in charge of enforcing the quotas and censorship regulations. From 1949 to 1994, foreign films were banned in China as they were considered as propaganda. From 1994, a quota system for 10 foreign films was initiated and subsequently increased to 20 films since 2001 (Follows2015 ). Following consistent lobbying efforts by the US studios and increase of Chinese stakes in the US film industry, in 2012 these quotas have been increased by an annual intake of 14 films on a revenue sharing basis, bringing the total quota of foreign films from 20 to 34 films per year for theatrical release and revenue sharing (Follows2015 ). More recently, these quotas have further been unofficially relaxed with 39 films imported in revenue sharing in 2016 (Papish 2017; Brzeski 2017). The revenue sharing proportion also increased from 13% to 25% in 2012 (IIPA 2016; Follows 2015). This means that in 2015 only 34 foreign films can share 25% of the Chinese BO receipts. Fourteen of these films had to be Imax films (therefore almost practically natural life documentaries or commercial Hollywood films) (Follows 2015; Papish 2017). The rest of the foreign films imported for theatrical release are purchased on a flat fee basis (these are not subject to strict quotas), which on average were between US$100,000 and US$250,000 in 2008 depending on the 112 4 Mapping Out the Chinese Media Landscape film (Kender and Baker 2008) but increased to US$7 million for a film likeResident Evil in 2016 (Papish 2017). In regard to flat fee films, the Chinese distributor’s revenue is made by the difference between his net BO receipts and the flat fee. Twenty-one foreign films were imported on a flat fee basis along with the 20 revenue sharing fee films in 2008 (Kender and Baker 2009) this quota was exceptionally expanded to 51 flat fee and 39 revenue sharing films in 2016 because of the Chinese BO slowdown. This measure shows the adaptable and ambiguous nature of local regulations.15 Quota expansion is estimated to favour mostly Hollywood based productions such as films produced in IMAX or 3D. US films regularly take the lion share of the Chinese quota system. This is due to three key factors: Firstly, the quota system refers to revenue sharing films, US mainstream films attract a larger audience that translates into higher revenues for local exhibitors and the government, as it levies a tax on each theatre ticket for the national film fund (in the same way as the French CNC fund functions in Europe). Secondly, US films have long driven interests and benefited from the lobbying pressures of the MPAA, IIPA, WIPO and WTO that give them some leverage with the Chinese Government. Thirdly, there have been significant cross-border investments between the US and China in the film and media sector. The recent cases of Disney, DreamWorks and Warner as well as the acquisition of over 5000 screens from AMC by Dalian Wanda are a few examples of the current stakes of China in the US film industry (Verrier 2012; Yue Jones 2012). Expansion of the quota is seen as a first step to open the theatrical Chinese market, but it is a rather slow move that was initiated 3 years earlier through the 2009 WTO claim on cultural reciprocity (Abrams 2012).

4.6.3 The Online Exception: A Changing Paradigm

Until the new regulation in March 2017 and its subsequent implementation throughout the year, online providers did not have to comply with the same quota rules as theatres and they were able to legally screen thousands of foreign films. While the online platforms had to make sure that they avoided what the government regarded as inappropriate content, sensitive political or religious topics such as Tibet or Falun Gong, for instance, they had a lot more freedom for their selection. Therefore, China’s video sites could offer more online content than theatres partly because online content was approved by China’s Ministry of Culture, specifically the General Administration of Press and Publications (GAPP), a government body in charge of monitoring publishing, news groups and the Internet. This body benefited from a slightly looser framework. The Ministry of Culture also monitored the legitimate DVD distribution while the film and broadcast-TV regulators (SARFT) monitored the theatrical exhibition and TV. Since March 2013 SARFT

15 The government justified the exceeding numbers as ‘cultural exchange projects’ (Brzeski2017 ). 4.6 Political Dimension: Piracy, Censorship, and State Control 113 and GAPP have merged into the State Administration of Press, Publications, Radio, Film and Television (SAPPRFT).16 The consequences of this merger were originally unclear, although the name of the new entity and the general consensus indicated that the former SARFT administration had essentially taken over the GAPP functions. And the SAPPRFT would administrate the online circulation of films with a similar set of policies as those used to administrate television, theatres and radio. In March 2014, SARFT decentralised some of its activities and offices to the provincial level whereas foreign productions and co-productions are still dealt with centrally in Beijing (Ma 2014a). This indicated that domestic productions were facilitated and the authorisations for local productions accelerated, but it also suggested that these productions were more closely monitored. Meanwhile foreign productions remains centrally and tightly controlled both for theatrical and Internet windows. The firm and central stance of SAPPRFT was reinforced when it denied a film import licence claims of a private institution, China Railsmedia Corporation Ltd. associated with China National Culture & Art Corporation (CNCAC) (Cremin and Ma 2014). Hong Kong China Railsmedia had spread the rumour ahead of its IPO, but the reaction of the state confirmed the intention of the government to keep foreign films imports centralised with China Film Group and tightly controlled by the state institutions. With these measures, China focused on increasing its national output while keeping control over foreign productions. The amount of foreign content was even more controlled and reduced online. Some popular foreign content was taken down over the years from 2014 and the trend intensified in 2017 (Carsten2014 ; Dou and Abkowitz 2016; Frater 2017).

4.6.4 Birth and Evolution of the Great Firewall

While the Internet distribution window was not subject to the same strict rules as the theatrical window till 2017, it had been monitored by a very effective censorship system called ‘The Great Firewall’ or ‘Golden Shield Project’. Fang Binxing, an Internet expert from the Harbin Institute of Technology who was appointed Dean at the Beijing University of Posts and Telecommunications in 2007, created the Great Firewall (GFW). Fang Binxing’s firewall design was selected among many other system designs as the most effective. The GFW was launched in 1998 almost 10 years after the Tiananmen events that was a pivotal year when the number of online users reached a critical mass of 1 million individuals (Fang 2011). The system was tested and only officially came online in 2003. The GFW has since developed in successive stages over the years. It cost approximately RMB5 billion (US$800 m) and was originally developed to block access to what the Chinese Government and censors judged to be undesirable online content and to assist the police in their investigative work (Lee 2011). The wider aim of the

16 guojia xinwen chuban guangbo dianying dianshi zongju or 国家新闻出版广播电影电视总局. 114 4 Mapping Out the Chinese Media Landscape

GFW was to provide authorities with a large database including Internet records, voice and face recognition information. Although very few people know how the GFW works, the most common feature is to block content linked to certain keywords that would typically lead to content judged inappropriate by the censors. Such keywords include terms such as ‘corruption’, ‘Tibet’, ‘democracy’, ‘porn’, and from 2011, it also included words or groups of words such as ‘Jasmine’ or ‘Jasmine revolution’ following the series of events in the Middle-East and North Africa. The same year, a new department, The State Internet Information Office (SIIO), was created by the central government to gain more control over the Internet, which was handled by a dozen different departments with their own agendas at the time. The SIIO was created to help improve coordination between government bodies in regard to Internet platforms and to implement a tighter control on online content including cultural content. The SIIO operates under the State Council Information Office (SCIO), the central government’s propaganda information arm (Buckley 2011). A series of filters has also been introduced to facilitate the censorship process, although Chinese netizens have taken the invasion of their privacy very strongly and rejected such practices (Cui and Wang 2009). The GFW worked very effectively: in 2010, the Chinese branch of Internet giant Google had to relocate its servers to Hong Kong in order to prevent the firewall from blocking some of its content and access its users’ information (Farrar 2010). In reality, many Chinese Internet savvy users manage to bypass the GFW and access blocked content by using either a proxy or a Virtual Private Network (VPN). But the GFW increasingly takes this into account. Fang Binxing refers to it as ‘an everlasting war between GFW and VPNs.’ Although the GFW was systematically blocking content when it was originally launched, Fang Binxing advises that the firewall should eventually become more ‘sophisticated’ and subtler in the way it blocks content and should allow for more leeway and freedom. Fang Binxing also reminds that 180 countries, including developed countries such as the US or Germany, currently monitor and block content themselves and that it is ‘a common phenomenon around the world’ (Fang 2011). However, the use of personal VPNs has since been declared illegal in China starting 2018. This shows the increasing presence and control of the government over technology and its use (Bloomberg 2017). Ahead of the 19th National Congress of the Communist Party of China scheduled for October 18, this trend has also touched the nascent decentralised blockchain technology and Bitcoin which had been driven by China up to now (Cheng 2017).

4.6.5 The 2009 Shutdown Campaign

Going back in time, 2008 and 2009 were particularly pivotal years for censorship and control as they were for technological and start-ups developments in China. Ahead of the Olympics, the government initiated a ‘clean-up’ campaign that aimed to reduce piracy and exert more control over content across all platforms. The Film Bureau issued notices warning filmmakers not to produce films that could show China in a 4.6 Political Dimension: Piracy, Censorship, and State Control 115 bad light. As per SARFT’s warning from 5th October 2007, these restrictions included ‘unnecessary and lengthy smoking scenes’ (Kender and Baker 2008, 67). But the lack of laws regarding the control on tobacco meant that authorities could only issue a warning rather than enforce a ban on smoking in film and TV productions. The Film Bureau also blacked out the release of many foreign films over the same period in order to keep a clean slate but also a slate that was predominantly Chinese. Thereby protecting local interests, whether economic, social or political. On 29th December 2007, the government issued a notice regarding ‘porno- graphic’ material, threatening filmmakers of a five-year ban if they entered a film that contained such scenes in festivals domestically or abroad. Lost in Beijing (Li 2007), a film that displayed explicit material on massage parlours in China and migrant workers was pulled from theatres and Fang Li, the producer and Laurel Films, the production company were barred from producing films for 2 years. The distributor, Poly-Bona was also severely criticised as an unapproved copy of the film was presented to the 57th Berlinale in February 2007. These measures sent a clear message to the local filmmakers who then went back to working essentially on politically safe projects such as Wu Xia films and period dramas, Red Cliff (Woo 2008) or The Warlords (Chan and Yip 2007). As a result of the lack of diversity and increased control over content, the young public lost interest in local productions. Online platforms catered for this gap and Hollywood films featured high on these platforms (Cunningham and Silver 2012). A 2008–9 survey that I conducted in Hong Kong and China demonstrates that US films had a penetration rate of 93% with the 18–25 year old urban Chinese audiences, followed by EU films with a penetration of 66% (Poujol 2010). Most films circulated online, formally and informally, in China have been Hollywood productions with a significantly smaller share of film and television productions from Europe, Japan and South Korea (Cunningham and Silver 2012). At the time, the central government and local Internet industries contested this trend, which claimed that a large part of the content watched online consists mostly of local TV dramas. The only significant foreign TV dramas that had reached a level of popularity with local audiences came from Korea (Kender and Baker 2009). Following the government’s measures to control and formalise the sector, most of the local and foreign online informal websites either actively provided pirate content or indirectly accepted it were taken down. This left a larger place for compliant websites such as Youku, 56.com or Tudou that considerably concentrated and formalised the online film-viewing sector. The consumption of local Chinese films remained relatively low while the viewing of pirated US content was still prevalent, as a large part of the film content provided by these emerging websites was geared toward Hollywood film circulation (Chmielewski 2008). TV based VoD services were also relatively consolidated.17

17 However, the period of consolidation is over, as large groups such as Baidu, Alibaba and Tencent (BAT) have started to diversify and decentralise their operations into smaller entities which go public independently (Chung and Hou 2016). This was the case of Alibaba Pictures Group, for instance. While Alibaba Pictures remain part of Alibaba and its overall strategy, it acts as a special- ist in its own sector. 116 4 Mapping Out the Chinese Media Landscape

The second wave of censorship in 2009, aimed both at reducing the amount of controversial content online as much as formalising the online-video sector. This shakedown also coincided with the introduction of a controversial new Internet fil- ter, which worked in parallel with the GFW and was placed directly on the users’ computer hardware (Cui and Wang 2009). China was also put under pressure on the international scene and it is a general view that it had just appealed at the WTO on the basis of trade reciprocity on cultural content to buy time in regard to the various IPR claims led by the US (Lynn 2009). The nationwide operation during which a series of pirate websites as well as websites containing inappropriate content were taken down by the Chinese Government (International Intellectual Property Alliance 2011) resulted in the shutdown of 162 online-video pirate websites (Iordanova and Cunningham 2012). Ninety-one websites that displayed political or porn related content were also taken down in a vast operation that was described by the authorities as a way to reduce ‘vulgar’ content on the Internet (Yu et al. 2009). In effect, foreign websites such as Google and YouTube as well as political blogs were targeted in the nationwide operation, which preceded the anniversary of the 1989 Tiananmen troubles. The initiative was as much political, in the light of the Tiananmen’s 20th anniversary, as it was commercial and reinforced the dominance of the domestic online formal players. For instance, in 2008 before Google was shut down, it held 27.3% of the search engines market share in China, second only to the Internet Chinese giant Baidu with 63.5%. In the same year, Google China also had a significant 8% and market share just behind Baidu (18.7%) and Sina (10.5%) and in front of Sohu and Tencent (with 7.1% and 4.9%, respectively) (Kender and Baker 2009). The Chinese Government protected its domestic interests and the local economy in what was a fragmented and competitive environment. Online Chinese startups such as Youku, Tudou or Voole also greatly benefited from the ban of YouTube in China in 2009 (Branigan 2009; Chang 2009). Around the same time, several websites that operated mostly in the online formal economy, such as Youku, allowed the Chinese Government to monitor their content and to decide the removal of videos judged as inappropriate. Less than a year later Avatar (Cameron 2009) was prematurely removed from theatrical screens at the peak of its success on the basis that it was judged ‘subversive’ by the authorities, and it was argued that it could lead to acts of violence, particularly in regard to scenes of forced removals in the film (MacArtney2012 ). The state, as in the many instances outlined previously, played a role of patriarch in line with Foucault’s idea of governmentality. However, the removal of ‘Avatar’ may not have been just motivated by the content itself, but by its economic impact and its BO success, which would have eclipsed its theatrical rival Confucius (Hu 2010; MacArtney 2012). Many film professionals, including Chris Doyle have complained about the arbitrary decisions taken by the Chinese Government, the general lack of transparency, and the ambiguity in terms of film censorship (Kender and Baker2008 ). Until March 2018, it was still uncertain what changes the recent merger between SARFT and GAPP may have produced in terms of quotas, censorship and IP enforcement. It was regarded as an appropriate step by some in terms of regulating the online film-viewing market that should cater for new technologies, a consolida- 4.7 Conclusion 117 tion of the online sector and a possible convergence and integration between the various distribution windows. Others saw it as a threat and step toward increasing monitoring on the part of the government. Since Xi Jinping abolished SAPPRFT in March 2018, the initial merger can be confirmed as a first step towards more creative content restrictions and control across all the media platforms. Emerging technologies such as Cloud computing, which have recently been introduced, may bring more change to the present formal and informal practices and activities as it would make any type of content available to anyone globally and through any type of device be it tablet, PC or smartphone (Gubbins 2012). With the recent advances in cloud technology, this may create another generation of pirate cyber lockers as well as new entrants and powerful stakeholders in the online film-viewing sector, such as cloud servers. The online film-viewing screen is taking many shapes with the array of commercial devices available such as iPad and iPhone. These developments challenge traditional desktop and laptop computers as viewing platforms. Film viewing becomes mobile, flexible, participatory, and interactive. This evolution of the hardware gives more power to the audience in theory. Indeed, what has emerged are ‘active audiences who demand access to existing content at a time, place and price of their choosing’ (Gubbins 2012, 72). However, this power may be challenged by the fact that all these devices are geographically traceable and that most of the content that audiences watch can be monitored. A large part of this content is controlled from distribution to its circulation. This content may escape keyword based systems and tracking, which is why the Chinese Government has been developing its Great Firewall for many years and recently formed a department in charge of dealing with the Internet circulation of content and digital platforms, integrated under SAPPRFT and now at cabinet-level.

4.7 Conclusion

The promotion of China’s culture is central to the way in which creative and particularly the media industries developed post-WTO entry. Chinese media industries are subject to economic imperatives and, more prominently, to tight political agendas and rules. Tensions around the latter are particularly vivid because of the perceived potential for politics to be negatively disrupted as a result of technological forces especially with the Internet that became an economic and sometimes a politically disruptive tool in other parts of the world (Iordanova 2012; Cunningham and Silver 2012). In principle, the shift to develop culture allows for a greater freedom of speech and a free flow of critical and creative ideas. However, the analysis of the current media landscape and its evolution from 2001 until 2017 through the study of Peterson’s and Lemaire’s combined models have revealed the following dynamics in the creative industries in terms of technological, economic, legal, and political forces: 118 4 Mapping Out the Chinese Media Landscape

Technologically, the disruptive potential of the Internet advocated by Iordanova has not really materialised in China. The Internet and the accompanying hardware and online industries have only disrupted some of the traditional and state-run enterprises economically without much influence on political power and progressive ideas of ‘democratisation’. Pirate websites that started the trend such as YT eventually got more under control. The progressive building of China’s great firewall18 over 20 years is emblematic of this control. It is not only content that has been kept out of China; online foreign media companies have been prevented from setting up businesses in Mainland China.19 Meanwhile, economically, the Chinese Government has supported corporations such as Alibaba, YT and Wanda to expand beyond China’s borders. Chinese investments have allowed China to exert some influence on several Hollywood studios, notably through the Wanda group that purchased US-based AMC Theatres in May 201220 (Brzeski 2014). Legally and in terms of the IP regulatory framework, it seems that the global IP agenda pushed on to China (mostly by the US and its lobby groups) may not have been that disruptive for the CCP. The IP agenda has allowed a natural engagement of China with key US and worldwide creative industries. The Chinese Government has embraced the resulting opportunity through its national champion brands, although with some degree of controversy. This strategy has contributed to the expansion of its soft power abroad while the country’s economy is further integrated globally (Minkoff 2015; Williams 2015; Clover and Hornby 2015). Politically, the Chinese Government has maintained tight control over its own creative industries, particularly film content. Arguably and as seen in Chap. 3, the government is the key engine shaping media in China. This is evidenced by how the state has intervened in all aspects of the media through the issuance of licenses, the imposition of censorship, and the enforcement of quotas for foreign productions to protect its own creative industries and cultural identity. The Chinese Government seeks to attract consumers into online controlled spaces (Montgomery 2010), an unorthodox practice which has also arguably been used by the West in light of the NSA scandal involving both the US and the UK (BBC News UK 2014; BBC News US & Canada 2014). One can understand why the Chinese Government may take a cautious stance in this regard, particularly in the wake of the confrontational stance taken by President Trump against China. Supporting and promoting state-friendly and formal Internet platforms such as Alibaba that are willing to be monitored, audited and controlled may provide a solu-

18 Also created with incremental steps like all the other political-economic strategic decisions taken over the past 60 years. In this way, the great firewall mirrors the political power in place and acts as one of its many microcosms. This is also symbolic of The Great Wall of China, and the reason why the wall was initially built: to protect China from foreign invaders. 19 Google and YouTube were both blocked in early 2009 after first temporary blockings in 2007 and 2008 following riots in Tibet (Loveland 2009; Griffin 2015). 20 http://edgar.secdatabase.com/877/95014212001222/filing-main.htm References 119 tion for the Chinese Government in balancing social stability imperatives over a large population while expanding its political-economic power and creating employment in its emerging creative industries sector. Therefore, it is important to observe and to understand how a relatively new company such as Alibaba was created and how it evolved in a rapidly changing technological and regulatory environment driven by the state. In the next part, I observe a three-part case study on Alibaba. Alibaba stands at the centre of all the forces described in this chapter. This case study also covers the micro-organisation of the online creative industry, themes of job creation and the privatisation of the media economy that are important elements of Peterson’s model. I will then complement the elements of societal and market forces in Chaps. 8 and 9. The following part (Part II – divided into three chapters) analyse how Alibaba has been adapting to the political-economic macro forces as well as the technological and economic forces studied in Chaps. 3 and 4 respectively. Chapter 5 describes how Alibaba has shaped its strategies and tactics to develop and remain dominant in the creative industries and technological sectors. This chapter assesses Alibaba from an organisational perspective and studies how it has become a financier of creative content. Chapter 6 takes a micro lens to study Alibaba from a film production angle. Chapter 7 observes YT, an online distribution arm of Alibaba, through its journey towards formalisation and its initiatives to identify and support new talent.

References

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Social scientist Bell (2005, 10), argues that the case study approach can be ‘particularly appropriate for an individual researcher as it provides an opportunity for an aspect of a problem to be studied in more depth’ in a relatively short amount of time and can also shed light on a particular phenomenon occurring in a given geographical area. However, case studies also carry their limitations. One of the most common issues with case studies is ‘the difficulty to cross check information’ (Doyle and Frith 2006, 568). Another concern when conducting case studies is the issue of ‘generalizability’ evoked by Denscombe (2010, 60–61) and the ‘extent to which findings can be generalized… depends on how far the case study example is similar to others of its type.’ Bassey develops this argument by introducing the concept of ‘relatability’ that is arguably more significant than ‘generalizability’ in the sense that the case study should be judged ‘to the extent to which the details are sufficient and appropriate for someone working in a similar situation to relate his decision making to that described in the case study.’ He concludes that ‘relatability’ is more important than ‘generalizability’ (Bassey 1981, 85). He considers that if case studies ‘are carried out systematically and critically, if they are relatable, and if by publication of the findings they extend the boundaries of existing knowledge’ then they are valid forms of research (Bassey 1981, 86). The case studies that I have selected are central to the finance, production and circulation of films online in China and in that sense they are relatable to other experiences of the same type. I cross-reference these case studies with other companies such as Tencent or iQiyi in China or Amazon in the US and with other types of film productions, which also carries an element of generalisability. In Chap. 5, I observe Alibaba Pictures as a financier of original film content and as a potential sponsor for local emerging creative talent. In Chap. 6, the case study of The Last Race works as an example of a traditional film production originally co-produced, promoted and distributed by an online creative champion, Alibaba Pictures. This shows evidence of tensions between political and economic agendas as well as between traditional filmmaking and online working cultures. Finally, in Chap. 7, the case study of YT, one of the largest online circulation windows acquired by Alibaba in 2016 for film and media creative content, demonstrates a 126 Part II Case Studies: Industrial and Ethnographic Perspectives first series of steps from digital creative online portals to identify and promote local emerging talents. Throughout these three case studies, I researched and analysed in real time how a film can go through the entire creative life cycle from its finance to its circulation in the current Chinese online media production chain. As a side note, particularly given the large scale of Alibaba and the complexity of its structure, I will use the terms ‘Alibaba’ and ‘Alibaba Group’ to refer to the entire conglomerate, whereas, I will use the names of the other entities which I refer to specifically, such as ‘Alibaba Pictures’ or ‘Alibaba Pictures Group’ for the media and entertainment subsidiary of Alibaba Group. And ‘ANT Financial Services Group’ or ‘ANT Financial’ for its finance subsidiary, for example. In this study, access to reliable information from surveying, interviews with film industry experts and scholars as well as industry reports help me correlate findings from distinct sources. The correlation of these various sources of information also helps minimise the possible risk of ‘selective reporting’ (Bassey 1999, 12). The interviews of film industry authorities, representatives of Alibaba, YT, and scholars were conducted in Mainland China, Hong Kong, Europe and the US, which gives a broad range of information. The perspective of the audience is also integrated and balances the academic and the industrial views of the phenomena under study. The following chapter (Chap. 5) informs the reader of the steps that Alibaba took in order to contribute to the creation of original local content while facing tensions between the traditional and online film production models: the chapter describes the political- economic mechanisms behind Alibaba Group’s rapid creation and development since 1999 to the creation of Alibaba pictures in 2014 and the acquisition of YT by Alibaba in 2016. It shows how Alibaba is both a driver and recipient of a changing business culture in the Chinese media sector that is becoming increasingly IP centric and where the political-economic agenda of the government is increasingly framed as soft power. This chapter also describes the early stage of blockchain technology adoption by the group.1

References

Bell, Judith (2005). Doing Your Research Project. Open University Press. 4th Edition. Denscombe, Martyn (2010). The Good Research Guide for Small-scale Social Research Projects. Buckingham: Open University Press. Doyle, Gillian and Simon Frith (2006). ‘Methodological Approaches in Media Management and Media Economics Research.’ In Alan Albarran, Sylvia Chan-Olmsted and Michael Wirth (eds). Handbook of Media Management and Economics. Mahwah, NJ: Taylor & Francis. pp. 553-572. Bassey, Michael (1981). ‘Pedagogic Research; on the relative merits of the search for generalization and study of single events.’ Oxford Review of Education. 7:1. pp. 73-93. Bassey, Michael (1999). Case Study Research in Educational Settings. Buckingham: Open university Press.

1 Part of this chapter was presented at the Nanyang Technological University – King’s College London Joint International Conference Chinese Film Market and Asian Cinema on August 24–27, 2017 under the title: The Potential Development of Chinese Creative Talents Through Alibaba’s Ecosystem. Chapter 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance

This chapter stands as a transition between the Chinese political-economic and media macro-contexts and the micro-contexts of film production and creative talents. Through the lens of Alibaba Pictures and following Peterson’s framework, I analyse the organisational process and the change in business cultures within the Chinese corporate media world. I argue that this change directly affects the development and programming of content. In addition, Alibaba’s (and Tencent’s) recent embrace of blockchain and smart contract technologies may further transform the creative industries (Zen 2018; Zhao 2018). This shift also affects young emerging talents and their opportunities in creative endeavours. Alibaba is central to this research: it is one of the largest soft power agents of the Chinese Government, it owns Yulebao (the ‘VIP crowdfunding’ website) and it distributes the film which I observed in real time from its inception to its commercial release: The Last Race (Shin and Parker 2017).

5.1 Introduction

Since its creation in 1999, Alibaba Group and more recently Alibaba Pictures in 2014 have followed a fast expansionist stance that mirrors the macro political- economic evolution and trends in the media sector development in China. Alibaba is a political-economic, technological, societal, and cultural hub. It is a manifestation of the Chinese media evolution (through all the facets explored in Chap. 4) that lies at the epicentre of the Chinese creative industries. Alibaba mirrors the entire sector’s consolidation and its areas of tensions created by a rapid evolution since China’s WTO entry. Politically, Alibaba is at the threshold between the macrocosmic and microcosmic media contexts in China. It is the point of convergence of the triarchy represented by

© Springer Nature Switzerland AG 2019 127 P. Poujol, Online Film Production in China Using Blockchain and Smart Contracts, International Series on Computer Entertainment and Media Technology, https://doi.org/10.1007/978-3-030-02468-0_5 128 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance the government, the creative agents (whether they are companies or individuals) and the changing audiences. Economically, Alibaba is also the intermediary between all the economic players across sectors: wholesalers, retailers and consumers. It is also the intermediary between modern online media and traditional media production. In that sense Alibaba is an innovative force and a disruptor that has recently stepped into the film arena changing this sector considerably and at a fast pace. Alibaba is not part of the established and traditional filmmaking circle. It has also been largely supported in its success by young urban users (Clark 2016). Through retail and payment activities, Alibaba Group has created an exclusive connection with the millennials reinforced lately by its involvement in the media arena. This has been accompanied with a national soft power campaign as a branded Chinese champion that has expanded internationally. This special set of characteristics makes Alibaba a potentially key media organisation to successfully identify and nurture young emerging talents both locally and internationally. Firstly, I study Alibaba Group’s political-economic background, its current leader Jack Ma and Alibaba Pictures formation. Secondly, I observe how Alibaba Pictures and its parent Alibaba Group position themselves in terms of their media involvement as financiers, producers and distributors of content. Thirdly, I analyse the potential of Alibaba as a political-economic disruptor through its plans to train and nurture young filmmakers, its crowdfunding activity Yulebao and its blockchain aspirations.

5.2 Alibaba’s Creation and Background

In this section, I observe the developments of Alibaba from its creation in 1999, just a couple of years before China joined the WTO, up until 2016, when the group officially acquired YT and integrated it to its Digital Media and Entertainment Division. Apart from observing the creation and development of Alibaba, this section also analyses its incremental embrace for the newest technologies and how the group used them as a set of disruptive strategies and tactics to gain successive control of: the various ecosystems in which the group operates (retail market, logistics, finance, cloud computing, and the creative industries), other large Chinese corporate groups, as well as overseas markets, and other online and creative media players. Ultimately, this section explains how Alibaba has built its organisation from the micro scale and how it managed to become one of the largest media players on macro national and global scales. This section is structured along the following three axes. Firstly, I take a historical perspective on Alibaba and I assess the context in which the group operates. Secondly, I use organisational and industry analysis to understand the structure of Alibaba and the nature of its changes over time. Thirdly, I make use of metrics and figures to triangulate and strengthen the first two axes. 5.2 Alibaba’s Creation and Background 129

5.2.1 Alibaba Group: A Multi-faceted Disruptor

Created in Hanghzou in 1999, Alibaba has had an explosive growth over a period of 18 years: its capitalisation reached US$360 billion as of June 8 2017. The group operates 270 subsidiaries in over 240 countries, and has an online presence through a set of over 20 web platforms, ranging from retail, finance, cloud computing, and media1 (Chen 2017a; Zhao 2017; Medina 2014; Alibaba Group 2012; Shrader 2013).

Background: Rapid Expansion at Home and Abroad

Alibaba Group Holding Limited (Chinese name: 阿里巴巴集团控股有限公司) is a privately owned set of integrated businesses originally created by Jack Ma and 18 of his collaborators as a website, Alibaba Online.2 The group started as an e-commerce website, Alibaba.com, which connected small businesses with each other.3 Between 1999 and 2000, Alibaba raised US$25 million finance from an investment group led by Japanese tech giant Softbank and US bank Goldman Sachs (Clark 2016). Sixteen years later in 2016, Alibaba Group generated US$22.96 billion in revenues (an increase of approximately 40% year-on-year) mostly through transaction fees and commissions, advertising, subscriptions, affiliations, IP production, and ownership (Zen 2017). As a retail giant, Alibaba operates along three market types: the Business-to- Business (B2B) market, Business-to-Customer (B2C) markets and customer-to- customer (C2C) platform. Tmall, 1688 and Aliexpress are dedicated to B2C markets while Taobao operates a C2C platform. As of March 2013, it had over 760 million products listed on its site and was one of the top 10 most visited online platforms. Around the time of its NYSE IPO in 2014, Alibaba had close to 75% e-commerce penetration in China with 560 million Internet users (twice the size of the US) (Bhowmik 2012; Medina 2014). Alibaba has expanded its reach beyond China to the US (21%) and European (18%) markets (Medina 2014). To extend its reach to international markets (so called emerging and developed), Alibaba Group has established over 70 offices in many countries such as the US, UK, India, Japan, and Korea (Fannin 2015). To strengthen its market access, Alibaba formed foreign partnerships early on. While e-Bay’s leadership rejected Jack Ma’s opportunity of partnership at a terrible expense, the partnership with Yahoo! opened Alibaba the doors to the West, both in terms of promotion and access. Alibaba started disrupting Western companies on a global scale. (Clark 2016)

1 For further details on the chronology of Alibaba Groups’ developments, please refer to the timeline in Appendix 3. 2 Alibaba Online, the first version of Alibaba.com, was officially launched in December 1998. 3 A much more elaborate version of China Pages, the first company created by Jack Ma in 1995. 130 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance

Alibaba’s expansion outside of China has sometimes been quite controversial and disruptive, particularly its IPO track record. Alibaba had its first IPO in Hong Kong (2007) and the group was subsequently de-listed in 2012 before it attempted to re-list in Hong Kong again in 2013. The Hong Kong Authorities claimed that they did not accept the second listing because it infringed their regulatory framework. This is when Alibaba looked for IPO opportunities in the US instead.4 On September 19 2014, the NYSE IPO was successful and controversial because it did not meet the SEC (Securities and Exchange Commission) requirements, but nevertheless was accepted. Alibaba’s shareholders essentially own a certificate for a shell company in the Cayman Islands not in the actual activities and assets of the company. Alibaba is therefore one of the only such known cases of political- economic hybrid; a large corporation quoted on the NYSE with Chinese characteristics and ultimate ownership.5 Alibaba’s IPO was the largest flotation in history with a total IPO of US$25 billion raised and a market value of US$231 billion at business close, the equivalent of Amazon and eBay’s market capitalisations combined (Baker et al. 2014; Clark 2016, 11). Despite collapsing to a market valuation of US$212 billion at the end of December 2015, Alibaba’s worth rose to US$360 billion in June 2017 (Meng 2017), surpassing its rival Tencent to become the largest Asian company by market capitalisation. This followed a series of integrations and structural changes that enabled Alibaba to overcome the US giant Walmart as the largest retailer in the world. Alibaba’s expansion plans are extremely aggressive: the group’s vision is to double the number of transactions from 2016 to 2020 and to reach 2 billion customers worldwide by 2036 (Zhao 2017). Alibaba’s market aim is to eventually get 50% of its customers from outside of China (Bryan 2015).

Disruption of Traditional Industries: The Iron Triangle

Since its launch, Alibaba Group has been progressively disrupting three key traditional industrial sectors and gained traction and control inside of them: retail, logistics and finance. These three core activities form the triangle, the cornerstone of Alibaba’s commercial strategy, also named ‘The Iron Triangle’ (Clark 2016, 1). This strategy has essentially been to put customers at the centre of its business that was a common practice in the West but a new concept in China. Alibaba has made it easy for its users (businesses and customers) to buy, receive and pay for products at a low price.

4 The structure that was ultimately accepted by the SEC, supposedly very conservative, was not originally accepted by the Hong Kong Stock Exchange. It is unclear whether it is because Hong Kong did not want to infringe its rule of law or because China wanted Alibaba to be integrated with the US and the global economy and advised Hong Kong to refuse the listing as a reason to access the NYSE. 5 The fact that ANT Financials and Alipay is essentially a Chinese bank with control over Chinese nationals is what motivated Alibaba Group and the Chinese Government to limit the shareholders’ ownership. 5.2 Alibaba’s Creation and Background 131

China’s e-commerce market is very different from the US market because it has come with state planning and the state-owned enterprises influence (Clark 2016, 15), but this has changed with the arrival of platforms such as Tencent or Alibaba. Currently, 10% of the retail shopping is done online in China against only 7% in the United States. And 40% of Chinese consumers buy groceries online whereas only 10% of the US consumers do so (Clark 2016, 15). Youngsters are prime commercial targets particularly in urban areas (Clark 2016, 11). In terms of retail, initially Alibaba progressively increased its range of products and entered a series of partnerships particularly with Small Medium Enterprises (SMEs). These SMEs did not have the network to export their products. The platform eventually expanded to retail customers and to the most famous brands and suppliers over the years, with more than 70,000 different international brands now trading on Tmall (Clark 2016, 7). It could be argued that by decentralising and disintermediating trading networks, Alibaba has democratised business and shopping in China. After gaining control over the brick and mortar traditional businesses (Alibaba Pictures opened brick and mortar offices in Pasadena, California in 20166 (Fannin 2015; Ostiller 2016; HOK 2017) through its online platforms, the group has also increased its sales by putting many of them out of business. Alibaba has now lower levels of competition to roll out its own shops, like Amazon in the US. This strategy has been recently supported by its Online to Offline (O2O) services, where the mobile phone serves as much as a purchasing item as it is used to bring the customers to physical Alibaba shops, for instance. In terms of logistics, which is the second aspect of the iron triangle, Alibaba has disrupted the classical delivery and transportation networks by positioning itself in its centre, whereby it created a network of fast and reliable delivering partners in China and throughout the world. While it gathered information related to suppliers and buyers online, all this data collected helped the group address issues such as logistical problems with the delivery of goods and payment speed. Alibaba took control over the second facet of the iron triangle by taking control of the pivotal hub of Zhejiang province and by co- investing with Fosun (another conglomerate) in ‘Cainiao’ (China Smart Logistics). Cainiao became a conglomerate of large logistical companies meshed and intertwined with each other. However, unlike rival JD.com, Alibaba does not own assets of the logistical activities of Cainiao, it owns the network at which it put itself at the centre in an ‘asset-light’ fashion (Clark 2016, 14–17). This strategy allows Alibaba not to be as debt-leveraged as groups such as Wanda, for instance. With this move, Alibaba Group became more than just an intermediary as it started adding value to trades and transactions. In terms of the third element of the triangle, finance, Alibaba became aware of the payment and logistical issues that they were facing with traditional channels as it placed its customers (buyers and suppliers) at the centre of its business. By

6 This was not the first time that Alibaba Group was opening offices in the US, where it already had five offices in Seattle, San Mateo, San Francisco, New York, and Washington DC (Wang2015 ). 132 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance

implementing technological innovations, Alibaba also came to develop efficient payment systems by creating Alipay as early as 2004. Alipay now represents one third of the 2.5 trillion global online payment market with a view to reach more smartphone users, 830 million individuals in China (Bhowmik 2012). Mobile payments represented US$5tn in China in 2016, 50 times more than the US (Faison 2017). In parallel, this process served the group as it could collect critical information of users’ habits, their credit information or their reliability. As a centre of all these trades, Alibaba could ensure suppliers were paid on time while buyers were satisfied with their purchase. In that sense, Alibaba became in itself the fundamental trust that was previously lacking in business transactions. Through the competitive advantages deriving from its large customer base, its logistical network and its payment system, Alibaba gained traction against Chinese financial services. Chinese state-owned banks were inefficient and did not pay much attention to their retail customers and SME clients. In February 2014, ANT Financial attracted CNY93 billion (over US$15 billion equivalent) (Clark 2016, 20) as its payment solution, Alipay, gave more freedom to its users such as the option to withdraw from their phones without penalty. In doing so, Alibaba reinforced the trust of its users that was established through 15 years of reliable services. The new deposit product offered by Alibaba was so successful that in March 2014 state-owned banks holding collectively 100 trillion in debt stepped in and set legal limits at a national level on how much its clients could withdraw and transfer to online operators. After disrupting the retail and logistical sectors, Alibaba became a challenger and a disruptor of the Chinese traditional financial services. The Iron triangle strategy gave competitive edge to Alibaba through the control of product suppliers, logistics, finance, and to some degree of its users. With cloud computing and big data analysis, Alibaba is now in a better position than banks to be able to assess its users’ credit risk and analyse their needs, for instance. Cloud computing has been a growing area of Alibaba’s business model (103% growth between quarter 1 2016 and quarter 1 2017). On June 10 2017, Alibaba Cloud added plans for two new data centres in Mumbai and Jakarta. This will bring the total number of global data centres to 17, in countries such as Germany, Japan, the United Emirates and the United States (Faison 2017). Alibaba derives 80% of its revenue from two of its retail platforms, Tao Bao and Tmall alone (Clark 2016, 7). Its core sectors are retail, logistics and finance, but its revenues are now increasingly complemented by cloud services and the group is aggressively increasing its presence in the media and the creative industries.

Balancing Commercial Disruptions and Political Compliance

In 2015, Alibaba employed 36,000 collaborators across 70 cities over the world (Fannin 2015). Alibaba is a significant job creator and indirectly it also gave the manufacturing sector and particularly the SME sector even more jobs and means to sustain them. Jack Ma claims that Alibaba has in fact created 30 million jobs in China, mostly through trading activities (Sangwongwanich 2016). 5.2 Alibaba’s Creation and Background 133

This is fundamental as the SME sector represents 68% of all Chinese imports and exports and 58% of the GDP, which as observed in Chap. 3, is crucial for the promise of stability of the government (Medina 2014). Although a lot of these jobs are based in China, Alibaba brings together importers and exporters from more than 240 countries and provides them with business opportunities (Alibaba Group 2012). In early 2017, following a backlash against Chinese influence in the US following a string of aggressive investment deals led by Wanda Group and the election of Donald Trump, Jack Ma went on a charm offensive with President Trump. Ma initially smoothed the nascent conflict between the US and China and claimed that Alibaba could create 1 million jobs in the US7 (Meng et al. 2017). After disrupting other traditional and established industrial sectors, Alibaba has initiated a disruption of the traditional media sector and creative industries. Through the use of technologies and by consistently filling the existing gaps, Alibaba also disrupted the way state-owned enterprises were operating their business. Local authorities do not seem preoccupied by the growth of this behemoth as long as it is growing economically, accumulating capital and creating jobs. Alibaba’s market capitalisation was 56% higher (2017) than at the time of its IPO (2014) and its share price had soared 61% from US$93.89 in 2014 to US$151.8 on July 14 2017 (Mac 2014; Market Insider 2017). Additionally, Alibaba’s freedom to operate continues as far as it complies with the rules and politics of China. Despite its large size, Alibaba Group is organised in a similar way to the Silicon Valley startups, based on a decentralised and flat leadership model. In the case of Alibaba, the difference is that although to some degree it is decentralised in its structure, the power still remains at the very top. Commercially, the entities that compose Alibaba Group are rather independent from each other, but they are federated at the top by a strong vision and a strong political-economic power. In early 2017, the entertainment division of the group was restructured to cater for changing customer habits, a larger array of creative products, and potential conflicting leadership issues. In terms of central leadership, the role of Alibaba’s leader has been fundamental in bringing the vision and the required changes to the organisation while complying with the Chinese Government guidelines.

5.2.2 Jack Ma: The Founding Vision of Alibaba

Jack Ma (Chinese Name: 马云 [Ma Yun]) (53) was born on September 10 1964 in Hangzhou, Zhejiang Province, China (Clark 2016). He is Alibaba’s original founder and he was the company’s CEO until May 2013. Since then, he has been serving as executive Chairman and is the individual most often associated with Alibaba. Subsequent Alibaba CEOs have rotated at the head of the company, starting with Jonathan Lu in 2013 and Daniel Zhang in 2015 (Kelley and Yarow 2015). While

7 These rather precarious ‘jobs’ however, would mostly consist in transforming users into sole trad- ers of goods and products, probably by taking over of a lot of e-Bay existing trades. 134 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance

Jack Ma stepped down from the role of CEO, these leaders essentially took roles of COO with upgraded CEO titles.8 The man behind the company’s vision and its strategic decisions still seems to be Jack Ma.9 He is now the richest man in Asia and has been often referred to as one of the most influential and powerful businessmen in the world (Bloomberg 2016). Jack Ma also holds a strategic position on the board of Japanese tech-corporation, Softbank10 and Chinese media giant Huayi Brothers. Jack Ma is quite unorthodox and rather different from the other Internet billion- aires in China, India or the US. Unlike most of the other CEOs from large state-led or private groups such as Wang Jianlin (Chinese: 王健林), Ma did not have an immediate connection with the party.11 He did not study abroad either whereas other CEOs of large online platforms, like Pony Ma12 (Chinese: 马化腾 [Ma Huateng]) or Victor Koo13 (Chinese: 古永鏘 [Gu Yongqiang]) did, for instance (Ma 2015). No matter how powerful he is today, Jack Ma was not originally from the Chinese golden circle; some of his mother’s relatives were KMT dissidents (Clark 2016). In his early life, he notoriously struggled both at school and trying to find a job. As a teenager, he used to organise tours for foreign tourists just to be able to practice his language skills. He eventually became an English teacher in 1988 partly because of his curiosity for the language and its associated cultures. After starting his first Internet venture China Pages in 1995 with an initial investment lent by friends and relatives (Clark 2016, 70–71), he moved to Beijing and worked for the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) as the Head of the International Department of the China International Electronic Commerce Centre (CIECC)14 (Clark 2016) where he was in charge of designing the first government website for China. This is how Jack Ma was first introduced to the Chinese political circle and its Guanxi ring. This is also one of the reasons why,

8 It may not be a coincidence that Jonathan Lu moved on to train new Alibaba talents from ‘within’ and help to ‘develop the next generation of leaders’. Rather than a rebuttal, Jonathan’s change of role mirrors the way the CCP leaders and heads of the Chinese Government rotate in power. It is done in a gradual and collective manner with a consensus from the other members towards a planned agenda of the existing structure – The boundaries of this structure are represented by the Group for Alibaba executives. It could be argued that the political structure of China may have a lot of similarities with corporatist power structures. 9 Although he recently announced his plans to retire from Alibaba in 2020 to concentrate his energy on philanthropic activities and education (Chen 2018). 10 One of Alibaba’s early corporate funders. 11 Wang Jianlin had served as general for the People’s Liberation Army (PLA). Wang’s father also fought alongside Mao (Chinese: 毛泽东 [Mao Zedong]) during the Long March (October 1934– October 1935). CEO of Tencent. 12 CEO of Tencent. 13 CEO of Youku Tudou. 14 The Ministry of Foreign Trade runs the CIECC and it is in charge of credit assessment, electronic payments and Internet security with projects aimed to reduce cash transactions. Its influence extends to the Asia-Pacific region and it has a UN representation (CIECC2001 ). 5.2 Alibaba’s Creation and Background 135 after Alibaba was formed, both Jack Ma and the government paths became increasingly connected. During his time at MOFTEC, Jack Ma also encountered the co-founder of Yahoo! Jerry Yang who was instrumental in his career development (Clark 2016, 90–91). This encounter would later explain the tight partnership between Alibaba and Yahoo!. In that sense Jack Ma benefited both from Chinese and US connections early on. Therefore, when Alibaba was created Jack Ma was already acting as a bridge between East and West. Beside his atypical path, Jack Ma has an enquiring and disruptive character. He is renowned for his monumental ambitions, his unconventional methods, and his creative strategies that made him and his company unpredictable: these were key reasons for his nickname ‘crazy Jack’ or ‘Jack magic’ (Clark 2016, 23). Jack Ma’s core traits such as his openness, his intelligence, his sense of observation and adaptation, and his determination influenced how his organisation is run and how fast it developed. Despite being singled out many times during his career, Jack Ma managed to learn from his experiences and he adopted what appear to be the characteristics of a ‘growth mindset’ (Dweck 2006, 108–111). Ma’s psychology and mindset are important as they influenced and defined Alibaba’s entire group and its developments to the present date. In fact Jack Ma is inseparable from the history of Alibaba in the same way Bill Gates, Steve Jobs or Mark Zuckerberg have become brand names for Microsoft, Apple or Facebook in the US. However, this is a new phenomenon in China in terms of corporations where state-owned corporations typically had low-profile corporate presidents nominated by the government for a period of 5 years or less. It is also unusual that a private business leader is given so much emphasis outside of the party, which was the sole perpetrator of the cult of personality.15 However, like Wang Jianlin before him, Jack Ma is soon leaving Alibaba’s control room (probably in a smoother fashion than his counterpart at Wanda). Perhaps the CPC saw a threat in Ma’s increasing popularity and power over the masses? Or maybe this departure is a genuine retirement after many years of exhausting work aligning both private and national agendas? It is hard to tell, but this may remind the reader that as seen in Chap. 2, the political supersede the economic dimensions in China and no matter how successful and powerful businessmen become they do not disrupt the political power in place. If it was not for the obvious benefits that he and his company may derive from the cultivation of such a positive image, Jack Ma could be considered at first sight as a political progressive activist and as a philanthropist: he seems to be concerned with great causes and human development such as health care, education and

15 The CCP realises that the story of Jack Ma as a self-made man is a positive and uniting aspiration for its population. It serves a soft power function abroad and fits with Xi Jinping’s ‘China Dream’ communication strategy seen in Chap. 3. The party sometimes shows its affiliation with popular figures such as the NBA player Yaoming or Jackie Chan to soft the edges of its hard-stance policies. 136 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance

environmental initiatives.16 He says himself that he will dedicate his energy to philanthropic causes and education from 2020 (Chen 2018). However, Jack Ma has a complex and somewhat ambiguous character. Jack Ma’s love/hate relationship with the US manifests, for example, through his early passion for US pop culture which is counter-balanced by a fierce competitive stance with both Hollywood and the Silicon Valley (Lieberman 2015; Erisman 2012). On Alibaba’s website, Alizila, many of the articles covering the film industry mention the race for China to reach and surpass the US number of screens: China has since overtaken the US (39,600 screens) to reach over 41,000 screens in 2018 (Najberg 2016). Alibaba also harbours a quasi-martial stance in its structure and military terms used at work. Alibaba’s employees nickname Jack Ma, ‘The King of Soldiers’ (bing wang) (Clark 2016, 31). While Jack Ma and Alibaba act as bridges between US and China, he has sometimes displayed rather driven and aggressive stances towards the US. He appears as a milder figure than Wang Jianlin. Therefore, one may wonder whether this is just a played act conferring the role of ‘good cop’ to Jack Ma while Wang Jianlin takes on the role of the ‘bad cop’.17 In which case Alibaba would be the perfect Trojan horse to accomplish dominance through a charm offensive or it could also be that Ma is an actual disruptor who may 1 day head China towards more progressive policies (Lashinsky 2014). Jack Ma seems to be a disruptor within the imposed political framework. In that sense, although Jack Ma is a controversial character, he had to adapt to the political- economic framework in place to achieve his ambitions. When asked what is the nature of his relationship with the government he says it openly, ‘one has to obey the rules and the laws of the country’ (Erisman 2012). Jack Ma’s public image lies at the intersection of a contrast between pro- government capitalist and corporate disruptor. As seen in Chap. 3, Chinese neo- capitalists and entrepreneurs are happy to operate without causing political disruptions to the power in place and without taking the limelight. For example, while promoting the virtues of a cashless society and the use of blockchain as an element of control and transparency (Zen 2018), Jack Ma has publicly been less enthusiastic about the political-economic disruptive and decentralised nature of Bitcoin (CNBC 2017; Crypto Martez 2017). In exchange for their compliance to the government’s guidelines and its line of command, China’s entrepreneurs are relatively free to accumulate capital. In addition, they get a degree of power and social recognition. This social recognition is strengthened through the developments of Alibaba Group into the media and creative industries arena, notably with the Alibaba Pictures subsidiary.

16 For instance, he is now the chairman of The Nature Conservancy’s China Program. 17 This role seems to have played against Wang Jianlin recently when the government limited his Western take over ambitions and over-leveraged debt positions in real estate. 5.2 Alibaba’s Creation and Background 137

5.2.3 Alibaba Pictures: The Ultimate Disruption

Media and creative activities of Alibaba go beyond Alibaba Pictures Group and they integrate other divisions of the larger Alibaba Group. Although most of the focus of this section is on Alibaba Pictures that includes several services such as Yulebao, for the purpose of this chapter, I will encompass other departments and divisions of the larger Alibaba Group that are not necessarily part of Alibaba Pictures. These entities comprise ANT financials for financial activities, Damai and Taobao for ticketing, or YT for the online circulation of films. These subsidiaries and divisions of the Alibaba Group are technically connected to Alibaba Pictures and they create an intertwined synergetic network at the centre of which creativity, media and IP play a determining role. Alibaba Pictures is emerging from the rapid developments of Alibaba group and it is a corner stone of the overall group’s strategy. The media and entertainment activity of the Group is one of the fastest growing revenues with a 234% increase between March 2016 and March 2017 (Faison 2017). When I visited the Alibaba Pictures offices hosted by Alibaba Group in Time Square, Hong Kong, I was surprised by the similarity of its environment to companies like Google, Amazon or Facebook. The eccentric decoration conveyed creative inspiration and the Pasadena office seems to be built on the same model too; they are functional, they seem to invite communication, creativity, innovation, and collaboration (Fig. 5.1). It is said that the approach at Alibaba is generally based on a Silicon

Fig. 5.1 Left: Alibaba offices in Hong Kong/Centre and right: Pasadena offices. (Courtesy of Patrice Poujol) 138 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance

Valley-like growth mindset where polls are organised, employees are encouraged to speak their mind, to use nicknames, and to be creative. They are regularly celebrated and put at the forefront of the company (Clark 2016, 29–31). In that sense, Alibaba’s approach seems to differ from the Chinese traditional state-owned enterprises. Alibaba’s vision that culture, film and entertainment should be integrated in the group’s business model is not solely the product of Alibaba’s adaptation to the increasing online market and the growing box office receipts. This strategy started at the time of Alibaba’s creation. When Jack Ma presented his idea to the Chinese Government in the mid’ 90s, he was already thinking about exporting Chinese culture and entertainment to the West and vice versa as a commodity among other retail items (Erisman 2012). In March 2014, Alibaba Pictures started with the acquisition of a 60% controlling stake in the Hong Kong-based ChinaVision Media from Alibaba Group (Kwok et al. 2014). The acquisition led to a scandal related to the valuation of ChinaVision’s assets and significant accounting discrepancies (Chu and Osawa2014 ; Kuo 2014). To dissipate these issues, the company was later registered in April 2014 under a different name as Alibaba Pictures. In July 2014, Zhang Qiang, state functionary and Vice President of China Film Group resigned from his position to take the lead of Alibaba Pictures Group and replace the original heads of ChinaVision18 (Frater 2016a). Since its creation, Alibaba Pictures has now grown to become the largest film company by asset in China. The company had an explosive growth fuelled by multiple acquisitions and integrations with other entities of Alibaba Group19: from US$6 billion after the acquisition of ChinaVision Media and the company’s listing at the end of 2014, to US$ 9.66 billion in June 2015, to US$32.55 billion as of the 18th of July 2017 (Cain 2015; Busch 2016a; Yahoo Finance 2017). Alibaba Pictures represented c. 8.5% of the totality of Alibaba Group’s assets on July 18 2017; 30% more than the entire group itself on the close of business of its IPO in 2014. Despite this rapid growth, Alibaba Pictures and other entertainment subsidiaries of the group have attracted consistent losses (Frater 2016a, b). Alibaba Pictures was profitable only in quarter one of 2016 while in quarter two it suffered losses again due to its ticketing services and the rapid integration of its activities. As a result, Alibaba Pictures was restructured: Alibaba Pictures now runs four distinct but intertwined activities Content Production, Internet-based Promotion and Distribution, Entertainment E-commerce, and International Operations (Busch 2016a). Led by Alibaba Mobile Business Group and Autonavi’s President Yu Yongfu, Alibaba Pictures was eventually combined with YT as well as all the other entertain-

18 The early supervision of Alibaba Pictures Group by a former cadre from China Film Group shows the strategic importance of media and the creative industries for Alibaba Group’s strategy and beyond this, for the Chinese Government’s agenda of controlling media both in China and abroad (As seen in Chap. 3). 19 With the acquisitions of Yueke (entertainment ticketing website), Taobao movie, film ticketing platform Tao Piao Piao, or Yulebao (C2B crowdfunding platform), for instance. 5.3 From Retail to Media: Alibaba’s Strategy and Tactics 139 ment divisions such as music, literature and sports under the Alibaba Digital Media and Entertainment umbrella on October 31 2016. This major restructure of the entertainment activities of Alibaba Group was chaired by YT’s former CEO, Victor Koo and aims to integrate all the creative industries of the group across all the existing circulation platforms to harness more customer data (Cadell et al. 2016). Use of this big data is supposed to generate cross-promotion and cross-sale opportunities. Hong Kong, the location of Alibaba Pictures is of great interest. It is the birthplace of some of the most long-lasting film successes,20 some of the greatest directors,21 artistic talents, and core professional film skills in Asia. Hong Kong also manifests both the status of a financial hub and a bridge between East and West in terms of media, entertainment, retail, payment, and technology. In a sense, this alignment symbolises the revival of a familiar post-World War II axis between Beijing (where Alibaba Pictures’ new headquarters were set up from 2015), Shanghai, Hangzhou (original headquarters), and Hong Kong (Frater 2015e). This axis used to be the filmmaking studio and film production axis back in the 1950s (Curtin 2007, 29–47). Jack Ma also claimed it offered him more ‘flexibility and freedom’ (Erisman 2012). However, one question remains as we will observe in the next sections; did Ma set up his film operations in Hong Kong only to benefit the integration of technology, creative talent and financial infrastructure, did he make this decision to evade the scrutiny of the Beijing government or instead to represent it? At the start of this section, I explained Alibaba’s Iron Triangle strategy. This approach has originally shaped Alibaba into a marketplace, a search engine, and a bank (Singh and Shukla 2014; Clark 2016). Embracing and being at the forefront of technological developments has enabled Alibaba to use technological disruption to launch online payments first, online film circulation and for products and merchandising. It also used big data, cloud computing (Aliyun), Artificial Intelligence (AI), and more recently 3D printing developments for the sale of products and film merchandising. At the time of publication of this book, Alibaba has also become a creative content giant. The group strategy has now more to do with an iron star frame than an iron triangle. Cloud computing and media have been added and tightly knitted with Alibaba’s original three core activities. Alibaba Pictures is integrated into the larger group and forms an instrumental part of its strategy in a very coherent way, as analysed and explained in the next section.

20 Bill Kong’s company, Edko, was the key driver of the worldwide success Crouching Tiger, Hidden Dragon (Lee 2000). Media Asia were the Producers of Infernal Affairs (Lau and Mak 2002), revisited by Martin Scorsese into Oscar winning filmThe Departed (Scorsese 2006). 21 The list is long since the Hong Kong New Wave: John Woo, Wong Kar Wai, Johnnie To, Patrick Tam, Peter Chan, etc. 140 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance

5.3 From Retail to Media: Alibaba’s Strategy and Tactics

To become a global driving force in the creative industries Alibaba Group and Alibaba Pictures have used strategies and implemented tactics with a hybrid approach which balances planning and adaptation.

5.3.1 Integration: Alibaba as a Central Hub

As seen in the previous sections, since its move from e-commerce and finance activities into the media sector, Alibaba has integrated many activities and entities through partnerships and acquisitions. This was made possible because of the volumes of cash, which the group had attracted through its core retail and financial businesses. It has sometimes acquired entities above their price range such as ChinaVision or YT to gain exposure to additional markets, customer base, and activities. As a result of its proactive investments in media since 2014, Alibaba has created even more synergies with the previous activities of the iron triangle. Alibaba Group has been able to acquire and integrate further businesses, financial services, technology, suppliers, and consumers. This integration has followed both vertical and horizontal paths. Alibaba has expanded in several areas of the media sector including film production with Alibaba Pictures and film crowdfunding finance with Yulebao as well as distribution on multi-platforms with YT as a prime outlet. Alibaba has also integrated online ticketing facilities with Taobao, Damai, and Wepiao, for instance, in which it co-owns a stake with its rival Tencent (Griffiths 2015; Krapels 2017; Jones 2017). It has developed plans to build and acquire cinemas to position itself on the theatrical window (Frater 2016b). Geographical integration has facilitated the collaboration with global creative partners. While Alibaba has managed to buy controlling stakes in local companies in China and acquire them, it has also engaged in partnerships with other countries, particularly with the US. For example, Alibaba Pictures signed a recent deal with Steven Spielberg’s Amblin Pictures in October 2016, shortly after the opening of its Pasadena offices (Rahman 2016). Alibaba has also come into a partnership with Lionsgate in terms of distribution with the OTT set-top box and Disney to promote a full Disney IP centred multi-media package including animations, games, music, and books called DisneyLife (Busch 2016a, b; McNary 2014; BusinessWire 2015). These international deals were sometimes further integrated with local deals. For instance, Lionsgate received US$375 million from Hunan TV in May 2015 while Alibaba established a joint-partnership with DMG and Hunan TV in July the same year (Frater 2015c, d; Jaafar 2015). Several other deals with European and Hollywood’s high profile industry professionals such as Harry Potter’s producer, David Heyman, were subsequently negotiated in what seemed like a targeted integration of creative talents (Frater 2016c; Lincoln 5.3 From Retail to Media: Alibaba’s Strategy and Tactics 141

2016). By acquiring equity into Amblin Partners, for example, Alibaba technically took a stake in Spielberg’s activities. This allows the company a certain degree of control over the content produced. Alibaba’s retail and financial activities give the group and its subsidiaries access to immense capital resources through which they expand. Does it give however Alibaba the know-how, the creative talent and the artistic sensibility that it is trying to buy?22 It is understood that Alibaba is trying to get exposure and gain knowledge of the film and creative industries firstly through its partners, hence its deals at the highest level of the industry. This succession of international partnerships leads Alibaba Pictures and Chinese media to an increasing integration with international media groups, particularly with Hollywood. It also enables Alibaba to contribute to control and change the image of China abroad by bringing creative talent, such as Chinese actors and actresses in Western films. Even if the series of partnerships and acquisitions does not immediately give Alibaba all the creative talent it needs in the long-term, it positions the group and Alibaba Pictures in a central role. Using partnerships is also a less capital-intensive exercise than taking over an entire chain of theatres, for example. Partnerships allow for a thorough observation of the partner, particularly in a foreign land where rules and culture are different. This method facilitates the development of a meaningful longer-term relationship that is prone to creating synergies. When the time comes and if the opportunity is there, the potential integration of the partner within Alibaba’s structure would bear lower costs and it has more chances to succeed. This targeted and cautious approach mirrors the methods of the government when making decisions related to the international sphere. This is further evidenced by the relationship that Alibaba entertains with some of its more significant rivals. Tencent and Alibaba, for instance, co-own a few strategic sectors such as part of China’s box office ticketing company Wepiao or Weibo (Griffiths2015 ; Lajoie and Shearman 2014; Krapels 2017). Fosun, a large retail and entertainment conglomerate which now owns Cirque du Soleil is cooperating with Alibaba on a Shanghai-based education project to train new generations of Chinese filmmakers (Busch2016 a). It seems that China’s largest entertainment conglomerates like Alibaba, Tencent, Baidu, Wanda, and Fosun are only rivals on the surface, while they are actually intertwined and collaborating on many strategic activities. This characteristic of the Chinese creative industries sector seems to be a departure from the large Western conglomerates like Apple and Microsoft, Google and Facebook, or Disney and Warner, which, despite occasional joint agreements, have quite separate and sometimes conflicting activities. The methods used to negotiate these partnerships and acquisitions in the global sphere have not followed the methods of Wanda group’s aggressive and imperialistic

22 Some industry professionals have argued that the higher management of Alibaba, including Jack Ma himself has very little knowledge about the realities of the film business, which can create tensions with the professionals and experts who Alibaba Pictures has hired to support its expansion plans into the film industry. This is the case with some of the management of Alibaba Pictures in the US who have shared their desire to resign in the close professional circles of the industry. 142 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance strategy. Wanda’s strategy used take-over techniques whereas Alibaba has followed the softer line of partnerships. Some have attributed these differences directly to the leaders of the respective groups.23 While areas of tension between Wanda and Disney were voiced publicly (Martin 2016; Iyengar 2016), Disney had already cooperated with Alibaba (Wang 2015b). Nonetheless, this partnership had to be put on hold during the conflict between Disney and Wanda (Dou and Abkowitz 2016). These confrontations channelled through a foreign third party may reveal deep and nascent tensions between Wanda and Alibaba. Even if they use different methods and strategies, the two groups compete for similar end goals: to gain as much control on the media sector and the creative industries as possible in China and abroad. Alibaba’s organisation is integrated vertically and horizontally in terms of payments, ticketing, finance, production, and distribution. Its marketing and sales strategy is also integrated and follows an IP centric approach like in the US (Busch 2016a). This is a notable evolution and change of business culture. Alibaba is bringing the traditional integrated commercial Hollywood model online and offline (ticketing, theatres). This is a novel integrated way connecting Hollywood and Silicon Valley business methods and cultures. In this context, it may seem that Alibaba may have a more viable approach than Wanda. To this extent the Chinese Government has recently pushed back Wang Jianlin’s aggressive take-over aspirations in the West and it has limited his investment activities (Yang et al. 2017). This is a particularly relevant strategy in the post- Trump election when the congress is leading hard-stance negotiations against China in strategic sectors such as media and creative industries. The inclination towards Alibaba Group’s softer methods had initially placed Alibaba in a better position than Wanda for example to negotiate with the Trump administration. This could eventually reinforce Alibaba Pictures’ control of how film and media operate in the West, particularly its contents and maybe its aesthetics. Beside the Alibaba case, such transformations have already taken place with Hollywood trying to entice the Chinese market with local talent such as Fan Bingbing or Jay Chou as just two examples out of many (Wong 2016; SBR 2015).24 However, with the trade wars starting and intensifying in 2018, Alibaba’s plans in the US have significantly slowed down.

5.3.2 Political-Economic Control

The multi-dimensional integration described and analysed previously gives Alibaba a tremendous amount of control over the creative production chain from development to circulation. Like Wanda, vertical and horizontal integrations are ways for

23 As seen previously, Jack Ma is a very different character from Wang Jianlin (CEO of Wanda Group). This will be further developed in Sect. 5.4.3. 24 Fan Bingbing has since had issues by the Chines goverment over tax matters. 5.3 From Retail to Media: Alibaba’s Strategy and Tactics 143

Alibaba to control theatrical and other distribution platforms back-end deals by disintermediating film from the traditional players. With the centralisation of book- ings, payments and revenues as well as the building of cinema chains and online circulation down to the sale of merchandised items, Alibaba controls the commerce of creative content vertically and horizontally. At the moment, Alibaba Pictures relies significantly on partnerships with local players for production and theatrical releases. For example, Alibaba Pictures has entered a partnership with Hengdian studios and invested US$150 million in Dadi cinema chain, the fourth largest cinema chain in China (Coonan 2014; Lieberman 2014; Frater 2016b; Keane 2007, 2016, 213). If Alibaba manages to operate its own theatrical screens as planned, it will have achieved a firm vertical control over the entire production chain from finance, production, distribution of films, and its creative content. Alibaba Pictures may also become a hub for film finance and creative content development: it simultaneously collects traditional private equity as well as crowdfunding financial resources.25 Moreover, by positioning itself as a bridge between East and West, Alibaba reduces investment risks by using a blend of national and foreign investments. Like other divisions and subsidiaries of the overall Alibaba Group, Alibaba Pictures Group and ANT Financial Services Group are now intrinsically interconnected. For example, the latter contributed to raise finance for the former to fund its online ticketing series B, Taobao Movie in 2016 (Shu 2016). The resulting financial hub owned by ANT is ultimately controlled by Jack Ma who sold most of ANT stake into his own company to comply with the government regulations regarding financial services (Spelich 2011). Since, the entire financial system that funds Alibaba is centralised, it grants Alibaba and its top leaders a large control over the group. With Alipay’s payment system and Alibaba’s multiplatform presence from smartphones, PCs to theatrical cinema chains supported by Alicloud storage and O2O, it can be anticipated that Alibaba Pictures could eventually gain control over the entire media chain from finance to circulation and on all existing platforms. It would give Alibaba Picture the advantage of proximity and the benefit of targeted advertising revenues by reaching its audiences with smartphone, for instance. Alibaba would also gain full control over the box office revenues (currently 90–95% of film revenues in China) due to the development of its own theatres and its ownership of the largest online ticketing platforms. Alibaba may be able to control the flows of capital deriving from creative works, the full payment chain, and the DRMs associated with content creation. Alibaba’s control extends to the content itself as a result of controlling finance, production and distribution. Alibaba can influence the entire film production process on all viewing platforms. It has become a modern version of the 1950s Hollywood studio system whose expansion was controlled in the US by the antitrust laws, based previously on Sherman and Clayton anti-trust Acts from 1915 (Wasko 2013, 11–14; Jones 2001). Even if large US conglomerates have been left

25 This will be further developed in Sect. 5.4.3. 144 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance alone since the Reagan presidency (Shepherd et al. 2001), the two key differences with the Hollywood studio system are that the studios were never able to achieve such a direct reach over domestic and foreign audiences as the technology currently available had not yet been developed. In addition, the world political economies were not so deeply integrated. Moreover, despite the colossal size of companies like Facebook, Apple, Google, and Amazon, these companies have not reached the level of vertical and horizontal integration and quasi-monopoly that Alibaba currently enjoys. This phenomenon is so far unparalleled throughout history and it is quite difficult today to forecast what will actually happen as a consequence of these developments. Except for the political force which is directly driven by the CCP, Alibaba is a point of convergence and a point of control of all the Petersen forces seen in Chap. 4: economic, technological, legal, organisational, and to some degree societal and cultural forces. Alibaba’s economic control over its retail platforms and its iron triangle strategy give the group access to one of the largest loyal customer-base in the world. A large part of its users are young urban audiences who are driving the growth of both its retail and media activities through the regular use of multi-platforms. In that sense, Alibaba achieves horizontal control. This conglomerate strategy where cross- promotions and the sales integrate local and international retail alone act as a cash- cow and as seen in the previous section, represent the base line income which covers the riskier business ventures such as creative content. This promotion and sales strategy is maximised across all platforms: theatrical, traditional, online, and mobile devices. With practically no foreign competition in China, Alibaba has been controlling all viewing contexts with very few collaborative rivals (Tencent, Baidu, Wanda, Fosun) while expanding abroad. Alibaba’s integrated strategy encompasses a precise observation of its markets and their fragmented nature. This is partly assisted by the use of big data, metrics analysis and AI. For instance, segmentation and tailor-made promotional tactics are used to integrate urban/rural audiences and lifestyles by offering different types of trailer depending on where the content is watched. This allows Alibaba to expand and increase its reach past the urban walls into the countryside. This has been achieved through its technological embrace of big data along with Alibaba’s central role leads to the exertion of power and control on several levels. In the same way, local and particularly foreign content as well as foreign platforms are tightly controlled in China. Meanwhile the Chinese Government and its companies are free to export Chinese soft power abroad sometimes by using the banned Western platforms (Heifetz 2015).

5.3.3 Political Compromise and Surveillance

Alibaba’s control and dominance in the creative sector are contained within the SAPPRFT and DoP framework. Alibaba is not just exerting economic control, but indirect political monitoring for the government. In embracing this tactic, Alibaba’s 5.3 From Retail to Media: Alibaba’s Strategy and Tactics 145 is able to keep the Chinese Government on its side and continue to operate and thrive in the retail, finance, cloud computing, and media sectors in China. The timing of Alibaba Pictures’ creation coincides with the start of the Hong Kong yellow umbrella movement. Ironically, this movement and the resulting social unrest were largely motivated by the increased scrutiny and influence of the Beijing Government over Hong Kong. It is arguable that this was an early plan of surveillance to do with intelligence strategies and potential counter-insurgency measures. When Alibaba acquired the South China Morning Post (SCMP) for US$266 million, (Minkoff 2015c) several local controversial editors went mysteriously missing: the timing does not seem coincidental (Earp 2016). While Jack Ma’s official rationale for SCMP’s acquisition was to make news available to the widest audience by reducing its price26 (Lhatoo 2016; Chow 2016), buying this outlet positioned Alibaba and the Chinese Government in a state of control in regard to an English speaking newspaper with a wide and loyal audience. Alibaba can simultaneously use the outlet as an instrument of propaganda and soft power.27 The acquisitions of ChinaVision and SCMP in Hong Kong are part of this expanded geopolitical influence of the Chinese Government through Alibaba. While there are no clear proofs at this juncture that SCMP has been censored, it has regularly been a promoting outlet for Alibaba’s activities and it is ultimately under the wider group’s supervision (Lhatoo 2016; Earp 2016; Lam 2016). Alibaba’s influence has grown to reach a regional controlling presence. In Korea, for instance, Alibaba Pictures has partnered with Kim Soohyun in Real, one of the traditional Asian film hubs (Lee 2017). This initiative is supported by a fast expansion in South-East Asia through Alibaba’s investment in the platform Lazada (Chen 2017b). US deals and partnerships seem to spring out of the same strategic goal that may have to do more with long-term control than collaboration. In this context, Alibaba would be an ideal champion and a very efficient tool for the Chinese Government in its quest for global soft power, regional control and sovereign political stability. Alibaba’s acquisition of news outlet outside of China illustrates its will to control English language news as well as Chinese news at home. This is particularly evident after the global scandal that involved Alibaba that harmed its brand name recently. Alibaba has been at the centre of a lot of controversy in regard to counterfeited items circulating on its platforms. As a result, at the end of 2015, Alibaba risked being blacklisted by US authorities (Minkoff 2015a). This succession of events has put Alibaba in a challenging position both commercially and politically. Commercially, the incident led to the erosion of trust in Alibaba’s platforms amongst its customer

26 It may remind the reader of the propaganda system under Mao that used free media platforms such as press, television and cinema to disseminate its messages to the widest audience. 27 Although the fact is that Alibaba’s acquisition of the newspaper may have somewhat discredited the outlet’s integrity and defeated the purpose of buying it in the first place. The fact is that the newspaper is now in full control of Alibaba Group and the Chinese Government. 146 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance base. Alibaba’s share price plummeted and it could have resulted in NYSE de- listing that would have been disastrous for the company. In light of bad international press and US pressure, the Chinese Government vehemently condemned Alibaba. This episode was considered a loss of face for the government as it cast a shadow over its ability to control Alibaba and its platforms that were at the epicentre of the scandal. The government appeared lenient and powerless in the face of international press. As seen in Chap. 4, while the Chinese Government made great efforts in designing an elaborate legislative model against piracy during the DVD era, they have had issues with the actual implementation of the laws and enforcement (Mertha 2007; Dimitrov 2009; Wang 2003a, b, 2010). The provincial governments sometimes turned a blind eye to these issues for several years, as they were not necessarily the highest on their agenda28 (Mertha 2005). Another element is that the rules set by the government are generally and purposely left ‘ambiguous’ or ‘vague’ to allow both local authorities and the central government to adapt to unforeseen situations and to give them more freedom in doing so (Mertha 2005, 72, 208; Keane 2013, 9). The Alibaba counterfeits situation is therefore more complex than it largely appeared in Western media. The polemic undermined the soft power efforts of the CCP internationally. More importantly, it was a challenge to the CCP’s authority that escalated with Jack Ma’s defence of the incidents and corruption accusations against certain officials in the midst of Xi Jinping’s anti-corruption campaign (Tejada 2015). Jack Ma responded and defended his company throwing part of the responsibility on the platform users (for instance, he retorted that if a Gucci bag is only CNY50 it must be fake). Moreover, the US has conveniently blamed and black-listed Alibaba while Amazon also holds counterfeited items on its platform and has not been black-listed (BBC News 2016). Meanwhile, Google and other US-based platforms have been used to spy on worldwide governments and private users without any major negative repercussions for their business (BBC News UK 2014; BBC News US & Canada 2014). There is a global geopolitical power struggle at play that seems to have intensified since the latest US elections in November 2016. This increases the existing tensions on counterfeiting and piracy issues and the central nature of IP as a key political-economic tool. Having to face the growing international tension, the Chinese Government retaliated and ordered Alibaba to address the issue. The Alibaba counterfeits scandal comes as China has put increasing emphasis on IP protection. The Chinese Government attempted to foster innovation and develop a tertiary sector that will help move away from an economy reliant on cheap labour and natural resource intensive manufacturing that deteriorate the environment (White and Xu 2012; White 2012; Keane 2007, 11; 2013, 3).

28 This is where Lobato identifies one of the faces of piracy and counterfeiting as ‘free enterprise’ (Lobato 2012, 69–94). The wealth and jobs that piracy and counterfeiting create tend to entertain corruption, but they also contribute to the ultimate stability of the country as explained in Chaps. 2, 3, and 4. 5.3 From Retail to Media: Alibaba’s Strategy and Tactics 147

The integrated sales approach associated with a given film and creative IP across multi-content and platforms29 was not a widespread business model in China. It was in fact rather inexistent until conglomerates such as Wanda, Fosun and Alibaba stepped into the media industry. US studios were originally not keen on the Chinese market to export their merchandise. One of the key reasons that once deterred the studios such as Disney from participating in maximising IP revenues was mainly counterfeiting. Manufacturing legitimate merchandise and trying to sell it through official channels did not offer a competitive advantage over the pirate enterprises (Tsi 2017). Wanda also used these techniques in some of its leisure parks, particularly when it tried to compete directly with the recently opened Disney leisure-park in Shanghai. Wanda’s theme park featured some IP infringing characters from Disney such as Mickey Mouse or Captain America (Iyengar 2016). In comparison with Wanda, Alibaba can alert its consumers of the legitimate and official outlets faster and systematically. It can also promote and sell legitimate film merchandise online. Since Alibaba has stakes in this business, it has a direct incentive to track down fraud and maximize the revenues for a given IP. Alibaba took some measures to tackle the growing international issue. First, Alibaba responded with short-term tactics. The group hired, for example, Matthew Bassiur a US expert on anti-counterfeiting as Head of Global IP Enforcement to avoid being blacklisted in 2015 (Minkoff 2015a, b). Bassiur had operated for large US corporations and he was a federal prosecutor for the U.S. Justice Department. On July 1 2016, Bassiur’s announcement on its company news website Alizila was that Alibaba unveiled a new counterfeit-free platform30 (Brennan 2016). Given the immense task at hand, 2000 permanent staff and 5000 volunteers were assigned to tackle the circulation and the sales of fake and pirate items on Alibaba’s platforms. Despite these efforts, Alibaba’s efforts were judged not to be conclusive and Alibaba was black-listed in December 2016 (BBC News 2016). But the blacklisting cannot solely be attributed to the issue of counterfeited items. It coincides with the election of Donald Trump and the administration’s hard stance on China and IP. Days after being black-listed, Alibaba started suing some of the counterfeiters (Kharpal 2017) and these actions reaffirmed the gradual influence of the rule of law in China.31 In parallel, Jack Ma sided with the government and asked for harder

29 Including books, documentaries, videogames and merchandising items sold online, in shops, and in the theatres. 30 The name of this new platform has not been revealed yet. 31 As seen in Chap. 3, the rule of law is a Western concept that has culturally and structurally conflicted with the Chinese system in place. 148 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance measures against counterfeiters (Ng 2017). But in doing so, he became critical of the existing laws and the socialist judiciary system in place.32 Secondly, Alibaba implemented longer-term measures that went beyond the sole purpose of controlling fake items into the grey area of crime prevention. These measures made use of big data (behavioural customer metrics), Artificial Intelligence (AI) and geolocation data33 (McEleny 2017). This aspect of Alibaba was exemplified in a statement from Jack Ma in 2017 Ma announced that his company would help national security by forming profiles for potential crime perpetrators. This is simply a continuum of the measures already implemented in 2015 which imposed a physical presence of police officers in all the online platforms’ headquarters, including Alibaba’s, with access to all information and metrics34 (Custer 2015). Jack Ma is leaving this surveillance apparatus in the hands of corporatist cadres who work directly with the government. The simultaneous fight against counterfeited items and the need to verify online identities and metrics has been at the core of Alibaba’s embrace of blockchain technology.35 Alibaba started working with Onchain on an identity repository. The company evolved into a blockchain platform called Antshares. Antshares did not belong to Alibaba Group and it was therefore renamed to NEO in 2017 to avoid any confusion with ANT Financial Services36 (Mendoza 2016; Higgins 2017). This semi-private chain has since developed carefully monitored projects such as identity based blockchain applications such as THEKEY (TKY) (ICO Analysts 2017). This project piloted at the local level before reaching agreements with such telecom giants as China Unicom (TheKey 2018). The developed chain is so far centralised and shaped in compliance with government supervision. Alibaba has also developed its own blockchain and smart contract solutions outside of the NEO chain, notably in terms of payment transfers and by securing patents (Zen 2018; Zhao 2018).37 As illustrated in Chap. 3, the government has adapted its measures to this technology by using a slow incremental two steps

32 On the opposite of former PLA Officer Wang Jianlin, Jack Ma may, at least at first sight, be a key factor of progressive change in China. 33 Autonavi is a subsidiary of Alibaba and handles geolocation by GPS. Autonavi’s CEO is currently the head of the Alibaba digital entertainment group. 34 This was an explanation why Alibaba had to move its headquarters from Hangzhou to Beijing to facilitate this tight monitoring process. 35 While other chains such as Vechain have been created to tackle the counterfeits issue, Alibaba’s interest in blockchain technology to fight counterfeiting through a systematic and transparent identification of its vendors and registered products is growing. An Alibaba official confirmed this during an interview in Alibaba’s office December 2017. This view was also expressed publicly by Jack Ma in broader terms (CNBC 2017). 36 Its rival Tencent took a similar step with its platform TrustSQL. Baidu also started working on its own blockchain solutions (Super Chain). 37 Alibaba is developing a crypto wallet, which would benefit the Filipino workers in Hong Kong transferring funds cheaper and faster back home. It has also registered 90 blockchain patents (one of the highest in the world) ahead of IBM that had 89 patents as of 3rd September 2018. 5.3 From Retail to Media: Alibaba’s Strategy and Tactics 149 forward one step back approach.38 For example, the government has kept a tight grip on the blockchain developments and its sector by limiting their main source of fundraising, the Initial Coin Offerings (ICOs) and issuing regular warnings through mainstream media (Lee 2018). The government has tried to balance the interests of the online giants to adopt the technology to develop its monitoring features while not disrupting the centrality of institutions such as the People’s Bank of China (PBOC).39 Therefore, large BATs private blockchain developments have characterised the growth of the ecosystem in 2018. The initiatives announced by Jack Ma appear to follow a scenario similar to The Minority Report (Dick 1956) inasmuch as Alibaba could provide the central government with predictive data on potential crime perpetrators. In summary, consumer behaviour and surveillance would be mediated by Artificial Intelligence (AI) through big data analysis (Zhao et al. 2016). The principle is similar to Google, Facebook and supposedly Netflix in the US (BBC News UK 2014; BBC News US & Canada 2014). But it goes further so as to pre-empt crime based on computer data all the while risking to condemn innocent parties who have not committed any crimes yet. Online giants both in the US and in China act as geo-political-economic weapons. They mirror the underlying international tensions and the new world power dynamics at a micro-level. These surveillance plans explain why the Chinese Government may have been cautious in letting Western platforms operate in China and why it blocked YouTube, Facebook and Google by 2009, for instance. This protectionist stance has also been the origin of Warner Bros.’ withdrawal from the Chinese theatrical market in 2006 (Friedman and Lee 2006) and of the recent Netflix’s backtracking due to ‘the regulatory environment which has become a lot more challenging for online foreign content platforms in China’ (AFP 2016). It was argued that part of Netflix’s decision was motivated by the conditions imposed by the government on the platform40 (Ge 2016), such as the disclosure of its customer’s data and metrics. This would put the platform at a serious disadvantage if this data were leaked to its competitors including YT (Alibaba). This situation created a political conflict for Netflix in terms of its users’ privacy. Therefore, Netflix

38 Some blockchain experts challenged this view when Consensys (a US/Swiss-based technology company created to develop Ethereum-based solutions) signed a Memorandum of Understanding (MOU) with the Xiongan local government for their smart city project in July 2018 (Yakubowski 2018). This event of a foreign company consulting in China for blockchain technology was sensa- tionalised in online newsgroups such as Coin Telegraph and assumed that the MOU meant an official agreement and that decisions taken at local level were as significant as those taken at national level. However, as seen in Chaps. 3 and 4, the government is not uniform and decisions occur from a top-down highly hierarchised structure. Therefore, this event does not mean that Tencent blockchain project or NEO have lost their quasi-status of chosen blockchain platforms for China – NEO’s rather centralised structure of seven nodes (compared to Bitcoin’s c. 11,700 nodes in January 2018) makes it easier for the government to control the chain. 39 The decentralised features of blockchain technology and its applications poses a threat to the centralised political-economic nature of the Chinese Government and its banking system as much as its corporate and centralised online media sector (BAT). 40 As it had been the case already with Yahoo. 150 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance preferred to enter a distribution partnership with iQiyi to gain exposure to the Chinese market without sharing its customers’ data and bearing the regulatory risks at home and in China. This episode highlights the current areas of tension between the local political and economic forces at play in China. These tensions play simultaneously at micro and macro political-economic levels and can explain some of the reasons why lately Alibaba took a collaborative stance in favour of the government. From the point of view of the government, Alibaba is undoubtedly too big to fail. The company is now a national symbol of innovation and success, a high-profile Chinese brand and a soft power corporate champion at an international level.41 This is part of the difficulty for Alibaba and the Chinese Government to conjunctly manage their image internationally when one single decision or a string of events such as the counterfeit incidents can bring global discredit. Alibaba has become a projection of the Chinese hybrid system in the US. Given the current stance of the congress on Chinese investments in the US, this arrangement might be readjusted (Mayeda and Mohsin 2017). Trump’s election might bring further changes but it is too early to speculate on the turn of events or longer trends for the future. Meanwhile, Alibaba complies with the Chinese Government’s agenda and its need for political stability. Jack Ma said it himself repeatedly, when dealing with the Chinese Government, the strategy is to ‘fall in love but not marry’ (Zhao et al. 2016). The Alibaba counterfeits incident is also an illustration that IP has taken a strong and central role in China. The Chinese Government is under pressure to give the impression that it is tackling the issues raised by the US-driven international community while ensuring political-economic stability. Macro and micro level political- economic agendas are intertwined in a very complex canvas. This has been leading to long-term changes in the structures of Chinese businesses, media and creative industries.

5.4 Alibaba as a Manifestation of the Change of Business Culture and Media Consciousness in China

5.4.1 Business Cultural Changes

As seen in the previous section, Alibaba exemplifies the change in business models. It also illustrates a change in business culture led by the online platforms. This evolution is sometimes driven by the CEOs of the online platforms who studied in prestigious Western universities abroad, like YT’s former CEO, Victor

41 This is particularly relevant with Alibaba’s listing on the NYSE where it had the largest Chinese IPO at the time. 5.4 Alibaba as a Manifestation of the Change of Business Culture and Media… 151

Koo who studied in Stanford or Tudou’s former CEO Gary Wang (Flannery 2010). These leaders learned how to run businesses, create business models and strategies from these institutions and the Western education system is thought to have influenced them. The rise of these leaders educated in the US or influenced by its culture (Jack Ma has expressed his interest in rock and pop culture) outside of the Chinese establish- ment seems to condition some of their methods and their visions (Flannery 2010).42 Nonetheless, it would be too simplistic to conclude so early that the resulting effect of Western cultural influence would take on a political-economic disruptive dimension. As seen in Chap. 3, the Chinese neo-capitalist entrepreneurs comply with the power in place. These leaders know that if they want to continue to rise and increase their capital, they should not upset the central government. As much as their visions and models may have been influenced by the Silicon-Valley educational approach and their network of entrepreneurs (students and alumni), they remain tied up to Chinese characteristics. The story of Jack Ma, originally an English teacher, spreads the idea that anyone can become someone in China and it reinforces Xin Jinping’s over-arching vision of the ‘Chinese Dream’ (Keane 2015, 117). It provides a flavour of democracy, which antagonises and somewhat balances the Wang Jianlin’s (CEO of Wanda) aggressive stance. These changes have ultimately led to local business cultural transformations. The Chinese online champions have adopted the Silicon Valley model of fast adaptation within the Chinese political-economic framework. This is a departure from the traditional state owned companies such as TV channels or China Film Group and Huaxia that still monopolise acquisition rights.43 From a human resource and a human factor point of view, Jack Ma has managed to inspire a rapid development within Alibaba between 1999 and 2009. He managed to get a concerted and organised effort from both the power in place and his employees whereby inserting himself as the image of his company, as an intermediary inside the macro triarchic system composed by the state, the industrial world, and Chinese society. In his own words, Jack Ma’s focus has been on his ‘customers first’ that is a change of business culture originating from the US with the customer relationship management approach (CRM). He then puts his ‘employees second’, which is a more governmental approach than in most US firms. This decision probably springs from a Chinese socialist trait.44 Jack Ma puts the ‘shareholders last’ (Erisman 2012; Clark 2016).

42 Jack Ma did not study abroad. He says himself that he has been influenced by Western culture and publicly claims his interest for rock and pop cultures. 43 China Film Group and Huaxia are still the only two companies that can officially acquire foreign content. 44 Although when looking at the blatant example of Foxconn and other exploitative Chinese corporations, it seems that many Chinese companies do not seem to have such preoccupations (Chamberlain 2011). 152 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance

According to Clark, this is where Jack Ma’s vision is truly disruptive and obeys to the political-economic hybrid system in place. In the West, corporations generally obey a different order where shareholders are placed first, then the customers, and the employees last (Clark 2016). By nurturing his customers (source of Alibaba revenues) and employees (Alibaba’s human resources) first, Jack Ma’s system may actually be better for his shareholders in the long-term as he is focusing his energies and core business on what matters the most.45 Alibaba’s business culture could therefore be considered a US business culture adapted to China, ‘with Chinese characteristics’ and more probably so with ‘Jack Ma’s characteristics’. What happens to these characteristics remains to be seen once Jack Ma leaves Alibaba in 2020. Moreover, Alibaba’s new business culture is hybrid: On the one hand, it mirrors the political-economic system in place; it is under Chinese monitoring while being quoted on the largest Western international exchange (NYSE). In addition, the ambiguity of the Chinese political-economic framework does not give Alibaba’s shareholders the usual level of control that they might have in the Western capitalist system where companies have to disclose public accounts of their results. Chinese companies cannot publicly reveal information in relation to their accounts as it would be considered illegal in China (Amigobulls Mediatech 2014). On the other hand, since Alibaba is quoted on the NYSE, the SEC disclosure requirements place Alibaba at the epicentre of global areas of tension. Although Alibaba’s business culture has changed throughout the internationalisation of the company, it is hybrid and it remains under Chinese Government supervision that keeps the control over the allocation of shares. Technology has also contributed to these changes and it is at the core of Alibaba’s business. The large and rapid push of mobile devices and online platforms already analysed in Chap. 4 may have influenced daily lives of companies and their media users. This is particularly relevant as China has jumped from a closed emerging ecosystem to a digital multi-platform world in less than 20 years. The change of Alibaba’s business culture makes it a prime player to drive disruptions to the traditional creative industries and to lead innovation and change within this sector. Similarly, the change in business culture and the pervasive media platforms driven by Alibaba could indicate an evolution of the audience’s media consciousness.

5.4.2 Cross-Promotion and Sales, Big Data and Change of Media Consciousness

Marx claimed in Capital that ‘in changing the technical world, Man changes his own nature’ (Bell 1995, 13).

45 As a matter of fact, Alibaba’s share price has significantly increased since the 2014 IPO (Mac 2014; Market Insider 2017). 5.4 Alibaba as a Manifestation of the Change of Business Culture and Media… 153

Fast-Evolving Viewing Contexts

Alibaba audiences have the choice of various viewing platforms and viewing contexts. They can watch films in theatres, at home or on the move with an array of ever increasing devices and circulation windows. This has brought different economies than the traditional model that was based on a regimented distribution window starting with theatrical release, video (VHS/VCD/DVD/Blu-Ray), television and online circulation. Some of the commercial content releases are now ‘day and date’ and they can be accessible across various geographical areas and on multi-platforms. In China, the emergence and fast developments of online and mobile viewing as well as mobile payments (a 64.7% penetration in 2016) have created an unprecedented content viewing and circulation context (CIW Team 2016). China had to adopt rapidly compared to Western countries. This was a feat given the size of the country, the population, and the closing of society during almost 50 years since the post-World War II. This evolution was accompanied by profound structural transformations in Chinese the media sector in China from public to private (explained in Chaps. 3 and 4). This rapid change of media contexts has largely defined the modern day Chinese audiences. It has also influenced the traditional filmmaking and the creative industries sectors. After disrupting traditional trading and banking sectors, Alibaba has been challenging the traditional filmmaking model.

Cross Sales/Cross-Promotions: The Centrality of IP

The cross-sales and cross-promotion of content (and associated merchandising) which belongs to a central IP system has been developed in Hollywood since George Lucas’ Starwars in the 1970s (Stringer 2003). This model means that studios have been generating more revenues with the sale of ancillary products, based on the creative IP, than on the film content itself. While it is a rather old model in the West, it is a relatively new concept in China; multi-media platforms like Alibaba have only started to embrace it. Many groups such as Fosun have recently acquired IP that they could exploit on several platforms and derive multiple products.46 When Jack Ma invited Daniel Craig, the current 007 icon, to launch its single day sales on November 11 2015,47 he knew that the face of James Bond would help increase sales both in China and abroad. On that day Alibaba processed US$14 billion worth of sales in 24 h. It was a commercial success (Bryan 2015). The cross-promotion, cross-content and cross-platform business model is a very lucrative line of development for Alibaba to get access to studios that are more familiar with this business model. It is also a great commercial opportunity as it provides Alibaba with growing sales prospects on its retail platforms. Alibaba is not

46 This was evidenced by recent talks from Fosun Group at the Cultural Industries Global Forum, Conrad Hotel, Hong Kong on the 6th of June 2016. 47 Also known as ‘11/11’, a nationwide shopping event created by Alibaba. 154 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance simply looking to sell creative content to its audience, but to maximise the IP it owns and to sell all the associated products derived from this specific creative work (merchandising and theme parks for example).48 Alibaba shows its adaptation of the Western model to its own particular circumstances. In China, 90–95% of the revenues currently come from the theatrical window (box office and advertising). In comparison, in the US, 70% of revenues are derived from items other than cinema tickets but they are very often still related to the film IP (Erickson2016 ). By adopting this cross-sales/cross-promotion model, Alibaba makes creative IP a centric and core feature of any of its creative ventures.49 Alibaba’s core strategy is to create retail opportunities with films. In order to attract ‘eyeballs’ in the economy of attention, the films need to be of good quality. Storytelling seems to be an important part of Alibaba’s integrated plan. However, it has been argued that what China currently misses is a creative boost driven by writers and good creative producers (Frater 2015b) as opposed to technically advanced professional skills (with little to no creative content to promote). Whereas technical skills are required to produce good quality creative content such as advertising, short videos, VR, video games, TV series, Web series, and feature films (which are at the centre of the promotion of commercial IP), most of these creative works also require character development and good storytelling skills and craft (Erickson 2016a; Zhang 2016a, b). So far, the Chinese film industry has relied a lot on a blend of slap-stick comedies, washed out wuxia, romantic recipes, and Hollywood mimicry (O’Donnell 2016) that may have contributed to bring the BO revenues down in 2016, particularly for local content (Wong 2016). China needs to create original content that is commercial enough to attract attention and sell Alibaba’s retail merchandise. Hence, Alibaba’s recent strategic partnerships with Paramount for the co- financing of MI:5 (McQuarrie 2015), Startrek Beyond (Lin 2016), and Teenage Mutant Turtle 2 (Green 2016), with Amblin Partners and Patrick Hemley for production and Lionsgate for online streaming (Busch 2016b; Frater 2016c; McNary 2014; Rahman 2016). Additionally, Alibaba has teamed up with Hong Kong based Director Wong Kar Wai on The Ferryman (Zhang 2016a, b) using his name and his artistic and creative skills as an international promotional brand. Other partnerships with scriptwriter Randall Wallace (Busch 2016a) and directors such as Giuseppe Tornatore or Renny Harlin are also being developed (Tartaglione and Lincoln 2016). While it integrates its operations and various platforms under the Digital Media and Entertainment Division, Alibaba needs to be able to produce quality content. In that sense, Alibaba insists that the quality of the content is paramount (Zhang 2016a, b). This approach has larger and longer-term implications such as vehicle and container of circulation becoming content. As mentioned in Chap. 2, this

48 To that extent, it is worth mentioning that Alibaba is increasingly looking at the possibility to provide such merchandising with the use of 3D printing. This would mean lower logistical costs and higher margins for the company in the long-term. It would also mean less factory jobs. 49 This is a strong incentive for Alibaba to take down film piracy and counterfeited items wherever it may suit the company’s agenda. 5.4 Alibaba as a Manifestation of the Change of Business Culture and Media… 155 recalls McLuhan’s prophecy of the container itself which becomes media and art (McLuhan 1964).

Big Data and Change of Media Consciousness

Originally, big data was used to gain commercial advantage. Alibaba has integrated data analysis to its film activities, explicitly to try to match the audience evolution and sometimes to influence it. But Alibaba’s practices go further than Hollywood’s ‘crowd-wisdom strategies’ described by Escoffier and McKelvey (Escoffier and McKelvey 2014). In this regard, Alibaba Pictures use AI to analyse big data not only to target their advertising and promotion more effectively, but also to anticipate the type of content that audiences would like to watch. Integrated machine learning increasingly runs Alibaba’s management metrics of its big data and AI systems help Jack Ma and the Alibaba management to make certain commercial and strategic decisions. Alex Zhang, former Secretary General of the International Division of Alibaba Pictures, expressed Alibaba’s two-way approach of predicting and influencing the audience when he declared in 2016: It’s all in an effort to create a psychological map of their [the consumers] decision-making apparatus so that we can be in better position to predict and influence. (Erickson2016 b) This approach serves as an economic tool to provide continuous integrated promotional online efforts across platforms from development and pre-production to post- production and post-release stages. User metrics also serve to support a political agenda that facilitates surveillance. As described by Lucy Montgomery, audiences are being moved from TV and traditional theatrical spaces into ‘controlled spaces’ (Chap. 2, Montgomery 2010, 57–59) as a manifestation of Foucault’s governmentality and his description of a panoptic society.50 This reinforces the argument that political and economic agendas are tightly linked in the Chinese media sector on many levels: from the micro individual scale to the macro government scale. In terms of marketing, not only is Alibaba trying to adapt to audiences and but also to anticipate the trends. A key concept championed by Jack Ma is the value of user’s ‘stickiness’ (Jenkins et al. 2013, 6) which is connected to users’ loyalty and increases Alibaba’s control over its customers (Clark 2016, 21). In this regard, Alibaba Pictures use AI to anticipate the type of content that audiences would like to watch. This poses a number of questions. Does this mean that audiences may intrinsically influence the creation of films? To which extent is Alibaba’s algorithm turning into a self-fulfilling prophecy where the audience is left totally manipulated? Ultimately, since the government monitors Alibaba, the question to ask is, who is manipulating whom?

50 As seen in Chaps. 2 and 3. 156 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance

AI systems influence the content circulated and produced. For instance, unlike other traditional production companies, Alibaba is not just investing in blockbuster films, but also in more independent productions (such as Wong Kar Wai’s or Giuseppe Tornatore’s films). Alibaba’s use of big data and AI on its platform tends to work like YouTube’s that orientate the users towards a type of content according to their likes and to associate such behaviour with the promotion of a related product. An algorithm that is regularly fine-tuned by the developers essentially regulates it. This is made easier as China is now at the forefront of AI, VR and blockchain technologies, particularly AI globally (The Economist 2017). Alibaba benefits from a pool of local technical talent to improve its systems and a vast amount of data. These systems identify users on a personal basis and propose them with an array of familiar or desirable tailored content. This system has a downside as the platform tends to suggest similar types of creative works which eventually can create a looping effect: the user will keep being offered to watch the same set of films or to listen to the same music repeatedly. This eventually can cause the audience to reach saturation level and move towards different types of content and other platforms. Therefore, it is arguably a myth, in the current state of affairs that a company like Alibaba would be able to totally control the tastes of its users. Audiences still use word of mouth to give each other opinions about the content that they have watched or they may recommend creative works, for instance. The human factor should not be ignored in this specific context. Even if online conglomerates such as Alibaba can have access to word of mouth messages through keyword recognition, it would be more cost efficient to adapt to these metrics (which is what Alibaba claims to do) than to try and forcefully change or manipulate the opinions of fragmented audiences. Therefore, the use of AI and big data has indirectly influenced the aesthetic decisions of Alibaba Pictures. For instance, unlike other traditional production companies, Alibaba is not just investing in blockbuster films, but also in more independent productions such as Wong Kar Wai’s or Giuseppe Tornatore’s films (Tartaglione 2016a; Busch 2016a, b; Jaafar 2016). But the audiences also ultimately influenced these choices. Alibaba and its audiences mutually influence each other. By suggesting products and creative content to its audiences, Alibaba influences them. In turn by adopting technology and certain behaviours, Alibaba’s audiences influence Alibaba’s metrics. Computer and human interactions seem to work hand in hand and tend to balance each other. These disruptions to the traditional markets and state-owned enterprises have manifested in a number of innovative tactics and brand new initiatives. 5.4 Alibaba as a Manifestation of the Change of Business Culture and Media… 157

5.4.3 Alibaba’s Creative Ecosystem: An Opportunity for New Talents?

Alibaba’s Two-Pronged IP Strategy

Alibaba’s key strategy has been to strengthen its media position in China with local investments and consolidations. It has used the same strategy and tactics to expand internationally. Alibaba has followed a two-pronged tactic. Firstly, it has invested in already packaged large Hollywood productions such as MI:5 (McQuarrie 2015) directly or through the use of Yulebao, its crowdfunding arm. Secondly, it has acquired international IP and produced films locally by attracting international talents to them such as Renny Harlin for Legend of the Ancient Sword (Harlin 2018). In another instance, in 2017, Alibaba Pictures has acquired most of Guillaume Muso’s novels adaptation rights to make local Chinese films (Li2017 ). In each case, Alibaba has invested in low risk projects with potential high returns and it owns the IP and circulation rights for China, its main market to date. In the first example, Alibaba has invested in low risk high profile blockbuster films developed by recognised Hollywood entities all the while gaining access to exclusive, prime content and exposure to international markets that the company can learn from. In the second example, Alibaba remains in full control of the production while gaining potential international exposure through experienced foreign talent. Alibaba also works closely with local creative professionals. This is where the group intends to contribute to develop the Chinese creative talent pool by integrating it with international players (Jaafar 2016). Eventually, creative control could be asserted throughout the entire production line, including the circulation on Alibaba’s own online platform YT and its theatres. Given that Alibaba also owns or has stakes in some of the largest online film and entertainment ticketing platforms such as Taobao movies, Damai or Wepiao it also controls box office receipts which are collected ahead of the film release and help plan efficient screening organisation and scheduling in real-time (Griffiths 2015; Jones 2017). Alibaba benefits largely from the synergies and the control of the production chain as much as it does from the promotion of its content by subsidiaries like YT through the new social network business models developed in China (Lau and Kwok 2014). Alibaba’s system positions itself as an exploitative institution, disintermediated and pseudo-decentralised but it is only to put Alibaba at the centre of all transactions, what Bauwens and Kostakis describe as parasitic capitalism (Bauwens and Kostakis 2014). Therefore, the system is intermediated by one powerful central middleman. Michel Bauwens has been critical of such systems like Airbnb or Uber which he defines as parasitic capitalism or ‘cognitive capitalism’ (Bauwens 2014). This form of political-economic system often results in ‘hyper-neoliberalism’ where a central player attracts and integrates all the resources and capital for the benefit of its own growth and exploiting all the other players in the network (Bauwens 2014). 158 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance

Development of a Film Academy: Training New Creative Talents

In order to fill the creative gaps highlighted in the previous sections and to harness local talent, Alibaba plans to open a film academy to train new Chinese talent in the art and craft of filmmaking. Its operations would be set in Shanghai, close to Hangzhou where the group had its original headquarters51 (Tartaglione 2016b). This education project is still in development but it has received ideas and consultancy from both industry professionals and academics in 2017 (Ellis-Geiger 2017; Tartaglione 2016b). This initiative would represent a decentralisation of the monopolistic film and media-training hub currently located in Beijing particularly with the Beijing film academy (BFA) at the centre of this system. In any case, this seems like a return to the origins for Jack Ma who started his career in education and may be aware of its importance in training future generations of talent, as seen in Sect. 5.2.2, with the example of Jonathan Lu former, CEO of Alibaba reconverted into a leadership trainer within Alibaba. Alibaba puts high emphasis on learning, which is another element connecting Alibaba to the business culture of the Silicon Valley startups. It also confirms Jack Ma’s ‘growth mindset’ attitude and philosophy (Dweck 2006, 108–111). This growth mindset trait is further evidenced by Alibaba’s work to support emerging talents locally and to give back to the community. For instance, Alibaba organises the Big Hearts, Small Film festival initiative in Pasadena since 2017 (Business Wire 2017). The event gives an opportunity to nine young filmmakers including students from UCLA School of Theatre, Film and Television, to work on short creative content with local non-profit organisations to help raise funds for their respective causes. While the young filmmakers practice their craft and skills, they contribute to help the community through Alibaba. In November 2017, this event raised a total funding of US$200,000 through a red carpet event where the short films were screened and judged by professionals of the creative industry such as Steven Spielberg (Business Wire 2017).52 Although most of the filmmakers were US-based, this Alibaba initiative illustrates that while the group strengthened its local image it also encouraged the development of local creative talents.53 While it is not clear yet when the Alibaba film academy will be launched, it shows the intent of Alibaba to train local talent. Whether Alibaba’s agenda is solely to train young emerging filmmakers in terms of their creative skills or shape them to their corporate vision as well as the government’s vision (as it is currently the case in the BFA) remains to be seen. Beyond its potential direct influence over film content, Alibaba may gain a degree of influence over the creators as well. This school and its influence over young emerging content creators could bring Alibaba on a path to further disruption of a long-term nature or it could be the opposite. In any case, this initiative would benefit Alibaba economically, as Alibaba

51 After it open new ones in Beijing to comply with the government guidelines including the request to integrate police offices in all online platform headquarter sites (Custer 2015). 52 https://www.bigheartsmallfilm.org/ 53 Interview with an Alibaba Executive in December 2017. 5.4 Alibaba as a Manifestation of the Change of Business Culture and Media… 159

Pictures would be at the centre of talent discovery and IP creation. Ultimately, it could choose and have a lot of control on which talent should emerge or not.

Crowdfunding with Chinese Characteristics

I have already outlined areas of tension between Alibaba Picture’s new finance and production model and the traditional filmmaking model. In addition to this disruptive set of features, Alibaba Pictures is the first and only Chinese media company that has initiated a crowdfunding platform to finance films. Yulebao, the platform acquired by Alibaba Pictures in 2014 had originally financed local content such as Jackie Chan’s slate of films (Frater2015 a). The platform allowed Alibaba to raise up to US$4.8 million in less than 3 days from the crowds (Coonan 2015). It gave Alibaba access to a low-level risk type of finance while creating an early audience set which was already committed financially and emotionally to the film projects. Alibaba Pictures expanded its crowdfunding experiment to MI:5 featuring international star Tom Cruise. The film combined with a promotion engineered by Alibaba across the larger group’s platforms was the 11th most grossing film in China in 2016, with only a 2D version available (Erickson 2016b; Najberg 2016). Majority of the platform’s audience, like in most of Alibaba’s retail businesses, is formed by urban youth under the age of 30 (L. D. Investments 2017). Nonetheless, Yulebao does not act like a typical crowdfunding platform such as Kickstarter, Indiegogo or Slated, for example, in the West. First of all, most crowdfunding platforms in China serve to finance inventions, new designs or products, but no media content. Therefore, Yulebao currently has a monopoly on crowdfunded media projects. Yulebao operates with a minimum investment and challenges the concept of democratisation associated with the crowdfunding philosophy (Luka 2014) whereby anyone can invest any amount of money, no matter how small, in a given film. Nonetheless, crowdfunding, in its current form whether it is in the West or in China is not a truly open collaborative space. Bauwens and Kostakis view Kickstarter, for example, as a hyper-neoliberal model of parasitic capitalism par excellence, where the owner of the platform extracts a commission on each transaction simply for maintaining and administering the platform (Bauwens and Kostakis 2014, 33–34). This type of model lets collective creators and communities undertake the actual labour while other participants are funding it. According to a Sony executive who has dealt professionally with Alibaba, Yulebao’s model is not equitable with professional content producers (Lo 2017). Yulebao takes 24% equity on revenues: 10% for its investing crowds and 14% from the outset. This commission is almost three times as high as Kickstarter or Indiegogo’s 5% platform fees (Kickstarter 2017; Indiegogo 2017). Yulebao justifies this significant commission as maintenance of its platform and access to its promotion power and a potential reach of its 507 million mobile users (Long 2017). Most of this customer-base is driven by the youth who are widely coveted by content producers and their advertising partners: millennials and urban 160 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance female youth have largely been driving BO growth, for instance (Von Sychowski 2014; Thompson 2017). In addition to the film release, merchandising and product placement opportunities are significant on this segment, particularly for studios and large content producers like Sony. In effect, Alibaba takes a much higher than average 14% commission on crowdfunding content as a central intermediary and it has total control over the content. In fact, it proposes mostly commercial content that could have been financed by other means than crowdfunding and invests a ready-made audience to it at development level. This means that the basic principle of crowdfunding, which is the democratisation of media creation by giving a chance to filmmakers who otherwise would not get funded by traditional media industries, is severely limited. The element of collaboration and crowdsourcing that sometimes characterise this mode of production is also missing. This crowdfunding method could be labeled ‘VIP crowdfunding’ or C2B crowdfunding (as Alibaba calls it itself): it concerns a circle of urban users with the means to invest a minimum fee for highly commercial films. Most films financed on Yulebao are blockbusters, independent films made by already established filmmakers likeWolf Totem. There are a couple of exceptions such as Tiny Times and Impossible, but these are in the category of popular indie content. This centrally organised structure is a departure from the classical models of crowdfunding. Additionally, Yulebao and its parent company Alibaba Pictures monitor and carefully select the crowdfunded content, as they do not wish to antagonise the government. The platform stays in the realm of lucrative and low-risk mainstream content. These initiatives represent first tiny steps forward even if they are not yet beneficial to emerging talents. Although the Yulebao model seems limiting, it is in fact a step forward. Super Girl (超级女生 [Chāojí nǚshēng]), a TV show which allowed the public to vote for their favourite artists (in a similar fashion to Pop Idol, or Britain’s Got Talent) was halted by the Chinese Government in 2006 (Barboza 2006; Jacobs 2011; Keane 2013, 52, 146; 2015, 89, 98). The show produced by Hunan TV was a mass success and it reached an audience of 400 million viewers (Keane 2015, 89, 98). The official reason for the ban was that Super Girl stood against good morals and that it was ‘vulgar’ (Barboza 2006). The show also competed against and annoyed the conservative state-owned CCTV (Keane 2015, 89, 98). However, some argued that part of the government decision was motivated by the underlying democratic nature of Super Girl. The public was able to vote for the artists who they had chosen. Given the large numbers of youth who were following the show, this was seen as a potential threat to the political stability of the government (Jacobs 2011; Kender and Baker 2008). Liu Zhongde, culture minister at the time strongly and publicly criticized the show. In one of his interviews, he declared: “What the market chooses is not necessarily a good thing” (Jacobs 2011). Ten years later, in December 2016, a crowd election experiment took place during the early development of Maritime Silk Road, a romanticised story of Zheng-He, the national hero depicted in 1421 who is famous for discovering the American continent (Menzies 2004). 5.4 Alibaba as a Manifestation of the Change of Business Culture and Media… 161

The Maritime Silk Road project was presented in Fuzhou and Xian during the 2nd and 3rd Silk Road International Film Festival, an event initiated and driven by the government. The film is expected to be produced on a large budget; close to US$45 million and is to be shot in China and South East Asia is aimed to promote China’s ‘peaceful intentions across the region’ (China Film Observer 2015; Su Cong 2016). The producers of the film called on the public to vote for the acting talents who they would like to see in the film (China Film Observer2015 ). Unlike Super Girl, the case of Maritime Silk Road shows that the higher authorities validated the crowd-voting approach. In this scenario, the concept was appropriated by the filmmakers and supported by the government to promote a sense of national unity. Distinct production companies in the same vein have developed several Zheng He’s adaptations conjunctly, as the Monkey King. This was motivated by financially lucrative business reasons as much as to attract the favours of the government. The 1421 story is seen by the Beijing central government as an effective tool to promote its image positively abroad and its ‘One Belt, One Road’ political vision. Aside from creating a collaborative space for audiences to be commercially and affectively engaged with the content, the process was thought to create greater political involvement at the national level. The experiment targeted urban millennial audiences who use online platforms. If this project is eventually produced, the platform will have created one of the first crowd-voted propaganda films. A piece of propaganda created by the committee and supervised by the government in which audiences become emotionally engaged. In its current state, Alibaba’s crowdfunding platform may not be the appropriate outlet for young emerging creative talent to produce their first film.

Blockchain Embrace: IP Protection and First Steps Towards a Distributed Creative Network

While Alibaba has originally reproduced the successes and developments of US-based companies such as Google, Amazon or Facebook, it has eventually created a new system that also integrates finance and more recently blockchain technology. Blockchain technology started with the circulation of an unpublished white paper originating from MIT authored by Satoshi Nakamoto on a cryptography mail- ing list.54 This paper was the catalyst and the foundation of all the following blockchain developments in relation with Bitcoins and other crypto-chains (Nakamoto 2008). Since then blockchain has evolved into several networks of tokens or Altcoins, such as Ethereum or Monero that have been subject to a lot of financial speculation. Its fast and successive upgrades have tried to enable a scalability feature that would allow the system to propel the technology to a mainstream level with

54 The existence of Satoshi Nakamoto has remained a mystery: it is infused with controversy as he supposedly disappeared shortly after the circulation of his paper that was based on several other major cryptographic works. 162 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance a set of day-to-day applications ranging from crowdfunding platforms to globally distributed computer sharing and processing networks (Gupta 2017). The core features of blockchain technology are based on its currently unmatched levels of encryption and tamper-proof record keeping that guarantee close to no chance to alter the pre-determined rules of its protocol: this feature is called the immutability or the integrity of the chain. The integrity of the chain has made it a system which can ensure the transparency of transactions through their computer authentication, not just for transactions but also for smart contracts containing other types of data such as media (Szabo 1997). The Ethereum network has also developed applications which would expand these encrypted transactions to smart contracts including, but not limited to musical or film content (Virk2018 ). Since the overall exchanges that take place from one node to another in the network are strongly regulated by an encrypted algorithm and a computer network, it would make it very difficult to pirate a film or a piece of music, for instance. By the same token, in the field of creative industries, smart contract technology would essentially suppress the intermediary (whether talent agent, talent manager, lawyer, collection agent or distributor), as the computer network would safeguard and perform the duties of these intermediaries. In that sense, blockchain technology and smart contracts could essentially reduce what Lobato describes as the grey economy of intermediaries (Lobato 2012). The other feature associated with blockchain technology is its potential to enhance trust in different types of transactions: monetary or non-monetary (contracts, creative content). Because decentralised nodes (machines) validate the transactions, which are traceable and validated by the entire network, the distributed nature of the system can be defined as a peer-to-peer (P2P) network or a commons ecosystem with a very flat democratic and collaborative structure. Blockchain technology is associated with a political and philosophical ‘crypto-anarchist’ and cyberpunk movement (DuPont 2014). It is thought that blockchain technology could be a key instrument in establishing a supra-national balance between the triarchic dynamics of political power, corporate power and societal power (Bauwens and Kostakis 2014; Tkacz et al. 2014). However, some detractors argued that like any other technological advancement, blockchain could be in fact a double-edge sword. The auditability of the system, which is its main feature of trust and transparency could be used, for example, by governments to impose an unparalleled amount of surveillance and control over their citizens (Golumbia 2016). Scholars have added that instead of being a libertar- ian tool, Bitcoin’s (BTC) underlying technology (blockchain) had intrinsic components that made it inherently conducive to a collective and socialist type of political governance (Huckle and White 2016). The blockchain transparency features may give unprecedented amounts of disclosure for the Chinese Government over its nationals living abroad. The privacy of the latter will be at risk of being severely diminished particularly when combined with cloud computing and big data analysis. As it was the case with Internet, it can be argued that depending on the modali- ties of its technical implementation blockchain technology could become a double-edge sword: a tool of surveillance and control as well as an instrument of freedom, collaboration and transparency (Virk 2018). 5.4 Alibaba as a Manifestation of the Change of Business Culture and Media… 163

The changes and the adoption of blockchain technology have been consistent, fast and global. China has had a driving role in these developments: while the government tried to regulate Bitcoin, for instance, it never banned it and let blockchain startups flourish under its supervision. When the last phase of scalability innovations is implemented to blockchain technology and smart contracts (Gupta 2017), it can be expected that its use will expand to other sectors such as the media. Since 2013, a number of companies such as SingularDTV (Breaker) have been working on ways to safeguard IP and improve Digital Rights Management (DRM) while using a distributed circulation model by using blockchain technology. All the BATs and more recently JD.com have all engaged with varying degrees of focus in blockchain technology. Alibaba’s relationship with blockchain technology debuted through Onchain in cooperation with the groups’ financial arm ANT (Dotson 2016). ANT successfully implemented its globally expanding Alipay payment and transaction system. Alipay caters for efficient cash management services where Bank of China, for instance, may not. In addition, blockchain technology should allow for a full and reliable monitoring of these transactions. The series of scandals involving counterfeited items indirectly impacted the image of the Chinese Government and Alibaba, and therefore Alibaba had to implement fast measures to tackle this issue. Aside from forming a committed task force to reduce the circulation of illegal items on its platforms, Alibaba started to embrace blockchain technological applications with its cooperation with Onchain and NEO. Antshares did not belong to Alibaba Group and to this extent, they have been renamed NEO to avoid any confusion with ANT Financial Services, the Alipay financial arm of Alibaba55 (Mendoza 2016; Higgins 2017). In March 2017, Alibaba began implementing the technology to track counterfeited food items on its platform (Millward 2017). The cooperation with NEO is only a first step but its initial work on digital assets and secured transactions is now complemented by the implementation of smart contracts, which are a vehicle of choice for authored and secured media file transactions. Alibaba is starting to use blockchain to track counterfeits and is considering to roll out the same technology to tackle piracy and DRMs.56 In terms of media, this would give a significant advantage to Alibaba and its platform YT to avoid some of the issues and bad press previously mentioned. It would also support Alibaba in complying with the government’s guidelines. In light of Alibaba’s strategy of systematic integration of its activities (as seen in Sect. 5.2.1.), blockchain is set to be integrated to Alibaba’s core business structure, particularly in terms of inventory management and its recent Online-to-Offline (O2O) initiatives. This phase may come after the necessary testing stage of blockchain and smart contract technology is completed. This would imply that blockchain technology would eventually become an inseparable feature of Alibaba’s core

55 Its rivals Tencent and Baidu took a similar step with their respective platforms TrustSQL and Super Chain. 56 But these plans along with cross-border payment solutions are so far only developed in a private chain context. 164 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance trading and IP system. This technology and its intrinsic features would be embedded into the deeper layers of Alibaba’s software architecture. When blockchain technology is implemented in the media ecosystem, it might potentially limit film piracy. Blockchain technology and smart contracts would give the tools for Alibaba to reliably protect its IP and its associated revenue streams (Brennan 2016; Dotson 2016). This is an important step for Alibaba both politically and economically. Politically, the bad press associated with the counterfeit scandal has backfired on Alibaba and the Chinese Government. Economically, Alibaba needs credibility to ensure the harmonious development of its partnerships with IP holders such as Lionsgate or Disney, for example. Alibaba also needs to protect its own IP rights. Likewise, it would be easy for Alibaba to monitor and, if needed, to censor or to withdraw unwanted content from its platforms. Jack Ma has publicly explained his interest in blockchain’s features that allow for more control such as transparency and verification. In parallel, he was relatively dismissive and ‘confused’ about the decentralised nature of Bitcoin and argued that he did not ‘understand’ it (CNBC 2017; Crypto Martez 2017). Bitcoin’s decentralised features challenge Jack Ma’s vision of a cashless society through a central payment system such as Alipay.57 A key feature of blockchain technology and smart contracts is that they enable all the users of the protocol to interact in dissociated and fragmented groups. The main difference with this system compared with classical crowdfunding or crowdsourcing models is that the entire network is decentralised and subject to the rule of trust which is a significant departure from the existing crowdsourcing/crowdfunding communities described by Luka (Luka 2014). In terms of project funding and communal collaboration, blockchain technology seems to be succeeding where crowdfunding and crowdsourcing only met moderate achievements. For instance, Initial Coin Offerings (ICOs) are the crowdfunding equivalent of centralised traditional markets IPOs. ICOs are the sale of coins created by a company to be used for transactions between the participants of a chain. In some cases these coins can be considered as a share or a security in the company: in this case, the terms Token General Sale (TGE) is more appropriate. ICOs have been highly speculative and they have quickly provided large amounts of funding to projects (Chester 2017). For instance, one of the largest ICOs, IOTA, raised over US$1.8 billion in a day on June 13 2017 (Shin 2017). SingularDTV (Breaker),58 a decentralised creative content platform had a market valuation of US$140 million in the same month and the entire crypto market valuation (although it has wide swings) was over US$100 billion in June 2017 compared to less than US$10 billion in 2016 (Shin 2017). Blockchain technology has also created a dangerous hyper-fascination in the crowdfunding and crowdsourcing P2P communities and it is starting to reach the

57 Alipay’s aspirations to become a central worldwide payment platform have since been challenged by a political-economic stance from the US that led to Alibaba’s failed deal with MoneyGram on January 2, 2018 (Balakrishnan 2018; Soo 2018). 58 Now rebranded Breaker from February 1, 2019 (Breaker.io). 5.4 Alibaba as a Manifestation of the Change of Business Culture and Media… 165 mainstream audience (Kaminska 2017). To protect retail investors,59 the SEC has expressed concern over the sector and it has attempted to regulate it since July 2017 (Shin 2017). The SEC’s main argument is that ICO-issued coins should be considered as securities. However, the dilemma lies in the fact that the SEC fails to recognise most tokens and Altcoins as legitimate assets to start with and it is trying to impose its rules and policies beyond its jurisdiction. Not all ICOs take place in the US, as the official registration of Ethereum offices, for instance, is in Switzerland.60 The decentralised nature of blockchain networks makes them disruptive and hard to control for centralised and geographically bound entities like the SEC. Blockchain networks possess the elementary features of P2P that will remind the reader of Shujen Wang’s definition of piracy as networks or collaborative and distributed networks for content creation (Wang 2003a, b, 2010; Hartley et al. 2015). Since these networks are disintermediated and totally decentralised, they are particularly challenging to control. Moreover, NEO is an open source ambiguous protocol (not strictly speaking a private blockchain) that allows for consensus- based series of changes decided by the entire community of participants. Blockchain core technology and features imply the creation of such collaborative and distributed networks, not by using what a typical decentralised Internet network can offer, but more of a distributed system managed by a downloaded protocol (not necessarily a URL) offering the participants to interact, transact and collaborate node-to-node (P2P). The risk connected with the lack of control seems to be a key reason why a Chinese blockchain protocol such as NEO and Alibaba’s proprietary blockchain solutions work differently from decentralised, distributed and democratic systems such as BTC or ETH. Whereas NEO was designed as an open source collaborative block chain project, it is also a private chain such as US-created Ripple (XRP),61 making it an ambiguous hybrid model which I chose to call ‘open-private chain’ or ‘semi-public chain’- the supply of tokens on this platform is entirely issued and controlled by NEO (NEO cannot be mined). The ambiguous nature of NEO manifests itself through the control exerted by the company over the mining of the blocks (no external participant can mine and control the blocks of the chain therefore preventing hard consensus mechanisms such as forks). At the same time, NEO’s white paper clearly states that through Proof-of- Stake (PoS) each participant who owns a share of NEO has the right to vote for changes and consensus to be implemented into the system.62 On the one hand, these hybrid features confer NEO (and indirectly the Chinese Government) a tremendous amount control over the chain, while it serves as an experiment to enter a cashless

59 The motivation regarding retail investors’ protection is probably also combined with the difficulty for governments to impose taxes on unregulated tokens that are not considered as real assets. 60 As per July 2017, Ethereum (ETH) is the second largest crypto-coin per market valuation after Bitcoin (BTC). 61 Ripple (XRP) was designed and implemented to be regulated by a cartel of major international banks involving JP Morgan and Goldman Sachs for instance. 62 http://docs.neo.org/en-us/index.html 166 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance controlled society. On the other hand, NEO is one of the first openly authorised mass-scale collaborative and democratic voting systems in China to date (a departure from the Super Girl restrictions described under Sect. 5.4.3). Aside from starting to control payments and traded items through blockchain technology, Alibaba has been monitoring and to some degree controlling technological developments. The group has created a fund, The Alibaba Entrepreneurs Fund, for emerging startups, notably in areas such as blockchain technologies and Artificial Intelligence (AI). As a result of its offices in Seattle, San Francisco, San Mateo, New York, and Pasadena Alibaba has been able to keep track of the latest Silicon Valley technologies and ideas and it has invested in them at an early stage. The fund makes use of Alibaba’s office presence around the world, for instance, a round of start-up funding recently took place in Hong Kong in April 2017 (Tsui 2017). This fund is connected and organises events with key universities and its young emerging technical talent both in Mainland China and abroad. In that sense, Alibaba has been creating a network of excellence and innovation. This development and the integration of new technical talents adds another layer of control over the most innovative start-up ideas. Alibaba has evolved from an intermediary connecting small enterprises with each other on a national scale to harnessing early talents and innovation at an international level. In doing so, the intent of Alibaba is to be able to identify, select and nurture new ideas and to discover a fresh talent pool. This approach springs as much from the motivation to own IP and its corresponding revenues as it is to shape the ecosystem and the sector itself. As a result of its collaboration with local talent, its initiatives in the realm of education with the creation of a film academy and through the use of YT to identify new talents, Alibaba is becoming a creative hub. Additionally, when they are further developed, its blockchain activities could decentralise the structure of its system, aligning Alibaba with the original concepts of crowdsourcing and crowdfunding. The integration of these separate activities could give rise to a novel type of hybrid decentralised creative network where users interact and transact without having to rely on a larger entity to validate their creative activities.63 An algorithm would essentially regulate the entire system, but it would be Alibaba’s algorithm. In theory, this model could act as a vehicle for increased creative freedom. Meng argues that Internet and particularly P2P networks act as a decentralising power in China and a creative distraction to the system in place. Meng explains, for example, that transnational media consumption is taking place outside of the institutional environment and surmises that decentralisation both undermines local government and global trends (Meng 2012). This supports Austin and McQuail’s argument that audiences had a degree of control and participation, as they were producers of meaning and increasingly involved in the circulation and production of texts (Austin 2002; McQuail 2010). In this context, Hartley sees audiences interacting in the network economy and the

63 In a decentralised blockchain system, the majority of the network (not one single monopolistic entity) validates transactions and contracts. 5.4 Alibaba as a Manifestation of the Change of Business Culture and Media… 167 realm of the informational society as ‘creative users’, ‘creative individuals’ (Hartley 2009, 15), ‘creative audiences’, or ‘creative citizens’ who collaborate in groups or communities out of a complex system to produce content together (Hartley 2009, 18; 2012, 51; Hartley et al. 2015, 70). Without promoting the agency rhetoric, Hartley defines these creative individuals as media educated and conscious ‘navigators’ as opposed to mere commodities played by the system (Hartley 2012, 51; Hartley et al. 2015, 58). This view is somewhat nuanced by the idea that creative citizens (whether US or China-based) are almost systematically repatriated into the industrial and corporate IP platformised model without any tangible compensation for the creators (Montgomery 2010; Hartley 2009; Hartley et al. 2015). Many scholars have reinforced this argument and have warned about the potential issues surrounding free labour in the information society and the digital economy (Terranova 2000, 2004; Schiller 2000; Johnson 2007). They point at the associated risks of social exploitation. This is where a blockchained network could make a difference as it would mean that the participants of the creative ecosystem would be paid directly and immediately for their work. Aside from technical skills and creative sensitivity, most emerging filmmakers require funding to create films (Altabás Fernández2014 ). The lack of finance for creative projects is sometimes considered a strong form of economic censorship. Despite being under the control of the Chinese Government, the integrated model created within Alibaba’s ecosystem could cater to this issue. This model would depart from the highly intermediated and centralised traditional distribution system seen in the West (Silver and Alpert 2003, 59) – Fig. 5.2:

Fig. 5.2 Current model Current model for film distribution release sequence for film distribution release sequence. (Source: Silver Producer’s Exhibitor– Distributor and Alpert 2003, 59) movie theatrical release

Home video– rental/sell-through

Pay TV

Free-to-air network TV

Syndicated TV

Other ancillary markets 168 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance

Model for digital exhibition that bypasses blocked channels

Independent Independent Independent film digitized producer’s exhibitor’s in-house and uploaded film website server for digital or projection to paying Independent audiences distributor’s website

Fig. 5.3 Model for digital exhibition that bypasses blocked channels. (Source: Silver and Alpert 2003, 62)

Model for direct-to-consumer independent movies-on-demand

Independent Internet Independent movies-on- film distribution demand available direct to consumer’s home PC or Internet-enabled big-screen TV, offering streaming or digital download options using broadband cable or satellite transmission delivery

Fig. 5.4 Model for direct-to-consumer independent movies-on-demand. (Source: Silver and Alpert 2003, 63)

With the use of blockchain, Alibaba’s ecosystem should in theory transform into a disintermediated system. This system would allow each of the participant of the network to transact with each other in a similar fashion to Silver and Alpert’s online and theatrical circulation models in Figs. 5.3 and 5.4 (Silver and Alpert 2003, 62–63). Nonetheless, these two separate systems would actually become completely integrated within a distributed node-to-node network. This network would have the overall decentralised and distributed architecture described by Hartley in regard to Baran’s diagram64 (Hartley et al. 2015, 182). As observed previously in Chaps. 2 and 4, Ramon Lobato and Shujen Wang have used the concept of network applied to the informal circulation of pirated content (Wang 2003a, b, 2010; Lobato 2012). The same can be transposed to the notion of blockchain and smart contract networks. With the use of P2P blockchain technology and smart contract technology at the centre of the architecture of the system, this model could integrate Silver and Hartley’s models into a distributed, disintermediated collaborative ecosystem.

64 Paul Baran’s 1964 diagram (www.cybertelecom.org/notes/baran.htm). 5.5 Conclusion 169

Economically, if Alibaba is disengaged from the network as its epicentre and simply becomes one of its nodes, this would ultimately mean that it might lose most of its commission-based fees. But these could be counterbalanced by Alibaba collecting mining fees, transaction fees, and become the fundamental structure of the network. To do so, it would just have to maintain the algorithm and the network that could be essentially performed by AI and big data. Once blockchain and smart contracts are rolled out into the entire Alibaba ecosystem, it means that the creative space resulting from this transformation could be either increasingly monitored and confined or this may pave the way to a new node- to-node distributed and disintermediated collaborative space where each participant (or groups of participants) would be able to interact and transact freely throughout the protocol. This model could potentially give a higher degree of agency to both content producers and audiences. Content creators and audiences would interact with each other from decentralised nodes (for modes of payment and for the transfer of creative content). In doing so and given the open source nature of NEO’s distributed model, the participants should be able to use the transaction currency set by the protocol as well as to create their own tokens or coins. To some extent, these should be regulated by the protocol within a preset algorithm; the creative community would redefine the value of these exchanges. In that sense Alibaba is potentially contributing to build a true participatory ecosystem that could give space for Chinese emerging creative talent to develop.

5.5 Conclusion

From an organisational, technological and economic point of view, Alibaba has disrupted the way businesses were traditionally run in China by disintermediating traditional industries and by proposing a B2B, C2C, and B2C model where suppliers and producers, regardless of their size, can trade directly with Alibaba’s retail buyers.65 Through successive developments, this model has enabled faster deliveries, lower prices, and a more effective payments and banking system. On the surface, what Alibaba offers is similar to what blockchain technology offers in many ways, a decentralised model and be a custodian of trust in value transactions. The group has also disrupted large international conglomerates such as e-Bay or Amazon. This level of disruption could be argued to have a political-economic dimension as it contributes to promote the soft power concept created in China rather than made in China (Keane 2016) while disrupting US-based businesses. Alibaba’s leader, Jack Ma has offered a vision for the group and his passion for pop culture mixed with long-term plans regarding the cross-promotion and cross- sale opportunities of Alibaba platforms have motivated him to engage the group into the realm of media and creative industries through Alibaba Pictures. At first sight,

65 A similar approach to Amazon in the US. 170 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance

Alibaba has been operating a philosophy that is quite compatible with blockchain philosophy in the sense that it has disintermediated exchanges, decentralised the markets and disrupted existing inefficient businesses. Alibaba Pictures’ strategies and tactics mirror the group for all other sectors such as the integration of resources, the use of partnerships and ultimately taking major control over the sector by positioning itself as an unavoidable intermediary and a central hub. The group has become a point of convergence for key forces at play and has concentrated a lot of resources as a regional and an international powerhouse. As shown previously based on an analysis of Ng (2017) and Busch (2016b), it can be stated that Alibaba’s strategy has become IP centric. If it continues to develop its use of blockchain technology and smart contracts, Alibaba could potentially become a key player in the control of IP. Starting in 2015, Alibaba’s strategic plan in terms of IP has been to develop a reliable system to trade IP66 and to build an IP bank (Kudasov et al. 2015). Alibaba’s vision is to become a global player in IP trading.67 Its current evolution is consistent with the intention of the Chinese Government to move away from an economy mostly focused on manufacturing towards an economy of IP and creativity. Alibaba has the scale (in terms of the size of its customer base and its capital) to achieve disintermediated same day/date global release of films on simultaneous platforms as imagined by George Lucas more than 15 years ago (Silver and Alpert 2003). This system would be all the more effective that all payment transactions would be dealt with by a central payment system owned by Alipay rather than a succession of bank transactions. Compared to the existing model observed in Chaps. 2 and 4, this would mean that Alibaba Pictures would recoup a large part of the revenues for any released film early on. What Alibaba has already achieved for the retail and finance sectors is being applied to media content. It is still uncertain what might happen when the Alibaba blockchain and film academy projects are further developed and when they are fully integrated into the system. In the short-term, it is expected to that blockchain and smart contract technologies may significantly limit the levels of content piracy and counterfeiting, which would reinforce Alibaba’s central position as an IP custodian. Alibaba Pictures owns the entire production chain and controls its process. Alibaba Pictures becomes the key aggregator and the central point of contact. It takes the role of the Emperor and the coordinator of the other players in the industry. The system proposed by Alibaba is disintermediated, but it is in fact still solidly centralised. Alibaba Pictures can influence talent selection and to some degree audiences’ decisions. Alibaba has operated changes of business culture with Chinese characteristics. These have been met by a change of audiences’ media consciousness. These business and media consciousness changes have been intertwined and quasi-simultaneous.

66 This may require blockchain and smart contracts to avoid piracy issues. 67 Alibaba has also explored 3D printing as a way to improve the sale and delivery of merchandised items associated with a particular IP. References 171

The fast adoption of new platforms and devices combined with the use of big data, metrics analysis and AI algorithms means that online conglomerates have influenced their users. In turn, these users may have fuelled further changes in the media ecosystem and in companies, like Alibaba, which have been shaping it. Alibaba and its audience mutually influence and feed each other. These various levels of integration between different stages of production, from manufacturing to media, from the financing to the ticketing of film, to the study of its audiences and the control over instant electronic payments could give Alibaba a full global scale control over the programming of its content online and potentially in theatres like Wanda before Wang Jianlin’s efforts were curbed by the central government. Alibaba’s IPO at NYSE can be argued to be a form of soft power. In addition, having direct control over the screens and online programming of content throughout the world and on multi-platform contexts may be more than soft power, it could be considered direct power. If Alibaba’s plans of integration and control are met with success, the group could transform into a very effective global propaganda machine. But the recent failure to take over US-based payment provider MoneyGram shows that Alibaba’s plans for global expansion may be met with resistance. Alibaba is a meaningful, well-chosen name, particularly in the context of the pursuit of the Silk Road strategy, the soft power tool introduced by Xi Jinping in September 2013 (Tian 2016). In ancient times, the Silk Road was itself a bridge between East and West and an example of a decentralised trading system where sellers and buyers from the entire world could trade and collaborate. While being a bridge between East and West, Jack Ma could be considered at first sight as a decentralising political activist who empowers people. Not only has he exploited and disrupted the gaps left by state-owned enterprises and their inefficiencies, but also attempted to reform key sectors such as healthcare, education and environment. Likewise, disintermediation and decentralisation are key features promoted by the blockchain technology. The early cypher-punk adopters of blockchain technology have also emphasised the need for other values that transcend money, such as collaboration or the sheer pleasure of undertaking creative endeavours.68 While Alibaba departs from the US corporate business culture, its core values seem to diverge from the blockchain core values. Even its crowdfunding platform Yulebao that conveys collaborative features and the emotional attachment of the audiences, as a value to a particular project is ultimately a C2B exclusive and centralised financial model. Alibaba’s system is disintermediated and decentralised but it is only to put Alibaba at the centre of all transactions. Therefore, the system is intermediated by one powerful central middleman. As much as they encourage collaboration and the shared economy, according to Bauwens and Kostakis, such structures exploit local resources for their own capital accumulation, which is their ultimate goal (Bauwens and Kostakis 2014). The idea of a totally disintermediated and distributed system is more in line with blockchain

68 Cypher-punks, a tribute to the Cyber-punk literature led by Philip K. Dick, are the early developers who implemented the vision of Satoshi Nakamoto’s white paper. 172 5 Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance and a collaborative mindset. As a centralised hybrid system, Alibaba unfortunately cannot share all these traits. This poses a number of questions: how can a new participatory model that identifies and develops emerging local talent be developed within an integrated and centralised hybrid corporate political-economic context? What would it mean for the talents, content and audiences? Where would the creative values of the work lie in such a context? How could other values than financial values be promoted in such a system? The following case study will address some of these questions with the ethnographic approach of a film that was originally co-financed, promoted and distributed by Alibaba Pictures: The Last Race. Through the lens of this film, I observe the dynamics and the areas of tension operating on the ground between the online film business model and the traditional filmmaking model.

References

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6.1 Introduction

6.1.1 Background of the Case Study

In this chapter, I analyse the interactions of value, reward, and power structures as previously discussed in Chap. 2 through the onsite participant observation of the film entitled The Last Race ([终极胜利, Zhōngjí shènglì]) (2016) co-directed by Stephen Shin and Michael Parker in China. In Chap. 2, I discussed theoretically the changing nature of IP, of audience contribution as creators of content and the implications of creative peer-productions on these aspects. While the centrality of IP is redefined, a wave of young online creators is emerging. In Chap. 3, I showed that the political-economic macrocosm of China and its media sector were under the control of the government to serve collective economic interests as well as a propaganda agenda inside China and a soft power agenda abroad. In Chap. 4, I showed that these priorities significantly shaped the media sector towards a phenomenon of platformisation. Online giants such as Alibaba and Tencent emerged as selected champions and currently they have a prevalent role in terms of finance, production and circulation of online creative content. I also observed the dynamics of these forces in the context of the larger political economic macro forces at play, as seen in Chaps. 3 and 4 such as government intervention and media sector forces. These forces (political, economic, technological, and legal macro forces) as described in Peterson’s and Lemaire’s respective frameworks influence and connect at a micro level (organisation of the production, labour) as well as at a market level. In this way and as discussed in Chap. 2, the film under study serves as a microcosm of the forces operating in the wider media and political- economic macro-levels (Rabiger 2014). This case study shows how an international co-production led by China and Hong Kong works and how one of its main stakeholders, Alibaba, influenced the

© Springer Nature Switzerland AG 2019 183 P. Poujol, Online Film Production in China Using Blockchain and Smart Contracts, International Series on Computer Entertainment and Media Technology, https://doi.org/10.1007/978-3-030-02468-0_6 184 6 Live Film Production Case Study: The Last Race film production and distribution process. As seen in the previous chapter, this influence is so important that Alibaba developed its online media and film activities through Alibaba Pictures (Shu 2015), Yulebao, (Coonan 2014) and YT (Frater 2016a). After acquiring the largest cinema ticketing company in China, Alibaba is also planning to build its own cinema theatres (Frater 2016b, c). It could be argued that beyond its core online retail business, Alibaba is morphing into a multimedia driven corporation. Therefore, this case study is very topical in researching the rapid transformations of film and the creative industries in China. It also illustrates the tensions between traditional filmmaking and the emerging digital practices (such as the production of online creative content) driven by online corporations like Alibaba and YT. The fieldwork which I undertook as part of this case study was conducted between the period of 10 June 2015 to 1 September 2015 and was aimed to study the pre-production and production stages of the Hong Kong-Chinese-US film co- production originally entitled Chariots of Fire in China and later entitled The Last Race.1 It was a unique opportunity to be able to observe and collect data from such a production - producers are often very reluctant to get outside observers (including academics) embedded in their projects and thanks to my contacts within the production company,2 I was able to negotiate the study of this case in real time (live).

6.1.2 Methodology

I had a chance to see and comment extensively on one of the early versions of the script in 2011 (See Appendix 4). In addition, I was fortunate to have observed the early development of the film since the end of 2014 when I was a consultant on the film. This was a rare opportunity and, to the best of my knowledge, after reading an extensive amount of academic material relative to the creative industries, it appears that it is the first time that a film has been observed in details from the inside and in real time from its development stage, throughout its production and ultimately to its immediate distribution and circulation. Ortner and Caldwell have expressed and argued how difficult it is to gain access to the film development process and to onset productions, particularly in Hollywood (Caldwell 2008; Ortner 2009, 2010). I feel very fortunate to have been granted such access; this would not have been possible without Mr. Shin’s cooperation. This research environment is particularly important in regard to Bassey’s theoretical concept of ‘relatability’ (Bassey 1981, 85). Data collected, triangulated and analysed was available first hand as opposed to reconstructed after the events had already taken place. This is often the case when approaching case studies in film.

1 The film is a biopic about Eric Liddell, one of the main and real-life protagonists of The Chariots of Fire, who returns to his birthplace, China in the midst of the Japanese invasion. 2 And my previous work with them. 6.1 Introduction 185

Whereas retroactive data collection is done for practical reasons, it means that crucial data is generally lost in the research process (Austin 2002). This case study is ‘live’ in the sense that I studied The Last Race in its ongoing production process from its development in September 2014 until its Chinese release in July 2016 and its US release in November 2017. This approach involved tracking this film, concurrently with its promotion process3 to point of release to gather immediate evidence on the constraints on the film production process in China rather than retrospectively trying to reconstruct this context (Austin 2002). This film was originally financially supported and distributed by Alibaba in China, which will provide additional information about how this online corporate giant positions itself in regard to film productions and the changing traditional and online media sector in China.4 Williams, Rice and Rogers caution that a case study ‘requires the researcher to become part of the social context to understand it more adequately’ which suggests an ethnographic approach (Williams et al. 1988, 37). I have taken such an approach through observation and interviews: not only have I collected data during the development, the pre-production and the production phases when the film was shot in China over the summer 2015, but I actively participated in its production as a production consultant (in the initial development phase) and as an actor (in the production phase). This onsite ethnographic observation involved attending meetings with the production and directorial teams, formal and informal interviews with professionals from all the key production and creative departments who supported the creative vision and the production of the film. The film was shot in with different teams in three key locations and their surrounding areas: Tianjin, Weifang (mostly) and Beijing (I interviewed team members from all three locations).5 I had the chance to interact with both the creative and the production teams. I also gained valuable knowledge and experience while being on the set and observing the process. Taking part in the daily activities and meetings and showing a sense of commitment helped in being accepted on the production (which is prone to be quite insular). This helped me triangulate the collected data with various individuals who had different roles on the set and different hierarchical levels, genders and cultural backgrounds. Given my background in film production and earlier involvement with the film project, it could be argued that I positioned myself as an ‘observing participant’

3 The promotion efforts were observed through textual material such as the film promotional trailers and inter-textual elements such as trade magazines, media articles and audience discussions on social networks. 4 As seen in Chaps. 4 and 5. 5 I sometimes had to anonymise the names of the respondents and interviewees to avoid potential legal litigations. This is particularly true for the individuals who had signed a non-disclosure agreement with the production. Additionally, respondents generally feared to be blacklisted in the industry if they spoke out in regard to certain issues, therefore some of their testimonies were provided in confidence. The interviews were mostly organised informally as I was not allowed to record them with any type of device when meeting them one on one. This challenges the very notions of transparency, equality and freedom discussed in Chap. 2, particularly after a film has been made and released: film industry professionals operate self-censorship at an individual level. 186 6 Live Film Production Case Study: The Last Race or participant observer (Kaminski 2004, 6–8). However, in practice, my level of participation oscillated between ‘moderate participation’ and ‘active participation’ (Spadley 1980, 60–61; DeWalt and DeWalt 2002, 20–21), which was a good compromise not to come too close to the subject of study while being able to take notes every day and gathering sufficient details about the film process.6 Being behind the camera and eventually in front of it, gave me a good sense of engagement with the film as an observer (Fig. 6.1). Helping on the film set also gave me recognition and access to exclusive information. This is, for example, how I was able to interview both film professionals and 10 Mainland Chinese and Hong Kong emerging filmmakers who were working on the set. This was particularly relevant for the last part of my research (in Chap. 9) about creating a collaborative effort through focus groups and ongoing interviews to help me design a participatory production model (in Chap. 10) for this specific target group.7 In regard to taking pictures and the use of a camera, which is a bias observed in visual ethnography (Asch et al. 1973, 179–80; Pink 2001, 12), having such a device on board of a film crew, where everyone uses a range of mobile devices or professional cameras, helped me integrate with the team. Not having one would have made me look like I did not belong. The subjects of study were accustomed to having people around with audio-visual recording devices and the bias it may have induced should be considered as minimal in comparison with other non-film

Fig. 6.1 On the set of The Last Race. (From left to right: behind the camera (as Patrice Poujol) and in front of it (as Louis Klein)). (Courtesy of Patrice Poujol)

6 In terms of the biases which may have influenced my ethnographic research, I must inform the reader that I am a white male in my early 40s, with no extreme political or religious views. My previous experiences in film have been mostly as a writer, a Director and a Producer, so this may have influenced my views. I was initially placed in a position of observer in regard to the subject of study. However, as detailed in the next sections, I became increasingly active in my participation and interactions with it. Therefore, as a participant observer, I may in turn have been somewhat influenced by the subject of study. 7 Discussed in Chaps. 9 and 10. 6.1 Introduction 187

production related subjects of study. Arguably, in this case, visual ethnography actually facilitated a seamless integration with the group under observation. I have also studied the promotion and the distribution efforts of the production and distribution companies involved: Beijing Forbidden City Film, Innowave, Goodland Pictures, Sil. Metropole, Alibaba, Movie View International, Archstone and Sony until after the theatrical release of the film. This research was conducted through interviews, onsite observation, and industrial analysis. Following Thomas Austin’s approach (2002), I collected meta-text such as box office and online revenue data and studied the critical reception of the film in newspapers, trade journals and online social media websites.

6.1.3 Relevance of This Case Study

This case study is particularly relevant to my research as I needed to collect data from the inside of a production to critically analyse the nature of the connection between a film production shot in China and the influence of the Chinese Government. I also needed to get a thorough understanding of the interactions between the production and various private stakeholders such as investors and distributors in the current Chinese media context. The Last Race may occasionally be compared with other film productions such as OutCast (Powell 2014), Morning Paris (Q. Lee 2015), The Great Wall [長城] (Zhang 2016), Ghost in the Shell (Sanders 2017), or The Heart of Konba [貢傑的心] (2017). While it could be argued that these films, despite being made across the same period, are all quite different, they provide insightful counterpoints to the study of the production process of The Last Race: Ghost in the Shell. With Scarlett Johansson as lead actress, The Last Race was partly shot in Hong Kong while the other productions were Chinese productions with US A-lister actors attached (Nicolas Cage in Outcast and Matt Damon in The Great Wall).8 The budgets were also quite different with Ghost in The Shell and The Great Wall having each production budgets in excess of US$150 million, while Outcast’s budget was estimated at US$25 million (Movie Insider 2014).9 The production narratives of these films vary greatly,Morning Paris and The Heart of Konba, for instance, had comparable production budgets to The Last Race: US$6 million and US$8 million, respectively, without Promotion and Advertising expenses (P&A). Nonetheless, Morning Paris never reached the production phase while The Heart of Konba has finally finished its production phase as this book is released (Pilarski 2016). The Heart of Konba is quite a politically sensitive project as it is a film set in Tibet in the middle of the opium war. It is financed and supported by producers and investors close to Hu Jintao and Xi Jinping to promote the ‘China

8 Morning Paris reached the pre-production phase but was never produced. 9 The total budget of The Last Race was less than half the budget of Outcast for example. 188 6 Live Film Production Case Study: The Last Race

Dream’10 as soft power, similar to Chinese Salesman [中国推销员] (Bing [檀冰檀冰] 2017) featuring Steven Seagal and Mike Tyson that reconstructs a positive image of China in Africa. Moreover, the themes of the films vary greatly and their directorial teams are also different. This is why I am careful not to make full and direct comparisons between these projects. Effectively it is very difficult to compare film projects, which is why I chose to focus on a single film production case study, as no two film projects are entirely similar (Austin 2002). Comparing any given two production processes from start to finish would be like comparing apples and oranges. The film process is ultimately a shared human experience, a craft and a human tale that vary from one production to the next. I prefer to highlight punctually key trends and production similarities or differences to reinforce my points or sometimes to invalidate what could be initially perceived as a trend rather than addressing a full comparison with these productions.11 The structure of this chapter mirrors the film production process: it is linear. After giving a brief background of the film project, I analyse the key progression of the production throughout the filmmaking process,12 from the development stage (when the film is incubated and financed) to the production stage (when the film is made) and towards its distribution and its circulation phases, which according to Laurent Creton is what creates the encounter with the audiences and makes the film truly complete (Creton 2005, 11).

6.2 Act I: Preparation – Development and Pre-production

Making a film is impossible: there are so many teams, departments and interests to integrate, from the different arts and creative departments to the investors… we are doing the impossible! Joseph Fiennes – Press Conference for The Last Race, in Tianjin 24th of June 2015 In the words of Joseph Fiennes, the lead actor of The Last Race, making a film is impossible. As we have already seen in previous chapters, the filmmaking process involves many talents, creative agents and departments which all need to be integrated in order to collectively produce and create a film. The film is then to be distributed and circulated to audiences. From this point on, the film may or may not recover the proceeds of the investments used to initially make it. The impossible nature of making the film was overcome andThe Last Race was completed, the film failed to recoup its budget and the investing parties lost most of their stake. Why did this happen? Did the film end up being an acclaimed work of art? This is a unique opportunity to look at a traditional production throughout its

10 As seen in Chaps. 3 and 4. 11 Also unlike with The Last Race, I did not observe the process from start to finish with these films and sometimes information was not available first hand. 12 Seen in Chap. 2, Sect. 2.1.2. 6.2 Act I: Preparation – Development and Pre-production 189 entire process, from its development to its production and its circulation, in real time. An additional feature of this case study is that the film was initially made in partnership with Chinese online corporate giant, Alibaba.

6.2.1 Background

The Last Race tells the story of a missionary, Eric Liddell, the ‘Flying Scotsman’ featured in Chariots of Fire (Hudson 1981), who was born in Tianjin (Tientsin at the time) on 16 January 1902 and who died in a Japanese prison camp in Weifang on the 21 February 1945. The story deals with central themes such as cross-cultural friendship between a Chinese man and a foreigner, sacrifice and selflessness. These concepts are ingrained in the Christian nature of the project. The story follows the selfless and heroic achievements of two men (Eric Liddell and Xu Niu), their family and friends throughout World War II torn China with a focus on their struggle in the Weixian (Weihsien) Japanese Internment Camp. The film had to be produced in haste since another film with the same theme (Eric Liddell’s biopic) and entitled Absolute Surrender was being produced by a competing Hollywood based company Town Square Pictures involving writer Howard Klausner (Space Cowboys (Eastwood 2000)).13 Therefore, quite ironically, there was a sense of actual racing between the two productions, particularly since the lead actor for The Last Race, Joseph Fiennes had just completed another film connected with Christianity,Risen (Reynolds 2016), in which he performs as a Roman tribune (Clavius) who investigates the disappearance of Jesus Christ’s body in the first 40 days following his crucifixion. Nonetheless, Absolute Surrender (McNamara 2015) which was more focused on the religious aspects of Liddell as a missionary in China was not a coproduction with China but a straight US production which catered for a different audience. Another potentially competing film featuring World War II drama, Olympics and biopic themes, Race (Hopkins 2016) was in production and programmed for a 2016 release.14 Race features Stephan James as an Olympian track and field black- American athlete (Jesse Owens) who runs to victory in 1936 Hitler’s Aryan Germany. These films followed the success ofUnbroken (Jolie 2014) which also features the biopic of a US Olympic athlete soldier, Louis Zamperini, imprisoned by the Japanese during World War II. This film was a success at the box office with a budget of US$65 million and International box office receipts of over US$163 million on 12 March 2015 (Box Office Mojo 2015).

13 http://www.absolutesurrendermovie.com/#filmmakers 14 This is not a coincidence as all these productions, including The Last Race (In Mr. Shin’s own words and intent) were trying to ‘connect with worldwide audiences ahead of the 2016 Rio Olympics’ in Brazil. The 2016 Olympics appeared to be a good vehicle to get international exposure. 190 6 Live Film Production Case Study: The Last Race

Nonetheless, the original idea for The Last Race was not inspired by Unbroken (2014); its genesis dates back to 2005. It was an original idea from Stephen Shin [ 冼杞然], Hong Kong veteran director (The Great Conqueror’s Concubine [西楚霸王] (Shin [冼杞然] 1994), Black Cat [黑猫] (Shin [冼杞然] 1991)). Mr. Shin is himself a devoted Christian and he originally intended to conduct the project with a Christian approach. The initial title through which the film project was registered in China was Chariots of Fire in China. This decision was made in order to tap into the promotional and publicity promises of the 1981 Academy-Award winner sports drama The Chariots of Fire (1981). It was not the first time that Mr. Shin was using this type of promotion and marketing tactics. Black Cat was a straight remake of Luc Besson’s Nikita (Besson 1990). His latest film, 22 years earlier, TheGreat Conqueror’s Concubine, had been entitled this way to resonate with the Chen Kaige’s international success 1 year earlier of Farewell My Concubine [霸王别姬] (Kaige [陈凯歌] 1993) also starring Gong Li [巩俐] as lead actress. The film was a 177 min saga with casts of thousands which was at the time one of the largest budget films and met an equally significant commercial (box-office) failure with total earnings of US$2 million (HK$15.7 million equivalent) for an estimated budget of US$7 million (Elley 2016; Baidu 2016). The film was later recut into a 105 min director’s cut version entitled Blood Oath under a foreign consulting firm’s advice in 2011.15 Despite the re-edit, additional CGI and VFX to repackage the film and a test screening in Dublin, Ireland at the first Chinese Film Festival that year, it was no more successful than the original. The above background information highlights three points: Firstly, the over- reliance on form over content that is to say that marketing ploys prevailed over actual story-telling. Secondly, the over-reliance on marketing ploys rather than the making of quality content for viewers. Thirdly, it highlights a rather superficial and distorted understanding and view from China and Hong Kong-based producers on what might or might not work on the international and ‘Western’ markets. Overall, as we will see in the following sections it shows the urge of producers to tap into accessible funds and rely on these as an immediate reward and a form of payment rather than producing a film with a view to make it critically acclaimed or popular at the box office. In this case, the ambition of the producers was to make a case to produce a film both for the local markets (Hong Kong and China) and for international audiences. To do so, they sought a partnership with Hollywood producers and after much research, they found partners in Jim Green and Mark Bacino who had years of production experience. Although US-based, these credentials were in fact only fairly modest: their highest achievement had been the almost straight to DVD and TV adaptation of Stephen King’s novel IT (Wallace 1990) and the B-movie Higher Ground (Day 1988). Most of the producing credits of these two producers had been in TV and music videos in the late 1980s and 1990s in the same era as Mr. Shin. This made the entire production team very traditional in its approach to filmmaking. Like Mr. Shin, this was an

15 The Producers eventually understood that the working title The Great Conqueror’s Concubine was not going to have the expected appeal on the international markets. 6.2 Act I: Preparation – Development and Pre-production 191 opportunity for the US-based producers to take on the challenge to come back 20–30 years later in a world, an industry and with a market which had changed at a fast pace.16 Mr. Green and Mr. Bacino were represented by Grandview Management, a talent firm created by former agents from Creative Actors Agency (CAA)17 1 year prior to the shoot (Kroll 2014). Brendan Millan VP for Corporate Development at Grandview and former employee at Technicolor was a long-time acquaintance of Mr. Shin (an ‘old friend’ in his own words) and drove the project with Mr. Green and Mr. Bacino on the US side. Although Mr. Millan did not seem to have previous experience in producing, he was also part of the production team. According to Mr. Shin, he was previously a well-connected executive at Technicolor. In that sense, Mr. Shin, used his connections and friendships in the film industry to establish this co-producing partnership. The enterprise seemed rather fragile and risky given that the different parties involved had never worked with each other and given the relatively high budget size for an independent production (US$12 million officially). The US partners provided access to most of the foreign cast, including the lead actor Joseph Fiennes (Shakespeare in Love (Madden 1998); Risen (Reynolds 2016)) and a match fund which would double the budget of the film from US$6 million to US$12 million. Hollywood talent, Chinese production companies and Hong Kong veteran filmmaker responded to an ambitious agenda. Stephen Shin’s initial intent was to make The Last Race an acclaimed critical and artistic work, a commercial success and to comply with the Chinese Government soft power agenda. The following sections will describe if and to what degree The Last Race met the above expectations.

6.2.2 Development

The main goals of the development phase of a film are typically to finalise the script into a good story (blueprint for shooting), to package the actors and the crew and to raise the necessary finance to meet the constraints of the production budget.

Genesis of the Idea and Concept

It took effectively 10 years for Mr. Shin and his team to make The Last Race. Although this seems like a long time, it is not unusual particularly for independent productions; for instance, according to Ari Arad18 it took close to 8 years to bring Hollywood production Ghost in the Shell from its development phase to the end of the production phase. The Last Race project started effectively around 2005–2006,

16 See Chap. 4 for details about the rapid developments of the Chinese media industry. 17 One of the four largest talent agencies in the US. 18 Producer on Ghost in The Shell. 192 6 Live Film Production Case Study: The Last Race with Mr. Shin documenting the life of Eric Liddell and the Weifang prison camp and writing a first draft of the script. The Last Race was initially driven by Sil-Metropole as early as 2010–2011, but disagreements involving personal back-stories took place put the film on hold for a few years. Also, the script was not ready in 2011: The first version of the script which I had the opportunity to read in 2011 was only 50 pages (the equivalent of 50 min to 1 h of film on screen, since it was not properly formatted with the WGA standards) with a weak storyline interspersed with some good scenes most of which have remained in the blueprint script of the film (but were later taken down in post-production). To this extent, the role of Michael Parker was paramount in the development of the final script. Michael Parker’s vision can be seen as westernised and it was meant to facilitate the connection of the film with both Chinese and North American viewers. Mr. Parker had already worked in production with Mr. Shin on Black Cat (Shin 1991) and as director on Lunch with Charles (Parker 2001) while Mr. Shin was producing. Mr. Parker was already familiar with the Chinese culture.19 He rewrote the initial version of the script in English and made it into a good blueprint. In an interview with journalist Jamie Fullerton,20 Mr. Fiennes recalls that Mr. Parker was an ‘astute’ filmmaker. Indeed, although he was only credited for his script-writing work as co-writer, he is the one who actually brought the vision of the Eric Liddell biopic to a final script. He received a co-directing role and credits as a token of this creative vision. After a period of stagnation with Sil-Metropole, Mr. Shin’s idea was revived during the London 2012 Olympic Games when he approached other potential partners (Campbell 2012). Beside the purely commercial timing considerations of the next Olympics in Rio De Janeiro (2016), it was very important for the script to be authentic. The story depicted historical events and real life characters, therefore despite the dramatisation effects used in the script, a lot of research and thoughts had to be collected and integrated to the project. This is why I was brought in to initially consult on the film project in 2014 to negotiate support from the Eric Liddell Centre. Bob Rendall, CEO of the centre, based in Edinburgh, was very enthusiastic about the project. Mr. Rendall accepted a mere donation based on net sales revenues (once the film would be released) in exchange for archive pictures, footage, material which would be key for the actors and the art departments, and contacting Eric Liddell’s family (mostly his three daughters: Maureen, Heather and Patricia). The production wanted to make sure that the script suited them, was authentic, and served the memory of Eric Liddell. The aim of the production was also to secure the right to use their image, their life, and that of their father. In addition, the production wanted to avoid any possible legal litigation once the film would be released. This step helped validate and finalise the script and also bring investors in. The involvement of the Eric Liddell Centre gave much more credibility to the project that became easier to sell.

19 Mr. Parker’s spouse is from Hong Kong. He also understands and speaks Cantonese. 20 Correspondent for The Independent, Empire Magazine and The Scottish Sun in China. 6.2 Act I: Preparation – Development and Pre-production 193

However, making a film which was authentic to Eric Liddell’s family, the survivors of the camp and their families, and simultaneously an artistically appealing work for the Berlin International Film Festival while aiming for a commercial success in the US market and at the Chinese box office within the constraints set by the Chinese Government was a complicated task.

The Plot: Ambitious and Risky

The final script portrayed Eric Liddell as a good Westerner helping the local Chinese community during World War II.21 It displayed a rather negative portrayal of the Japanese, but it was nuanced with three lead Japanese soldiers ranging from good to bad characters. China has not yet come to terms with Japan and vice-versa, the way Europe has dealt with the German situation nearly 30 years ago, particularly with the fall of the Berlin wall in 1989. The wound is still open and the topic is sensitive.22 The film satisfied all the government rules seen in Chap.4 except for religious aspects that could not be avoided given the topic at hand and the character of Eric Liddell (the athlete who had refused to run during Sabbath at the 1924 Olympics). Initially, Mr. Shin tried to find a way not to compromise his Christian faith while not betraying his audience’s expectations and primarily satisfy the Chinese Government. The solution to make this happen seemed to be a universal theme such as the one used in The Last Race, where people unite as a community in a struggle against adversity for survival and larger than life ideals. This communitarian theme seemed to suit both the Christian agenda and the government agenda, which is concerned about the unity of Chinese people and ensuring the stability of the system.23 In this artistic, commercial and political compromise, two interpretations became freely possible and exploitable: a communitarian interpretation (which brings unity among people) and a humanitarian theme of selflessness and compassion (Christian ideal). To add to Mr. Shin’s imperative and dilemma in regard to the themes of the film, the threat of competing Hollywood project, Absolute Surrender, came more vividly since it would be an entirely US-funded and based production which would probably appeal more directly to the US audiences. Moreover, Absolute Surrender did not have the censorship and Chinese Government related constraints that The Last Race had to adhere to as a China-Hong Kong-US co-production. However, when Shawn Dou (Wolf Totem [狼图腾] (Annaud 2015)) and Mr. Fiennes were attached to the

21 Comparable at this level to movies such as Children of Huang Shi [黄石的孩子] (Spottiswoode 2008) or Flowers of War [金陵十三钗] (Zhang 2011). 22 As the film production was taking place and China was about to commemorate the 70th anniversary of the Nanjing massacre, ghosts were also still floating in Japan for the 70th commemoration of the atomic bombs dropping (This is a theme covered by Akira Kurosawa in his filmAkira Kurosawa’s Dreams (Kurosawa 1990) in the section entitled ‘The Tunnel’, a short film about World War II closure and the ghosts of the war). 23 As seen in Chaps. 2 and 3. 194 6 Live Film Production Case Study: The Last Race film and announced as lead actors only a few weeks after Ewan McGregor had passed the opportunity to impersonate Eric Liddell,24 The Last Race suddenly had an advantage. This was particularly true as Mr. Fiennes was eager for a comeback to cinema and the exploration of a new market such as China. Mr. Fiennes was also the lead in Risen, a film that had not been released yet at the time The Last Race was produced. Since Risen was a project about the resurrection of the Christ, it resonated particularly well with The Last Race Christian thematic. Therefore, initially it seemed that conjuncture, environment and timing were quite auspicious for The Last Race.

Favours and Guanxi25

Despite benefiting from a sizable US$12 million budget,26 in practice it looks as if the film was made on a lesser budget particularly since Sil-Metropole was no longer financing the film but just providing the film certificate.27 From the interviews and my own observations, Mr. Shin pulled a lot of favours from his friends and contacts, as it seems to be regularly the case on Chinese productions where the cultural concept of Guanxi is in use.28 The flip side of this approach is that some of these connections did not have the required skills and experience to work with such a large budget and it became detrimental to the film project. The funds originally saved were later spent to fix production mistakes. Also, the use of ‘friendships’ went beyond simple extra-time or basic favours. It created some unequal redistribution of resources and rewards such as salary defer- rals and discounts. The use of contracts was sometimes discouraged. As I will analyse later in this chapter, these methods that appear to be common on Chinese productions eventually impacted negatively on the budget and the morale of several key departments. Ultimately, it eroded the passion factor of many crew members

24 The production had to pay US$10,000 to a casting agent for Mr. McGregor to read the script. The script was turned down. 25 Guanxi [关系] is a Chinese term, which literally means ‘relationship’ and is commonly associated with the idea of network or circle of influence. While scholars have emphasized the importance of guanxi in China (Bell 2008), it is worth noting that these circles of influence also exist in other cultures worldwide. 26 Which is a fairly high budget considering that the average independent production budget in the US was around US$15 million and the European average fluctuated between EUR5million and EUR10 million at the time (European Commission 2014, 6). In comparison, the Chinese average has ranged from US$20 million to US$61 million over the past 3 years with significant discrepancies year-on-year (Numbers 2016). 27 The film certificate or Lixiang necessary to film a co-production in China is easier to obtain through a government controlled production company such as Sil-Metropole. It was also potentially good for the production to be associated with such a government company for the promotion and the release of the film. 28 Aymerick Pilarski, Director of Photography who has worked on several Chinese productions and co-productions has confirmed that a lot of producers and directors in China rely sometimes on unskilled, free or incentivised help from friends or family. 6.2 Act I: Preparation – Development and Pre-production 195 and some left for better job opportunities in the middle of the shoot. This of course generated a lot of disruptions. The production’s scale was relatively large, but at times the production seemed like it was for a short film.29 On the bright side, the production benefited from the energetic contribution, knowledge and expertise of numerous award-winner professionals such as Horace Ma [马光荣] as Art Director, Eddy Mok [莫均杰] as Costume Designer, Stephen Ma [马文现] as VFX Supervisor and Cheung Siu-Keng [郑兆强] as Director of Photography who were all working at a special rate and great enthusiasm as a favour to Mr. Shin. This was a reboot (second chance) since they all had already taken the journey with him on the unsuccessful The Great Conqueror’s Concubine a couple of decades earlier. Mr. Mok had been nominated at the Hong Kong Film awards and the Taiwan Golden Horse for best costume design on that film.30 The use of friendship and guanxi was also an exploitative and manipulative tactic to lure people and services into committing to the project with the promise of later reward and credits, while always pressing for more and using emotional ploys such as guilt to keep people into the production. Meanwhile, it cut the production costs significantly and considerably eased the production cash flows. Some of the investors were also the victims of these manipulative tactics. This was due to a sizable investment being pulled at the last minute by stakeholders such as Emperor Pictures,31 leaving the production with a significant gap of several million dollars just a couple of months before the shoot.32 In order to continue the film, the production pretended to some of the other interested investors that the international scenes had already been shot in Canada and in Scotland and budgeted as such, whereas they were actually just parts shot on a low budget for the promotional trailer and the documentary. Exaggeration and dishonesty to get access to full investment and to continue a film is not uncommon in this industry. Producers sometimes resort to deceiving investors about their lead cast or sales projections in order to raise the funds they need for their production.33 However, this meant low levels of transparency for the investors involved in the film such as Winner Films Capital Group, MGK,34 Alibaba, and such product placement and branded sponsors as Solvil & Titus or Aquascutum. This, in turn, could erode the trust that investors may have in the film and subsequent projects. In the long-term, it deters investors from investing in film that they view as obscure and risky.

29 Key organisational issues will be discussed in detail later in the production section (Sect. 6.3.3). 30 These were the only nominations that the film obtained. 31 As mentioned by Stephen Shin in April 2015. 32 This is not uncommon in China, for instance, the film Morning Paris had to be stopped 2 weeks before the production phase due to the lack of professionalism and the unreliability of one of its investor groups. 33 This was confirmed during a meeting in Hong Kong by producer Tan Kyle Cheo, CEO of Star Entertainment Co. on the 21st of July 2016. 34 http://www.mgk-int.com/about.html now renamed King David Inc. 196 6 Live Film Production Case Study: The Last Race

6.2.3 Pre-production

After the script is finalised and when funding is raised and the lead actors are attached to the film, pre-production can start. The main goal of pre-production is the organisation of the film production and the integration of all the resources and the crew. On the first day of pre-production, Mr. Shin insisted that “Each person in this team should know about their responsibilities and role in the production and they should stick to it. We are professionals!” Mr. Shin was asserting his leadership while trying to organise and integrate his team prior to the shoot. However, when I first became aware ofThe Last Race in 2011 through Mr. Shin, I did not realise that my involvement in the film was going to be so thorough and varied. In the development phase, I had to take a clearly defined role of consultant to advise Mr. Shin and his team on the foreign aspects of the co-production. In the pre-production phase, I acted as a participant observer, and my role evolved as Assistant Director. I was originally just going to help pro-bono to support both co- directors, Mr. Shin and Mr. Parker in bringing this film to a successful completion. In pre-production, I started helping the script editorial team with Mr. Parker and several assistants. Overall, these multiple roles gave me access to many professionals on set and to a lot of varied information throughout the different phases of the production process; from the catering department, to the wardrobe department, the actors and actresses, the directorial team and to the producers’ team. In the first couple of days of the pre-production phase, I connected with the entire production team and joined them for dinner. I managed to build a good rapport with them. This provided me with a rather accurate overall picture of the production. I also had the opportunity to help the drama team that gave me access to all the actors and the drama coach experiences on set. When I arrived in Tianjin on the 13 June 2015, the production and the directorial teams were just starting to build up and work together.35 The reason for my delayed arrival was due to logistical and organisational issues such as the bureaucratic visa procedure. This also caused some of the actors and actresses to arrive later than planned and could have been avoided with more preparation and foresight. As mentioned before, some investors also pulled out before the film actually started to be shot. Xingming withdrew close to US$3 million from the production at very short notice, which pushed the Chinese producers to pressurise the US producers for access to the match fund and this damaged trust between the two parties. Each day spent without shooting was costing the production around CNY100,000 (US$12,000) on average. The production started 2 weeks later than anticipated. This prompted Mr. Shin to resort to a shadow-banking loan36 to start the production as soon as possible.

35 The pre-production had already started 2 weeks prior to this date with location scouting. 36 For an undisclosed amount c. CNY1.5 million (US$180,000) according to several of the directorial crew members. 6.2 Act I: Preparation – Development and Pre-production 197

In addition, it became very clear in the first days of pre-production that although the main language used for meetings was Mandarin, Mr. Shin a native from Hong Kong was sometimes not understood fully by the Mainland Chinese and Taiwanese crew members. Multi-lingual circles of communications started to form. The Cantonese speakers (most of the heads of departments and their assistants spoke Cantonese) had immediate access to information, the Mandarin speakers lagged slightly behind and the foreign nationals were the last informed of any changes or meetings planned.37 Aside from the initial language challenge, I was also surprised to see that there were at least ten Assistant Directors (Ads), when there are typically only one or two in Europe and the US. Although this was positive for research purpose as most of them claimed ambitions to write and direct films in the near future or already had experience in filmmaking,38 it was quite negative for the general operating structure of the film: some of these talented and ambitious individuals ended up competing against each other within the production instead of working as a team. This was even more evidenced by the fact that their roles and responsibilities sometimes overlapped. But regardless of the rivalries that may have taken place inside the directorial team, the director was always addressed as ‘Director’ or ‘Daoyan’ [导演] from the first day. Mr. Shin was never addressed by his first name or his last name, as it may be customary on a Western production. Although this can be interpreted as a form of paternalistic respect relative to Confucian cultural roots, it was also, as revealed later, a symptom of a micro-projection of the central power structure operating within the production itself. Beside the nascent logistical and cultural challenges described above, from the second day, the talent agents and business intermediaries disrupted the shooting agenda on several occasions. For instance, the scenes that were planned in the reconstructed Weixian (Weihsien) Internment Camp, Shandong province, from the 10th to the 19th of July had to be rescheduled because of the limited availability of the lead Chinese actor Shawn Dou. This created tremendous stress for the crew (notably the Art Department who had to plan and decorate the locations in haste) and generated logistical and organisational issues for the directorial and production teams ending up as a costly rescheduling of events. This episode was also perceived as a loss of face for Mr. Shin, as the agent simply dictated her wills and that of Mr. Dou. She also asked for a five star treatment for Mr. Dou and that he would only attend part of the shooting process while foreign actors such as Mr. Fiennes and supporting talent who had been flown from LA had

37 I had to rely on the help of informal translators to be able to understand most of the meetings contents and assess the overall situation. I also developed a good rapport with the Hong Kong crew who could convey key information to me in English in a timely manner. I was relaying this information to the other foreigners as fast as I could. 38 This team formed the basis for a group of emerging filmmakers who I have regularly interviewed and conversed with (Chap. 9) to elaborate the participatory production model proposed in Chap. 10. 198 6 Live Film Production Case Study: The Last Race blocked 8 weeks of their time to come to China. Mr. Shin was concerned that the Chinese production would be seen as applying double standards against the foreign lead actors, which was a loss of face and undermined Mr. Shin’s authority and the stability of the production as a micro-political system. Shawn Dou’s agent knew about the financial considerations. She was clearly aware of the negotiating power at her disposal in such a situation. If Mr. Shin stuck to the planned schedule, the production would be losing c. CNY100,000 (US$12,000) per day between the pre-production team, the VFX team and the hundreds of people employed in various locations preparing the sets. This was a lot of pressure to cope with for Mr. Shin who at age 67 was already tired by a long and difficult journey of several years trying to raise finance, package the appropriate talent for his film and an expert team together. Before the first day of principal photography, the production was already in crisis. The total budget had been planned tightly around US$6 million just for production without development costs and post-production, which was going to be supported by the US match-fund. Moreover, securing the desired locations throughout the shoot was very expensive as substantial (but undisclosed) amounts of money had to be provided to local officials to secure access.39 The film needed the original European style buildings that would have been too costly and almost impossible to reconstruct in studio. In addition, Mr. Shin claimed that he wanted to stay authentic and loyal to the story of the historical characters. He intended to do so by shooting exactly where they had lived. It also served as a commercial ploy later: the film would be promoted and sold as a cathartic project shot on the very same location where the events had actually happened. This gave even more force to the narrative and was bound to make the film all the more believable and touching both to a Chinese and an international audience. In the eyes of government officials, this might have facilitated the use of the film as a vehicle to reinforce national sentiment at home and to export soft power abroad that is to promote locally and globally the vision of Chinese nationals fighting against the Japanese invaders. While Mr. Shin managed to solve last minute financial issues by agreeing with the agent’s new demands and the local officials’ increasing requirements, Mr. Fiennes arrived a couple of days before principal photography and the production phase started. As Mr. Fiennes entered the room, all the eyes of the directorial and the production teams were on him as much for the recognition of his past work, for his celebrity status and because he was key to the promise of exporting the film internationally. Mr. Fiennes stepped forward to shake Mr. Shin’s hand, he introduced him to the teams and the young faces started to relax a bit. At that moment, almost casu- ally, Mr. Shin declared ‘This is going to be a great film project… you can invite your brother, Ralph Fiennes, to our wrap party in the camp, it would be great, like in Schindler’s List…”

39 As explained later by Mr. Shin (this will be explored in more details under Sect. 6.3: Production). 6.3 Act II: Action – Production and Post-production 199

Fig. 6.2 Joseph Fiennes arriving (day 1). (Courtesy of Patrice Poujol)

The awkward silence re-emerged, but stronger this time. Mr. Fiennes seemed speechless for a moment, probably not knowing exactly whether this was some sort of test or a clumsy joke, or maybe a misunderstanding. He ignored the comment altogether and smiled at the welcoming crew. On day 1, this incident set the tone for the rest of the production. It illustrated both the lack of sensitivity of Mr. Shin to Western culture and made quite clear the intent to use both Joseph and Ralph Fiennes for the promotion of the film. Mr. Shin later joked that it could have worked and was worth trying (Fig. 6.2). On the 20th of June, the day before the production phase and principal cinematography started, a Hong Kong style ceremony was organised simultaneously to celebrate the Dragon Boat festival and to bring good luck to the production. Bordering religious rituals and superstition, the event consisted in an exchange of red envelopes (mostly financially symbolic as they contained CNY10–20 each) and prayers for the film to run smoothly (Fig. 6.3). To conclude this section, the goal of organising and integrating the production resources and the team was made difficult by several external elements: these included financial pressure, the disruptive forces regarding intermediaries (agents and local officials), internal issues such as language and cultural differences, the lack of clearly defined roles as well as organisational and logistical issues. Therefore, the film started with some significant disadvantages, but these could potentially be tackled and solved with the right attitude and decision-making. 200 6 Live Film Production Case Study: The Last Race

Fig. 6.3 The Pre-Shoot Ritual. (Courtesy of Patrice Poujol)

6.3 Act II: Action – Production and Post-production

The production phase comes after finalising the narrative and characters of the film through attaching and packaging the actors, tying up the finance, planning the shoot and finally integrating the crew who is going to make the film. This phase is the result of the preparation and the integration of all these efforts coming together for a rather short period of time40 to give birth to the film as a creative product. It is time for the production to implement its plan. In this part, I integrate both the production and the post-production phases of the film process. Although these phases took place at distinctive points in time where production (21 June to 13 August 2015) chronologically preceded post-production (end of August 2015 to April/May 2016), the fact that VFX and editing modules were present on the shoot made the two phases intertwined for the most part of the shoot. However, this is not unique to this production particularly as it involved war and action scenes requiring the use of green screen and CGI. It is a widespread trend these days as films often make use of integrated and computerised visual effects. Some productions also request the services of sound engineers and supervisors as well as composers to create the sound and music atmosphere of the film already in production. When a production is well-thought through, the director should integrate post-production talent to the production process early on, such as VFX, music

40 Typically, a shooting period of 6–8 weeks of filming. 6.3 Act II: Action – Production and Post-production 201

Fig. 6.4 Example of special effects coordinated with Mr. Ma (VFX Supervisor). (Courtesy of Patrice Poujol) and sound (Ellis-Geiger 2007, 9; 2012). There are many cases in which this approach was used going back to the association between Ennio Morricone and Sergio Leone for music and soundtrack, for instance, or more recently in Ghost in the Shell where the process between the Director of Photography (DP) Jess Hall and the VFX department41 was well thought through in advance of production. This greatly facilitated a smooth integration of the two departments and of their creative works. This practice saves a lot of time and money in production and post-production. It avoids many negative surprises in the editing room. Therefore, a lot of the post-production including sound and VFX (with the use of green screens) has to be thought through and executed in the production phase (Ellis-Geiger 2007, 2012; Cox and Poujol 2015). The production and the post-production phases have been grouped together in the next three sections as these phases are intertwined in the collective creative process that brings film to life. In the case of The last Race, Stephen Ma, the VFX supervisor was present throughout the duration of the shoot (Fig. 6.4). Chris Babida (famous for his work on the Beijing Olympics in 2008) composed a main theme, but he was not physically present on set during the production phase. Except for the main theme, the soundtrack was mostly left for the post-production.

6.3.1 Political-Economic Macro Challenges: Censorship and Power

The production phase started on 21 June 2015 around 4 am. Tianjin’s Wangguo Bridge had been blocked until 7 am. This was a great achievement from the location Manager since this is the main bridge, which connects the two sides of the city together and takes most of the traffic going toward Beijing. This decision also implied three key challenges (Fig. 6.5).

41 MPC were the lead driver of VFX on this film. They claim that they ‘are involved at every stage of the creative process, from the initial concept art to the final compositing and stereoscopic work- flow’ (MPC 2016). 202 6 Live Film Production Case Study: The Last Race

Fig. 6.5 Wangguo Bridge with traffic and first day of shooting. (Courtesy of Patrice Poujol)

Firstly, the production had to be executed perfectly to allow all the scenes to be shot within a tight deadline of only a few hours with no possibility to extend the presence of the crew on location as the traffic had to be restored by 7 am sharp. Secondly, the key investors of the film and government officials were attending the first day of the shoot to ensure that the production was running satisfactorily. Thirdly, the scene involved dozen of extras impersonating Japanese soldiers, vehicles and stunt personnel. It was a key scene which was meant to illustrate the friendship between the lead Chinese and foreign characters. This set of challenges presented a big risk for Mr. Shin, a make or break decision. If the filming went wrong, the investors would have reconsidered their involvement in the project and the production would have been at risk to be stopped a few days later. If the production work went according to plan, it would be positive for the production team and for the press conference that was planned only 3 days later. Mr. Shin decided to take the risk, as he believed that keeping the key stakeholders (investors and government agencies) happy throughout the entire film was paramount to the success of the production phase.

Setting-Up the Characters: The Hard Task of Keeping Stakeholders Happy

The tension to keep the various political-economic stakeholders happy remained throughout the production. This had largely to do with the conflicting duality of the project. On the one hand, it could be argued that The Last Race is a film which features the real life of a heroic Christian missionary in China, and therefore could act as soft power vehicle for Christianity42 in a state where religious beliefs and values have been vehemently discouraged by the government (Jacobs 2016; Leavenworth 2016; Stromme 2016; Woeser 2016). On the other hand as the following analysis will show, The Last Race (as an international co-production) was potentially a wonderful vehicle for the Chinese Government to showcase its openness to the world while maintaining a tight control on the production, an exercise of balancing soft power and censorship.

42 Despite claims in The Hollywood Reporter (THR) that the competing production Absolute Surrender was more loyal to the Christian faith of the lead character Eric Liddell (Bond 2015). 6.3 Act II: Action – Production and Post-production 203

It is with this background of tensions and diverging priorities that the film had to be produced. This resulted in a lot of stakeholders with conflicting agendas and varying degrees of power trying to influence the film production. The main stakeholders can be separated into three groups: (1) Primary stakeholders with executive and non-negotiable power over the production. (2) Secondary stakeholders in charge of managing and driving the production. (3) Tertiary stakeholders who had a non-negligible indirect level of influence on the production and acted as lobby groups.

Primary Stakeholders: Political-Economic Duality

To add to existing tensions regarding the religious angle of the film, primary stakeholders were sub-divided into a variety of political-economic institutions. Generally, the former (the political) took control of the latter (the economic) as the custodians of the entire production.43 The central government (represented by SAPPRFT as well as local government officials) took the lead with the corporate sponsors and the investors, in this case Sil-Metropole, Alibaba, and Maximum Gain Kapital Group (MGK). With The Last Race, the government (the DoP and SAPPRFT)44 saw the opportunity to relay their vision of World War II and anti-Japanese national sentiment to the world while reconstructing their view of Chinese heroism. In addition to SAPPRFT’s role, local Governments in Tianjin, Weifang and Beijing supported the project. In Weifang, a museum of the Weixian (Weihsien) Internment Camp was open after the film production was completed and a statue of Eric Liddell was unveiled for tourists from China and abroad to visit. During the shoot, numerous officials, some bilingual (Chinese/English), were informally ‘overseeing’ the filming process and its contents. In a similar way as in The Great Conqueror’s Concubine, Mr. Shin used his government contacts and one scene in Weifang brought in over 1500 extras, some of them thought to be local PLA servicemen who were training in a nearby Air force base ahead of the 3rd of September National day parade (Fig. 6.6).

Fig. 6.6 1500 extras regrouped for a night scene by Weifang Railway. (Courtesy of Patrice Poujol)

43 As see in Chap. 3, in China the political supersedes the commercial and the cultural domains which are seen as vehicles to promote the earlier: more will be discussed about this topic in the following chapter relative to YT. 44 As seen in Chap. 3, the newly merged SAPPRFT reports directly to the Chinese Government DOP. 204 6 Live Film Production Case Study: The Last Race

Sil-Metropole was the original financier of the film back in 2011. Thanks to a change of management, Mr. Shin was able to involve them into the project as initially planned. However, Sil-Metropole did not invest significant funds into the film, they facilitated the shooting certification of the film or Lixiang [立项], which was necessary not only to film the coproduction in China but also to later go through the requirements of SAPPRFT and distribute the film nationwide in China. Sil- Metropole which co-financed The Grandmaster [一代宗师] (Wong 2013), on which Mr. Shin had already worked in the role of Chief Operating Officer (COO) for Hong Kong, is a Chinese state-owned company born from the merger of Hong Kong and Chinese based studios. Therefore, the heads of the company are appointed by the Chinese Government and assigned to their position of CEO for a period of 3 years generally. Like in SAPPRFT and other state-owned enterprises, some of these appointed CEOs have no previous background in film and sometimes no interest in the sector; they take their role as an assignment for the government. They rely on the expertise of professionals such as Mr. Shin to make their strategic decisions. It is also important to note, that such companies represent the views and policies of the government, the DoP and SAPPRFT as they fall directly under their control. Alibaba motion picture branch registered in Hong Kong was one of the key stakeholders for the film in terms of investment, promotion and distribution. Mr. Shin used the connection he had with the General Manager of Alibaba Films in Hong Kong to complete the deal. The deal was key to the film as it would not only provide finance to the project but it would as well ensure a wide promotion, distribution and circulation through the gigantic network and ready-made audiences of the online giant. As seen in Chap. 5, Alibaba is a private entity quoted on the NYSE, but it directly reports and ultimately depends on the Chinese Government policy. Therefore, even as a corporate privately funded entity, it has to serve the political agenda of the Chinese Government. Within this framework, it is then free to function economically, to accumulate capital, and to attract foreign and local private capital.45 More recently, Alibaba has started to look into the development of branded theatres. This change of business culture mirrors the changes in the Silicon Valley with such companies as Google acquiring YouTube and Amazon Studios developing their own creative media content and inviting audiences to develop their own UGC content. This springs from an integrated business model aimed to maximise the cross-promotion and cross-selling of IP and products through the vehicle of creative content. Hong Kong and China based MGK was also a key investor in the film. MGK’s core activity was originally real estate, but like Alibaba or more specifically Wanda, it has recently started diversifying its business into media finance to offer its investors new opportunities in the growing Chinese box office potential. Mr. Stephen Lam was one of the facilitators of the deal bringing MGK’s stake into the production. Mr. Lam had worked on SPL II (Cheang 2015) a film starring Tony Jaa and for which MGK had raised finance. Mr. Lam is a seasoned and proficient old guard

45 As seen in Chap. 3. 6.3 Act II: Action – Production and Post-production 205 executive producer who had worked with Zhang Yimou in his early days and has known Mr. Shin for several decades. He worked with him at Sil-Metropole on The Grandmaster, for example, and more recently, they were both involved as co- producers on The Assassin [刺客聂隐娘] (Hou 2015) starring Shu Qi [舒淇]. Additional real estate private investment was also channelled into the production because of the vehicle company Winner Films, created just for The Last Race and with the view to help finance Mr. Shin’s subsequent projects.46 Mr. Stephen Fan, an experienced real estate businessman helms Winner Films. It becomes apparent with this thread of connections with government, public and private financial stakes, that Mr. Shin has used his guanxi and connections at the highest level to make the production possible. But this also meant that he had to report to these key stakeholders and keep them satisfied. Particularly as some of them seemed concerned that he was coming back to filmmaking more than 22 years after his last filmThe ( Great Conqueror’s Concubine) which had been a commercial disaster. Among the other financiers of the film came a series of sponsors whose products ranged from jewellery, clothing and tea. The film advertised a total of five brands as product placement. These brands were funding part of the project in exchange for some visibility in the film and during the promotional events and media coverage that accompanied the production both in China and abroad. The premise of The Last Race as a US-Hong Kong-China coproduction aiming all at once at the Chinese, US, and European markets was particularly enticing to them. Two of the most notable brands were Aquascutum a UK-based luxury-clothing brand and Solvil & Titus a brand of watch brought to the production by Mr. Nelson Lee, a talent agent who was another acquaintance of Mr. Shin. Mr. Lee also brought two of the supporting role actresses to the film. All these key stakeholders had to be satisfied as they were providing the bare necessities to make the film possible that were (1) the Chinese Government’s approval and certification both for the shoot and the release of the film in China, and (2) the finance to secure talent, crew, and the required equipment and locations. Although these stakeholders were numerous, quite surprisingly they did not seem to openly conflict with each other. The financial deals had been clearly established by contract with each of them from the outset and the government guidelines were to be understood as the primary line of command.

Secondary Stakeholders: The Custodians of the Creative Vision

The secondary stakeholders were persons and organisations in charge of the production of the film. They encompassed the executive producers who worked on fundraising for the film, the producers who executed and supervised the production and

46 Before the real estate giant, Wanda Group, started investing in the media sector, many Hong Kong-based companies had already pursued this model such as conglomerate Emperor Group. Some of these groups were thought to be closely associated with the triads and using film and the theatrical circuit to launder money from their other illegal businesses (Dannen 1997). 206 6 Live Film Production Case Study: The Last Race the co-directors who were responsible for the overall creative and artistic integrity and vision of the film. This is where the commercial and creative roles tend to meet and conflict with each other. This was particularly complicated with a tri-partite coproduction that naturally entailed different market approaches and different working cultures. The executive producers (Mr. Stephen Lam and Mr. Stephen Fan) raised funding with Mr. Shin on the Chinese and Hong Kong side, while Mr. Green, Mr. Bacino and Mr. Millan raised finance on the US side with a system of match fund. The US side would meet the total amount raised by their Chinese counterparties after the production had started. The production companies involved were MGK, Beijing Forbidden City Film and Mr. Shin’s company Innowave Ltd. on the China-Hong Kong side and Goodland Films on the US side. There were issues regarding the timing of the match fund becoming available on the US side as the producers waited for the funds to settle and to see how the production would be executed on the Chinese side (most of the filming took place in China). According to Mr. Shin, the US producers put in their financial stake last, apparently using elements of the contract to delay the payments that at times put the cash flows of the production at risk. Mr. Shin had the difficult task to be both a producer and a co-director of the film. This position kept him away sometimes from the purely creative role to handle financial and logistical imperatives. His role was already complex and conflicted from the outset. Mr. Parker, a seasoned TV Director, was supposed to take over the creative side if Mr. Shin had to handle the production aspects of the film. However, the co-directing dynamic took a different turn. In practice Mr. Shin had raised the funding from the film whereas Mr. Parker had not raised any funds, therefore, the final creative decision often pertained to Mr. Shin who kept the driver’s seat. This may have been detrimental to the production as Mr. Parker was the true custodian of the creative vision of the project. As the key writer of the script, he had developed the creative and artistic vision of the film up to that point, but he discovered during the production phase that it was often challenging for him to voice his opinion as financial imperatives superseded creative flair or artistic vision.

Tertiary Stakeholders: The Collective Power

In the hierarchy of stakeholders, after the political-economic stakeholders and the custodians of the creative vision of the film came what I call ‘the collective power’. Once grouped together, these stakeholders had a certain status and degree of influence on the production, but they had to either act like lobbyists, consultants making suggestions (which would be heard or not) or as collective power to influence the production towards what they thought would be the best course of action for the film (or in some cases to safeguard their individual agendas). To some extent, as the production went on and particularly in post-production, Mr. Parker sadly fell into this category as his script got modified while shooting. His decision power got eroded and Mr. Shin sometimes dismissed his suggestions. Mr. Shin was eventually the only one to shout the commanding order ‘action’ only a few days after the 6.3 Act II: Action – Production and Post-production 207 production phase started. This illustrated and reinforced the power that he had over the entire production. The two lead actors, Mr. Fiennes and Mr. Dou, thanks to their bankable credentials, had a certain amount of power on the production both creatively and to safeguard their own individualistic interests. This was due to their experience in the film industry and their status. Their fame and credibility were going to contribute to promote and sell the film, which again shows that financial imperatives superseded artistic or creative vision. Quality agents and managers represented the two leads, therefore they were able to negotiate certain aspects of the production and set up boundaries. The Eric Liddell Centre based in Edinburg and Eric Liddell’s family based in Canada also had a say on the production. As a historical biopic, the film was deemed to remain an authentic story of Eric Liddell’s life. It was on these conditions that the family and the Centre accepted to support the project. The drama team, the promotion team, the production team, the directorial team and the art departments were also collectively influential. They sometimes had to voice their opinion together to Mr. Shin and Mr. Parker to suggest changes which would ultimately serve the film well. However, most of the teams were divided by micro-politics before the film production even started. For example, in the promotion (PR) team, one group was in charge of Chinese National (internal) promotion while the other was in charge of international (external) promotion. This created a lot of tensions and gave birth to micro-political and power games. Ultimately, this was detrimental to the production. Other stakeholders included the British Embassy in Beijing, the British Consulate in Qingdao and Hong Kong/Macau who were preoccupied by their own business and creative agendas as 2015 was the bilateral cooperation year between China and the UK and they were happy to promote their new campaign ‘Britain is Great’ in China to market their indigenous creative industries (Fig. 6.7).

Fig. 6.7 ‘Britain is Great’ campaign. (Courtesy of Patrice Poujol) 208 6 Live Film Production Case Study: The Last Race

Coincidentally, a film co-production treaty had been signed in March 2015 (just 2 months prior to the production phase) between the UK and China. Therefore, they showed a lot of support to the production in terms of media and promotion. The British consular bodies had their own soft power agenda with China and The Last Race with actor Joseph Fiennes came as a godsend, particularly as they were planning the promotion of the 400 years of Shakespeare the following year in 2016. Shakespeare had already been impersonated by Mr. Fiennes in the Oscar-winning filmShakespeare in Love. This was a perfect opportunity to promote their campaign and raise awareness about the UK creative industries, particularly as Brexit became a more palpable reality less than a year later. With so many stakeholders and competing agendas to take into account and satisfy, we can appreciate Joseph Fiennes’ original statement “Making a film is impossible…” The hierarchy of stakeholders also means that the production was not in reality driven by the creative visionaries of the project (the co-directors and the creative departments) but that the primary decision-makers were the government and the corporate financial sponsors. In the next two subsections I will focus the study on these two latter groups of stakeholders (Chinese Government agencies and corporate financiers) that had higher levels of influence on the film.

Government Censorship and Propaganda

Multi-layered Censorship

From the review and acceptance of the shooting script to the final edit of the film and its release, the Chinese Government had been supervising, controlling and censoring the process. Surveillance was operated at several levels, the higher levels including certifications and the release of the film being dealt with at National level through SAPPRFT while the monitoring of the production was executed at local provincial level. The rapport with the government was generally fairly sympathetic toward the film production. Although the film dealt in some parts with religious aspects, it was not its main focus. In the words of André Gide, ‘Art is born out of constraints, lives through struggles, and dies with freedom’ (Gide 1921, 14). In that sense, the co-directors and the producers had to walk a thin line to be able to make this film. Eventually, they toned down the content and used symbolism to pass their message to the audience. The film did not oppose the central power and was not controversial. Therefore, it was generally not a great source of concern for the Chinese Government. The production was closely monitored nevertheless. Instead, most of the disruptive forces of censorship were not targeted at the content of the production itself but at its logistics. The government control of the Internet negatively impacted the production indirectly. The production crew quickly noticed that the connectivity was unusually low and that the production may have been under scrutiny due to the topic of the film. The entire production base and access were indeed concentrated in a hotel in the suburb of Tianjin and it was easy for the government to locate and isolate the production. On day 4, for instance, 6.3 Act II: Action – Production and Post-production 209 some of the team’s VPN backups47 prepared in Hong Kong before flying to China were already identified and blocked for the rest of the shoot. The government great Chinese firewall described in Chaps. 3 and 4 is an effective system to monitor and control the Internet. This is even made easier when the government knows exactly when and where a film crew will be shooting: the certification protocol allows government agencies to accurately target the production. These measures are not simply about commercial protectionism (economics), trying to keep Baidu and Alibaba’s potential competitors at bay, but it springs from a real political agenda to control the Internet. Local crew members told me that the Internet surveillance had increased in China, particularly since Google and Facebook NSA-linked scandal in Europe (BBC News UK 2014; BBC News US & Canada 2014) and ahead of the National parade of 3 September 2015 which revived security concerns. Ironically, the system is so effective that less than a year later, Fang Binxing [方滨兴], the creator of the Great Chinese Firewall, was blocked out of his own system on 6 April 2016 (Ramzy 2016). Unfortunately, the control of the Internet made the connectivity unstable for the production and it prevented access to foreign websites that would have helped the film project. For instance, when dealing with the production teams, art departments or actors and trying to convey concepts through pictures and videos, it was difficult to find the references that were necessary to express certain creative ideas.

Positive Censorship: Propaganda

In parallel to the monitoring, control and censorship taking place throughout the production process, as preventive and coercive series of measures, there was what I choose to call ‘pro-active’ or ‘positive censorship’ under the guise of propaganda. As seen in Chaps. 3, 4, and 5 propaganda in China is commonly termed as ‘publicity’ (same word in Chinese). I consider it a tool of inner soft power to rally the masses to a national sentiment while operating its influence outside of China under the form of soft power. When I define propaganda and inner soft power as ‘positive censorship’, I do not signify in any way that it has a positive intention or a positive outcome, but I refer to the meaning of ‘positive’ rather as in the psychological term of positive reinforce- ment. In that sense, positive means that an element is added as opposed to sub- tracted (like it is mostly the case with censorship when scenes are cut out for a script or a final edit, for example). Propaganda instead acts to add concepts and unify ideas in the viewers’ minds. Where censorship may be obvious as a method and its results can be seen (and feared sometimes) by the masses, propaganda on the opposite can be very subtle. It can act almost unconsciously on the film professionals and audiences alike to the point where many individuals start self-censoring. On 30 June 2015, more than a week after the production started, a crew member confided that the PLA were originally going to be involved in the film as investors,

47 VPNs were legal at the time of the shoot. 210 6 Live Film Production Case Study: The Last Race but in exchange for the full finance of the film, they wanted to take total control over the production and focus on the Sino-Japanese conflict as a tool of propaganda. A compromise could not be reached with the production team and the PLA did not invest directly in the film. However, the last part of the film was shot in the PLA studios in the South West of Beijing (Area 81). This was ideal as the last part of the film shoot was going to involve explosions and gunshots and Area 81 was used as much as a set for other pro-Chinese films as shooting range and army exercise ground. Mr. Shin had already collaborated with the PLA in his filmThe Great Conqueror’s Concubine in 1992 in which over 1000 soldiers participated in this Wuxia period drama. The film production had reached an agreement that some of the key set designs such as a large clock tower created by famous Art Department Head, Mr. Horace Ma would stay after the shoot as well as the sentinel towers for use in other film productions. In exchange, the government offered this Beijing-based shooting location (Fig. 6.8). However, filming in Area 81 was challenging as a lot of explosions from other films featuring World War II pro-government dramas could be heard while shooting. This also occasionally distracted cast and crew and had the significant disadvantage of rendering any clean live audio recording virtually impossible; a very difficult task for the location sound team. Many of the concurring film shoots in Area 81 had to deal with hundreds of Chinese extras dressed up accordingly as KMT or Japanese soldiers in content produced for national release and TV broadcast. In view of the scenes re-enacted which sometimes involved war and torture scenes potentially visible by all crew and cast (including children), it is fair to say that The Last Race was

Fig. 6.8 Making of the clock tower in Area 81. (Courtesy of Patrice Poujol) 6.3 Act II: Action – Production and Post-production 211 not the most pro-China World War II film shot in these studios compared to the other manufactured works of propaganda hosted by the PLA. The government ‘guidance’ was voiced for a specific scene (scene 108) that involved the characters of Japanese soldier ‘Matsushita’ (Takagi Sadahiro Teiyu [高木貞祐]) and a little French Girl named Daisy (Mila Gaeva Hassid). While both characters were supporting the two leads Eric Liddell (Joseph Fiennes) and Xu Niu (Shawn Dou), they had a central noticeable presence in several other touching scenes of the film. Scene 108 was set in a church about Matsushita playing the piano and remembering his family back in Japan while Daisy, a foreign prisoner, was hiding in the shadows mesmerised by the sound of the instrument. In the scripted scene, Matsushita noticed Daisy but pretended not to see her so as not to frighten her. Daisy reminded him of his daughter back in Japan. Because the two characters speak different languages, all the action and the building of trust was going to be slowly built in the eyes of the two actors. Drama coach and director, Mr. Teare had managed to obtain a very subtle and touching quality for the scene between the two actors during the rehearsals. But the scene had to be significantly reworked on set just before shooting it. According to Director Mr. Shin, the production had to follow ‘government guidance’. Quite surprisingly, the Chinese Government (SAPPRFT and DoP) wanted to portray the Japanese as ‘not totally criminal and brutal’ and they wanted him to come to Daisy to create a sense of suspense and fear in the audience first and then to give a ‘friendly’ handshake to the little girl. Mr. Teare argued that it was a rather clumsy attempt to portray the scene this way as it over-emphasised drama and was not plausible. He argued that it actually defeated the original purpose of showing this Japanese soldier in a good light. He also mentioned that the actors had rehearsed the scene many times before and this was quite disruptive to the dramatic creative process. It was later revealed that the rationale for this approach was meant to be catering for the lowest common denominator of the audience so that the entire audience would understand it and that the Chinese Government had positive intentions behind it as they wanted to show peace between the two nations. Nonetheless, the scene was filmed in a church, in CCP conservative Tianjin, the Japanese soldiers shakes the hand of a foreigner and not a Chinese little girl. A few weeks later, the same film crew and cast were filming amongst anti-Japanese film projects in Beijing-based Area 81. One could doubt the official explanation and the true intent for this creative choice as it may have served other purposes linked to propaganda or a simple display of authority. In any case, scene 108 was eventually cut out of the final edit as well as Matsushita’s nostalgic memories of his own family back in Japan. The government agencies’ argument over this scene to promote a symbolic idea of peace between China and Japan does not seem to hold true. Instead, showing the humanity in the Japanese soldier is what seems to have concerned the government officials. This is an illustration of the anti-Japanese sentiment discussed in Chap. 3 as a form of ‘Neo-Nationalism’ (Fung 2008, 196–7). This type of propaganda seems to work in unsuspected ways and it was reflected by the attitude of the team towards the Japanese actors who were quite isolated and sometimes treated with contempt by the Chinese crew. This shows the effectiveness 212 6 Live Film Production Case Study: The Last Race of the government propaganda. Considering myself neutral, I tried to explain to some of the Chinese crew members that these young Japanese actors had nothing to do with what their elders had done, that we had a similar story with Germany but that the only way forward was to forgive. As I commented that their choice, as Japanese nationals, to take these unrewarding acting roles was a brave move and it may not have been a very popular decision in Japan (particularly within their respective families), I was met with unconvinced faces. The Chinese people involved in the conversation responded that they were not very well known actors in Japan and that China was the only hope that they had to make a living. When I mentioned that Japan had suffered two atomic bombs, which had effects to this day, some remained silent and others argued that China had also suffered during the war. Coincidentally, as I talked later with one of the lead Japanese actors who is now based in Hong Kong, he told me that he was originally from Nagasaki… We locked eyes and there was a long minute of silence between the two of us. The 70th anniversary of the two atomic bombings was only a couple of weeks away. More subtle than in The Last Race but yet effective, there are several examples of China slowly taking over Hollywood and changing its content little by little. Red Dawn (Bradley 2012) and Iron Man 3 (Black 2013) productions had to rewrite their story and change the nationality of the antagonists who were originally Chinese so as not to upset the Chinese Government and its censor. There are also more Chinese actors and actresses in Hollywood films (whether they are co-productions or not). Fan Bingbing in X-Men: Apocalypse (Singer 2016) (Wong 2016) or Jay Chou (Rich 2016) in Now You see Me 2 (Chu 2016) co-financed by Hunan TV through TIK films and as part of a slate of 50 films with Lionsgate for 3 years (SBR 2015) are good examples of this. Particularly, Jay Chou like Ang Lee is often claimed by China as a Chinese representation abroad, whereas both of them are Taiwanese. Co-productions are interesting for the Chinese Government, because they create a bridge that allows China to increase its soft power abroad. Maybe in a more powerful way than censorship, it seems that propaganda and soft power become ingrained at the individual level (they form part of the changes in media consciousness). To go back to the ‘microcosms’ of China, the same dynamics seem to operate from the wider sphere of the government to the individual’s culture.

Corporate and Economic Censorship

The business model in China has been following and mirroring the US model which is based on the concept of deriving as much revenue as possible from a central IP by cross-promoting and cross-selling the same creative idea horizontally and vertically.48 Nonetheless, the model which has taken Hollywood about 100 years to develop has been adapted very quickly in China in less than 15–20 years. Therefore, the

48 As seen in Chaps. 2 and 4. 6.3 Act II: Action – Production and Post-production 213 integrated opportunities for product placement as a mean for companies to advertise their products and services through a specific film IP are numerous but companies are still in a learning phase as they have not got the maturity or the branding strength that Hollywood has developed. The Last Race, although originally a historical biopic was no exception to this trend and it has tried to exploit a semi-public IP through the vehicle of Eric Liddell to achieve cross-promotion purposes. Quite ironically, The Last Race was not produced in the West for lack of funding opportunities. Mr. Fiennes, reminds that several producers had the idea to produce such material but the task of raising the funds was just impossible before China got involved. Investors did not want to take the risk (Furness 2016). This has given product placement a non-negligible position in the film and its promotional events. It was evidenced by the many and obvious product placement shots and film promotion material. All the lead characters wore Aquascutum clothes and Solvil and Titus watches. This is particularly striking in one of the most touching scenes (scene 147) when Florence cries at her piano and Eric Liddell dies in a Japanese camp, away from her, the audience can clearly see a close-up of the watch displaying Titus. Furthermore, the watch is part of the plot between the lead characters and we see it in close-up many times during the film including when Eric Liddell part with his wife Florence before she flees to Canada. This scene in real life was the last time that they would actually see each other (Fig. 6.9). The Aquascutum high-end UK clothing brand collection was worn by most of the lead cast in the film and at surrounding promotion events. For Alibaba, the operator in chief of the film and also the giant online retailer, this was a good opportunity to connect with new potential clients both in terms of client brands and new customers. Despite these commercial opportunities, a small degree of power was given to collective negotiation. This manifested when whisky brand Johnnie Walker Black Label were proposing c. RMB5 million for Eric Liddell to drink a friendship toast with supporting character Xu Niu. Eric Liddell’s daughters and Mr. Fiennes himself opposed this decision since Eric Liddell in real life had made a point to never drink

Fig. 6.9 Solvil and Titus Ads. (Courtesy of Patrice Poujol) 214 6 Live Film Production Case Study: The Last Race alcohol. The production reluctantly let the whisky brand go for fear of legal issues and to ensure Mr. Fiennes’ enthusiastic participation. At the exception of the Whiskey sponsor, corporate sponsors who had higher profiles and higher commercial and financial stake in the film had generally the most influence on the shoot and the creative output. As French directors Yves Boisset and Jean-Pierre Mocky have claimed, one of the most difficult censorship to deal with is financial censorship (Boisset2011 ; Mocky 2014). It is an insidious form of censorship. George Ramsay adds that ‘the clever thing about capitalism is that it becomes its own opposition’ and therefore even political art ends up being financed or not by large corporations (Ramsay 2014). It is a more advanced and subtler form of censorship that comes with the economic structure of capitalism. This is a structure that China has inherited since the transition after 2001.49 As a result, Chinese censorship is now political, economic as well as cultural. Surprisingly, Alibaba representatives generally appeared to be a much tighter censor than the government state agencies. The company ordered a blackout of on- set pictures and footage for lead actors until several weeks after the shoot (28 September 2016). This deterred most of the foreign press, as they could not understand why Alibaba had acted as a monopoly and exclusive commercial conduit for celebrity pictures and articles between the production and the audience. Alibaba was motivated by a dual business and political agenda. On the one hand, it was acting in its best economic interest, and on the other hand it was supporting the government’s guidelines. As the distributor and one of the financiers of the project, it had tremendous power over the film and went up to the extent of imposing creative ideas on the production team. The team later claimed that these ideas damaged the credibility and the quality of the film, it also cost money to the production as the movie had to be re-cut several times to satisfy Alibaba’s Executives. In the words of Mr. Jonny Koo (Mr. Shin’s Associate at Innowave), Alibaba’s representatives were ‘young guys in their late twenties who had never made a film in their life and thought they knew the market better than anyone because they had audiences’ statistics on hand based on their retail customers.’ Mr. Koo thought that the Alibaba film executives that he had met had ‘no idea about what they were doing’ and they were just trying to impress the production team as they were carried away by the arrogance of pertaining to one of the largest company on earth. As I will describe in the promotion and distribution sections,50 the ideas defended by Alibaba’s executive express the areas of tension between traditional Hong Kong filmmakers and the new online giant. It shows a deep fracture similar to the one between Hollywood and the Silicon Valley giants in the US. In addition, it symbolises different working cultures and nascent political tensions between China and Hong Kong. In terms of Alibaba’s impact on the traditional and conservative filmmaking process, the production claimed that it had disastrous consequences in terms of creativity. According to the production team, Alibaba had a tighter control and censorship on the film than the government. It was argued that Alibaba representatives

49 As seen in Chap. 3. 50 Sections 6.4.1 and 6.4.2. 6.3 Act II: Action – Production and Post-production 215 feared to appear negligent and to disappoint SAPPRFT ultimately exposing them to blame. Quite importantly, this was a particularly tense period when Alibaba was under scrutiny both by the US and the Chinese Government in regard to their lack of dili- gence regarding copyright infringement and fake branded items circulating on their platform (Jhonsa 2016; Tejada 2015; The Wall Street Journal 2016). This episode made Alibaba look like a national embarrassment to the Chinese Government. This period also coincided with the government opening police offices embedded within each of the online champions headquarters, such as Alibaba (Custer 2015). While the Chinese Government was officially loosening its grip on film scripts as long as they did not contain ‘special subject matters’ such as religion or politics (CCTV News 2015), it was effectively reinforcing its control over the Internet and preventing national newsgroups from using social media content. Meanwhile, the CCP were using foreign social media themselves to expand their soft power abroad (Custer 2015; Heifetz 2015; Chang 2016). Ultimately the merger between GAPP and SARFT did not accentuate censorship or loosen it. It made censorship more pervasive and harder to detect, as it now seems to act at more subtle levels now. As claimed by Gide and Ramsay, censorship can paradoxically be a booster for creativity: artists have to adapt to constraints and outsmart the system and its rigid framework in the pursuit of new creative means (Gide 1921; Ramsay 2014). It can be a force that helps artists push the boundaries of their art and find new and subtle ways of expression. However, this task is challenging when the emperor structure lies with self-censorship at the centre.51 Incidentally the political fear of government reprisal and the economic fear of losing the finance for the film accentuated self- censorship within the production at all levels: higher hierarchical levels avoided making decisions which may have upset the power while lower hierarchical levels avoided speaking in public about such issues. One of the immediate results of such a dynamic was that the crew’s goodwill was generally transformed into fixed- minded attitudes and lack of initiative for fear of being blamed. Ms. Xu, one of the production managers was a typical case. She would not allow most foreign press on set to promote the film internationally: at some point foreign reporters had to be smuggled in.52 During the production phase, Mr. Shin admitted that he doubted he could eventually carry his vision the way he had intended because the pressure from the various key stakeholders was too strong. He had to be smart in how he was going to present his story to the production (the microcosm) to obtain the favours and acceptance of the government (macrocosm) and its champion (Alibaba – corpo-cosm).53 This was evidenced by the suppression of a rehearsed performance from Japanese lead actor, Shigeo Kobayashi (Yoshinori) in a key scene (scene 152) in which the actor was given a chance to show humanity for a few seconds before ordering the massacre of the foreign prisoners in the camp. The scene was taking place at the end

51 The Panoptic Society described by Foucault and Deleuze mentioned in Chaps. 2 and 3. 52 With the authorisation of the film co-Directors. 53 See Chap. 5. 216 6 Live Film Production Case Study: The Last Race of the film after its Emperor, Hirohito, had announced the defeat of Japan on the radio. It was very profound and could have brought a cathartic moment to the piece and to the audiences watching it. At the very least, according to Mr. Teare and several crew members, this performance would have greatly served the film. It was also a very inexpensive close up to shoot. However, the scene was dismissed by Mr. Shin for no apparent reason and replaced by a horde of Japanese soldiers acting crazy in a military canteen and throwing their bowl of rice on the walls after hearing Hirohito’s speech. With no second thoughts, they proceed to execute all the prisoners. Mr. Koo later explained that Mr. Shin wanted to retain total control over ‘his film’ while he had to compromise with the Government’s guidelines. In the end, so many stakeholders involved with so diverse agendas meant making a film by committee. This process is seen in the US as well where over-controlling financiers sometimes disrupt the creative process and the film can be unsuccessful or even financially censored (Lewis2000 , 2; Ramsay 2014). However, in Hollywood, the opposite mechanism takes place; the economic dimension supersedes the political dimension (Lewis 2000, 6). In this case, the political dimension represented by the different layers of the government agencies and officials adds another level of stakeholders who drive the film. The result is a film conceived and directed by committee where the creative team has in fact little to say. The film becomes an expressive illustration of the dysfunctional and fragmented system in place and the dynamics of the various forces at play that have been imposed by the key stakeholders. Paradoxically, self-censorship and corporate censorship had ultimately stronger and more immediate effects on the final film than government censorship. But in the same line of thought as seen in Chaps. 2, 3, and 4, politics and money played the major roles. Macro and micro politics superseded the economic agenda almost systematically. There was a hierarchy of priorities where political dimensions dominated financial and economic agendas. The economic dimensions then prevailed over the creative and artistic nature of the work. This manifested with the diverse agendas at play giving the directors little room to operate. In response to these dynamics, Mr. Shin felt that he had to both self-censor to satisfy the key stakeholders while asserting his authority with the cast and crew to give himself a sense of control over the film.

6.3.2 Micro-systemic Challenges: The Emperor and His Subjects – Cultural Microcosm

Setting Up the Stage

Initially, the production’s creative prospects were promising. The creative teams were a good mix and the success of the first day of principal photography gave energy to the crew. First of all the two co-directors were complementary; Mr. Parker’s calm and astute story-telling and characterisation talent balanced Mr. 6.3 Act II: Action – Production and Post-production 217

Shin’s strong creative energy. Mr. Shin as a producer in his own right was also deeply connected with the other producers, the production team and the camera and art departments while Mr. Parker had a good knowledge of the script, the dramatic arc and had a great rapport with the actors. This meant that they could in theory divide the work at hand with no or very little overlap between their roles. In theory, they could also manage to reach both international and local Chinese audiences. The talent and professionalism of all the departments involved generally impressed me: camera/lighting, sound, make-up/hair, wardrobe, production design, production and the directorial team. In addition, the film production was fortunate to have a great cast led by Mr. Fiennes and Mr. Dou and numerous worldwide emerging talents. This was complemented by some enthusiastic extras from various countries. Initially, the role of Mr. Teare as drama coach and director in federating the energies of the extras and some of the supporting actors was instrumental in making the film as realistic as possible and in nurturing what any good story needs: authentic drama. Unfortunately, as I will describe in the following sections, the external and internal forces at play put this equilibrium and complementarities under tremendous pressure.

Central Power Structure as Fixed-Minded Cultural Microcosm

Some of the above mentioned forces and the resulting pressure came partly from Mr. Shin’s view that he did not want to take the risk to ‘offend the Chinese Government’, and he had, in his own words, ‘to be careful with the authorities’. This did not reflect the creative and artistic intent conveyed by Gide 1921( ) or Ramsay (2014). It could be argued that indirect censorship, through the corporate financial system and self-censorship, was more effective than direct state intervention. Resolutely there is a strong argument to be made that corporate and self-censorship significantly supports the direct censorship and the propaganda efforts of the Chinese Government. Because of the way the film production was set in the macro world involving powerful political and economic decision makers such as the government agencies (and their officials) and corporate giants such as Alibaba and MGK, the hierarchy of power was impressed upon the production from top to bottom, from the macro-scale of the political-economic sphere down to the micro-scale of the production itself. Therefore, Mr. Shin became the catalyst and the envoy of the key primary stakeholders previously mentioned in Sect. 6.3.1. He took the role of a political-economic leader rather than that of a creative visionary. Mr. Shin essentially became an emperor, a micro replica of China’s central power. Mr. Shin was rapidly viewed and considered as the chief in command while Mr. Parker was gradually considered as his second in command. Mr. Teare at some point referred to Mr. Shin as the ‘Queen Ant’ or the ‘Queen Bee’ (in his own words) ‘surrounded by his subjects’ who were rushing around him trying to impress him and attempting to obtain his attention and favours. This mechanism is reminiscent of the approach taken by the central government, and quite close to the emperor 218 6 Live Film Production Case Study: The Last Race system in the ancient times of China. This situation is also reminiscent of what Carol Dweck describes as ‘groupthink’ in fixed-minded institutions where all the individuals who form part of the group structure have lost their focus from their primary goals and their impetus to create together (Dweck 2006, 134–136). This is not just due to the specific features of The Last Race and Mr. Shin’s personality. Firstly, the film was set as a co-production with the integration of Hong Kong and foreign-based talent and crew. Therefore, it was expected to be generally more open than a purely local production. Secondly, this is a cultural trait that is observable across the board in China as several industry professionals later confirmed (Shershow2015 ; Pilarski 2016). It could be argued that this is not specific to China since the Hollywood system has a similar power structure that has been researched thoroughly (Wasko 2003, 9–11). There is a hierarchy in Hollywood and in European productions too. This hierarchy is referred to as a ‘chain of command,’ (Schatz 2012, 170) but this structure generally allows for suggestions to travel back and forth between the directors, producers and the cast and crew. This communication process gives rise to discussions and a consensus is reached which greatly benefits the film project. This democratic approach does not diminish the director and the producers, quite the contrary: as communication channels remain open, the process prevents mistakes from occurring well ahead of time while the director, supported by the producers, generally remains in charge of the creative vision of the film. The characteristics of a shoot such as The Last Race, directed and co-produced in China by a Chinese majority taints the production with different cultural qualities. Therefore, one cannot disregard the cultural traits of Mainland China and the relationship of Chinese individuals and groups with authority. One of Mr. Shin’s AD confided during a conversation regarding a recent elections and subsequent geopolitical events that took place in Russia and Ukraine under Vladimir Putin that ‘Russia is like China, they need a king.’ This view seemed to be widely shared among the production and the directorial team members. A strong and all-powerful leader was expected and needed to give a sense of direction to the project. The leader should never be challenged, particularly in public, since the leader’s loss of face would result in a downfall of the entire system. I could not help but notice some strong elements of Confucianism in these discussions. These elements relate to the paternalistic male-oriented approach, organisation of Chinese society in this micro-environment, and the power structure of film production itself. The central, powerful and uncontested role of the director mirrors the power in place and its corresponding dynamics in China. Mr. Shin, who decided at times to change the script without advising Mr. Parker embodied this central power. Mr. Shin later took charge single-handedly of most of the editing in post-production. Ultimately, he took creative control over the project, probably to comply with the many stakeholders that he was trying to please. Although Mr. Parker and Mr. Shin discussed, argued, compromised and finally agreed on most of the discrepancies, further non-negotiated changes occurred during the shoot- this created conflicts within the production. 6.3 Act II: Action – Production and Post-production 219

Mr. Shin who comes from the traditional film industry rarely paid any attention or credited any ideas from his collaborators whether consultants (paid to give him advice), crew and actors. This is a vastly different approach in comparison to the participatory and reward system of online platforms’ culture such as Alibaba’s (Chap. 5). He seemed to be delighted to reject some of the best ideas at times to reaffirm his control as Emperor of The Last Race. Psychologist Prof. Carol Dweck describes these traits as pertaining to the ‘fixed- mindset’ as opposed to ‘growth-mindset’ that implies true creativity, open- mindedness and the will to improve and develop collaborators (Dweck 2006, 108–11). Prof. Dweck, although advises that this process can be reversed through time and effort, she cautions that such leaders are often times the reflection of a system that they grew up which is also fixed-minded. These leaders in turn may transform a potentially creatively fertile ground such as a film set into a fixed- minded structure. The consequences of such a system and this type of leadership, even though they may ensure stability for some time are quite damaging in the long-term as they lead to exploitative practices, the inequality in the distribution of resources and ultimately to the corruption of the system, down to its elementary component: the individual. At that point the passion factor described by Philip Lee is eroded (Lee 2005, 16).

Micro-exploitation

In the documentary filmThe Real Chariots of Fire about Eric Liddell and the feature film Chariots of Fire, Nigel Havers explains, “Eric Liddell practices selflessness almost to a fault” (The Real Chariots of Fire, (Sibley 2012)). There is some kind of irony in this, as the biopic of Eric Liddell, The Last Race, where his selflessness actually leads to his demise, is built on a team of selfless workers who give tribute to the man, but it also illustrates the level of exploitation that took place on the film production. The fixed-mindset approach gave rise to attitudes and behaviours relative to exploitation both in terms of structure and philosophy or ethos of the production. In general the crew was treated with lower levels of consideration and care compared to the US or Europe, they had to work through long hours (18–25 h without rest several times). Bad quality food, low pay and being crammed into cheap hotels, sometimes with several people sharing the same room (up to five in one room for some of the body doubles and stuntmen) were commonplace on the production. One of the production workers confirmed that the hotel where the crew and supporting cast were staying for several weeks in the outskirts of Tianjin was not even licenced to host foreigners because it did not comply with the minimum quality standards. The production team found a way around this by getting fake receipts from higher up hotels where the key cast were staying. In another shooting location, the low-end hotel that was pompously harbouring the name of ‘Olive Tree Four Season’ had frequent power supply cuts and this created disruptions with the production team that had relocated there. Cutting expenses 220 6 Live Film Production Case Study: The Last Race had adverse effects on the production that was initially not fully measured by the producers. The priority seemed to be about cutting costs; savings for a crew of 50 people was estimated to be between US$150,000 and US$200,000 in Tianjin alone over a period of 1 month. Further savings were made from salaries54: while Mr. Shin was asking for ‘favours’ from ‘friends’ amicably,55 the production was trying to squeeze every penny it could on the back of its creative collaborators. Meanwhile, little attention was paid to the losses incurred with the multiple disruptions generated by cost-cutting tactics and how it affected the crew’s morale negatively. On the 9th and 10th of July, the last two shooting days in Tianjin, several scenes were suddenly condensed into a one day non-stop shoot which went over 25 h.56 The next day, instead of taking rest, the cast and crew had to pack their belongings in a rush and travel to the next shooting location in Weifang. This gave rise to issues of child labour and exploitation when 9-year-old, Mila (Daisy) and a few more extra child actors were forced to shoot from 1 pm on 9 July until 3–4 am on 10 July. This practice would not have been allowed in Europe or the US, particularly in a continuous shoot with almost no breaks and no assigned place to have the children to rest on set. On a different day, a little Russian boy who was acting as an extra fainted under the heat (Fig. 6.10). These examples illustrate the difficult and stressful working conditions for the cast as well as the crew. The resulting tiredness and the erosion of enthusiasm generated miscommunication and mistakes among the crew who were low in energy. The acting performance of the cast was negatively affected. According to veteran Line Producer Aaron Shershow, there is a reason why shifts are typically 11–12 h per day “pushing it occasionally to 14–16 hours in China without overtime if the director has a good relationship with the crew” (Shershow 2016). Cast and crew need to rest to avoid mistakes and to work to the best of their ability and skills. Pressurising them too much means that the quality of the work decreases across the board and

Fig. 6.10 Children on set. (Courtesy of Patrice Poujol)

54 This task was given to Ms. Xu, which empowered here further within the production. 55 In Mr. Shin’s own words. 56 The longest shooting day on the production was a record 27-h non-stop shoot earlier in July when the cast and crew saw the sun rise twice without having taken a break. 6.3 Act II: Action – Production and Post-production 221 they feel exploited which has a negative impact on their morale and the overall quality of the production. This in turn has an incidence on the quality of the film. The resentment towards micro-exploitation culminated with the drivers’ strike less than 2 weeks before the end of the shoot in Beijing. In addition to workers’ exploitation this strike took place because of blatant inequalities in the distribution of resources within the production.

Unequal Distribution of Resources

While the exploitation and overuse of talent crew took place in the production on many occasions, other members of the cast seemed to be protected and were given first class treatment. This was particularly the case where the cast benefited from the support of producers or agents. This meant that personal connections and legal requirements got in the way. However, this created double standards, inequalities within the production and resentment. For instance, Mr. Dou’s agent argued that he should not be staying with the rest of the cast during the entire shoot; he would not be available. This forced the production to reshape the entire working schedule around him. His agent negotiated that he would have to stay in 5 star hotel resorts. Mr. Fiennes and three of the supporting role actors from LA had a similar treatment. The two lead actors also had their own trailer vans and the US producers- connected cast had their own tent with air-conditioning, which the lead Japanese actors who had more experience in the film industry did not have. In comparison, the other actors and crew members had to wait outside in the heat, sometimes in winter clothes. It was the case of the child who fainted. This not only illustrates the unequal distribution of resources within the production, but also unequal consideration, respect and treatment which created tension, jealousy and eventually acted on the morale, commitment and performance of the other team members. The crew generally felt that they were not being treated fairly. Although the role of the agent as intermediary is in principle to protect the interest and well-being of their clients, they sit at the other extreme of the spectrum of exploitation. In the case of Mr. Dou, his agent was double-booking him on various film projects with competing timeframes, keeping him busy and earning the commission. While on the one hand, the agent was defending her client’s right, she was also exploiting his talent and his availability as much as possible while contributing to undermine the stability of the entire production by creating double-standards. From such examples, it appears that there should be a balance, particularly with the intermediaries of the media sector, between the involvement of filmmakers in regard to their passion for filmmaking and their financial concerns. These are values pertaining to long-term vision and growth-mindset that helps develop committed and loyal film crews and emerging talent, rather than using short-term tricks and fixed- minded techniques as described by Dweck (2006). The unequal distribution of resources went beyond the well-being concerns of the privileged and the systematic cost reductions for the others. Inequality lied in the 222 6 Live Film Production Case Study: The Last Race radically unbalanced redistribution or funds and flows of capital. Some of the extras and stuntmen who were grouped with sometimes three more people in a room were paid as little as CNY100 per day of filming. Chinese extras were also paid around CNY100 per day and foreigners were paid CNY400. This meant that understand- ably the Chinese extras were putting little effort in their work and their performances. The differences of salaries were going from CNY100/day for Chinese extras to about US$1 million for Joseph Fiennes (as indicated by a production assistant). At the beginning of the shoot, the production was not transparent about the salaries of people and they wanted to keep it a secret to avoid jealousy, but of course it is challenging to keep such a secret over 2 months of intense filming and eventually the truth came out. At the end of the shoot and at the price of a lot of talk and distractions, everybody (from the runners to the producers) knew more or less how much everyone was being paid with the additional bitterness to have been either exploited, to have had a worse deal than their colleague, or to have been lied to and manipulated by the production. It would have been more commendable and energy efficient to be transparent right from the start. Bauwens recognises that salary differences within the same organisation should be ideally within a scale of 1–8 (Bauwens and Kostakis 2014).57 For US$1 earned by the lowest paid person within the organisation, the highest paid person for equal working time should not ideally earn more than US$8. It could be 1/10 or 1/20 for equal working time and it would probably still be fine. However, in this case the differences were phenomenal: the salary for instance between a Chinese background actor of CNY6000 (or the double CNY12,000 for a production assistant) on average for the entire duration of the shoot compared with a salary of US$1000,000 creates a ratio of about 1/500–1/1000. One of the Asian relatively well established stars who was only being paid CNY6000 for the whole shoot complained to me, “it’s not just about the money, it’s a question of respect… I do not feel respected for my contribution of talent and skills on this production.” Such inequalities in care, consideration and financial rewards eventually damaged the morale of the cast and crew on the project and possibly their enthusiasm to take on subsequent projects. It impaired the ‘passion factor’ described by Philip Lee (2005, 16, 148) and raised the notion of ‘value’ described by Graeber (2001). While their ‘passion factor’ was put at risk, it threatened the equilibrium of the entire production. As a result, it led to increasing levels of individualism and sometimes influenced their behaviours negatively. For instance, the sound team who had been very seldom considered had to be re-shaped twice as one of the sound engineers and experts decided to leave the set because of funding issues and because he felt his efforts were not recognised.58 This can explain the many continuity problems that the production had to face and the overall low production-value of the film. Without realising it, the production was using basic market mechanisms of supply and demand where higher in demand the skills and talent, higher the price and

57 As seen in Chap. 2. 58 This professional had already worked on the famous Monster Hunt (R. [许诚毅] Hui 2015). 6.3 Act II: Action – Production and Post-production 223 better the treatment (and vice-versa). It could be argued that the entire production was turned into a liberal capitalist micro-model with Chinese characteristics. Although there are merits in defending talents’ interests like the two acting leads’ agents did, there has to be a balance. There is the need for a more flexible system that is not solely dictated by rigid legal and market considerations, but where the collective working forces can have a say. If we take the Ghost in The Shell project as an element of comparison, there were still issues of double standard regarding the treatment of key lead talent (A-lister Scarlett Johansson) on that film. Nonetheless, whereas Mrs. Johansson was paid a lot more than the recommended 1/8 ratio compared to other cast or crew members, the salary distributed to all the workers on the crew was deemed fair and it allowed them to make a living. The Hollywood salary scale seems to take this important element of value into account (Siegemund-Broka and Bond 2015). In the case of Ghost in the Shell, this measure of fairness and respect motivated them to give their best, as they did not have to worry about how they would survive the end of the month. In addition, some of the crew which are traditionally seen as outside of the professional circle, such as ‘extras’, were treated with respect and seen as equals by the other workers who talked and socialised with them. This is an example of integrated, growth-minded and almost family-like working environment on a film with a budget over US$170 million. The size of the budget did not impact on the passion factor negatively, partly because the working conditions were fair and creative collaborators were respected regardless of their rank. The Last Race total film budget was officially US$12 million, the production value bargained through cost-cutting and crew and cast exploitation was meant to reflect a budget of US$36 million. However, this came at a price: the lack of people’s involvement. The crew will pretend that they don’t mind. Most of the time, this happens because they do not want to be blacklisted. For instance, at the end of filming, Mr. Shin asked for all the crew members to give their feedback in writing (but not anonymously) about their experience on the shoot. This was used to show the investors that the production had run its course as expected. Given that the feedback was identifiable, crew members preferred either not to make any comments or to give positive feedback.59 It can be argued with this example that self-censorship worked its way down to the individual level. Nonetheless, despite the positive feedback, all the cost cuttings came at a price, like some of the goods exported by China and made on the back of workers’ exploitation; the film generally displayed a lower quality.60 Cutting costs below a certain line eventually deteriorates the production value. From the expected production value of US$36 million on screen, to the actual US$12 million budget, the effective value on screen was more around US$6 million as some of the key crew members later admitted. This is partly due to the lack of people’s involvement, particularly in the second half of the shoot. They were exploited and therefore pretended that they

59 This was confirmed to me by one of the wardrobe Managers and one of the ADs. 60 The quality of the film is addressed in details under Sects. 6.4.2 and 6.4.3 about distribution and circulation. 224 6 Live Film Production Case Study: The Last Race

Fig. 6.11 Examples of crew members sleeping on set. (Courtesy of Patrice Poujol) worked long hours, but effectively they did not do much. Most crew members acted busy but some were sleeping on the set, at the back of trucks, waiting for time to pass by and to collect their cheque (Fig. 6.11). Another disparity that crew members have openly admitted was that the film industry was a ‘male-oriented’ industry, traditional and old-style’ with almost no place for women in it. One of the few women working on the shoot as AD61 who aspire to become a film writer and a film director mentions the ‘unequal representation of women in the Chinese film sector, particularly in technical and creative roles… We have a lot of female supporting actresses, assistants and secretaries, but few creatives or decision-makers’. The differences in treatment also seemed to be connected with capital and status. After the end of the film, Mr. Shin and the producers organised a dinner and only invited the few assistants who came from a wealthy background to tell them about their next film. Aside from testing the waters to potentially raise finance for their next film, they also wanted to nurture those who were going to become the next filmmakers generation: the golden circle that the other assistants who were not invited did not belong to. Aside from the unfair nature of such practices, in the long- term it means that the only crew members who could actually sustain a living in Beijing (or any other large Chinese city) with the monthly salary provided by the production were the ones from the protected and wealthier backgrounds. With a salary of CNY3000 per month in Beijing, it is very challenging to make both ends meet. Therefore, those who were not fortunate to be male and from a privileged background, even though they may have been hard-working, passionate and talented, may have stopped their career in film as a result of exploitation and inequalities. One of the female ADs who was not from a financially privileged background managed to get a grant through hard work to study in a reputable

61 Around 20 women for 200 men, none of the heads of the key departments were women except the hair and makeup department. 6.3 Act II: Action – Production and Post-production 225

London-based film school. She hoped to be able to alleviate the biases that currently challenge her as a female Chinese filmmaker from a modest background. She thinks that access to higher education in a foreign recognised institution might attenuate this prejudice. Film is above all a human enterprise with individuals at its very centre. The film production as a fixed-minded organisation without empathy for its workers or their development impacted directly on the morale of the employees who also became fixed-minded. The production power structure was stable on the surface but its true foundations were crumbling. Individuals tried to survive within the system because their salary did not provide them with enough resources to live outside of the production. Combined with lack of consideration coming from the production, this situation gave rise to rampant levels of corruption.

Endemic Corruption Levels

While the production systematically tried to save money to the detriment of its workers, the latter eventually became corrupt in the face of the system. When a system has lost its values then the people who compose it also lose their values (Dweck 2006). According to Mr. Shin, one of the producers withdrew his salary (US$100,000- a 1/100 ratio with the lowest paid personnel) directly through the accountant62 before anyone, as a result of the financial pressure on the production and when he saw that he may not be paid for what he had agreed.63 It happened during post-production and it generated delays and stress on the editing process. Small kingdoms were built and micro-politics started to emerge within the production. Without knowing it, the Emperor, Mr. Shin, was so preoccupied about pleasing the key forces and stakeholders at play that he did not pay much attention to the micro-forces that started developing under his eyes in his own production. In appearance the Emperor still had absolute power over his production, but in reality, various individual interests were slowly taking over. For instance, several days before the start of the production phase, Mr. Shin had to leave the production in Tianjin to travel to the Shanghai International Film Festival for a few days to represent his other filmThe Assassin. The crew and particularly the directorial team that up to this point had been reasonably loyal and seemingly hard-working,64 started being less diligent: some stopped working and went on for hours of lunch breaks instead. The Emperor had left the castle and his subjects were left at their own device with no surveillance. They took advantage of it. While Mr. Shin was away, middle

62 As a co-producer, he had the authority to so. 63 This was later reported by Mr. Shin. 64 Although many of them were merely staying in the office doing little. Some just acted their presence, pretending to be busy while working on their own personal activities. 226 6 Live Film Production Case Study: The Last Race management tried to assert their power. Ms. Xu, for instance, attempted to delegate tasks on other team members and started building her own micro-empire.65 When Mr. Shin came back and was informed of the situation on 2 July, he had to apologise privately and admitted that Ms. Xu was in fact one of the executive producers’ personal assistant and protégée. This meant that it was very difficult to blame her or fire her for her mistakes no matter how negligent, incompetent, and destructive a person she may have been. After all the executive producer, who was supervising her from a distance, had raised most of the funding for the film. Micro and macro politics started to mesh together through the prisms of politics, money and guanxi. As a result, the production was riddled by side agendas involving money, back- end deals, personal connections, guanxi, and government influence which sometimes distracted the focus on collaborative creative efforts, the production of the film and ultimately its quality. This was despite the initial enthusiasm and loyalty of the small hands (who were paid little) in the creative teams, the production teams and the cast to try and make this film as good as it could be. As the production phase went on there was a growing number of such issues that generated mayhem and disorganisation on the production. It increased individualism and resulted in clashing agendas instead of collaboration between individuals and teams. For instance, one of the best ADs a bilingual English and Mandarin highly experienced and talented individual had to be sent to the documentary team because of countless arguments with the Field Manager, Yang Yang.66 Yang Yang came from a vast experience in TV production wherein the key rules in China are to keep the production on schedule and within budget with little care for the actual quality of the content. The system is conservative and rigid with a regimented line of command. Yang Yang as a fixed-minded individual felt threatened by the ADs abilities and skills. Instead of learning from each other, the former acted like a small king and regularly rejected the latter. This illustrates again the symptoms of the contagious nature of a fixed organisational mindset (Dweck2006 ). The fixed-minded environment created conditions in that many individuals tried to get their own way back. They did so either to just be able to survive in the outside world or to get the reward that they perceived the production owed them for their work. They readjusted the exploitative system in a way that they thought was fair wherever they had the opportunity. As seen previously this was sometimes disruptive and generated delays and waste of funds. In the same way as in the macro- dynamics of Chinese society, these mechanisms gave rise to an individualistic and corrupt system down to its roots where basic work etiquette and quality procedures disappeared.

65 After the film was released one of the crew member and Mr. Shin explained that Ms. Xu, who Mr. Shin had trusted since the beginning of the production by giving her signing authority on the accounts and giving her access to the Mainland operations in her name, had rallied one of the production assistants to her cause, took control of Mr. Shin’s Mainland company branch, and fled with a significant part of the production money. 66 Also unanimously nicknamed ‘Si Mao’ or ‘dead cat’ by the crew members for his legendary scream on set which was believed to be able to kill cats instantly when they heard it. 6.3 Act II: Action – Production and Post-production 227

The levels of corruption within the production reached endemic levels. These could be witnessed from the lower to the higher levels of the hierarchy including individuals within the key stakeholders. The following three examples are by no means an exhaustive and all-encompassing picture of the manifestation of corruption on The Last Race, but they show that corruption took place at all levels of the micro- political hierarchy of production.

Example 1: Drivers After shooting, I received a call from the drama coach who told me that he could not find his phone and because he was tired, he probably left it in one of the vans that had brought us back to the hotel. After enquiring with the production team, they located the driver of the van who had found the phone. I felt relieved for a second, as the drama coach desperately needed that phone to perform his work. The person on the other side of the telephone told me that we could recover the telephone without a problem, but that the driver of the van would like a ‘compensation’ for it. I advised the person from the production not to buy into this and to threaten the driver to be fired if he did not return the telephone without payment. Eventually, the production had to pay the driver a bribe to get the phone back through one of the production coordinators.

Example 2: Casting Director Another occurrence took place in the middle of the production phase with the background actors’ and extras’ agents. One of the extras came to see me and despite having worked several hours of extra time, they were told that they would not be paid that day because the production did not have enough money. I talked to the production myself who informed me that they had paid the agents and that it was their responsibility. While I investigated the case with other background actors and the drama coach, we discovered that the casting director on the production and his close assistants had come to an agreement whereby the agents would give them a ‘60% cut’ in exchange for exclusivity. However, sometimes the casting director would not pay on time and the agents had to fight to get their money back. As I talked further with several agents employing extras and background actors from the US and Russia, I learnt that this is commonly the case. Agents do have to fight to get the money for their actor at the end of every shooting day. This is why according to them, they take between 60% and 90% of what the casting directors give them and the rest is for the actors and actresses. This also explains why background actors and extras only get paid typically CNY400 (CNY800 for older actors) for each day of a 12–16 h shoot. Furthermore, these actors, some of the agents later confirmed, do not normally work with any form of insurance or contract. They are exploited and they know it. They consider this situation acceptable, as they often do not have working visas and are vulnerable. This gives rise to two key systemic issues. Firstly, large sums of money leave the production budgets and are funnelled toward the casting directors and the agents, which is essentially misuse of funds and theft. Secondly, because they are exploited, the extras and background actors lose their motivation. Unlike on a shoot like Ghost in The Shell, on The Last Race, many told me that they generally felt like they did not belong. Although they mentioned that thanks to the drama team, The Last Race was actually one of the better experiences they had ever had in China. 228 6 Live Film Production Case Study: The Last Race

When confronted with this issue, The Last Race’s casting director pretended that this was not true, although his closest assistant spontaneously came to tell me that it was not the case as I was going to talk to the directors and the producers about it. The assistant told me that the casting director was not getting 60% of a cut from the agent in exchange for exclusivity. This specific detail that I had not mentioned to the casting director yet instantly revealed the scheme and the assistant’s involvement in it. The key director was informed about it informally and I was told that the agent was going to be fired as a result, but nothing happened and the production continued on the same exploitative grounds.

Example 3: Location Manager and Local Government Officials During a conversation that took place after the production phase with Mr. Shin, I complimented him for the wonderful locations that the location manager had managed to secure for the film in Tianjin. He admitted that these locations were secured because of the location manager’s ‘guanxi’ in Tianjin, but that they had cost the production a lot of money and ‘unexpected expenses’ in compensations. This is another case when the production lost some of its valuable financial capital through fund mis-appropriation. These funds unfortunately, were not used towards rewarding the cast and crew for their hard work and it contributed to diminish both the film budget and its quality. The Last Race is not a unique or isolated case in regard to systemic corruption that takes place on Chinese film shoots from the lowest to the highest levels of the hierarchy. Because corruption is rampant on most projects, as evidenced by the conversation with the agents and the producers, it can be difficult to get one’s deferred salary at the end of a production (Ellis-Geiger 2015; Pilarski 2016). Some of the more experienced and professional crews and talents ask for a 30–50% advance on payment to protect themselves in case a production goes into bankruptcy (in case money is funnelled out of it or if one of the investors defaults) or in case the production simply does not want to pay them. This was the case of Dr. Ellis–Geiger, for instance, when he worked on Hong Kong-based Johnnie To’s Film Election 2 (To 2006), as he had to struggle to get the second half of his salary back. Sometimes money disappears during the production and particularly in post- production, which is an efficient way to hide expenses and ‘cook the accounts’ (Shershow 2015). Post-production particularly is nicknamed the ‘money funnel’ by some industry professionals and that explains why a lot of productions insist to find and hire their own post-production deals either to safeguard their budget or to funnel funds out of the production for themselves (Ellis-Geiger 2016). Sélim Oulmekki explains that ‘Producers are usually so convinced that they will not see revenues from the sales because the system is so corrupt and the chances of getting proceeds from sales are so low that they rather take the money when they have it’ (Oulmekki 2015). Meanwhile, the corrupt system in place generates a lot of logistical mistakes, issues with communication and misunderstandings that impact on the quality of the production and the film. Unfortunately, there is a chain reaction connected with such practices, as the investors’ money is not entirely redistributed into the production. This lack of 6.3 Act II: Action – Production and Post-production 229 long-term vision has disastrous consequences for the morale of the crew and ultimately for the audience as the production value of the film is much lower than it could be. Ultimately, it could damage the whole sector if investors no longer want to invest in films due to lack of transparency and if audiences do not wish to pay for poor-quality theatrical content. There is a need for a new model to emerge to promote growth-minded features and transparency on film productions.67

6.3.3 Practical Production Challenges: Structural Issues

Setting-Up the Action: Conflict and Drama

Overall, production had nothing to learn technically and technologically from a US or EU based production of comparable budget. The Hong Kong-based key departments had some of the highest skilled worked. The directors enjoyed multi-screen functions even in the most remote shooting locations and air-conditioning was available in the directors’ tent (Fig. 6.12). After the shoot, the directors blamed the production inefficiencies on lack of funding but it truly pertained to the decreasing level of energy and morale of the crew that eventually translated into organisational and communication issues. Initially, the adaptability of the crew and their ‘passion factor’ were exemplary. They were originally dedicated to the film, and for some throughout the entire duration of the shoot. Many of the cast and crew members confirmed on many occasions that they wanted to nurture the film deep inside. This was evidenced by their will to

Fig. 6.12 The directors’ tent – state of the art equipment. (Courtesy of Patrice Poujol)

67 A model that would benefit investors, creative talent as well as audiences. 230 6 Live Film Production Case Study: The Last Race go beyond the line of duty despite long working hours and challenging working conditions. Lack of consideration, care, and fairness on the shoot eroded the initial passion factor and general faith that the workers had in the project.68 These fundamental leadership issues were complemented by issues of lack of role definition, disorganisation, basic communication challenges and a lack of international vision that I will study in more details in the sub-sections below.

Lack of Role Definition

Whereas, Mr. Shin stressed the point at the beginning of the production phase that everyone ‘should know their role and responsibilities’, the way specifically the production and the directorial teams were actually structured invited overlapping and shared responsibilities. Most of the teams were overstaffed, leaving some of the workers with not much to be doing and trying to prove themselves or find something to contribute to. For instance, the directorial team counted as many as 12 ADs whereas in the US or Europe, there are typically one to three maximum key ADs with very specific roles. Moreover, the ADs in Europe and the US can sometimes have tremendous power on the production as in some cases ADs reported directly to the producers and had the director fired from a shoot. OnThe Last Race much less power was delegated to the ADs and they were merely the subjects of the Emperor, Mr. Shin. Even the super production Ghost in The Shell which had a budget 15–20 times superior to The Last Race, had eight ADs but their role was clearly defined and these eight people were subdivided into a strict hierarchy and chain of command. Three key ADs who had over 20–30 years of experience in the industry on large productions had essentially two to three assistants (sub-ADs) helping them. In the case of The Last Race, the average age of the ADs was 25-years. Therefore, most of the ADs were aspiring filmmakers with little or no prior experience in filmmaking. Some had directed their own short films, one had worked for a film distribution company and another one was a production assistant on Luc Besson’s Lucy (2014). While the structure of the team, the areas of responsibility and the line of command were extremely clear on Ghost in the Shell, on The Last Race, the twelve ADs were multi-tasking and left with blurry and unclear guidelines with no authority to take action. This structure and the resulting group dynamics created the overlapping of roles and responsibilities. It also created competition between some of the ADs who were trying to prove to Mr. Shin that they were the best. He later confided that he had purposely organised the team in such a way so that the ADs would give their best. What Mr. Shin failed to see is that by antagonising his collaborators, the quality of the collaborative and participatory work suffered. A ‘groupthink’ mentality developed (Dweck 2006, 134–136), particularly as the ADs were all afraid to speak up their mind when they saw a potential problem arise so as not to be the bearers of bad news and risking to be blamed for it.

68 As seen in the previous section. 6.3 Act II: Action – Production and Post-production 231

I had the opportunity to help Mr. Teare from the pre-production phase to set up rehearsals for the actors and extras to improve the dramatic qualities of the film. The drama coach was easily lured into thinking that he was a drama director by the fact that he had only theatre and stage performance experience prior to this film and it was his first time on a movie set, which also justified a lower salary.69 Mr. Teare had his salary negotiated downwards in exchange of a credit of ‘Drama Director.’70 This misunderstanding (or perhaps manipulative technique) from the part of the production caused some conflicts and frustration later in the production phase as the responsibilities of the newly proclaimed drama director were sometimes blurry and undefined. Most of the film professionals on the set were not initially sure what his role was exactly supposed to be because he was not introduced as such and this role does not normally exist on a film set.71 As later reported, this unusual role impaired the credibility of the directing parties and the faith of some of the crew members in the viability of the project. The key role of the drama coach eventually focused mainly on dealing with the extras, background actors and supporting roles which was a rather frustrating experience for someone of his calibre.72His role was even more loosely defined as he was asked to perform AD duties as well as drama coach in the course of the shoot and frequently got in conflict with the field manager.73 Their responsibilities overlapped on set that created significant tensions. Multi-tasking became the daily routine of several crew members. This blurred the role definitions and invited basic mistakes to occur due to ill-defined responsibilities, when everyone was in charge of everything, no one was truly in charge of anything. The number of people blaming each other for mistakes and arguing about their respective responsibilities increased. Consequently, the morale of the crew suffered again, and they felt less accountable. This ultimately loosened the organisational structure of the entire production. In addition to the gaps created by the lack of role definition seen above, there were cases when even key roles were not filled. For instance, on the first day of filming, there was no sound team. When a sound team eventually took part in the production, they were largely neglected. The music aspects of the film were also largely ignored. Except for the main theme composed by Chris Babida, as seen previously, most of the thought put into the music dimension of the film were to do with public domain pieces as advised by Mr. Shin who did not want to spend money on copyrighted material. An AD was asked to collect public domain songs and themes online that could later be used for the film. When I advised the AD and Mr. Shin that IP rules not only concerned the piece of music itself but also the recording and

69 Mr. Teare told me that his salary was four to eight times lower than what he would normally take, but he took it for the experience. 70 A role, which does not exist on a film, because drama and actors are the direct responsibility of Directors. 71 This was later confirmed by Mr. Fiennes himself during a conversation with Mr. Teare. 72 Mr. Teare had trained as drama coach at the renowned drama school Jacques LeCoq in Paris. 73 Field Manager: This is another role which does not exist in a regular film crew. Yang Yang effectively occupied the role of 1st AD. 232 6 Live Film Production Case Study: The Last Race

performance rights, he seemed surprised. Given that Mr. Shin has over 30 years of experience in the film industry, it shows the little amount of practical knowledge that some traditional Hong Kong and Chinese filmmakers have about IP and copyright frameworks. An IP expert should have taken this role. These shared responsibilities and role gaps created conflicts sometimes even at individual level where one person occupied different and conflicting roles. This in turn generated a competitive spirit and the emergence of micro-politics among some of the team members. It encouraged people to play blame games that developed a fixed-minded attitude throughout the team instead of finding solution together and participating in a collaborative and creative growth-mindset effort. Beyond the micro-political games that were played under Mr. Shin’s supervision, a certain lack of purpose and synergy accompanied by a decreased morale affected the directorial team. This built a very destructive mindset for the logistics and the morale of the crew, which eroded their passion factor further. The trick to antagonise ADs was originally used to exploit the crew to the maximum. It worked to some degree in the short term, but it had long-term adverse consequences. The effects of such dynamics were accompanied with significant communication issues.

Communication

The previously observed challenges caused and amplified communication issues. The key communication issues were internal communication, language barriers and communication with the outside world. Many issues of internal communication created chaos on the production and cost the production significant amounts of money. This was sometimes a combination of lack of collaboration due to the structure in place complemented by the inexperi- ence of the staff. For instance, in scene 69 that was shot in Weifang, halfway through the production phase, around 150 foreign extras were initially expected. Scene 69 was a night scene which re-enacted the arrival of the foreign prisoners to the camp and was supposed to be key in character and narrative development. Just 10 min before shooting the scene, the production team was surprised that a lack of communication between the casting director, the wardrobe department, the production team and the directorial team meant that the scene was short of 50 actors. The directorial and the production teams had to find random people amongst local tourists from nearby areas in less than 30 min. This put the teams under a lot of stress, delayed the shoot and it created havoc in the make-up, wardrobe and art departments. For instance, the wardrobe department found it very challenging to keep count of costumes. They had to make sure that people, who had randomly been picked up from the street as free extras, were going to return the clothes and props. Some of the costumes disappeared into the night. The result was a chaotic series of shots with a crowd that was largely unruly to the point where Mr. Fiennes himself had to make a public speech to remind all the participants that people had actually died on the premises a few decades earlier and this is what the film was documenting. 6.3 Act II: Action – Production and Post-production 233

6.3.4 Lack of International Cultural Knowledge and Understanding

International Ambitions of the Film

The directors and the producers of The Last Race had international ambitions for the film. To some extent, the Chinese Government also had such ambitions for the soft power vehicle opportunities that the project initially presented. However, these ambitions were met with the lack of understanding of basic international perspectives both in terms of market knowledge74 and in cultural terms, as I will explain below. In the pre-production section,75 I mentioned the clumsy attempt of Mr. Shin to greet Joseph Fiennes on his first day in the production. This is an illustration on how the production generally displayed a lack of knowledge and understanding of international cultural perspectives. In the language barriers sub-section,76 it was evidenced that the lack of translators and bilingual staff was detrimental to the overall communication and organisation of the production. The lack of cultural bridges within the production who would understand the various cultures involved in the film was equally damaging for a film which was supposed to be targeted both at Chinese and international audiences. These cultural gaps concerned general knowledge. Although most of the foreign cast had come to China with an open-mind to explore the culture and had sometimes learnt how to speak Chinese, three of them with high level of fluency, openness and understanding of their respective cultures was not always reciprocated. Lack of knowledge and understanding took a more embarrassing and logistically challenging turn when the casting director and Mr. Shin handed 150–200 Russian and Latin American extras over to the drama team for large scenes rehearsals. Some of these background actors and actresses generally spoke better Chinese than English and could have been handled by the Chinese ADs. The Chinese directors had assumed that because they looked foreign and had ‘Western faces’ in their own terms, they should speak English, therefore the drama team should be able to communicate with them. This shows a basic lack of understanding of foreign cultures and even a hint of unconscious racism. This latent racism was later confirmed when Mr. Shin assigned me to my role as Louis Klein, a French-Jewish prisoner, for my ‘long nose’. I decided to conclude that this comment was not mal-intended as Mr. Shin delivered the line jokingly and with a large smile which did not conceal his excitement. He was not even aware that the comment could potentially be harmful as he made it in front of the whole crew, which I thought was initially rather embarrassing and humiliating, but it shows a higher degree of misunderstanding. Mr. Shin did not

74 This specific point is developed further in Sect. 6.4.2 under ‘Distribution.’ 75 Section 6.2.3. 76 Under Communication Sect. 6.3.3.3. 234 6 Live Film Production Case Study: The Last Race seem to understand the basic cultural fundamentals or his film’s historical facts and their meaning: The Last Race dealt with the World War II conflict and all its associated themes.

Global Political-Economic Misunderstandings

Mr. Shin’s grand vision was to make a film that would include a lot of different cultures, particularly in the camp, which would act as a microcosm and a ‘reflection of the entire world’ during World War II. But these grand international plans later revealed that this intent was coming from an uninformed business mind than an artistic open and knowledgeable mind, illustrating once more in the words of Dweck the symptoms of a fix-mindset (Dweck2006 ). For example, Mr. Shin decided to include French characters in the film at the last minute: Daisy, a little girl who was not originally meant to be French, and Louis Klein, her father who was not in the initial script. Mr. Shin wanted Daisy and Louis to have a scene in French. I could have easily spoken in English and the child-actress, Mila, could speak fluent Chinese or English. When I enquired about the reasons why he wanted us to speak French, Mr. Shin told me about his intention to represent as many countries as possible in the camp. There were two other practical reasons for this choice that pertained to the political-economic dimensions of the film. The first reason was political and it was to show the entire world that the Japanese not only had persecuted Chinese nationals during the war, but that foreigners from all walks of life and all countries had also been persecuted and fought alongside the Chinese against Japanese oppression. The aim here for a film that was going to be distributed internationally was to touch international audiences and rally them to the Chinese cause and its soft power agenda. The second reason was economic, as he was originally looking to target the Berlin International Film Festival for commercial exposure. He was also looking into the French market for the release and possibly a selection in Cannes as he had started preliminary talks with the French-based distributors Pathé and Wild Bunch.77 Mr. Shin was trying to charm the European markets by using both a French and British charm offensive in Germany. This case illustrated a misunderstanding of basic cultural and business mechanisms in Europe where no local distributors, film critiques and audiences would be manipulated by such an obvious commercial trick. It reveals the naiveté of Mr. Shin as much as Chinese Government officials in their approach of international markets. Unfortunately, once the Berlin festival plans fell through, the French scene that had been rehearsed, shot, edited and that was ultimately approved was taken out of the film.78 It had failed to fulfil its political- economic role.

77 Wild Bunch had views over cooperation with China and created the Europe-China Film Fund for US$120 million (100 million Euros equivalent) in January 2016. 78 It was re-cut into the film in the US version at the demand of the US producers. 6.3 Act II: Action – Production and Post-production 235

Cultural Exploitation

Other mistakes having to do with the lack of knowledge of other cultures were evidenced when Turkish Muslim extras and vegetarians were asked why they would not eat the pork dishes that they were served on set. Indeed, several background actors starved for the whole duration of the shoot or had to cook their own food. This lack of consideration and lack of open-mind to other cultures culminated in July, when the production had not realised that some of the Turkish Muslim extras were going to do Ramadan. After they were informed about it, no special care was given to them and the production continued as usual to serve pork dishes. The production took empathy, fairness and respect as a small point of detail, whereas it could have revived the passion factor and the energy that were lost in the film process. These examples also show the efficiency of the Chinese media and propaganda controlled system, which keeps their nationals fairly closed from world matters and the variety of cultures worldwide. The aim to open the film to international markets and audiences had more to do with maximising soft power and financial profits than conveying artistic or charitable values. This was later again evidenced by how the real survivors of the camp and their descendants were treated with a relative lack of consideration and used during the opening of the prisoner’s museum in Weifang (Fig. 6.13).79 Ultimately, although the film was announced as an international co-production, it was in fact a production mostly driven by China, and within that framework, mostly driven by the various key stakeholders of the production along political- economic agendas. Under these conditions, it is understandable why the US co- producers delayed their investment as long as they could (according to Mr. Shin), particularly as they could remotely monitor the set through US actor Jesse Kove, and UK (LA-based) actress Elizabeth Arends and actor Richard Sanderson with whom they were closely connected. Not only had the US production cast these

Fig. 6.13 Eric Liddell’s daughters/former prisoners and their families. (Courtesy of Patrice Poujol)

79 This part will be developed in the promotion Sect. 6.4.1.3. 236 6 Live Film Production Case Study: The Last Race actors, but Jim Green, one of the lead US producers is the godfather of Jesse Kove, which shows that Guanxi and privileges can occur in their own way in the West as well. In addition, the US production was well connected to Mr. Fiennes and received up-to-date reports from him and the other LA-based actors. This is why none of the key US producers came personally to visit the shoot and observe the proceedings. Although there were talks that they would do it, they never made the effort. This may have been a mistake, as it was taken as a lack of interest, consideration, and respect from some of the crew members and non-LA-based cast who felt somewhat alienated. Also, their presence could have boosted the morale of some of the workers and they could have influenced the production in a positive way thanks to their level of authority. As a result, instead of a co-production, this film is seen essentially as a Chinese production with foreign investment and foreign actors, now sometimes referred to as ‘whitewashing’ (BBC News 2016; Sun and McMillan 2016), a ploy to try and access foreign markets and box-office receipts while promoting soft power and Chinese brands abroad. This makes a lot of sense given that Alibaba Films was backing the project and that they wanted to expand internationally (Wang 2015a, b, c).

6.3.5 Production Phase: Concluding Lines

Similar issues were witnessed at post-production level, but aggravated by the lack of budget needed to complete the film. As seen previously, some of the budget had been wasted in production through corruption and disorganisation, which in turn had significant knock on effects on the continuity and on the general quality of the film. The insecurities of Mr. Shin, his self-censorship, and lack of international understanding of international audiences, as well as his inability to take advice from his collaborators largely contributed to concentrate all the power and to dwarf the production in favour of the key stakeholders. While film productions are notorious for their set of unforeseeable and unexpected incidents, a lot of the mistakes studied in this chapter could have actually been avoided with better planning, proper delegation and by nurturing a growth- minded collaborative spirit between individuals and departments who worked together on the set and in post-production. But this would have meant that the entire dynamics of the film would have had to be changed down to the very structure of the production and its ethos. Mr. Shin should have been stronger in the face of the key stakeholders while he should have nurtured and trusted his collaborators. As a result of the many continuity issues and other organisational mistakes, the post-production process took much longer than expected and ran over budget. Weeks later after the production phase when the film was already halfway through its post-production, I discussed the above issue with Mr. Shin’s trusted friend and associate, Mr. Koo. He informed me that as a director, not listening to this type of advice was a way for Mr. Shin to assert unconditional power over a production 6.4 Act III: Reaction – Promotion, Distribution, Circulation 237 that was not totally under his control due to investors, government and Alibaba making key decisions. This confirms the micro-empire style structure which mirrors the larger system established in China and its traditional media industry. After the release of the film, it was revealed by one of the cast and officially confirmed by Mr. Shin who made a crew announcement that Ms. Xu, who had managed to gain his trust, had eventually taken ownership of his company in China and disbursed all the accounts. Ms. Xu had apparently seduced one of the trusted production assistants who had access to all accounts and manipulated him into stealing the money. This is the official story, and it is highly plausible. However, Ms. Xu was the personal assistant of the executive producer who was a long-time friend of Mr. Shin and who was also accountable to the investors. While the disappearance of the funds remains a hard fact, I interrogated myself on who was the ultimate recipient of these funds: Ms. Xu, the Executive Producer, or did Mr. Shin use this story to cover the company’s expenditures? Whatever the truth might be, it reinforces the idea that the production microcosm at the image of its macrocosm had become micro politically and economically corrupt.

6.4 Act III: Reaction – Promotion, Distribution, Circulation

6.4.1 Promotion

The aims of the promotion phase are generally to satisfy investors, build an audience and maximise the exposure of the film to increase sales opportunities. The promotion phase took place conjunctly with the production phase. Although there were a couple of press releases and conferences taking place before the production started, the core of the promotion efforts concentrated on the production phase that continued after its completion, and finished after the release of the film. I have chosen to study the promotion phase chronologically rather than thematically following its evolution during the production of the film, its post-production and its point of release. In practice, the promotion phase was a continuous effort. However, five key milestones mark the study I have chosen to study as they highlight the main themes and challenges that the promotion teams had to face. These key steps in the promotion of the film were: (1) The Tianjin first press conference, (2) The on-set promotion of the film, (3) The Shandong press conference organised right after the completion of the shoot, (4) The Cannes film market promotion, and (5) The China tour during the release of the film.80

80 Please refer to Appendix 6 for a few selected press articles regarding The Last Race. 238 6 Live Film Production Case Study: The Last Race

The Tianjin Press Conference: Propaganda and Self-Censorship

On 24 June 2015, the first official press conference forThe Last Race was hosted at the Ritz-Carlton hotel in Tianjin, 3 days after principal photography had started. Apart from being a key location for the shoot, Tianjin was an interesting choice as a hosting city for the press conference. Economically, Tianjin is a typical case of a city dedicated to the creative industries as one of the clusters for innovation development. As seen in Chaps. 2, 3, and 4, it was one of the first developed SEZs (Grub and Lin 1991; Keane 2013, 165–67). James Cameron studios and many post- production studios were established or relocated there. Tianjin was and still is a test zone for the digital and creative industries. This allowed the area to create thousands of jobs and expand; it is expected to be part of Beijing’s larger urban area by 2030. Politically, a lot was at stake in this press conference as the production had made the use of its connections to secure key locations for the shoot with the local government. Tianjin is seen as one of the most conservative and pro-government cities in China with the highest CCP membership per capita (Laliberté and Lanteigne 2008; Bell 2008; Shambaugh 2008, 141). It is an extremely sensitive area. Therefore, the production was quite careful not to antagonise the most important stakeholder of the film, the government and its local agencies. To mirror these concerns, all the promotion meetings held by the production prior to the press conference were in Mandarin only with no translators almost entirely populated by Chinese participants at the exception of the international press team that was composed of only two people. This evidenced the little emphasis given for the international dimension of the film. There were communication issues even within the Mandarin speaking team: no briefing to the other teams after the Chinese promotion meeting and no access to a proper Wi-Fi connection. After insisting, the international team eventually managed to get key information regarding the conference. The project manager in charge of the Press Relations (PR), Ms. Xu, did not seem to have foreign press in her mind as a priority (Fig. 6.14). The international promotion team finally got a copy of the press release late in the process (only 48 h before the press conference), in Chinese and they had to translate it.81 During the translation process, I was surprised to discover that the film was promoted as a piece that was going to be solely directed by Mr. Shin as Chinese Director. Facts that he was Hong Kong-based and Mr. Parker’s involvement as co- director were not mentioned in the Chinese press release. These elements were added for international press when the English translation was completed. During the press conference another example of media manipulation occurred. The lead Chinese character of Xu Niu was depicted in the press release and the film material as if he had existed whereas he is actually a fictional character created to dramatise the biopic. In the press release, which was given to local Chinese press, Xu Niu was depicted as a national hero who saved 1800 lives by smuggling medi- cines and food to the prisoners and thanks to him only six prisoners died over the

81 See Appendix 5: English and Chinese versions. 6.4 Act III: Reaction – Promotion, Distribution, Circulation 239

Fig. 6.14 Tianjin press conference. (Courtesy of Patrice Poujol) course of their 8-year internment between 1937 and 1945. This is the issue when adapting a biopic; reality and fiction tend to collide with each other. However, in this case, it shows how history was distorted and rewritten by the production under government supervision. The international press release clarified that Xu Niu was a fictional character added to the story for dramatisation effects. Quite ironically, the man who led the charge to liberate the prisoner’s camp in 1945 (a US-Japanese national employed by the CIA) was never even mentioned in the biopic. He and his men are the ones who saved the prisoners from certain death when the war ended. This obviously also influenced the book and the documentary which were derived from the film and which aimed to support its cross-promotion and sale to mass audiences. Ms. Xu was informed of the erroneous information that was being published, but the national press release to Chinese media remained the way it was originally drafted. Whereas there was some room to compromise in terms of soft power, the propaganda and control structures remained tight on the production. This situation contributed to fragment the local Chinese and the international PR teams and it created frictions throughout the entire process. During the press conference, Mr. Shin made a clear and brave statement that ‘none of the achievements up to date would have happened without the help of God’ and he thanked God for the film to be able to go forward. This prompted interest from freelance journalist Jamie Fullerton who corresponded with UK-based media outlets such as The Independent. He had arranged an interview with Mr. Shin and Mr. Fiennes about his experience on the film and in China. After the interview, 240 6 Live Film Production Case Study: The Last Race

Mr. Fiennes admitted that he had felt slightly uncomfortable in regard to the questions from the journalist as some of them seemed to be angled towards religious matters. The resulting article was quite positive for the production and showed it in a good light (Fullerton 2015a). Nonetheless, the mention of several key words such as ‘Christianity’ and ‘religion’ in it made the production wary of the consequences it would have on the film and how the government would perceive it. This concern spread to Mr. Fiennes and Mr. Shin, particularly in regard to the government’s current stance regarding religious beliefs. Ironically, it did not seem to matter too much for Mr. Shin to announce to local and international media alike that this film was made thanks to “God.” The journalist later explained that this and the fact that Mr. Shin had openly confirmed his dedication to Christianity in the interview were the key reasons why he had felt rather safe to mention religion in his article. Ms. Xu asked the international media team to advise the journalist to withdraw the article after it was published, which was impossible, and not to mention religion in his future articles. This was an attempt from the production to self-censor and to satisfy the government even if this meant going against Eric Liddell and the directors’ own beliefs. The journalist was not impressed and advised that he could not self-censor, however he put less emphasis on the religious aspects in his later articles for fear that this was going to harm the film particularly in a city like Tianjin where politics are even stricter than Beijing. This incident marked a point of departure, which revealed the fundamental difference between how Chinese and European or US media operate. Ms. Xu openly claimed that in China, journalists were typically paid to say what the film production wanted. This is generally not the case in countries like the US or Europe, where the film journalists and critiques are encouraged to keep a certain level of criticism and integrity in their work. The production failed to see the benefits of such an article published in the UK as audiences and critiques alike were starting to get an interest for the film. It was a wonderful promotion opportunity and the press conference in that regard was a success as more than six outlets including The Guardian published the story. This was a great achievement given the tight timeframe of just 48 h that the international team had to operate with. However, from that moment the production became very cautious about foreign press. A form of paranoia seized the Chinese promotion team and they exerted a lot of efforts in containing any international press coverage. They prevented the use of foreign social media outlet and prohibited pictures from being posted even remotely by the US team. Their efforts to self-censor were motivated as much by the aim to keep the government happy as it was for Ms. Xu, a way to keep total control and power over the promotional side of the production. Macro-politics translated again into micro-politics.

On-set Promotion: Corporate Censorship in Action

On-set promotion is crucial for an independent film because it is a way to build an audience early on. It is also a promotional effort that can cost little compared to a full PR and marketing campaign: it makes use of traditional media and social media 6.4 Act III: Reaction – Promotion, Distribution, Circulation 241 information and pictures that cost little compared to flying and hosting cast and crew later on in the process and producing posters and other promotional material.82 The promotion begins before the film is finished and it is an opportunity to give the future audiences and film critiques a sense of the production efforts put into making the film. It also serves to familiarise them with the narrative and the characters from an early stage. The onset promotion took place from the first day of principal photography on 21 June to a couple of days after the end of filming83 on 13th August 2015. From the first day of pre-production, Mr. Shin declared in front of the entire directorial and PR teams that promotion and marketing were not his priorities. As a result, and given Ms. Xu’s hostile stance toward foreign media (as previously mentioned), little attention was paid to the on-set promotion opportunities of The Last Race. The divide between the local PR team headed by Ms. Xu and the international PR team intensified. Originally, the media plan agreed to on 8 July 2015 was that Ms. Xu would capture and coordinate promotional material with media outlets and start building an audience with on-set news. The agreement included a strategic promotional plan on how to reach trade journals such as The Hollywood Reporter (THR), Screen International, Film Business Asia, Variety, CMM Intelligence (CMM-I), China Film Insider, The Independent, The Guardian, the BBC, ITV and share contacts with local outlets such as Ray Li (fashion magazine), Global Times, Netease, CCTV6, Phoenix. Other direct promotional events including television talk shows, interviews of Mr. Fiennes and Mr. Dou, joining forces with the British Embassy and the British Council by connecting the film to 400 years of Shakespeare were also discussed. Few of the officially planned interviews happened and none of the direct promotional events discussed actually took place. In addition, a couple of weeks after starting filming, Alibaba required exclusivity on all pictures and footage taken on set and proclaimed a blackout on the use of such material until at least 28 September 2015. This was a significant barrier to foreign media access while they intended to interview the lead cast and crew and take their own pictures as is customary on a shoot promotion. This also meant that no social media communications were allowed and no on-set pictures should be posted online by any of the cast and crew members. Aside from being a difficult measure to enforce, it frustrated many crew members who felt that they were constantly under scrutiny. The first victims were the ITV crew who managed after much negotiation to come on set in Tianjin on 9 July. They were not allowed to take pictures of Mr. Fiennes and had to take random pictures of the set that did not show the film in a

82 This material is compiled into an Electronic Press Kit (EPK) that is then distributed consistently to all media and film festivals. This method is extremely cost efficient as it avoids work duplication and focuses the message to be delivered to all media outlets. However, the EPK only became available in March 2016, which cost the PR teams a lot of time and energy being wasted and missed opportunities with the media. 83 Also commonly called ‘wrap’ in the film industry. 242 6 Live Film Production Case Study: The Last Race

Fig. 6.15 Pictures that ITV were allowed to use to promote the film. (Source: https://www.itv. com/news/2015-07-13/chinese-sequel-to-british-classic-chariots-of-fire/) good light. This made the production look amateurish and over-controlling in the eyes of foreign media who started to doubt whether this was a co-production or whether it was solely driven by China (Fig. 6.15). While international media outlets were sidelined following clear guidelines from Ms. Xu and Alibaba who hired their own accredited photographer on set, local media were granted access to the set and were paid for it. These media outlets included popular sensational and amateurish journalists who tried to lock actors and actresses in on-set gossip as later revealed by talent Zack Ireland (as known as Zuǒyòu [左右], his artist’s name) and Augusta Xu-Holland. Local journalists were trying to get insider’s testimonies from them about Mr. Dou’s love life. When the international PR team later confronted Ms. Xu about such practices, it appeared that the risk associated with the deterioration of the image of one of the lead stars of the film did not seem to worry Ms. Xu or government agencies as long as religion was not mentioned in the articles. Businesswise, Ms. Xu and Alibaba considered that it was publicity for the film and it did not upset the key stakeholders. The international media team who were loyal to the production and wanted to see it succeed had to resort to guerrilla techniques to promote the film abroad. An article was published on Netease with the help of the British Embassy (Netease 2015). Informal tactics were used to smuggle foreign journalists on the shoot while Ms. Xu was away.84 This was the case of The Independent journalist Jamie Fullerton who also covered Empire Magazine and the Scottish Sun.85 Thanks to one of the lead female actresses, Augusta Xu-Holland, New Zealand TV3 channel was also brought on set with the collaboration of the documentary team. This reflects the tendency of the crew to become slightly corrupt and resort to unconventional tactics in the face of a rigid and corrupt system. Except that, in these two

84 This operation was orchestrated in agreement with the two co-Directors who saw an interest in this opportunity. 85 The Scottish Sun had agreed to give a double central page to the film. 6.4 Act III: Reaction – Promotion, Distribution, Circulation 243 instances, the aim was intended to be beneficial for the film collective and not geared towards personal gain. Although Western media was important for the sponsors, particularly the Chinese and international brands in promoting their products abroad, they were totally underestimated. The blackout on pictures and footage combined with the difficulty to gain access to the shoot, cancellations and delays that the production imposed on the journalists resulted in a lot of media outlets losing interest in the film. This situation culminated with Mr. Fiennes who kept a journalist crew waiting for 5 h in a hotel lobby because he was generally disappointed by the production.86 Several China-based antennas of international news outlets such as The BBC and Empire Magazine lost patience and dropped out. Other outlets decided to take another stance, THR for instance decided to take the side of Absolute Surrender, the competing sequel of Eric Liddell and through an interview of Maureen Liddell discredited The Last Race. Maureen, Eric Liddell’s third daughter, never knew her father and grew apart from her two sisters and the Eric Liddell Centre, so her negative statements about the production held little credibility, but in the eyes of industry professionals and public opinion they carried weight that contributed to deteriorate the image of The Last Race while promoting that of Absolute Surrender. The term, ‘unofficial sequel’ referring toThe Last Race was mentioned a few times in articles emphasised the journalists’ doubts and suspicion about the credibility of the production (Fullerton 2015a; Watson 2015). To add to the generally negative perception of the film, some of the journalists who had waited for 5 h in Mr. Fiennes’ hotel lobby, felt the urge to be humourously deprecating with him in an article revealing ‘he once washed actor Ian Charleson’s underpants – but will now step into his running shoes in the sequel to Chariots of Fire’ (Fullerton 2015c). While this article generously promoted the film and Mr. Fiennes in the UK, some people on the production did not seem to understand the humour or the publicity potential in it. In the end, it was perhaps a good thing that international media had limited access and were sometimes not allowed on set as it is easy to imagine what would have happened, for example, if the BBC crew had been present when the drivers’ strike took place. It could have been detrimental to the film and to the image of working conditions in China. Planning for promotion followed the assumption that the shoot would be an organised and non-corrupt system. Unfortunately, the defi- cient production power-structure studied in the previous section had a knock-on effect on the promotional aspects of the film as well. As a result, the production self-censored and was not interested in having foreign press on-set. International media was kept in the dark. However, as Ms. Xu was trying to put the blame on the international media team, what she failed to understand was that foreign media would write and broadcast what they experienced first-hand, so it was better to bring them on the positive side

86 Ms. Xu had a great part of responsibility for the unfolding of this crisis: she had not arranged for Mr. Fiennes’ family to come and visit him on set as specified in the contract. 244 6 Live Film Production Case Study: The Last Race of the production. In this specific context, it shows that self-censorship is a short-lived practice. The more local productions try to control foreign media, the more it seems to damage their image and their soft power abroad. This situation also displays a lack of understanding from the Chinese production team about the working mechanisms of foreign media outside of China.

The Shandong Press Conference: Propaganda and Exploitation

From 16 to 18 August 2015, the production organised a key promotional event in conjunction with Shandong provincial government officials, Weifang local government agencies, Alibaba, and the key investors in the project. A press conference and wrap party followed the event that culminated with the unveiling of Eric Liddell statue and the opening of a museum to the memory of the victims of the Weihsien Internment Camp on 17 August 2015. The wrap party was organised as a beach barbeque where the key cast and crew were invited.87 The event was organised in a rush right after the completion of the shoot on 14 August. Foreign media who wanted to attend were asked to provide picture IDs and pass- ports. The last minute constraints imposed on foreign media and institutional guests including the personnel from the British Consular bodies in Qingdao were such that BBC chose not to participate, particularly in the wake of the Tianjin incidents, which they chose to focus on rather than dividing their attention with a film production that had ignored them until then. Therefore, the event gained little international exposure except for a couple of UK outlets led by the British Embassy and correspondent Jamie Fullerton, who were loyal to the film and attended the event (Fullerton2015b , d; Midgley 2015). This was also motivated by the promise of connecting the UK with China in a soft power exercise during their cultural bilateral year and to foster their own creative industries soft power campaign: “Britain is Great.” The production and Alibaba largely underestimated this mutually beneficial promotional opportunity (Fig. 6.16). Likewise, the production, film sponsors including Alibaba, and the local government agencies were eager to tap into worldwide promotion and soft power with the unveiling of the Weifang Museum and Eric Liddell’s statue. At the same time they aimed to convey a sense of heroism and anti-Japanese sentiment nationwide. But, their desire to limit access to foreign media came in the way of the first goal. Priority was given to national sentiment as local and national media were allowed to interview Eric Liddell’s daughters, some of the survivors who were invited to the event, Mr. Fiennes, Mr. Dou, and Mr. Shin freely after the unveiling of the statue. A considerable amount of money was spent bringing the survivors of the camp and their descendants to the historical site. The production also organised a press conference exclusively for national media on a Shandong beach in the evening. Although they had come from Canada and remote countries for the opening of the

87 Few of the smaller supporting roles and none of the agents and background actors were invited to it. 6.4 Act III: Reaction – Promotion, Distribution, Circulation 245

Fig. 6.16 From left to right and top to bottom: Patricia and Heather Liddell, former prisoners and their families, and The Weifang War Museum. (Courtesy of Patrice Poujol)

memorial and unveiling of Eric Liddell statue, families of prisoners and former prisoners themselves (in their 80s) were given poor attention particularly during the press conference in the evening. Most were left on the periphery of the conference without any seats that was a combination of bad organisation and lack of consideration. This was particularly alarming as some of them were forced to sit on stairs sometimes in uncomfortable conditions despite physical limitations such as canes and crutches while government officials and sponsors enjoyed the best seats at the front. Some reported that they felt a bit bitter to be used for what seemed to be promotional purposes to support the local government propaganda and the film pre- release commercial campaign (Fig. 6.17). The next day, these families were toured around Weifang that was planned to maximise the promotional impact of the film rather than out of respect for them. For instance, the kite makers who had supported the film and were part of the promotion campaign got largely featured. None of the foreign media outlets were invited to this tour that was largely focused on local media and government agencies. Right after the Shandong beach wrap press event, an unofficial and poorly edited trailer that was just intended for the production crew on the wrap party leaked to the media by mistake. This was the result of a combination of negligence, bad organisation and miscommunication from the part of Ms. Xu’s team. This was particularly harmful as there had been practically no online presence up to that moment. Coherent and meaningful IMDb presence only came late in March 2016 and consistent online presence only started on 22 April 2016 ahead of the Cannes film festival. 246 6 Live Film Production Case Study: The Last Race

Fig. 6.17 Beach press conference with kites promoting key corporate sponsors. (Courtesy of Patrice Poujol)

To add the final touch to an already frail promotion campaign, according to Mr. Shin and his executive team, Alibaba’s team of young executives decided to take over the general promotional and creative aspects of the film, giving it an unattract- ive look to young audiences and even general audiences. Although Mr. Shin and his associates tried to voice their opinion, they soon realised that they had to comply with Alibaba’s creative guidelines. An example of Alibaba’s creative choices on the promotional posters was the over dramatic scene of a Japanese officer brandishing a sword and about to behead Eric Liddell who is looking for the help of God in the skies. Although it may rally nationalistic and patriotic sentiments, the poster was eventually left aside as all the feedback from cast and crew had been negative. Alibaba executives realised that some of their creative ideas were not serving the film and ultimately their economic interests. The corporate censor overestimated the impact of Chinese nationalism to make box office sales. Leaving responsibility to Alibaba’s exclusivity and control over some of the creative choices regarding the promotion of the film and its contents led to a loss of opportunity in terms of international and local publicity and international audience building. This was accompanied by the production’s own mismanagement and Ms. Xu’s vested micro-political agenda that ultimately was detrimental to the overall promotional effort of the on-set production in the wake of its wrap. One of Mr. Shin’s closest associates, later complained about this state of play saying openly that the Alibaba young cadres “had no idea about the film business and they relied solely on mass metrics.” He admitted that in the face of Alibaba’s power, they had to abdicate and “if their decision was a mistake, at least they would be the only ones to blame. The production did not want to take the risk to make a 6.4 Act III: Reaction – Promotion, Distribution, Circulation 247 decision which would lead the film to poor box office earning or which would upset Alibaba.” However, if the claims of the production are true, Alibaba’s executives’ decisions on shaping the creative vision of the film impacted negatively on the basic logistics of the production, its promotion efforts and the capacity of the team to start building an audience around the film. Corporate control and censorship had a more negative impact on the film than government censorship.

The Cannes Film Market Promotion: Last Effort to Go International

During post-production, promotion consisted a series of small PR events in Beijing on 18 January.88 These events were poorly publicised and only served to give a sense to the stakeholders that something was happening as well as to keep them happy.89 The events did not even feature on SCMP that had already been purchased by Alibaba (Chow 2015). After missing the Berlin International Film Festival in February 2016, the production managed to get a booth at Filmart between the 14th and the 17th of March 2016. The aim of the booth at Filmart was as much to promote the presence of the film as to find new buyers. At that point, Alibaba had decided to withdraw from the production.90 Alibaba’s logo had to be removed from all the promotional material that featured on the booth with black markers at the last minute: the posters had already been printed when the news broke out (Fig. 6.18). Two months later, from the 12th to 17th of May, the film was promoted at the 69th Cannes International Film Festival in an attempt to increase the project’s exposure internationally. The production had assumed that Risen that was released and featured Mr. Fiennes would work in favour of The Last Race. Unfortunately, rather than the execution of a well thought through plan, the promotion of the film in Cannes was a rather desperate attempt to find international promotion opportunities after they missed the Berlin festival opportunity (Fig. 6.19).

Fig. 6.18 The Filmart booth and The Beijing IFF press conference. (Courtesy of Patrice Poujol)

88 The production joined forces with a local charity organisation and in Hong Kong on 3 March. 89 http://www.lcsd.gov.hk/fp/en_US/web/fpo/programmes/2011rt3/film74.html and http://www. youth.gov.hk/en/event-calendar/detail.htm?content=1119096&cat=ec1 90 This will be explained in further details in the following Sect. 6.4.2 under Distribution 248 6 Live Film Production Case Study: The Last Race

Fig. 6.19 69th Cannes film festival: Palais Des festivals’ entrance. (Courtesy of Patrice Poujol)

The film was not part of the official selection or any of the sub-selections such as Un Certain Regard, The ACID Selection, or the Directors’ Fortnight (particularly after it was rejected by Berlin). The production decided to spend a large capital of several tens of thousands of US dollars to promote the film in Cannes. The Last Race only featured as part of the film market.91 The key cast was invited to Cannes that involved a few promotional events and a main press conference on 15 May 2016. During the festival, Mr. Shin did not invite Mr. Parker to the event. Mr. Shin tried to exploit many of the artistically-acclaimed and commercial stories that had been successful 15 to over 30 years prior to The Last Race such as the original Chariots of Fire, Schindler’s List (Spielberg 1993), Life is Beautiful (Benigni 1997), and The Kite Runner (Forster 2007). The use of the key visual elements of these films is evident in the promotion of The Last Race as Mr. Shin admitted it himself during the production stage. The two co-stars Mr. Dou and Mr. Fiennes were heavily involved in the promotion of the film. This is particularly the case of Mr. Fiennes who was called in to defend the film both against the previous THR review in favour ofAbsolute Surrender and to show the production in a good light. Talking about the film, Mr. Fiennes claimed that ‘it transcends religion’ (Smith 2016). Mr. Fiennes also praised his working experience in China (as reported by Xinhua, the party mouth piece). This shows an attempt from the government to use the film as a soft power vehicle.

91 Which any film can enter provided the production has the budget to fly their lead cast, to buy promotional space, and book screening time on the market. 6.4 Act III: Reaction – Promotion, Distribution, Circulation 249

The argument is all the more convincing as the author of the article, Federico Grandesso, is foreign himself (Grandesso 2016): Mr. Parker is not mentioned as co- Director of the film in most of the articles, even in Mr. Fiennes’ interviews. However Mr. Shin’s attempt to seduce an international jury and film critiques, similar to his attempts 24 years prior to this with The Great Conqueror’s Concubine, did not work as expected. The film was not selected and obtained low media returns,92 with only 6–7 articles written and one interview with the BBC.93 The pre- screening reviews were generally positive but mainly supported Mr. Fiennes as Eric Liddell. Mr. Dou was not considered a major acting talent in the West. Therefore despite the budget invested in the event, the expected promotion return was rather disappointing. It seemed that this event was organised in priority to justify the promotional budget spending, to keep the key stakeholders happy and to show them that the film had somehow managed to reach international exposure. It was also a last minute attempt to try to sell the film internationally since Alibaba had withdrawn from the production. Unfortunately, all the collaborative creative efforts that had been dedicated to the production of a book about the Weihsien Internment Camp and a documentary on the same topic to be used as cross-promotional material also fell short of recognition. This was due to the fact that the production of the documentary94 had been rushed and so was the book. Therefore, none of these productions had been translated or subtitled for the international market in time for Cannes. The idea that was suggested to Mr. Shin to sell the documentary to European TV channels and have them to broadcast it ahead of the European release was dismissed. The documentary was left aside which in turn disappointed the crew of seven people who had worked diligently on it. This was reminiscent of the consistent lack of coordination and vision that characterised the production phase. Unsurprisingly, the promotion phase suffered from the same symptoms of micro-power structures. The commercial cross-promotional and cross-selling opportunities that could have been generated by these three integrated projects were lost. As advised by several collaborators, they could have been sold potentially as a package to Pathé, for example, or any other distributors, or to a sales agent for a good value and get international exposure. The passion factor of the documentary team was eroded and it expanded to the rest of the team who had worked on the film. This had nothing to do with censorship. It was due to structural, micro-political and personality issues that could have been solved if Mr. Shin had stood his ground against the key stakeholders and treated his crew more fairly. If he had learnt from the mistakes of The Great Conqueror’s Concubine and not repeat them again with The Last Race, his film and his crew would have greatly benefited. This would have required him to embrace a growth-minded behaviour and attitude as a leader (Dweck 2006).

92 Less than during the on-set promotion campaign. 93 Please see Appendix 6 under ‘Cannes Promotion.’ 94 Although a very good piece of work. 250 6 Live Film Production Case Study: The Last Race

Following the promotional campaign in Cannes, it was still unclear for both the US and the Chinese producers whether the film would be a success. They decided to test the markets in Hong Kong95 and in China first before continuing to promote the film internationally. This showed the insecurity of Mr. Shin and the other producers about the quality of the final work, which had already been rushed and creatively altered by Alibaba before it withdrew entirely from the project.

The China Tour: Trying to Rally Chinese Audiences

The premiere tour of The Last Race consisted in promoting the film across significantly large cities around China. As much as Cannes was about reaching international markets, the China tour was about marketing the film to its core audience: the Chinese cinema-goers. The film had its official premiere in Macau, followed by Hong Kong, and several cities ranging from Weifang to Beijing and Tianjin: with buses painted to promote the film and its brand sponsors. At that point, the only lead actor present in some of the events was Mr. Dou. From 11 June to 2 July 2016, the entire team travelled across China. They had started at the Galaxy Casino Resort96 in Macau on 11 June and then a premiere was organised in Hong Kong on the 12 June with a Hong Kong and Macau release on the 17 June 2016. From that point on, the promotion team embarked on branded buses and travelled throughout China, covering over 8 major cities (Weifang, Chengdu, Fuzhou, Guangzhou, Changsha, Shanghai, Beijing and Tianjin) in the space of 10 days starting from Weifang on 24 June, to Shanghai on 30 June, and finally reaching Beijing for the official premiere and national release date on 2 July 2016 (Fig. 6.20). Joseph Fiennes was not present for any of the release activities in China. After watching the final cut of the film, he understood at that point that there was very little for him to gain in promoting it. In fact, promoting such a film could actually harm his image. Instead, Risen, which was a relatively successful film at the box office was used to eclipseThe Last Race potential failure. The cross-promotional work with key sponsor Solvil & Titus followed a different path. The potential for the film to be successful and to gain exposure at the box office given its limited release in a handful of theatres seemed very unlikely at that point. As a result, the product placement opportunity from Solvil & Titus lost its lustre and according to Mr. Shin, the brand demanded US$200,000 equivalent in compensation (Fig. 6.21).97 In the end, Mr. Shin claimed in various articles that he managed to go around censorship and that the government had become more tolerant (Watson 2015; Ryan 2016). Effectively, the government used the film as a soft power vehicle, perhaps also to show that censorship over religion had gone looser. Meanwhile, the govern-

95 Which is traditionally packaged with Macau in distribution territories. 96 The venue was connected to some of the real estate investors. 97 Mr. Shin made this comment in a private conversation. Solvil & Titus’ reaction was a direct consequence of the production and promotion flaws illustrated previously. 6.4 Act III: Reaction – Promotion, Distribution, Circulation 251

Fig. 6.20 Hong Kong Premiere: 17th of June 2016. (Courtesy of Patrice Poujol)

Fig. 6.21 Solvil and Titus’ Kiosks in Hong Kong. (Courtesy of Patrice Poujol) ment was waging greater control over it by taking down crosses around the country. As a propaganda piece, the film managed to keep its promise and serve both a national and an international soft power agenda (Tsui 2016). The promotional efforts as much as they work in conjunction with the production are also a way to prepare the distribution phase. The promotion phase is aimed at preparing and creating an audience and to make the film attractive to them. It also serves to appeal to the potential sales agents and distributors who will release the film on the various distribution windows and traditionally in the following chronology: the cinema theatres, DVD/Blu-Ray, television, and online platforms. In this case, the film as a promoted and saleable creative product was not made very attractive to them.

6.4.2 Distribution

During the distribution phase the key aim is to sell the film for earnings. This is when investors know whether they will recoup their investment. It is also the stage when key creative actors are may be paid extra for their participation and efforts. In practice, and particularly in China, it is very rare that producers and creative talent see any of the returns at this stage as most of it gets manipulated and sometimes absorbed by the cinema chains, distributors and investors (Burkitt 2015). As for the rest of the film production process, financial transparency is a key issue for the distribution and the circulation of the film. 252 6 Live Film Production Case Study: The Last Race

The distribution structure was made clear contractually at the beginning. North American distribution (US and Canada) was under the responsibility of the US co- producers, China and Asia was the remit of Alibaba, while ‘rest of the world’ (ROW) was going to be covered by another producer with ties in Europe. But three key events occurred: Firstly, Alibaba withdrew from the film in the post-production phase. Secondly, the US stakeholders influenced Mr. Shin after the production phase and he gave them both North American and ROW distribution. He therefore breached his contract with his other producers’ friend. Thirdly, the film presented challenges in terms of its output format.

Alibaba’s Withdrawal

Originally, Alibaba had distribution exclusivity and as seen previously they were controlling the promotion process in China, Asia and sometimes even in foreign markets. Despite all the requirements set by Alibaba on the production such as promotion exclusivity on set and their direct creative input on the film, Alibaba withdrew from its distribution role by March 2016. According to one of Mr. Shin’s assistants, when they withdrew from the project, Alibaba Executives claimed the end product simply did not comply with the vision they originally had for the film. Mr. Shin on the other hand privately claimed that he was the one who had “pulled out”. His rationale for withdrawing was that the Alibaba cadres “had no idea how to make a film and that their business was in retail and they should stick to it.” This was quite an ironic point considering that Mr. Shin was a former General Manager at the retail chain SOGO in Hong Kong for several years and that he went back and forth between film and business during his career. The bottom line was that Alibaba no longer supported the film. Nonetheless, in an interview with Chinese Film Insider’s reporter Fergus Ryan, Mr. Shin claimed to the press that Alibaba was still involved in the distribution of the film long after they had officially withdrawn from it (Ryan 2016). Mr. Shin later informed me in private that “Alibaba was just the distributors on paper”, meanwhile the online giant would not let the production keep its logo on the Filmart booth where the film was presented. Originally, Mr. Li Jie [李杰], head of government cultural relations with the US pledged CNY80–100 million to support the film abroad (Netease2015 ), but one wonders whether this pledge materialised and if it did how the funds were employed. Mr. Shin claims that the promotional efforts to sell the film cost around CNY10 million for a box-office return just above CNY1 million that suggests that the production never saw these funds. It could be argued that these government promotional funds were withdrawn when Alibaba left the project. Although it is quite difficult to assert the exact nature of the deal between Alibaba and the film production as there must be some truth on both sides, it is possible to deduct the following. The corporate representatives from Alibaba who were involved with The Last Race seemed to have little experience in film promotion and production: Alibaba Films division had only started a few months prior to the beginning of the film. After taking control of the production and its promotion, Alibaba’s execu- 6.4 Act III: Reaction – Promotion, Distribution, Circulation 253 tives had creative conflicts with the production team. Despite imposing time and money consuming demands on the film, they decided to withdraw from the project when they realised that it would be challenging to sell it. As the central power on the production, Mr. Shin tried to save face by claiming that he was the one who had left Alibaba. This is evidenced by his claims to the press that Alibaba was still involved after they had actually left. As Cannes was starting shortly after Filmart, the production had to find another intermediary to represent and sell the film in China. The only option available at this point, given the lower quality of the film was the newly established Movie View International [看电影]. This Beijing-based PR company run by two “fresh” sales- persons98 (Sun 2016) was formed only a few months prior to Filmart. Nevertheless, despite its lack of distribution credentials, it took charge of Asian sales and distribution. The production had difficulties finding distributors for the film at this point and decided to work with them.

The Trans-Atlantic Battle

While the Asian distribution of The Last Race passed from one intermediary to another, the distribution of the North American territories and ROW followed a similar trajectory but for different reasons. The quality of the film initially seemed to deter potential distributors and festivals alike. The film did not even manage to be selected for the Edinburg film festival despite its direct connection with Scottish hero Eric Liddell and the support from the Eric Liddell Centre. The US producers who had already settled lawyers’ fees and Mr. Fiennes salary after raising a match fund of US$6 million were probably preoccupied that their investors would not recoup their investment. Therefore, they decided to take on the world, quite literally. Except for the Asian distribution they demanded the rights on North America and ROW. The US producers’ rationale was a potential deal with a branch of Sony (which later materialised). They expected the deal with Sony to happen because the distribution company was already representing Mr. Fiennes’ previous filmRisen . While this was a speculative attempt, it also implied that the film would be re-cut at Mr. Shin’s expenses to be able to secure the distribution deal. Given the creative differences with the US producers, financial and time pressures with the actor’s voice recording (ADR), re-cut of the film and being short of options, Mr. Shin agreed. The consequences were that the producer in charge of entering the film into European festivals and distributing the film there and other worldwide markets was pushed aside while the Western European markets were handled by the US with the view of a deal with Sony for all territories and distribution windows. The rest of the world was essentially forgotten with large markets such as Latin America, India or Russia not even being considered for which the producer had a team ready to initiate

98 Alexandra Sun, CEO of The Film Library, an experienced producer and distributor, with over 20 years of experience in film, mentioned that two journalists formed the group in 2015. This was confirmed by the company’s presentation on Cinando’s website which mentions the former name of the company as newsgroup Movie View Media Group (Cinando 2016). 254 6 Live Film Production Case Study: The Last Race sales to local distributors. The large number of background Russian actors (close to 100) who could have helped promote the film on that market through social networks was also largely underestimated.

Output Issues

The final film was a patchwork of languages. Originally the film was going to be shot in English for foreign markets and then dubbed in Mandarin and Cantonese for China and Hong Kong/Macau. In the end, the film was shot inconsistently, in the performers’ respective native languages and ended up being 2/3 in English with the remaining 1/3 in Chinese and a few lines in Japanese. Despite the costly ADR process that took place in Beijing, London and LA (depending on the actors’ locations and availabilities), the film could not have a unified language per market. This compromise was due to lack of budget and meant that the film would have subtitles. This limited potential audiences in the US and even China. The film had to be re-cut three times; once for China, once for Taiwan and once for North America which again cost the production a lot of unplanned financial investment. In addition, the producer who had his contract breached by the production and who had lost the ROW distribution had already done some work and involved distribution contacts in the project. He decided to settle the matter with the production company. He eventually received out of court compensations for his work thanks to a LA-based lawyer who worked for a high profile legal media firm. On 15 September 2016, Mr. Shin announced that the US producers were ready to sign a distribution deal with Sony and that they would distribute a new cut of the film under the tentative title On Wings of Eagles (eventually, the film was theatrically released in the US in November 2017 and in Japan in April 2018). Nonetheless, this chain of actions and reactions illustrates the issues of power structures, lack of transparency and trust between the different players and intermediaries in traditional filmmaking. It reveals that there is a need for more transparency in traditional film productions. In summary,The Last Race carried challenging expectations to be successful at the Berlin International Film Festival as an original artistic and creative work, as a commercial success on the US and Chinese markets, while complying with the government political requirements. This was a difficult task that only Ang Lee’s Crouching Tiger, Hidden Dragon [卧虎藏龙] (Lee [李安] 2000) had been able to achieve until then, more than 15 years prior. The following section is an illustration of the film’s success in these various categories.

6.4.3 Circulation

The main goals of the circulation phase are to make the film available to the widest audience and to share the vision of its makers with them. The audience then reacts to the film and makes it its own. At that point, the production has lost creative control over the film. 6.4 Act III: Reaction – Promotion, Distribution, Circulation 255

I have chosen to measure the circulation of The Last Race along three axes, a commercial axis concerned with commercial aspects and box office earnings, an artistic and creative axis concerned by the film reception by film critiques and film audiences, and finally a piracy axis that shows how certain films still generate popular demand even though they may not be critically acclaimed or commercially successful. This illustrates Ramon Lobato’s idea argument that piracy is not just theft.99 As he demonstrated with the example of Elite Squad (Padilha 2007) in Brazil, it can be integrated to the circulation of a film and even support its success. For instance, the now cult TV series Game of Thrones (Benioff and Weiss 2011-) initially claimed that they had more popular success on illegal platforms than on the legitimate TV distribution window for which they were initially produced (Van Der Sar 2013; Tassi 2014). This informal success is what contributed to support the TV series that went on for further seasons and developed a strong IP while advertising HBO worldwide at minimum costs. This IP was in turn declined into books and merchandising for which the production now derives revenues.

Commercial Considerations

According to The Last Race’s Executive Producer, Mr. Lam, the film’s original box office estimates were CNY180 million (c. US$27 million equivalent) for China alone. This would have meant that the initial US$12 million production budget would have been more than doubled with the Chinese market alone and that international markets would have provided further profits. However, the film did not live up to its expectations. Since they were released after Angelina Jolie’s success Unbroken, The Last Race, Absolute Surrender, and Race appeared to film audiences as followers in the World War II genre. This is quite unfair as Mr. Shin’s film had been in development since 2005. Nonetheless in film, it is not just up to who has the concept or the idea first (particularly if it is not over a registered IP), but who executes it first (and better) through their contacts, organisation and pool of talent. Of the three films,Race arrived first commercially and critically with a box office of over US$20 million. Regarding The Last Race, while it was nowhere near recoup- ing its budget of US$12 million with an estimated Chinese box office of c. CNY1.06 million (c. US$160,000 equivalent till 9 July 2016) and gathered heavy criticism, the film was actually completed and released.100 Absolute Surrender, on the other hand, has not been produced and has not passed the arrival line yet. Unfortunately, The Last Race was screened at odd times in Hong Kong and Beijing alike, in few theatres: a limited release in Taiwan on 17 June 2016101 and a

99 Seen in Chaps. 2 and 4. 100 http://movie.mtime.com/225946/. Despite the deal with Sony, it will be relatively hard for the film to eventually recoup its initial investment. 101 http://movie.mtime.com/225946/details.html 256 6 Live Film Production Case Study: The Last Race total of six screens in Hong Kong and nine screens in Beijing at the peak of its release. The total box office receipts in China after 1 week on screen was merely around CNY1.06 million, after which the theatres decided to remove the film from the big screen. The film had performed nearly 180 times less than expected. At that point, the investors would not recoup their original investment, particularly as this amount would not even cover the Promotion and Advertising fees for the distributor after the deductions of theatres and government shares (typically 53% and 8.3%, respectively) (WiC 2016). This was disappointing for the producers and investors as Mr. Fiennes’ other film Risen did well in comparison. Columbia Pictures released the film on 19 February 2016. Risen grossed a worldwide total of c. US$46.1 million (US$36.9 million in North America alone), almost 200 times more than The Last Race, against a production budget of US$20 million (less than twice the budget of The Last Race). Unlike The Last Race, Risen screened in 2915 theatres in North America in its opening weekend. It is estimated that fewer than 100 theatres screened The Last Race nationwide in China (c. 30 times less than Risen). In comparison, films likeThe Mermaid [美人鱼] (Chow 2016) and The Monkey King: The Legend Begins [西游记之孙悟空三打白骨精] (Cheang 2016) were grossing respectively US$525 million and US$181 million equivalent over the same period.102 This shows that the government did not fully support the film after watching it. It also means that audiences did not rally further demand through word of mouth. The film could eventually raise more revenues on other windows such as TV, online and through syndication. As seen in Chap. 4, the theatrical window currently makes about 95% of the earnings of a film in China and the chances to see the film distributed online through Alibaba’s YT are very slim (except maybe Tencent). The film could also generate more revenues internationally: As this book is being published, Sony Pictures Home Entertainment has purchased the film through Archstone and released it theatrically and into DVDs and VOD platforms, but recoupment is still uncertain – particularly with a film containing subtitles that are typically not popular with US audiences.

Critical and Popular Success of the Film

Unfortunately, it is fair to observe at this juncture that the film was commercially unsuccessful. The fact that it was not selected for any of the major film festivals worldwide already meant that it was not going to be an artistic reference. The film received negative film critiques on reference sites such as Rotten Tomatoes.103 IMDb gave it a 7.3/10 but this was probably supported by crew members and the production’s friends. An incisive article came from Alibaba owned SCMP that qualified the

102 The Great Wall, which was a rather unsuccessful film commercially and critically managed to gross over 70 million at the Chinese box office (Rosen 2017). 103 Not scored yet: This showed the little interest that the film has gathered. 6.4 Act III: Reaction – Promotion, Distribution, Circulation 257 film as a ‘Contender for worse movie of the year 2016’ and ‘a wretchedly executed script from start to finish’ (Marsh2016 ). Ten days later, Edmund Lee added in SCMP again ‘What was Joseph Fiennes thinking? This unofficial sequel to Chariots of Fire may well be recognised as the worst movie of the year’ (Lee 2016). Perhaps some of the critiques realised that The Last Race was a pro-government film directed by a Hong Kong filmmaker and they felt that their Hong Kong identity was at stake. The critique felt that Hong Kong-based Mr. Shin had betrayed his original vision and given in too easily to the external pressure of the political-economic stakeholders that he was trying to please. Particularly, in a tense environment where Ten Years (Au et al. 2015) received the prize for best film and where Hong Kong writers had disappeared and reappeared only a few weeks before (Phillips 2016). Some of the SCMP writers hinted in that direction by claiming that the film was a ‘strong contender for worst film of 2016’ (Marsh2016 ). Overall, the SCMP film critics only gave The Last Race a rating of 0.5 star over five stars (Marsh 2016). Chinese online social media critiques were milder than Hong Kong-based (and Alibaba Owned) South China Morning Post. Online critiques and fans commented on Douban’s and Mtime websites between 1 July and 15 July 2016. As seen previously, some of these platforms were supported by the production and indirectly by the government. Douban gave the film 6.6/10 over 167 persons voting while Mtime gave the film 6/10 with 36 viewers voting that is quite low in terms of numbers.104 In comparison with The Last Race, other Hong Kong co-productions and influenced films such asThe League of Gods [封神传奇] (Hui 2016), was rated much less at 3.1. The Bodyguard [超级保镖] (Song 2016) was rated 5.4 and Brothers [钢刀] (Gan 2016) was rated 4.1. But these ratings were obtained respectively with 18,617, 1517 and 2888 voters; more than ten to a hundred times more than The Last Race (Douban 2016). Outcast that was released in China in April 2015 as a Chinese-US co-production was given a 4.1 rating on Douban, for instance, but it was with a total 9269 ratings. While it was not a commercial success and even failed to get US theatrical release, the film grossed much higher box office returns105 than The Last Race for just twice its budget at US$25 million. At this point, it is fair to argue that the ratings of the latter three films were influenced by a genuine film-going audience and not mostly by a voting poll of under 200 film-goers that supported The Last Race (Fig. 6.22). The production also tried to lobby for the film on IMDb, rating the film 7.1 out of 10.106 The only reviewer of the film that had not even been released in any Western countries at the time of the review was ‘webjenniferyoung’. It is evident that the review is biased as the reviewer displays an unusual knowledge of the film and particularly behind the scene details that would be typically inaccessible to any other member of the audience. The review is entirely positive about the film, only blaming lack of promotional funds. The reviewer also contradicts herself: she claims that she

104 http://movie.mtime.com/225946/ 105 US$3,860,000 for China alone and $979,761 in other territories for a total of $4,839,761. 106 http://www.imdb.com/title/tt4714896/?ref_=fn_al_tt_1 258 6 Live Film Production Case Study: The Last Race

Fig. 6.22 Mr. Shin mentioned as sole director of the film on Mtime. (Screenshot courtesy of Patrice Poujol) is a regular user of IMDb, but her review of The Last Race is the only one she has ever written and she has only been registered on the website since the release of the film in July 2016. As is customary in China the production tried to use the media, a social media platform in this case, to make it tell the story it wanted audiences to hear. What is new is that in the same way the government uses foreign social media to promote its soft power abroad while restricting its access at home, the production has also used IMDb as a platform to manipulate audiences to its advantage. Because the film had attracted little interest, the production was able to control the message it wanted to deliver without being challenged by a democratic majority vote. Interestingly, on both the Douban and Mtime websites, Mr. Shin is noted as sole director like in the press release and Mr. Parker is only assigned as co-writer behind Mr. Shin. The online reviews are mixed and sometimes generated nationalist thoughts and nostalgia from part of some the online commentators. Some of the online reviewers were ready to forgive the fragmented nature of the executed plot on screen and find the film “touching”. Several moviegoers refer to it as an attempt to make a Chinese Schindler’s List and they praise the director in making the attempt. But, despite the support of the production, most of the reviews were negative. One of the online critiques in Douban, ‘Ranger’ claims that ‘China cannot shoot its own Schindler’s List even in ten years time’. He concludes that the film is generally 6.4 Act III: Reaction – Promotion, Distribution, Circulation 259

“laughable”, borrows heavily from previous films and that Mr. Shi is a “second-rate Director” (Douban 2016). It could be argued that the government and producers were spared by the lack of interest of the film that would have otherwise spread a negative publicity for all the stakeholders including the government, the investors and the lead cast (Mr. Fiennes and Mr. Dou). It is no surprise why Alibaba decided to leave the project in March 2016 when they saw the final cut. This is also why it made sense to limit the circulation of The Last Race to a few theatres to test the market first and to be able to control the audience’s ratings of the film. The negative publicity was partly contained by the production and the government that did not support the film after its release. This tactic limited the number of shows available to the public. Commercially, the quality of the film that was more suitable for the TV window, also deterred the theatre owners. Some of the ratings were left by the promotional team and some of the crew members. They tilted the votes in favour of the film to give it a second chance and give it legs for other distribution windows such as television or online release. Despite the limited theatrical release, it can be argued that the film was nevertheless poorly received.

The Online Piracy Test

I will now explore the pirate window that could show a degree of popularity and support for the film. Although I will exclusively focus on online piracy, I visited pirate DVD/Blu-Ray stores during my visit of Beijing over the release period of the film andThe Last Race was not available in that format either (Fig. 6.23). In September 2016, 3 month after its Chinese release, The Last Race did not feature on Putlocker or any of the main pirate outlets available.107 On Watchfree.to another film entitledThe Last Race (Litten 2003) was available but it was a different

Fig. 6.23 Beijing ‘Informal’ DVD store: 5 July 2016. (Courtesy of Patrice Poujol)

107 Note: access to these websites and the brick and mortar illegal DVD/Bluray shops in Beijing was solely motivated by the requirements of this research which is for educational purposes and therefore by presenting ‘fair use’, it does not infringe any copyright laws. 260 6 Live Film Production Case Study: The Last Race production with a much lower budget. Quite ironically, this film directed by Christopher Litten 13 years prior to The Last Race features another fictitious version of a biopic: that of James Dean. In place of Eric Liddell’s biopic, it tells the story of the Devil who challenges James Dean to the race he was going to when he died. In the end, The Last Race (2016) attracted so little interest even on pirate platforms because it was probably eclipsed by Risen in the career of Joseph Fiennes and because its promotion campaign had been poorly organised and managed. Pirate viewers either did not hear about it or did not feel it was worth for them spending the time uploading the film online. Where Game of Thrones initially succeeded as a pirated content that then drove its commercial, critical and popular value up, unfortunately The Last Race also failed the piracy test. The film eventually started being pirated on the Chinese Internet 6–7 months after its release. This is a long time considering pirate releases sometimes precede official releases. They often come just under 24–48 h post-official releases following local subtitling (Meng 2012; Yeh and Davis 2017). The film was recut and renamed On Wings of Eagles for an incognito resale on the US market, therefore hiding the piracy element as much as the failure of the Chinese release. As a result, a distribution deal was signed with Sony through an intermediary company (Archstone Distribution) for DVD and online circulation. The film had a limited US theatrical release in Pasadena, California for a couple of weeks in November 2017 and in Japan in April 2018. On Wings of Eagles eventually ended on Putlocker and other pirate websites 1 year after the Chinese official release of The Last Race, which shows that the US release was probably only contractual. The late pirate upload demonstrates a general lack of public interest for the film. It also shows how traditional industries are relatively powerless to control their content and IP compared to groups such as Alibaba who benefit from AI and Big Data control. Unlike the official material posted on websites such as Mtime or Douban by the film marketing team, as seen previously, the film that was distributed by pirate network and subtitled by the Zimuzu community actually paid tribute to Michael Parker as co-Director, thereby giving a fair credit to Mr. Parker.108 This reminds the facets of film piracy both as enterprise and as free speech as described by Lobato (2012). Commercially, the only remaining hope for the film is a potential online distribution through Netflix where it might end in a repository like thousands of other ‘long- tail’ films which have not found an audience yet (Anderson 2006, x). Or as the SCMP writers and the Douban fans claimed the film could potentially become a cult if it is officially declared worse film of 2016. Sadly, there is an audience for these films as well that generate additional publicity and revenues out of it. The Golden Raspberry Awards (Razzies), held 1 day before the Academy Awards (Oscars) pub- licise such films.109

108 http://putlocker.io/watch/qva8Wkd3-on-wings-of-eagles.html 109 http://www.razzies.com/ 6.5 Conclusion 261

6.5 Conclusion

When they were interviewed, many supporting actors and actresses who had worked on several Chinese films prior to The Last Race claimed that despite the significant production issues, The Last Race was one of the best organised film shoots that they had experienced in China. Mr. Pilarski who worked on the state-sponsored film The Heart of Konba has encountered the same issues as those described in this chapter (Pilarski 2016). The structural issues observed previously are not just related to the specific case ofThe Last Race, but that they are endemic in the film sector in China. These practices are not rare even when international organisations get involved, such as on The Great Wall or Outcast as explained by professionals who have worked on both films. Throughout the study of the entire production process from the development phase of the film to its production phase and its release (circulation phase), I was able to identify at least one common trend, a theoretical concept connected with the production of the film that I named ‘China’s Microcosms’. In a similar way as theories of documentary illustrated with the example of Fred Wiseman’s film research work by Rabiger described in Chap. 2 (Rabiger 2014, 219–220, 223), China’s microcosms allow for the observation of a smaller slice of local social activity (such as a film shoot allows for the observation of a slice of society). The political-economic characteristics of the macro-system of Chinese society can be analysed through the political-economic micro-experience of the film shoot that I was studying. In this context, the case study of The Last Race is an illustration of a microcosm of the larger macro political-economic mechanisms and systems in place in China that have been ingrained in traditional film productions even when they are supported and promoted by such modern online corporations as Alibaba. On the positive side, the film was completed but it went over the originally set budget and took several additional months to complete over the anticipated deadline. Many projects stop at various stages of the production process, making a film was allegedly an impossible task as advised by Mr. Fiennes at the beginning. Therefore, the fact that the film was completed despite all the challenges described in this chapter is an achievement in itself. However, issues of corporate and self- censorship interfered in the production process. If we follow Peterson’s framework, political and economic macro forces had a strong influence on the film production. Even more significantly, the film’s organisational and structural issues deriving from its centralised nature created overlapping and conflicting roles, endemic corruption, and fixed-minded behaviours that spread within the team. In a similar manner, Dweck speaks of ‘groupthink’ attitudes (Dweck 2016, 134–136). These factors and the general lack of transparency in the administration of the production greatly diminished its value. As observed in Chap. 4 and in Sect. 6.3.1 (and throughout Chap. 6), in China, strong forces regulate the film production process from its development to its release – this results in creation by committee with various political-economic agendas in mind that may limit the creative and artistic qualities of the work. 262 6 Live Film Production Case Study: The Last Race

The director represents a vision of the film that he cannot fully control: the film becomes a manifestation and an illustration of the forces operating at large. While Mr. Shin did his best to compromise with the various stakeholders (presented in Sect. 6.3.1), the end result as observed throughout the different stages of production in this chapter, is a fragmented vision that did not deliver its promises creatively, commercially or politically. Beside concerns pertaining to censorship and propaganda, one of the key issues encountered on the film shoot was structural and concerned with micro-corruption and lack of transparency. There is a need for a model that could make productions more accountable to private and public investors’ capital. This model could establish trust between the production and the financing parties. There is also a need to take into account the audiences’ change of media consciousness and to involve new emerging talent in the creative process. At the moment, and as observed in Chaps. 5 and 6, audiences seem to be viewed by corporate online giants such as Alibaba as ‘metrics’. In parallel as described throughout the analysis of The Last Race production and other film examples such asThe Heart of Konba seen in this chapter, emerging creative talents can easily be disappointed and deterred from filmmaking given the lack of consideration and the exploitation that they have to go through during their on-set apprenticeship. With the use of government censorship, corporate censorship and self-censorship studied in Chap. 6, audiences seem to be merely considered a passive mass of recip- ients who must be lectured with the appropriate, desired propaganda. But their media consciousness has rapidly changed. Audiences have evolved notably through the viewing of foreign uncensored films110 across sets of numerous viewing screens ranging from desktops to smartphones. The changes of the creative industries in this regard and how they support the overarching concerns of the government in monitoring and controlling audiences and promoting its image locally and abroad will be developed in the following chapter (Chap. 7). This case study showed that traditional producers who currently make films might be fixed minded, unable to adapt to the changing reality of filmmaking that is increasingly produced online in China and worldwide. In the following chapter, through the lens of an online company, YT, I will observe how the Chinese media sector has been reshaped. Like Alibaba, YT provides the dual role of promoting local soft power abroad and creating local IP. In addition, it may contribute to identify new emerging talents.

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7.1 Introduction

The previous chapters provided an overview of the key political-economic developments and transformations of China before and after its WTO entry (Chap. 3) and how they have been shaping the local media landscape (Chap. 4), particularly in terms of financing and production of creative content (Chaps. 5 and 6). In Chap. 7, the case study of YT as a microcosm of the macro political-economic forces identified by Peterson and Lemaire (Chap. 2) illustrates how these changes have affected the circulation of films online in China since 2001, how it redefined IP, and how it might have supported the emergence of a new generation of creative talents. YT presents an interesting example of an online pirate platform initially operating as an informal outlet that adjusted its film-viewing model in the midst of the Chinese IP and technological formalising landscape. With its recent acquisition by Alibaba in April 2016 for a total c. US$4.2 billion (Aycock 2016) and its subsequent integration in Alibaba’s Digital Media and Entertainment in October 2016 (Tartaglione and Lieberman 2016), it exemplifies the current corporate integrations and consolidations which have been taking place in the Chinese media sector over the past few years as seen in Chaps. 4 and 5.

Note: This chapter was used in the three following presentations: (1) ISEA 2016, Hong Kong, May 18, 2016 with the tile On-line Film Circulation in China: The Case of Youku Tudou as a Creative Corporate Soft Power Champion. (2) Between East and West, technological innovations and new forms of narration in cinema, CityU and French Consulate in Hong Kong, March 15, 2016 and (3) Law, Policy, and Culture for Creatives Industries Workshop, University of Hong Kong, February 12, 2016, with the tile The political-economic transformations of China and its media sector post WTO: the emergence of Youku Tudou as a creative corporate soft power champion. A large part of this chapter is also published in the peer-reviewed journal Théorème, University of Paris III, Sorbonne Nouvelle in 2018 under the title: La diffusion numérique des films en Chine: le cas de Youku Tudou en tant qu’Ambassadeur industriel créatif.

© Springer Nature Switzerland AG 2019 271 P. Poujol, Online Film Production in China Using Blockchain and Smart Contracts, International Series on Computer Entertainment and Media Technology, https://doi.org/10.1007/978-3-030-02468-0_7 272 7 The Case Study of Youku Tudou

Nonetheless, as argued by Jia and Winseck (2018), YT, Alibaba and the online Chinese giants have not received a lot of scholarly attention. Except for the study of the Tudou festival by Hartley, Wen, and Li and Zhao’s (2015) analysis regarding UGC’s professionalisation on platforms such as YT and Sohu, YT have not been covered in-depth academically as a single entity from the angle of its contribution to emerging creative talents (Zhao 2016). YT has been mentioned as one of the leading platforms in the literature by Cunningham and Silver (2012a, b) and Keane (2015, 2016), but no in-depth analysis of the company’s creation and its evolution in the changing Chinese media landscape or its support to nascent filmmakers seem to have been undertaken to date. If we are to understand the changing context of multi-platform film-viewing in China today, the case study of YT is important. It should also provide some key information about the progressive transition of the Chinese online sector from pirate models to legitimate businesses. In addition, the Alibaba take over sheds some light on the changing business culture of the creative industries in China and the level of sectoral consolidation. The first part looks at Youku and Tudou as separate entities. The second part investigates the nature of the YT merger just before the Alibaba take over announcement. It also features the early stages of YT’s integration to the larger Alibaba group and its attempts to harness the emerging wave of local film talent. The third part looks at the increasing consolidation levels in the online film-viewing sector at a more macro-level. The case study of YT is central to this research, as it describes the creation and development of one of the key champions promoted by the Chinese Government as a microcosm of the forces operating at large and the emergence of a creative corporate soft power model with Chinese characteristics. In addition, it raises the following questions: In the current media context, how is the Chinese Government shaping the evolution of its media system towards the creation of national brands and creative champions such as YT? To what extent is this influencing China’s soft power agenda abroad? What does it tell us about the political-economic characteristics of the power in place, the media sector and their changing relationship with IP? How can such models of circulation harness emerging filmmakers in China?

7.2 The Case Study of Youku Tudou as a Microcosm of the Key Forces Operating at Large

The transition of China from a planned economy to a market economy can be studied through the analysis of the transition of YT from an online pirate platform to a legitimate platform. The way YT developed after China’s WTO entry illustrates China’s ongoing tight political control over the media and its concurrent support of Chinese businesses, brands and the will to build soft power abroad.1 YT also reveals

1 YT in this context could also be referred to as one of the microcosms of China, reflecting the dynamics of the larger political-economic power in place. 7.2 The Case Study of Youku Tudou as a Microcosm of the Key Forces Operating… 273 the technological transition of film circulation from being viewed on TV sets to online platforms (WestEnd511 2015) and simultaneously the rationalisation of the Chinese media sector, which is moving away from piracy and formalising by adopting legitimate practices where copyrights have an increasingly central role. YT integrated two websites that used to be pirate platforms and are now legitimate online platforms listed on the New York Stock Exchange (NYSE). Born from a recent merger, YT has become one of the largest legitimate online video providers in China and the second largest worldwide after YouTube, according to Alexa rankings.2 YT’s market share was around 35.5% of the entire Chinese online film- viewing market and it provided films for close to 400 million Chinese users per month in 2012–13 (Takada 2012; Tsui 2013) and now to over 500 million (Young 2015c). Although both Youku and Tudou used to infringe copyrights, they have now formalised their activities and made a transition towards an IP-centred business model. This merged legitimate platform circulates local, regional, national and foreign content for which it now purchases the rights. Following the success of YT’s model and its competitors’ the sector has been instrumental in reducing physical and even online piracy by placing IP at the centre of their business model. This model also facilitates monitoring and control over the type of content that circulates online with economic and political implications. Economically, advertising is more targeted and therefore more effective. Audiences can be channelled through these platforms in hundreds of millions which allows for large viewer bases that the US or European markets cannot match. Politically, it is relevant to acknowledge that these online champions can be used as surveillance platforms from which the government can control the dissemination of creative content and ideas. It has managed to migrate local audiences in ‘controlled spaces’ (Montgomery 2010, 57). However, this phenomenon is not exclusive to China (BBC News UK 2014). YT also serves the political purpose of expanding China’s soft power abroad as a growing brand name and a successful business. With the planned integration into Alibaba Group, it will undoubtedly help promote further the group’s brand name and its operations both locally and abroad. To understand how YT has transitioned from an online pirate platform to an IP centric legitimate company that identifies and supports young emerging talents, I will analyse YT as two separate entities before their merger and then observe their key synergies as a single entity in the next three sections.

7.2.1 Youku: Prime Content and IP Emphasis

Victor Koo, a Stanford graduate and former President of Sohu,3 led the development of Youku by raising the initial finance to create Youku 优( 酷) through his own fund (1Verge) in 2006. Youku went through several steps before the government

2 Alexa is a San Francisco-based subsidiary of Amazon.com that records, analyses and ranks websites according to their global traffic. 3 One of China’s largest search engines, the equivalent of Google or Yahoo for China. 274 7 The Case Study of Youku Tudou licenced it to offer films online legitimately and to produce its own content in a similar way to Netflix.4 Originally, Youku hosted mostly User Generated Content (UGC) much as YouTube does in the West. It also featured local and foreign pirated content. But Youku’s path followed a different trajectory from its Western counterpart: as early as 2009, 70% of Youku’s content had become professional and 30% was semi-professional or amateur (Kender and Baker 2009). The particularity of Youku is that, since the start, it authorised its users to upload material irrespective of length. This feature was particularly problematic in the early development of Youku, when entire feature films were uploaded on the website and violated copyrights. Youku progressively came into agreements with over 1500 producers and distributors from the film and TV industries to provide professional content to their viewers. The year 2009 was pivotal for Youku, since it coincided with vast censorship and anti-piracy operations initiated by the Chinese Government. During this anti-piracy campaign, the Chinese Film Bureau shut down hundreds of pirate websites (Cunningham and Silver 2012a) and these online film-viewing platforms were required to apply for a license, forcing hundreds of websites to close down including the foreign competitor, YouTube, which was blocked in China. As a result, only a handful of local websites such as Ku6, PPS, iQiYi, and YT were able to provide online film circulation to the wider Chinese audience. It allowed Youku and its most legitimate local competitors to gain market shares in the online video sector to the detriment of other platforms that were exclusively screening pirated content. By January 2010, Youku became the number one Chinese online video provider (Kender 2010) after the website successfully managed to win over 50% of the online video market, in terms of time spent (Chen and Stanton 2008). It also forced viewers to migrate from other pirate platforms and foreign competitors to the remaining local players (about 10 in total), therefore increasing their audience and concentrating the sector. Without a license online video companies could not continue their business. SARFT’s5 new license became a compulsory element for all the video-sharing companies: for example, BitTorrent’s file-sharing company, BTChina, was shut down by the authorities for not being able to secure a license (Chen and Balazovic 2009). In the eyes of the Chinese Government, the license system would help tackle pirate websites6 and at the same time formalise the online video-sharing sector, keep foreign platforms at bay and retain control over the sector’s concentration. The license, in effect, gave power to the licensees to legitimately cooperate with TV stations, video production companies and to air their content after purchasing the appropriate

4 Although the latter started from the business of physical DVD distribution as opposed to online pirate activities. 5 SARFT: The State Administration of Radio, Film and Television also called Film and Television Bureau (until 1998) is in charge of administering, monitoring and enforcing film and television regulations such as quotas, censorship or the delivery of licenses. 6 This later led to the crackdown on 162 online-video websites in 2009 (Cunningham and Silver 2012a). 7.2 The Case Study of Youku Tudou as a Microcosm of the Key Forces Operating… 275 rights. It also significantly limited the chances of new players entering the sector as they would have to obtain a license before running their video-sharing business (Wang 2008). This move contributed further to migrate viewers from TV to PC and online viewing contexts. This government initiative was timed for implementation just before the Initial Public Offering (IPO)7 of Youku on the NYSE in 2010. It is widely accepted that the crackdown on foreign sites could have also been motivated by a wish to promote Youku along with other Chinese companies that were seeking funding in the global financial markets. In 2009, China represented 45% of the entire IPO volume in the US with a record high of 183 ventures launched on the stock market (Grocer 2010). As a reference point, China sold over US$50 billion worth of shares compared to US$24 billion for the US that year. 2010 was also a good year with the capitalisation of 22 Chinese companies on the NYSE including Youku, Bona Film Group and ChinaCache. Without YouTube and other foreign rival companies8 on the Chinese market, the perceived value of Chinese brands, such as Youku’s, would increase their chances to attract capital and enhance their business prospects (Loveland 2009). However, the success of Youku cannot solely be attributed to theses wide- reaching government operations of 2009, which targeted a large number of pirate and foreign Internet platforms; it is also the result of a distinctive and well-designed business model implemented within a competitive context. A large proportion of Youku’s revenues had been derived from advertising – similar to YouTube – and to a small extent, from subscriptions and pay-per-view (PPV),9 although these revenue streams have recently been increasing which also contributed to fuel both the cost of local and foreign content. Before the merger, programming accounted for almost 30% of Youku’s costs (Cheung 2013a, b). When Youku was first launched, some of its content infringed copyrights and most feature films uploaded on the website were broadcast without a license. From January 2010, Youku set up a digital system to minimise the issue of pirated content and progressively proceeded to take down pirate material systematically. These measures coincided with the Joint US-China Commission on Commerce and Trade (JCCT), which addressed issues of piracy in China in October 2009. During the commission, Chinese representatives officially acknowledged the negative effects of piracy on the US cultural industries and reassured the US trade representatives that the Chinese Government would ‘impose maximum administrative penalties on Internet infringers’ (Executive Office of the President of the United States 2009). Youku also took restrictive measures on pirated content just a few months ahead of

7 Stock market launch. 8 Google China had to relocate its server to Hong Kong in 2010 (Farrar 2010). 9 Traditionally, PPV was associated with the cable television networks and described a release of exclusive or premium content that typically occurred months after the theatrical window release, but before the video release. PPV has now been integrated as part of some of the online platforms model. The concept of PPV has changed in the sense that the theatrical release window and the PPV release online can now sometimes be simultaneous (Iordanova 2012). 276 7 The Case Study of Youku Tudou its IPO announcement that indicates its intention to legitimise its business in order to attract foreign capital. In an effort to integrate with the global IP regulations, it complied with the international IPR framework and made it a central part of its business model. Youku also allowed the Chinese Government to monitor its platform and to decide the appropriateness of the content. As per Peterson and Lemaire’s integrated models, this example shows that a combination of technological, global, legal, economic, and political forces have largely shaped the online Chinese media sector. This marks a transition within the Chinese film-viewing sector from being exclusively centred on pirate activities to becoming a legitimate enterprise. It also shows the increasingly central role of IP in China, driven both by transnational and local political forces. This IP centric corporate approach, characteristic of Hollywood (Wasko 1994, 2003; Bettig 2008), trans- forms IP into a key feature of online players such as YT and Alibaba that serves both political and economic agendas in China.

7.2.2 The Creation and Formalisation of Tudou

While Tudou was created before Youku and represents an important component of YT, it was Youku that effectively purchased Tudou and drove the merger. On 15th April 2005, Shanghai-based Tudou (土豆网 or Tǔdòu Wǎng)10 was officially launched by co-founders Gary Wang and Marc Van Der Chrijs. Tudou started as a blog hosting website and then developed a video-hosting platform, similar in concept and features to YouTube. Before the merger, Tudou had already built a large viewer-base and enabled access via mobile telephone technologies, which turned the merger with Youku into a significant opportunity: a brand new hybrid model using both Netflix and YouTube’s key features to circulate content across multiple platforms. In the summer of 2007, Tudou had the fastest Internet growth in China; the number of video clips viewed per week increased from 131 million to 360 million with an average of 40 million visitors per month (Zhu 2007). Tudou started working on wireless and mobile video technologies as early as September 2007 in collaboration with Intel. As a direct result of its focus on mobile technology, by August 2011, Tudou had close to 15.5 million mobile subscribers on China Mobile alone making it one of the largest mobile operators in China (Geron 2011). Similar to Youku, state intervention was instrumental in Tudou’s transition from a pirate platform to a legitimate online business, but transnational political-economic pressures also contributed to these transformations. Tudou did not try to advertise itself as a challenger of YouTube11 prior to its IPO, mainly because it was originally used mostly to screen pirated content.

10 Which quite literally means ‘Potato Net’. 11 Particularly in regard to its superior use of bandwidth (Tan 2007). 7.2 The Case Study of Youku Tudou as a Microcosm of the Key Forces Operating… 277

For example, in 2007 on TVLinks, a UK website acting as a linkfinder,12 many US mainstream films were directly connected to Youku, Tudou, and 56.com websites, where the copyrighted content could be accessed for free and sometimes even featured Chinese subtitles. With an estimated 2000 films infringing copyrights and a traffic ranked 214 on Alexa with 40% of US-based users, Tudou became a significant East-West pirate gateway, which represented a major threat for the rights holders in Europe and particularly in the US. Not only was the US film industry struggling to penetrate the Chinese market because of its quotas and censorship restrictions that prevented access to the large potentially lucrative Chinese market, but they were also running the risk of their own domestic market getting eroded by these Chinese websites (Cunningham and Silver 2012b). Despite several attempts from the industry to target the end viewers, little could be done legally against users watching films in streaming mode, since it was made available by a foreign server. The only way to counter such pirate activity was to shut down the infringing websites, which outside China required a lengthy and costly legal action (Lobato 2012). Therefore, it became a priority for the US film industry to lobby internationally to reduce the negative impact of the Chinese websites on their own markets and to formalise the Chinese sector, for instance, during the JCCT and through WTO claims. The US film industry’s lobbying efforts cannot be disregarded as contributing factors to the formalisation of the online film-viewing sector in China, but it can be argued that the media sector started regulating itself by bringing more cases to court. In 2009, Tudou was sued by Joy (one of its rivals) and 80 rights holders for infringing copyrights on some of their content (Cunningham and Silver 2012a). Youku and Tudou also sued each other ahead of their merger in regard to copyright infringement issues (Keane 2015). In one instance, Tudou was fined RMB50,000 (US$8000 equivalent) for screening a Chinese film, Hao Ning’sCrazy Stone (Feng kuang de shi tou) (Ning 2006), without purchasing the rights from NuCom, an online rival platform (iResearch 2008). Like Youku, the year 2010 was key for Tudou in terms of becoming a legitimate platform that operated in the formal economy (Lobato 2012; Lobato and Thomas 2015). From 2010, Tudou posted official guidelines regarding piracy and rules against copyright infringement on its website to raise its users’ awareness about piracy (Tudou 2012). In 2010, Tudou started to purchase the rights to legitimate and professional film and TV series content. Similarly to Youku, Tudou acquired exclusive film content from Hollywood rights holders that cost the company millions of dollars in licensing fees. The purchase of rights coincided with both the JCCT and Tudou’s own IPO (on NASDAQ). While state intervention placed more emphasis on IP, it also increased government control over the online video sector and contributed largely to shape the existing online media landscape towards an IP controlled corporate model.

12 Online platform used as a search engine for finding and streaming content online. 278 7 The Case Study of Youku Tudou

7.3 The Youku Tudou Merger: Economies of Scale, IP Creation, and Sector Concentration

Youku and Tudou announced their merger on 12th March 2012, when Alexa had ranked Youku 10th and Tudou 13th in China, which translated respectively as 49th and 65th worldwide (Cunningham and Silver 2012a). After the merger took effect, the resulting online-video group was the largest in China, with a value of over US$1 billion, which made it the largest Internet deal in China at the time (Takada 2012). This merger had enormous potential in terms of converging platforms leading to cost reductions in bandwidth, content acquisitions and increased advertising revenues. While the two brands remained distinct, the cumulative viewer base of YT made it one of the Internet pioneers in China and abroad. The merger was expected to take advantage of regulatory changes that would allow online video platforms to strengthen their position within the Chinese media sector and enable them to compete against state television. To that extent, the merger between SARFT and GAPP13 into SAPPRFT14 in March 2013 would facilitate this strategy. Timing of the merger coincided with agendas of the media sector and government, specifically to identify and promote local IP and film talent, produce films for its local market and export them as trade (economic) and soft power (political) vehicles. An important factor for the merger was the revenue loss that both Youku and Tudou had consistently incurred over the years. Despite rising revenues and a joint market penetration of 75% on average in 2011 and 2012 (iResearch 2013), both Youku and Tudou remained unprofitable businesses. Combined losses persisted after the merger, reaching US$34.54 million (RMB219 million) in the third quarter of 2013 and US$55 million (RMB348 million) in the third quarter of 2015 (Chen 2012a; Young 2015b). These losses were attributed to the rising costs for Internet bandwidth, mobile video services and the significantly heightened cost for purchasing copyrighted content. While the merger helped rationalise these costs, they still represented a significant expense. It is still debated whether the Alibaba take over was orchestrated to avoid an embarrassing bankruptcy, as YT was a newly NYSE quoted Chinese corporation: this would have damaged the soft power efforts of the Chinese Government and it would have meant foreign capital flight from YT. This reinforces the importance of political-economic forces that shaped the local online media sector.

13 GAPP: previously part of China’s Ministry of Culture, the General Administration of Press and Publications was a government body in charge of regulating and monitoring publishing, news groups and the Internet. It has recently merged with SARFT into SAPPRFT. 14 SAPPRFT: Since March 2013, SARFT and GAPP have merged into the State Administration of Press, Publications, Radio, Film and Television. 7.3 The Youku Tudou Merger: Economies of Scale, IP Creation, and Sector… 279

7.3.1 Bandwidth Synergies and Increasing Use of Mobile Phones

Beside helping Youku tackle issues of rising content costs, one of the major aims of the merger was to improve the speed of access to its website and its streaming system while decreasing the costs of bandwidth through technological synergies. In regard to online viewing, YT relies mostly on streaming content as opposed to downloading,15 which provides several benefits for the rights holders, the viewing platform and the audience. From a rights holder and a platform’s point of view, online-video streaming forces users to click and watch advertising while watching content on the Internet rather than allowing the content to be downloaded and then distributed by the viewers without any level of control from the rights holders or the viewing platform. Streaming allows a greater level of control in terms of accounting how many times the content was actually watched. In the case of revenue sharing, it allows both the platform and the rights holder to have a precise picture of the income generated by a film. It also offers the option to record accurate metrics that can be analysed: the time of the viewings, their duration and the type of audience watching are recorded in real time. The availability of these metrics for the online industries mean that a rich quantity of data and market intelligence is gathered in real time about the audiences, their behaviours and their tastes. This is a very useful mine of information for advertisers. Gubbins reminds us that this private information is ‘often freely given in return for access to targeted content’ (Gubbins 2012). To explain the adoption of streaming services from a viewer’s perspective; online-video streaming means that users are not theoretically affected by any viruses that could be embedded in the files that they download. Viewers do not need to use any storage memory since the files they access are simply viewed online. In order to watch the selected content, the users do not need software such as RealPlayer or VLC, which require regular updates. They do not need to worry either about the format type16 of the files that they are downloading and the compatibility of these files with their own viewing software such as RealPlayer, QuickTime, VLC, and Windows Media Player (to name just a few). A streaming in H.264 format, such as YT’s, can generally offer a High Definition (HD) viewing quality and experience that is much better than an average pirate download. To this extent, YT’s collaboration with Qualcomm in 2013, a world leading company in 3G, 4G and next- generation wireless technologies, provides its viewers with high quality video formats for mobile platforms while reducing YT’s use of bandwidth. This initiative helped YT reduce its bandwidth costs while delivering high quality videos both on computers and mobile devices. The growing acceptance of mobile phone as a film- viewing screen and the increase of broadband speed also contributed to the domi-

15 Such as with cyber-lockers (Megaupload) or with P2P (Pirate Bay, eMule) technologies. 16 Technology has developed an extensive and sometimes confusing range of formats such as: mp4, Divx, flv, .mov, etc. 280 7 The Case Study of Youku Tudou nant practice of content streaming instead of downloads. Ultimately, streaming ‘does not require a major change in consumer culture’ and can be quickly adopted by large numbers of viewers (Gubbins 2012, 83). As a result, before Alibaba’s takeover it appeared that the YT merger had already achieved economies of scale in terms of bandwidth. The proportion of the group budget allocated to bandwidth costs had decreased from 43% in 2012 to 31% in Quarter 1 (Q1) 2013. YT also benefited from Tudou’s technological advantages regarding its mobile viewing applications. These applications allow the viewers a quicker access to film content on their phones. The mobile viewing market is expanding rapidly and looks promising as a growing strategic income stream for YT and Alibaba. The growth in YT mobile traffic continued with daily video views growing more than 50% quarter-over-quarter in Q1 2013 to 150 million videos viewed per day (Koo 2013). This growth was accompanied by over 230 million of 3G smart mobile devices that were sold across the nation (Xinhua 2013). While referring to mobile users, Victor Koo realised that ‘a lot of those users actually do not have PCs’ and that the mobile telephones are the only screens they might use (Koo 2013). According to Sinomonitor, 60% of online video users watch more than one video screen on a daily basis and 75% on a monthly basis (Koo 2013). While this new viewing context, particularly with the convergence of mobile devices such as smartphones and tablets, may increase bandwidth costs, it may also help generate more advertising revenues. A multi-screen video advertising package allows brands to be positioned more effectively throughout a range of screens. For example, viewers can be directed to targeted ads on their mobile device when they appear to be physically located near the advertiser’s point of sale. This pervasive advertising system is known as geolocation and can also be used by government agencies as an accurate surveillance device. This goes to show how political- economic agendas have been embedded in the creative industries through technology from the development, production and circulation of content.

7.3.2 The Increasing Price of Content and Economies of Scale

At the end of December 2012, YT’s portal offered a selection of 4500 films, 2700 TV series and more than 900 variety shows. The content could either be streamed for free (with advertising) or it could be accessed with paid subscriptions or PPV. This acquisition strategy, implemented over the course of several years, was a fundamental departure from Youku and Tudou’s initial business model and of most of the online film-viewing platforms (pirate or legal), including YouTube, which relied almost entirely on advertising revenues. Some of the YT licensed US Hollywood studio productions included The Vampire Diaries (Plec and Williamson 2009–2011), The Walking Dead (Darabond 2010–), or Mad Men (Weiner 2007) (Chao and Tejada 2012; Tsui 2013), Schindler’s List (Spielberg 1993), The Mummy (Sommers 1999), Being John Malkovich (Jonze 1999), The Big Lebowski (Coen and Coen 1998), and Jurassic Park (Spielberg 1993) (Cho 2011). In that sense, YT 7.3 The Youku Tudou Merger: Economies of Scale, IP Creation, and Sector… 281 developed a new hybrid model for China, which positioned itself between YouTube’s and Netflix’s business models and tried to take advantage of both worlds: attracting high volumes of viewers through its social network activities and then selling them premium content.17 The increasing demands for premium content via the Chinese online platforms and TV channels continued to drive the prices of content up and simultaneously raised the importance of copyright and IP in the media landscape. The transition towards a model that also included subscription and PPV revenue streams was a new concept in China for an audience that, up to then, had mostly benefited from free entertainment and media content (Curtin 2007; Keane and Hemelryk Donald 2002). However, audiences adopted the new model relatively fast: by November 2012, YT had 2 million paying viewers who could either opt for a RMB15 (US$2.50) monthly membership (subscription fee) or a RMB5 (80c) fee per film on average for PPV services (Wang 2012b). Gary Wang, former CEO of Tudou, claimed that viewers were starting to ‘get used to paying for content’ (Chao and Tejada 2012). But to make this strategy viable, online platforms need to keep securing exclusive access to increasingly expensive professional quality content. In the short term, co-purchasing rights with other online film-viewing platforms such as iQiYi or LeTV and purchasing rights from regional players such as TVB has helped YT keep their content related costs under control (Gao 2013). Various analysts have commented that the YT merger allowed the group to reduce the copyrighted content costs through economies of scale by exchanging and cross-releasing content (Hille 2012; Barboza 2012). Compared with online platforms located in other parts of the world, Chinese online video providers such as YT could also take advantage of the lack of structure regarding the distribution windows in China. Until after the merger of SARFT and GAPP in 2013, the Chinese digital release windows had been enjoying more flexible domestic regulations in regard to quotas and censorship than the Chinese theatrical window.18 When it comes to online film- viewing in China, online video providers also operate on one of the most populated single territories: a potential audience of over 500 million Internet film-viewers (Tsui 2013), a market for which YT had a dominant market share (iResearch 2013).

7.3.3 The Importance of Creating In-House and Exclusive IP

The increasing price of content also prompted new tactics, particularly from YT: it started to emphasise the production of its own original content to simultaneously reduce content acquisition costs in the short-term and to become less reliant on it in the long-term. Both Youku and Tudou had initiated the production of their own

17 A strategy often used to promote YT’s brand (Young 2015b). 18 Nonetheless, less than 3 years after the merger between GAPP and SARFT into SAPPRFT, the government effectively tightened its grip over the Internet. Among many new regulations, it embedded police officers within YT, Alibaba and other online platforms (Custer 2015). 282 7 The Case Study of Youku Tudou content prior to 2012. For instance, Youku financed and produced Hip Hop Office Quartet (Youku 2011a), which had more than 100 million online viewers in 2011. This trend seems to have intensified after the merger. In 2013, five of the Youku’s produced shows were in the top 10 of the group’s most viewed content. This decision to produce and promote content made financial sense for YT since, in most cases, in-house production significantly reduced the costs associated with content acquisition, given that an in-house feature film can be produced for as little as RMB1 million (c. US$167,000).19 Following the same strategy after the merger, YT renamed its production house ‘Heyi’ (literally meaning ‘unify’).20 Following the merger, Tudou and Youku’s websites still existed independently with a certain level of brand fragmentation, which in time could have created brand identification, validation and audience engagement issues. While Tudou and Youku remained complementary,21 Heyi promoted the production of its own content with a common brand (Young 2015a). In this regard, the company tried to regroup its distinct target audiences: Tudou.com had positioned itself in the ‘fashion’ and ‘youth’ target while Youku was more of a ‘mainstream’ online-video provider (Chen 2012b). In 2013, Heyi started to coproduce prime content with global companies such as Canal+. Heyi co-produced Outcast (Powell 2014) with Nicolas Cage for an estimated budget of US$25 million (Lee 2015).

7.3.4 Redefining Product Placement and Advertising Standards

The new directions taken by YT in terms of content production have not only allowed the group to reduce its cost of purchasing content, it has also contributed to increase its advertising revenues and build a distinctive social and corporate image. Large corporations such as General Motors started advertising on Tudou before the merger and sometimes contributed financially to produce original content for the Chinese market such as Miss Puff (Youku 2011b), an online animation series that targets the young female audience. In this Beijing-based animation, one of the protagonists owns a GMC car, which was a good product placement opportunity for the car manufacturer. Additionally, YT has been competing domestically for audiences and advertising revenues against national and provincial television networks that are

19 Interview with Ding ‘Roy’ ZhuoTao, Head of promotion and communications at YT, August 29, 2015. 20 Heyi, the entity born from Youku and Tudou’s in-house production activities also means ‘harmonious union’ (Zhao 2016, 5448). 21 On the one hand, some of Tudou’s core activities were quite similar to YouTube and focused more on UGC streaming and social networking than Youku, and more distinctively on mobile telephone video viewing. On the other hand, Youku had a larger professionally produced content base and caters to film and TV viewers, quite similarly to Netflix in the US. As a joint online video provider, YT was applying differentiated branding and audience targeting (China Economic Review 2012; Chen 2012b). 7.3 The Youku Tudou Merger: Economies of Scale, IP Creation, and Sector… 283 quite fragmented.22 The most popular TV shows typically capture 2–3% of the national audience (Italian Trade Commission 2011; Koo 2013) so there is scope for YT to build larger audiences than the local or national TV networks. The Chinese TV network is still state-owned and suffers from significant levels of bureaucracy that YT tends to be free from as a private enterprise mostly co- financed by US and Chinese transnational capital. Government restrictions have also led young Chinese to migrate from their TV to online platforms to access Western and on-demand content (WestEnd511 2015). When online regulations come into place that allow online-viewing channels to compete directly with the state television networks, it is expected that an even larger part of the audience will move online. YT has another advantage compared to the local TV networks: on Youku’s website there is about 1 min of advertising per hour, compared with 12 min on Chinese TV, which gives YT considerable space to operate and increase its advertising revenues. Appealing to the advertisers and providing them with a good service seems to be at the core of both Youku’s and Tudou’s strategies even before the merger. In 2010, Youku was the first online-video website in China to use third party auditing of all its videos. Youku partnered with CR-Nielsen, a Chinese joint venture between Nielsen and ChinaRank, to systematically and independently monitor the ads and transfer the data directly to the relevant advertisers (Kender 2010). Based on transparency, credibility combined with its IPO gave Youku a distinct advantage in attracting advertisers to its platform. This initiative was also part of the group strategy to negotiate its transition from a pirate platform to a legitimate business. At the same time, Youku did not simply look to comply with state-led and transnational IPR regulations, but it positioned itself as a pioneer company that demanded urgent standardisation of ad-tracking criteria, for ad effectiveness and transparent ad- tracking systems to be implemented (Media Partners Asia 2010). In a similar way, Tudou challenged the Silicon Valley-based Alexa ranking criteria as a set of data that can sometimes be inexact and misleading. In particular, Tudou challenged the concept of the ‘click’ largely promoted by Silicon Valley- based dot-coms that had lost some of its initial significance, and instead chose to focus on new criteria such as time spent on the website, unique visitors and user ‘stickiness’23 (Chen and Stanton 2008; Tan 2007). YT has been challenging Internet practices both at home and abroad in order to reshape a fast changing online landscape for what appears to be better practices, but first and foremost to remain a market leader domestically and secondly in its quest of global expansion. In this sense, YT can be considered a Chinese creative champion spreading soft power abroad. This series of domestic and global tactics should now serve the overarching Alibaba brand after the takeover. These changes within YT also illustrate the transformation of the company’s original business culture. YT

22 China counted 77 satellite TV channels (cable and network), 1214 TV channels, and 2337 TV stations in 2008 (Kender and Baker 2009). 23 This concept defines whether a netizen has an actual connection and a satisfactory interaction with the website. 284 7 The Case Study of Youku Tudou and Heyi have essentially developed a corporatist, IP centric business model and culture, similar to Hollywood, which also operates as a soft power vehicle for China. It is in this environment that young creative talents have emerged.

7.3.5 The Role of Creative Audiences in IP Creation

In parallel with the development of its in-house professional productions, YT chose to turn towards pro-sumer video creators (produsers) to create exclusive content and IP. Since 2008, Tudou has organised the Tudou Video Festival (an online independent film festival) to attract and build loyalty with young urban audiences. In 2013, for the festival’s 6th edition, the website registered 18,000 entries (almost twice as many as Sundance) and had 230 million online viewers. The festival also moved across several cities and screened films during events at various locations including Beijing, Shanghai and Guangzhou (Li 2012). Since 2011, the festival started collaborating with Sundance and acts as a large catalyst to identify and nurture local emerging talents (Laughlin 2011; Lin 2015). Some of the participants were able to find their audience and reach up to 1 billion viewers (Hartley et al. 2015, 85). YT also finances original content from local filmmakers, separately from the festival, sometimes propelling them to fame while knitting a long-term working relationship with them and retaining the copyright of their work.24 When YT merged, the group invested CNY10 billion (US$1.6 billion equivalent) to create original and ‘made-for-web’ PGC content through the development of individual online channels (Zipindao) (Zhao 2016, 5449). This initiative was aimed to build a large pool of creators whom YT has categorised in tiers from 1 to 12 depending on their viewership (Tier 1 under 2000 subscribers and tier 12 over 50,000 subscribers). In return, YT started sharing revenues with the most successful tiers. This motivated the content creators to build large audiences and promote their channels to receive financial rewards such as 70% of the advertising revenue for the highest tiers and up to 90% of revenues for products purchased online. This situation converted these content creators in social network advertisers (Zhao 2016, 5449).25 As a result, the formalisation of YT and the entire online sector drove the evolution of content from amateur UGC to Professionally Generated Content (PGC) (Zhao 2016, 5448). When YT launched its ‘New Revenue Sharing Program’ in June

24 Interview with Ding ‘Roy’ ZhuoTao, Head of promotion and communications at YT, August 29, 2015. 25 This trend was observed across the online sector and accompanied by other online giants such as Sohu which gave its creators 40–60% of advertising revenue share and a total investment and marketing budget for PGC and channel creation and promotion of CNY3.2 billion (US$482 million equivalent) (Zhao 2016, 5450). 7.3 The Youku Tudou Merger: Economies of Scale, IP Creation, and Sector… 285

2013, it gave young talented video creators the opportunity to be paid for producing high quality UGC or PGC, sometimes in the range of US$3500 to US$10,000 per month (Zhao 2016, 5448). The operation was successful and YT had entered agreements with approximately 600 selected partners less than 1 year after the creation of the programme (Cheung 2013c). The decision of YT to screen a blend of exclusive mainstream films, regional and in-house productions, along with pro-sumer content allowed the group to control the cost of its acquisitions, while simultaneously ensuring that it still operated legitimately. YT continued to attract large online audiences: YT has largely benefited from its young video creator’s network audience effect and the ability of the online content creators to market themselves to attract more viewers. YT also started to manage and control the rights of its own catalogue of original creative content. As Zhao describes, Tudou has been ‘cultivating a reservoir of amateur productions’ (Zhao 2016, 5446). The company’s revenue sharing programme was not solely based on financial rewards. Tudou’s training programme to teach young video creators key filmmaking skills such as cinematography and editing supported this initiative (Zhao 2016, 5448). This helped hundreds of creative talents develop their filmmaking craft. These talents would not have necessarily been able to do so otherwise. For example, access to the Beijing Film Academy is very competitive. The cultivation of online creators also contributed to the development of better quality content for YT while allowing both the company and the government to monitor and control its output. This system helped new emerging creative talents to make a living from their creative works while building up and connecting with their respective audiences. This model has given young filmmakers the tools to achieve their creative visions and a distribution window to circulate and promote them, but this is happening in a tightly controlled corporate and centralised environment. This context can limit their creativity more than the general SAPPRFT rules would have as evidence with the effects of corporate and self-censorship discussed in Chap. 6. Zhao highlights the limiting nature of such a creative environment when she argues that content creators have to ‘carefully navigate between state and market’ (Zhao 2016, 5452–3). She admits that creators often have to resort to self-censorship as the platform and the government guidelines are for them to convey ‘positive energy’ (Zhao 2016, 5453). Zhao nuances this situation by arguing that the critical values of such creative work is not totally lost as the viewers can resort to the interpretation of coded textual language or what she quotes from Scott act as ‘hidden transcripts’ (Scott 1990, 1). In my opinion, Zhao’s analysis does not emphasise enough that ownership of the work is ultimately co-opted by the platform (Zhao 2016; Dong 2015). As much as this system contributes to professionalise a generation of content creators and to reward them financially for their work, it may be a short-lived exploitative system for emerging creative talents. This was explained in Chap. 2 and argued by Terranova (2000, 2004), Bauwens and Kostakis (2014), and Keane (2016) in their description of platform capitalism. Paying creators for their work does not compensate them for the loss of their IP ownership. 286 7 The Case Study of Youku Tudou

Tudou’s integration into Alibaba group seems to indicate a continuation of the above trends as the larger group intends to ensure Tudou focuses on advertising micro-films instead of long-form narrative films (Lucas2017 ). Since 2016, the Tudou film festival took a less important role in the Alibaba strategic use of the platform. Alibaba’s priority for Tudou seems to have changed with its ‘Big Fish Program’, which is to involve emerging talent to produce UGC and PGC in the form of microfilms. These are to be used as ads for its retail division and the promotion of its consumer products. While this seems like another opportunity for emerging talents to sharpen and polish their creative skills while getting public exposure, it could be a creatively and artistically limiting experience: emerging online talents would be confined to the creation of short-form ads and commercial content for which YT and Alibaba would keep the rights (Ge 2017; SinaTech 2017). Aside from becoming a central part of the online creative corporations, IP seems to be combined with the promotion of emerging talent. However, the emerging creative talents cannot retain their IP ownership. This situation positions YT as a centralised and exploitative institution that Bauwens and Kostakis describe as parasitic capitalism (Bauwens and Kostakis 2014). The exploitative tactics used by the traditional film industries (seen in Chaps. 4 and 6) may have survived in the digital era and they are accompanied with corporate censorship and control.

7.4 The Consolidation of the Online Creative Champions

The political-economic agenda of the media industries (traditional and online) and the government are to create corporate brands primarily as soft power political tools for international expansion, and to some degree, as a way to attract additional revenue streams from both local and foreign markets. This strategy is more effectively applied if there are only a handful of Chinese players to promote internationally and it makes the sector and creative content creation easier for the government to control. This meant that film and the online sectors had to consolidate rapidly. The concentration of the online sector is exemplified by the recent takeovers of PPS and Iqiyi by Tencent, Youku and Tudou’s merger, and more recently with Alibaba’s purchase of a 18.6% stake in YT in 2014 and the successful acquisition of the remaining control of the company for c. US$4.2 billion in April 2016 (Perez 2015; Szalai 2015; Aycock 2016). These series of consolidations seems to show the government’s intention of increasing its supervisory role over the online political agenda and its economy. The rationalisation of the sector is reflected at a political level and coincides with the merger of official departments, for instance, SAPPRFT and its recent abolition to keep film and media decisions at cabinet-level in 2018 (Frater 2018). The government has regulated and controlled the sector to balance the number of companies operating in it. It has avoided situations of monopolies and at the same time consolidated the ecosystem so that the champion brands can economically survive in it. Supporting online brands and creative champions while avoiding monopolies comes from the imperative to create more jobs and develop the sector 7.5 Conclusion 287 in a sustainable and harmonious fashion. These measures also have an underlying political motivation as they make the sector easier to control. Additionally, they make it easier to promote and diffuse a handful of strong emergent brand names from China and spread their soft power globally. This corporate framework also contributes to identify and promote local emerging talent online. This could be a long-term soft power strategy if these talents are nurtured and if they are to grow as creative ambassadors. Nonetheless, it remains to be seen how YT will be further integrated into Alibaba Digital Media and Entertainment, what will be its redefined position in terms of new local talent discovery and support, and how Alibaba’s strategy in terms of blockchain technology may affect its development.

7.5 Conclusion

As seen in Chaps. 3 and 4, since the beginning of the Chinese reforms, particularly in the 1970s and after the WTO accession, macro political-economic transformations have influenced the evolution of the media sector in China. This is particularly true of the online media sector that has gone through successive phases of formalisation and rationalisation with an increasing emphasis on the corporate development of IP and talent. YT is no exception to this trend as it has embraced a fast series of transformations since the early 2000s. These changes have taken YT from being a set of online pirate platforms that operated in the realm of the informal economy to a formalised, legitimate business quoted on the NYSE with an IP centric model. YT has also built a large viewer base that attracted significant advertising revenues and started to pay for premium content. This viewer base has eventually contributed to create the platform’s own IP in the face of increasing content prices. This form of content evolved from UGC to more sophisticated and engaged PGC, therefore paving the way to a new generation of online filmmakers. YT’s support to emerging talents as a circulation and promotion platform as well as a training ground has been a significant phenomenon – particularly through the early success of the Tudou Video Festival, the platform’s financial investments into new talents, and its revenue sharing programmes. However, the creative talents’ ownership of their works has remained the property of the platform. When Alibaba acquired YT, it inherited its online and mobile technology, its extensive online licensed film catalogue as well as its UGC, PGC and in-house created IP. In addition, Alibaba acquired YT’s large viewers’ base, particularly the mobile viewers who are increasingly paying for online content. However, it is still unclear what will happen to YT now that it is part of Alibaba’s Digital Media and Entertainment Group. YT brand name could potentially disappear so as not to compete against Alibaba. Will the Tudou video festival continue? How will YT’s circulation platform be further integrated into Alibaba group? Will it stand out as a set of two distinct brands or will it be absorbed into Alibaba’s brand? As a corporate player, will YT further develop its initiatives to support emerging creative talent? 288 7 The Case Study of Youku Tudou

YT may be called onto online circulation synergies with the rest of the group as a key component of Alibaba’s Internet Plus strategy. The fact that Victor Koo, YT’s former CEO, is chairing the Digital and Media Entertainment Division of Alibaba and that Youku and Tudou were kept as two separate brands within the group may hint that Alibaba is rolling out a diversified campaign to appeal to various fragments of the local audiences (Deloitte 2017).

7.6 Concluding Remarks of Part II

As a general conclusion of Part II, I would like to remind the reader of my methodological use of Peterson’s and Lemaire’s combined models to study the political, economic, technological, legal, and market macro levels as well as the organisational and labour micro levels. While I will study the market (audiences) and its transformation into professional talent and creative labour in Part III (Chaps. 8 and 9 respectively), Chaps. 4, 5, and 6 have illustrated the following political-economic, technological, legal and organisational trends: From a political-economic perspective, the Chinese online media sector has received a lot of attention worldwide with successive IPOs and posed new challenges to both Hollywood and the Silicon Valley companies. Local talent, Chinese patents, industry standards, and brands have been promoted in a corporate fashion that shows a different business culture emerging within China. While the culture of China’s online champions such as Alibaba and YT has changed, it remains in line with the government’s political-economic strategy and its progressive integration to the global economy. The series of carefully planned strategic changes and tactics of adaptation by the Chinese Government illustrated in Chap. 3 also mirror the growing trend of a Chinese corporatist culture that seems compatible and develops symbiotically with the CCP’s corporatist structure highlighted in Chap. 3. Jack Ma’s imminent but smooth transfer of power to CEO Daniel Zhang confirms the CPC-like corporatist nature of Alibaba. This is quite a difference with some of the Silicon Valley entre- prises, which have sometimes promoted a certain cult of personality with Bill Gates, Steve Jobs, or Elon Musk for example.26 Could the next step of China’s online companies be to move towards a corporatist model whereby emerging creative talent could be identified, selected and nurtured by the corporate political-economic system in place? How would creative process and content look like? These are questions which remain outside of the remit of this work but which should be covered in further research. In terms of regulations (legal aspects), Alibaba’s strategy has become IP centric. While transnational forces pushed this agenda, China has been mostly influenced by

26 Like in China, a lot of these companies, have closely worked with the national interest and the US government as explained in Chap. 2 with the involvement of Google and Facebook in the NSA scandal in 2014. 7.6 Concluding Remarks of Part II 289 its own interest in regulating the sector and in creating its own tradable IP. With the use of blockchain technology and smart contracts, Alibaba could become a key player in the control of IP, particularly with its head start with blockchain patents. Starting in 2015, Alibaba strategic plan in terms of IP has been to develop a reliable system to trade IP27 and to build a global IP bank (Kudasov et al. 2015). Alibaba’s approach reveals consistency with the intention of the Chinese Government to move away from an economy mostly focused on manufacturing towards an economy of IP and creativity. From an organisational perspective, Alibaba Pictures is now integrating various structural and financial systems that once competed with each other, such as traditional film investors versus crowdfunding for film finance and media professionals versus young emerging audiences for content production. The group has also been integrating all the existing distribution windows (mobile, online film circulation, online TV, and theatres) and ticketing activities. While the current global political context has limited this trend, Alibaba as a central intermediary has influenced media eco-systems abroad through partnerships with key industry players and by contributing to bring Hollywood and the Silicon Valley closer to each other. Technologically, online platforms such as Alibaba, YT, LeTV, and iQiYi have changed the way traditional media industries function. This transformation has manifested by giving emerging filmmakers access to audiences in hundreds of millions and by sometimes allowing these new creative talents to engage in paid part- nerships28 (Dong 2015). It gives an opportunity for emerging talent to practice their creative vision and their craft (Frater 2015). It also gives them exposure with local audiences. However, despite their online success, moving to theatrically released films where acting and professional talents are extremely expensive is an enormous leap that many cannot take (Frater 2015; Dong 2015). Given that the theatrical window currently represents approximately 90% of the total film industry revenues, it leaves little long-term scope for these emerging filmmakers to become recognised locally and internationally if they continue to work with the local online corporations.29 Most of these creative directors come from a background in commercial acting and production finance rather than a purely creative background; most of them have never studied the film artistic tradition and craft (Frater2015 ; Dong 2015). There is a need to provide artistic training to emerging talent so that creative producers can emerge if the film industry ecosystem is to develop on firm and long- term foundations. At the moment, a large part of the producers in the Chinese film industry are financiers and they lack creative vision (Frater2015 ). This means that there is a fracture between large budget mainstream tentpole films and small unprofessional

27 This plan may require the use of technologies such as blockchain and smart contracts to avoid piracy issues. 28 At least in the case of YT. 29 Which is what the Chinese Government may need to build creative brands and pushing its soft power agenda globally in the long-term. 290 7 The Case Study of Youku Tudou low budget production with few productions in between. The results are that less than half of the films produced are released theatrically and 90% of the films released lose money (Shaffer 2015). Additionally, the growth of the Chinese box office (BO) has started to decrease (Evans2016 ). In order to maintain the BO figures at higher levels and to fill in the newly built screens, the government has recently expanded its annual quotas to allow more Hollywood films in to the immediate detriment of local films (Coonan2014 ; Evans 2016). In the current context, there are no strong and coherent springboard mechanisms for local emerging creative talents to become the next internationally established film visionaries of China. They are relegated to TV series that serve the online corporate giants products and merchandise placement advertising and economic agenda (Frater 2015; Dong 2015). After summarizing the analysis of Peterson’s and Lemaire’s key forces above, I study their intersection and I choose to focus on the microcosm of Alibaba through the lens of talent creation in the rest of this conclusion. Despite playing the role of a vertically and horizontally integrated modern studio, Alibaba has arguably developed initiatives to harness local talent. With YT, Yulebao and its film academy project, Alibaba is creating an ecosystem conducive to creative talent discovery and participatory culture in China. It is an ecosystem where Alibaba and its audiences mutually influence and feed each other through the mediation of the platforms and the use of big data analysis. However, this system is currently centralised, parasitic and exploitative in the sense that it makes use of talent creation to its own benefits. This leads to a paradox; YT, for example, is an illustration of changing IP structures in China. The IP system has become more central and formalised, but emerging creators increasingly lose ownership of their IP creations: despite ad-revenue sharing schemes, the IP created ultimately belongs to Alibaba. The group may protect it with an integration of AI, big data and blockchain technologies and to trade it on its platform. Companies such as YT give a circulation window for new emerging filmmakers to showcase their work and to build an audience, but they limit the talents’ creative freedom and they deprive them to the ownership of their work. Since its integration into Alibaba, Tudou’s role may now lead to corporate creativity that is to support a generation of micro filmmakers and advert-makers rather than to develop filmmaking talents. As seen in Chap. 6, there is a risk of increased corporate censorship. In parallel, Yulebao is a C2B crowdfunding platform that has limitations, as it provides little opportunity yet for new entrants to be financed by the multitude of Alibaba users – most of the productions promoted by Yulebao employ already experienced and popular filmmakers. While the Alibaba corporate model represents a window of opportunity for emerging talents in the short-term, it may not help them create a solid foundation and build a career in the long-term. It is still uncertain what will happen when the Alibaba private blockchain and film academy projects are further developed and when they are fully integrated into Alibaba’s model. While Alibaba seems to be motivated by long-term talent development with initiatives such as the Shanghai Academy, in the short-term it is expected that blockchain technology will significantly facilitate payment processing and 7.6 Concluding Remarks of Part II 291 limit the levels of content piracy and counterfeiting.30 This would strengthen Alibaba’s position as an IP custodian. While it is not initially aimed at developing new creative talent networks, blockchain technology that Alibaba is cautiously and progressively integrating to its business structure goes beyond its immediate applications of IP protection. The blockchain protocol considered by Alibaba could act as a creative network where participants would interact in a distributed and disintermediated environment. The question is what would happen to a corporation like Alibaba or Tencent when they introduce a distributed and disintermediated protocol at the core of their own centralised and intermediated system on a large scale? Over the next few years, it will be interesting to observe how a centralised political-economic system such as China with a few monopolistic online intermediary platforms such as Alibaba, Tencent or Baidu, adapts to a distributed, disintermediated protocol that is a fundamentally different political-economic structure at its core. Furthermore, how the Chinese Government manages to control such a decentralised system remains to be seen. One can foresee increasing political-economic areas of tension in regard to blockchain technology and media with emerging creative talents as potential catalysts. As seen in the case of The Last Race, there seem to be cultural traits attached to film productions in China such as their central and corporatist structure. There are also technological and economic areas of tension between the traditional and the online industries as revealed with the case of YT. Politically, these areas of tension manifest between China and foreign lobbying forces and between state-run businesses and private companies. Artistically, these areas of tension are situated between censorship and creative freedom. Bauwens and Kostakis see the emergence of a Commons Based Peer Production (CBPP) context (Bauwens and Kostakis 2014, 51) as a ‘triarchical’ macro- participatory system where partner states (governments), commons (creative collective agents) and corporate spheres should ideally interact and cooperate with each other to reach a stage of mature peer production (Bauwens and Kostakis 2014, 67). While Alibaba Pictures CEO, Zhang Qiang, may give an optimistic view when he claims that ‘the spirit of the Internet encompasses openness, freedom, collaboration and sharing’ (Jaafar 2016), it is too early to know whether the protocol attached to the blockchain ecosystem may eventually provide more control over media content, its users and the network, or whether it may foster more creative freedom and collaborative space for its participants. The next part will study these questions. This is the current dilemma that China is facing and it might impact its creative industries domestically and internationally. At the centre of this dilemma lies the concept of ‘tolerance’ introduced by Keane and ‘talents’, that he argues is even harder to come by (Keane 2007, 27). I argue in the next chapter that before they started creating semi-professional or professional

30 In theory, counterfeiting could be limited with blockchain technology but this would be with digital assets. To this day, it is almost impossible to guarantee, in practice, the reliable and systematic association of the ledger with physical products. 292 7 The Case Study of Youku Tudou content (UGC and PGC), local emerging talents were and still are audiences who have evolved over the past 20 years (and more rapidly over the past 10 years) to become new drivers of creativity.

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This part is divided into three chapters. Chapter 8 describes the evolution of young urban audiences in China from passive, to active, to creative between the middle of 2008 and the end of 2017. Chapter 9 takes a micro-view of a section of these audiences and studies the emerging creative talents who are both market and labour forces in the local creative industries. Chapter 10 is a pre-concluding chapter, that integrates findings from all the previous chapters to make a proposal for an alternative participatory creative production model. As explained in the methodology of Chap. 2, Chap. 8 studies the key creative industries driving force defined by Peterson as market force and by Lemaire as societal force. Like all the other forces observed in this research, the market and societal forces change over time at varying speeds. This study’s timeframe over a period of almost 10 years should give the reader a meaningful perspective about these transformations. Chapter 8 Chinese Audiences: Evolution and Change of Media Consciousness

Mark Pesce in his work Hyperpeople and Charles Shiro Tashiro in his article Videophilia both concur with the idea that media and film change audiences (Pesce 2005; Tashiro 1991). Film distribution and exhibition are tightly linked to technology and these are thought to have a significant influence on the way audiences perceive films. In that sense, Mr. Arash Amel (Head Researcher for Screen Digest) at the PEVE conference on the future of DVD and Blu-ray in Paris on 16–18th April 2008 was claiming that ‘hardware and technology drive consumers’ behaviours’ (Amel 2008). The influence of the computer and electronics industry was decisive in the successful introduction of the DVD and the recent HD developments: the computer industry became instrumental in the way formats were selected and how successful a technology could be introduced to the home consumer market (McDonald 2007, 19–55). However, a few years after Mr. Amel’s statement, DVD and Blu-ray technologies had given way to non-physical formats, while audiences re-appropriated creative content after it was made and released (sometimes even before their official release). The relationship between the film industry, the content produced and audiences has changed significantly and rapidly over the past 10 years. As seen in Chap. 5, it appears that both audiences and films are intrinsically connected and that they mutually affect each other. The main argument of this book is that neither technological determinism (utopian or dystopian) or audience empowerment hold an unmovable truth, but that their interactions are oscillating constantly between limited periods of temporary imbal- ances, like a pendulum in an interconnected network. Gubbins strengthens this argument when he describes a ‘relationship’ between audiences and content that has ‘fundamentally changed’ and uses the term ‘active audience’ (Gubbins 2012, 68). This balance between technological determinism and audience empowerment is partly due to the emergence of networks and interconnectedness between industries and audiences through creative content and flows and analysis of big data.

© Springer Nature Switzerland AG 2019 299 P. Poujol, Online Film Production in China Using Blockchain and Smart Contracts, International Series on Computer Entertainment and Media Technology, https://doi.org/10.1007/978-3-030-02468-0_8 300 8 Chinese Audiences: Evolution and Change of Media Consciousness

Ultimately, and as seen in Chap. 5 with the case of Alibaba, audiences and creative industries mutually influence each other through the medium of creative content: creative content has become an area of tension and mutual influence (Montgomery 2010; Lobato 2012). This chapter combined with Chap. 9 integrate both quantitative and qualitative methods. On the one hand, Chap. 8 aims to observe key trends in the change of young urban Chinese audiences and to answer the contextual question of ‘what are the key changes?’ in terms of audience evolution and their transformation into creative audiences. On the other hand, the qualitative data analysed in Chap. 9 provides continuity to this question. It offers a more in-depth exploration and answers the questions ‘Why is this phenomenon happening?’, ‘How is it taking place?’ and ‘Where is it likely to go in the near future?’ Chap. 9 shows micro-trends that sometimes confirm the macro-trends observed in Chap. 8 and sometimes contrast them. The balance between quantitative and qualitative methods with the combination of industry data is important as it allows a work of triangulation in the analysis and contributes to data reliability, its relatability and its extrapolability (as seen in the methodology of Chap. 2).

8.1 Audience Evolution and Chinese Urban Youth: A Quantitative Study

8.1.1 Introduction of the Survey

Barbara Klinger in her book Beyond the Multiplex identifies the challenge of studying platforms and viewing contexts that are subject to fast technological changes (Klinger 2006, 17–22). She acknowledged in her book that parts of her work may be rendered obsolete by the time it gets published because of the fast changing nature of technology. Likewise, parts of the present study run the risk to become obsolete upon its publication. Therefore, in order to reduce the impact of fast changing technologies such as online platforms as well as blockchain and smart contract technologies, which might limit the use of this study, the present research takes a step back and uses a historical view to the evolution of the creative industries and audience evolution. In light of the thematic evolution on audience research, most of the audience studies are still divided along the lines of industrial, textual and ethnographic approaches. Most of the work is largely concerned with TV and theatrical screens and has often ignored the screen evolution of the past 20 years. To mark this attachment, some scholarships still refer to Internet film-viewing platforms as the future of television or as ‘new television’ (Hartley 2012; Keane 2015, 142). This study of the young urban Chinese audiences’ evolution and their change of media consciousness finds most of its inspiration from the respective methodologies of Austin and 8.1 Audience Evolution and Chinese Urban Youth: A Quantitative Study 301 ww that allow the use of a balanced interdisciplinarity (Austin 2002; Napoli 2011, 2003). I look at this segment of the population with the contribution of research data from 2008 to 2009. As described in Chap. 2, in the methodology Sect. 2.6, I use key elements from a quantitative survey that I administered and conducted over 346 participants in 2008 and 2009 with the support of CUHK and UCD.1 I compare and correlate this data with more recent information originating from trade journals, interviews of experts and industry reports. This process allows me to measure and analyse the evolution of these young urban audiences over a timeframe of 9–10 years. This approach gives us some perspective on the rapid succession of changes that has taken place from 2008 until 2017. I chose to start the quantitative survey observation from 2008 to 2009. This point in history was pivotal and it makes the quantitative data collected at the time quite unique and important for this research. The year 2009 coincided with the 20th anniversary of Tiananmen, the creation of the CFF, the 60th anniversary of the founding of the CCP. It was 1 year after the Beijing Olympics and 1 year ahead of the Shanghai Expo (both events were recognised as key soft power vehicles for China). In terms of external factors, and as seen in Chap. 7, 2009 was also a year of trade and IP negotiations between China and the US with the occurrence of JTTC and the subsequent efforts taken by China to tackle piracy and online industries. The government blocked most foreign-based online startups and hundreds of pirate websites in an unparalleled effort to reduce piracy and take control over the Internet. The Chinese Government also blocked YouTube and Google in China in that same period while it opened its tech sector to an unprecedented number of IPOs on the NYSE: the following year, companies such as Youku and Tudou were launch- ing their own IPO. Beyond studying the influence on how digital and online creative industries affect traditional creative industries in the context of film-viewing, I observe and analyse the implications of the digital and online creative industries on the audience in the context of young urban audiences in China. I aim to get an understanding of the trends that define young local audiences and the emerging creators of content in the current context by first starting with 2008–9, which was such an important milestone. From this point, I am covering the evolution of the young Chinese audiences simultaneously with the technological, legal and political-economic dimensions already observed in Chap. 4. I have used the combined framework of Peterson and Lemaire’s respective models to do so. At this juncture, it is important to define the subject of observation and to explain why I specifically chose to study young urban Chinese audiences.

1 This data was already presented at the Trinity College Dublin (TCD) 2010 Postgraduate Symposium in Ireland in April 2010 under the title Measuring The Impact of Globalization on Mainland Chinese and Hong Kong Audiences. 302 8 Chinese Audiences: Evolution and Change of Media Consciousness

8.1.2 Millennials in China

The study of the 2008–2017 time period and the comparison of the past trends with the current context provide a rich insight into the evolution of the creative industries, the content produced and circulated and the young urban audiences. The young urban audiences also defined recently as ‘millennials’ have captivated both traditional and online creative industries: millennials are currently defined as youth born after 1980, aged 18–35. In China, this group represents a large section of the population (28.4%) or 385 million individuals (Russell and Chiu 2016). It should be noted that this group is not as uniform as the marketers would like it to be. Firstly, it is separated into two distinct waves: the 1980s millennials born before 1990 and the 1990s millennials, born from 1990 (Russell and Chiu 2016; Rosen 2009). These two waves correspond to distinctive political-economic contexts: The first wave corresponds with the Tiananmen in the late eighties and the start of the economic boom. The second wave corresponds to the mainstream developments of the Internet and smartphone devices and a slowdown of the economy. Therefore, their cultural references as much as their perspectives are quite different. Someone born in 1995 grew up in an economy about twice the size as someone born in 1985. While both waves are described as more individualistic and generally better educated than their elders, the second wave is seen as more rebellious and were given the opportunity to explore their own individuality earlier than their peers from the 1980s. Rosen expresses the generational fracture between the two waves in China who do not necessarily have the same outlooks on life, society and culture (Rosen 2009). In effect, what the marketers call the ‘millennials’ essentially consist of rather fragmented groups and communities (Russell and Chiu 2016). The survey used as a reference point to observe the evolution of young urban audiences in China was conducted with individuals aged 18–25 in 2008–9, so they mostly belong to the first wave of millennials (the 1980s wave) whereas the young emerging talents interviewed in focus groups for Chap. 9 are mostly from the second wave. Since the second wave is seen as being more open-minded, challenging of authority and in pursuit of their own dreams, it should give this study a balanced perspective between the two groups, particularly when it comes to their creative aspirations. Before moving to this study, it is important to note that new media, digital media and creative media have been limited in this study to technologies of film-viewing associated to technologies of telecommunication, computing, new user device, and their practical application as film-viewing devices and platforms. The 2008–9 survey and the subsequent evolution of the industries and audiences after this time-period give us an insight into how the current reconfiguration of the relationship between audiences and media industries position viewers in regard to Internet based technologies and online content creation. It also informs the field of creative industries about the changing nature of the power dynamics between industries and audiences. Finally, it explores how the concept of value in regard to creative content can be re-assessed. 8.2 Theatre, Home and Mobile Viewing Platforms: Changing Practices and Changing… 303

8.2 Theatre, Home and Mobile Viewing Platforms: Changing Practices and Changing Industries

The quantitative survey that I conducted in Hong Kong and Mainland China used the method of quotas. The methodology chosen for the quantitative research was planned and implemented to alleviate major biases. The findings are therefore generally considered statistically reliable and valid. The repartition among the following four key variables: geographical area, gender, age, and urban/suburban divide was satisfactorily balanced. The sample size is within the original target: 346 respondents with satisfactory response levels. The sampling and methodology applied ensure the validity and significance of the answers to a satisfactory degree for the 18–25 years old urban population of Hong Kong and Mainland China.2

8.2.1 The Revival of Cinema-Going

A large majority (89%) of the respondents between age 18 and 25 watched at least 2 films per year over the period of study. This trend has intensified with 6.5 films per year in 2016 (Lang 2017). Cinema going, even if already saturated in Hong Kong in 2009 (Hong Kong had reached a maturity phase of adoption with little increase of screens and a mature audience), was growing strongly in Mainland China. The set of data indicated a revival of cinema going in China and outlined market opportunities for the Hong Kong film industry. This result from the quantitative survey concurs with the figures of the box office revenues in China: Up to 2009, box office revenues had increased by an average 20–30% per year since 2005. As seen in Chap. 4, this trend has been continuing throughout 2015 with a growth rate of the box office of 35% year on year on average and a slowdown in 2016. This phenomenon was supported by the deployment of screen theatres at a rate of 1.5 screens per day on average throughout the entire period. The roll out of 20,000 digital theatre screens planned by the Chinese Government over 5 years met and exceeded its target and quadrupled the number of screens between 2010 and 2015 (from around 8000 screens to over 31,000 screens) (Graph 8.1).3

2 Questionnaires were translated in Chinese (simplified and traditional characters for Mainland and Cantonese respondents respectively). 3 Originally, these 20,000 screens were lower resolution than the 2 K HD compliant standard ordered through the provider Barko and were mainly designed to be installed in rural areas. 600 digital projectors of higher resolution at 1.3 k were also to be installed in smaller cities: Information gathered with Mr. Liu Chun, Government Official for SARFT (Chinese Film and Television Bureau), December 2009. In effect, 2 k and 4 k projectors were installed in urban areas with the increasing expansion of 3D cinema. 304 8 Chinese Audiences: Evolution and Change of Media Consciousness

Mailand China (2014 Objecve) 60,000 Mainland China 324,066 Hong Kong 36,979 USA 7,721

0 100,000 200,000 300,000

Graph 8.1 Population per screen in 2008, compared to SARFT estimates for 2014. (Sources: Mainland China figures from SARFT, 2009 (these figures also include rural areas), Hong Kong figure from MPIA and Hong Kong Film Development Council, April 2009, and US figure from the European Audiovisual Observatory (EAO) in Focus 2009)

At the end of 2016, China had overtaken the US in terms of number of screens with nearly 41,000 screens in China compared to over 40,000 in the US. The construction rate increased exponentially from 1.5 screens built per day in 2009 to 27 screens built daily throughout 2016 (Lin 2016). This trend was reinforced with the successes of 3D and Imax in China with 592 Imax screens already (50% more than the US) and 150 more Imax screens planned by Wanda if this initiative materialises (Robehmed 2017). Despite these advancements, the Chinese box office growth slowed down in 2016 from 34% to 4.7%, in comparison, the number of films officially released theatrically over the same period of time was only 315 on average,4 an indication that an exhibition and a circulation network without creative content is like an empty vessel (Lin 2013, 2016). In 2009, female respondents were already more frequent cinema-goers than their male counterparts (11% of them watched films in theatres at least once every 2 weeks, whereas only 7% of their male counterparts did). Some Hong Kong and Mainland directors such as Tsui Hark, with his film All About Women (Hark 2008) started to capitalise on this emerging audience particularly the young female audience. This gender difference has materialised as a continuing trend both in cinemas and on online and mobile platforms where female audiences are overtaking male audiences in numbers and consumption (Von Sychowski 2014). While online film-viewing windows such as Youku were still mostly dominated by male viewers in 2015 (70%) (Ding 2015), millennial female viewers are now taking the lead on practically all other windows from mobile telephones to theatrical exhibition. It is becoming such a phenomenon, that local and international filmmakers are starting to adjust the content produced to cater to this growing audience. The Chinese box office success ofWonder Woman (Jenkins 2017) directed by a female director and featuring a female lead confirms this trend.

4 Officially 315 films were released from 745 produced in China in 2012. In reality, only 183 were effectively released in theatres, while the rest only had a certificate allowing them to be released but they were not formally released nationally: http://www.the-numbers.com/movies/ country-breakdown/2016 8.2 Theatre, Home and Mobile Viewing Platforms: Changing Practices and Changing… 305

8.2.2 Home Viewing Platforms: Traditional Versus Digital

In 2009, TV and Internet were the two platforms most frequently used by the respondents: Internet and the traditional TV network had respectively 77% and 67% of the respondents using these platforms. At the end of 2016 this proportion had changed with the increase of broadband and mobile connections, and the number of Internet users in China (as seen in Chap. 4). In Hong Kong, Star TV (now owned by 21st Century Fox) and TVB’s television presence are still strong, despite their ability to broadcast to China being limited.5 In 2009, VHS had almost disappeared with only 15% of the Mainland China and Hong Kong respondents from our study still watching films on that platform occasionally. At the time, VHS, which had been introduced in the 1980s in Mainland China and Hong Kong, had already been significantly reduced by pirate cable TV channels (Curtin 2007, 113–114). In 2017, most of the retail VHS equipment has been withdrawn and the medium has become nearly obsolete.6 Other physical formats still had a strong use case. The use of High Definition Discs (Blu-ray and other formats) was higher with Mainland respondents: in our study, 32% of the Mainland respondents used High Definition discs whereas only 16% of Hong Kong respondents used this platform.7 The higher viewing frequency of HD/Blu-ray Discs in Mainland China was often associated with piracy which was higher in China than Hong Kong. Hong Kong had seen a draconian enforcement of anti-piracy measures including the closure of illegal shops and shipping by the police. But this viewing trend was not solely attributable to higher levels of piracy in China. It was also due to China’s newly developed own High Definition disc format, the China Blue DVD (CBHD), supported by its local computer hardware industry Lenovo. The CBHD used China’s own patents and since its introduction, Warner Bros. had decided to support the CBHD format with a discounted retail sale price of CNY50–70 per unit (Around US$5 at the time) as early as March 2009.8 This case is interesting since it was the first time in the past 50 years of film innovation adoption that the Hollywood Studios (including Sony) were challenged by an outsider from an ‘emerging market’, in this case China. It also showed the intent of China to become independent from foreign patents and create its own IP. The use of physical formats DVD or high definition has now receded due to higher bandwidth capacity and the development of home cinema and smart TV.

5 Since 2016 and given the limited scope to reach the Mainland Chinese market, TVB has been developing a streaming box allowing viewers across Asia to watch their content. 6 Some informal activity of digitisation of VHS tapes into DVDs or non-physical formats combined with the planned obsolescence of the tapes have accelerated the disappearance of this medium. 7 As of October 2008, Patrick Tong (Head of the Hong Kong Video Association) referred to the penetration of Blu-ray Discs in Hong Kong as ‘weak’: the financial crisis and the rather high pricing of this product (over HK$400 per disc in 2008) were the main barrier to adoption of the new format. With no further developments, the format stagnated and receded. 8 Luc Marchand, European Head of KDG and Editor of DVD Intelligence, PEVE conference, April 2008. 306 8 Chinese Audiences: Evolution and Change of Media Consciousness

The physical formats were a short-lived step before the jump into non-physical formats, what Keane described as ‘going online’ and which he called digital TV (Keane 2015, 2017). Except this television is no longer TV. It is interactive by nature, it can be controlled by the audiences who can play the content on demand at a time that suits them, they can fast forward it, stop it at will, appropriate it, remix it, thereby putting the audiences in an increasingly proactive role, a participatory mindset, a role of creators as well as audiences. The success of the Internet was partly due to the fact that broadband connections had been deployed on a wide scale in Hong Kong and Mainland China. Mainland China continued to develop its broadband capacity and it had reached 270 million people for Internet connections and 93.5 million people for broadband domestically.9 This was compared to 86 million in the US. While the penetration of broadband was superior in the US compared to China (28% and 7%, respectively), the development and diffusion of broadband since 1999 had been explosive in China with a growth of 23% compared to 16% in the US between Q2 2008 and Q2 2009 (See Table 8.1 below). Less than 10 years later in 2015, the number of connections nearly tripled, with 649 million users and increased to 731 million in 2016 (Zheng 2017; Coonan and Brzeski 2015). It is estimated that 58% of these Internet users are millennials (Russell and Chiu 2016). When this survey was conducted, Mainland respondents used online viewing platforms to watch films significantly more than the Hong Kong respondents: 90% of the Mainland respondents used the Internet to watch films in comparison with 69% of the Hong Kong respondents. Mainland’s audience attention was already

Table 8.1 Broadband access Top 10 broadband countries by country in 2008–2009 2008Q2 2009Q2 Country Total Total China 75,768,350 93,549,000 USA 74,440,195 86,227,582 Japan 29,584,700 31,085,500 Germany 21,420,702 24,086,250 France 16,601,286 18,324,300 UK 16,718,400 17,838,200 South Korea 15,061,659 15,876,992 Italy 11,534,230 12,855,463 Brazil 8,490,400 10,469,755 Canada 9,005,181 9,618,107 Source: Data provided for the Broadband Forum by Point Topic

9 As of 2008: Reference Prof. Lu Di, Peking University, March 2009. 8.2 Theatre, Home and Mobile Viewing Platforms: Changing Practices and Changing… 307 moving away from traditional physical formats toward non-physical formats such as the Internet. At the time, the main form of viewing were pirate P2P downloads that were formalised and taken over by streaming from 2010 thanks to the deployment of broadband and video compression technologies such as H.264 and H.265 (as seen in Chap. 7). Whereas TV was still a strong film-viewing platform, it became the second platform for watching films at home after the Internet for the 18–25 young urban Chinese respondents. TV retained a non-negligible presence to this day thanks to its syndication to platforms such as YT or iQiyi; for instance, TVB entered agreements with YT as seen in Chap. 7. The rise of provincial networks such as Hunan TV, Shenzhen TV or Zhejiang TV amongst others managed to produce fresh content and to continue to attract audiences thanks to exclusive in-house proprietary content. The same occurred with CCTV channels that also expanded abroad in languages other than Chinese. It is worth noting that in 2008–9, the various platforms highlighted above were separated by clear legal boundaries. The limits of each platforms corresponded to specific sets of commercial rights. For instance, Digital Rights or DRMs (Digital Rights Management), DVDs, TV, or VOD were ‘governed by different rights and therefore different commercial arrangements’.10 The legal release of films on these platforms also coincided with their respective distribution windows: Internet and TV releases traditionally came at the end of the release chain, whereas DVD or special pay per view satellite releases tended to come first (after theatrical releases).11 The timing of these releases and the chronology of the respective distribution windows were typically subject to legal frameworks that varied from country to country. In China distribution windows were released with more ambiguity than in the US where the chronology was enforced rigorously. As I write these lines, both China and the US have tried to fight early pirate releases by applying ‘day and date’ (same date) release on films globally (Silver and Alpert 2003, 59). This practice was also motivated by the increase in proprietary quality content released on home platforms such as HBO or Netflix in the West or YT, iQiyi, or LeTV in China. A few months before its acquisition by Alibaba, a platform like YT attracted over 80% of its audiences with individuals aged between 18 and 29, 43% of which were students with typically less purchasing power than young professionals (Ding 2015).

10 Mr. Alan Friel, Attorney specialised in DRMs for Major studios in LA. Tom Sherak, former Executive Distribution Consultant for Paramount. 11 As part of this study, I chose to exclude marginal distribution channels such as airplane and hotel viewings. We also excluded the marginal personal use of 35 mm or 16 mm projectors used to screen films privately. 308 8 Chinese Audiences: Evolution and Change of Media Consciousness

8.2.3 Mobile Platforms Explosive Growth

In our survey, mobile digital platforms were still in their infancy with only 14% and 6% of users, amongst all the respondents, who watched films on MP4 players and cell phones, respectively. The adoption process phase was in a stage of ‘early adoption’ (Rogers 2003, 114), in fact it was estimated that only 60 million of the total population of China used their telephone to watch audio-visual content12 including but not exclusively films. By 2016 this trend had reached more than 700 million people (more than 60% of the Chinese population) and it has exceeded the amount of content watched online in sedentary viewing contexts (on laptops or desktops in a fixed setting) (CIW Team2016 ). For example, 75% of YT’s traffic is generated by mobile devices (including tablets) (Ding 2015). This trend was facilitated by the developments of 3G networks in China after the Beijing Olympic Games and then rolled out in 4G. This was combined with affordable but sophisticated local smartphone devices such as Lenovo or Xiaomi, the decreasing prices of mobile data packages, the increasing numbers of Wi-Fi spots, and the daily use of mobile applications such as Wechat wallet or Alipay payments, mobile ticketing and social networks such as Wechat or Weibo. In 2009, the use of mobile platforms seemed to be significantly influenced by disposable income: over 5% of the top disposable income respondents watched just over 2 audio-visual pieces per week on their mobile phone whereas none of the lower classes of disposable income did so. Video enabled mobile phones were still luxury and expensive tools. Because 3G networks were not commonly operational yet, one had to download videos to view content on their devices. This medium and its viewing context have grown exponentially and most videos are now streamed. More than 92% of the Chinese 18–30 years olds now own a smartphone (Russell and Chiu 2016). The use of mobile phones to watch creative audio-visual content was marginal. Most of the videos downloaded were short music videos and TV series under 30 min. The viewing frequency was higher in Hong Kong because it had already developed its 3G network, but the download prices made it relatively expensive to watch audio-visual content. Rogers argues that individuals categorised as early adopters (such as the mobile phone users viewing films on that platforms), ‘have a greater degree of upward social mobility than do later adopters. Evidence suggests that earlier adopters are not only of higher status but are on the move in the direction of still higher levels of social status’ (Rogers 2003, 288). The categorisation of the young urban Chinese middle or affluent class appeared to match this categorisation as early adopters. This was later confirmed with the adoption by larger audiences as the following stage of diffusion.13

12 Mr. Tony Dillistone and Ms. Marjorie Daleo (former representatives of Enterprise Ireland in Los Angeles), both CEO of Media Mojos, a company supported by Universal studios and specialised in content distribution on new media platforms. 13 The idea of family background or connections and of the golden circle is reminiscent of the urban millennials; a situation which was less openly spoken about in the past but has come back to fore 8.3 New Viewing Contexts: Physically Isolated but Virtually Interconnected 309

Until March 2017, when the new film regulations came into place in China, online content enjoyed a relatively free status based on self-censorship with no or little interference on the import of foreign content. Online platforms (either sedentary or mobile) are now increasingly monitored and regulated (see Chaps. 4 and 5). The effect of the merger of GAPP into SARFT to form an all-media encompassing SAPPRFT has played a more controlling role than under the previous administration.

8.3 New Viewing Contexts: Physically Isolated but Virtually Interconnected

8.3.1 Piracy and the Demise of the Traditional Industries

It appeared clearly that the number of respondents using Internet to watch illegal copies of film or ‘free films’ was much higher than the number of illegal DVD or VCDs purchased: 80% of the respondents admitted using Internet to download or stream illegal copies of films whereas only 66% admitted buying illegal DVDs or VCDs. Pirated DVD/VCDs sales were starting to suffer from the Internet pirate networks. This is particularly true in Hong Kong where the police and customs have cooperated to stop the inflow of pirated material from Mainland China (Graph 8.2).14

Graph 8.2 Proportional use of pirated film on DVD/VCDs and internet. Use of illegal 80% 20% (Courtesy of Patrice Internet films Poujol) Yes No Use of illegal 66% 34% DVDs

0% 50% 100% 150%

following the anti-corruption campaign of Xi Jinping and the complaints of the majority against nepotism and the unequal opportunities to increase wealth or to get decent employment. For some second wave urban Chinese millennials who do not come from the golden circle, achieving financial stability is a struggle due to high competition on the job market. 14 Mr. Wellington Fung, Hong Kong Film Development Council, December 2008. 310 8 Chinese Audiences: Evolution and Change of Media Consciousness

Physical Versus Non-physical

The fiercest opponent of the DVD/VCDs pirate industry may not have been customs or police forces but simply Internet pirates who deliver the content faster, more conveniently, with more choice, often with the same level of quality and for free. The downloads were different from the current streaming context in the sense that now audiences do not seek to ‘own’ the material, they just watch it that legally makes the task of the rights holders harder to enforce IP protection as streaming audiences were never in possession of the content that they watched. In a certain way, they started wondering why they should pay a high price for watching a film that they may have paid a cinema ticket for already. Moreover, audiences have now become concerned about storing films on their computers as they could be liable and it takes storage space that they could use for their own personal content. It also showed that film and creative online content might have become a reusable, disposable and recyclable commodity. As young urban audiences started adopting online media in China and Hong Kong, the implications of such technological and content adoptions on the phenomenon of piracy intensified. In 2008–9, IP did not follow a centric model in China as it is today. The study was conducted just before the crackdown on pirate platforms that operated by circulating illegal content under the arrangement that it was for English language education purposes rather than entertainment. Now, the levels of piracy have declined following the emergence of large platforms such as the BAT online platforms (iQiyi, YT, and Tencent Video) that, as explained in Chaps. 5 and 7, have rendered piracy less attractive because of their business model which mixes advertising revenues, subscriptions and PPV. Technology has also allowed these platforms and the Chinese Government to spot illegal content more easily and to take it down faster. Out of the 36 Internet spontaneously cited six platforms (17% of the total number of platforms) made 87% of all the responses: The popularity of the film-viewing platforms was strongly concentrated. For instance, if we look at the frequency of use by young urban audience in Hong Kong and China of such platforms, we can see that Youku and Tudou (Chap. 7), which at the time were not a merged entity but a set of two pirate platforms, featured highly on the list. Tudou was particularly successful with 21% of Hong Kong respondents using it and as much as 33% of the Mainland Chinese respondents regularly watching creative content on it.15 This content was either pirated films or UGC that demonstrates how local audiences had already taken a step towards the creation of their own content. Other platforms such as Xunlei, PPStream, Ku6 or A56 that have since been acquired by larger groups or shutdown by the government were also quite popular with an aggregated 10% viewership. The most prominent platforms used by Hong Kong respondents were US-based platforms.

15 In comparison, Youku was gathering 25% and 13% of these respective audiences’ attention. 8.3 New Viewing Contexts: Physically Isolated but Virtually Interconnected 311

Graph 8.3 Comparative use of the top 10 internet viewing platforms between Hong Kong and Mainland Chinese respondents. (Courtesy of Patrice Poujol)

P2P platforms such as Pirate Bay or Bittorrent were not used much amongst respondents and suggests that they were already using streaming pirates services online rather than downloads (which was not possible on mobile phones for lack of 3G networks) (Graph 8.3). Over the past 10 years, a two-pronged phenomenon occurred in terms of piracy. Firstly, online piracy almost extinguished DVD piracy with the support of the hardware industry – which now rarely offers a DVD or Blu-ray reading device on their computer or media equipment. Secondly, online platforms such as YT are now limiting online piracy with the support of the government. This is particularly significant with the second wave of pirate platform crackdowns, legal prosecutions of perpetrators and the ban on VPNs (which have now become illegal). Increasing online monitoring has supported these changes – monitoring has since been automated with the use of image and sound recognition. Online monitoring is becoming increasingly effective with the use of AI, big data analysis, and in the very near future, blockchain and smart contract technologies.

Adaptation of the Traditional Industries

The survey showed that while piracy was rampant, it did not necessarily impact theatrical releases as much as initially claimed by the MPAA. Only 20% of all the respondents were watching films illegally before their theatrical release. However, this figure increased to 38% and 41% of the respondents watching films illegally on DVDs and online respectively within 6 months of a film’s US release. 312 8 Chinese Audiences: Evolution and Change of Media Consciousness

In 2009, both the traditional and new media players of the film industry were trying to find ways to harness the potential of digital platforms and to find a model to monetise them. In the short-term tighter distribution windows such as day/date strategies were implemented to counter the adverse effects of piracy. Other strategies involved longer-term measures to monetise Internet: the case of Beijing-based company Click-To-See (backed up by investments from Disney) had already proposed in 2008 a viable Internet distribution model uniting advertisers, brands and production companies. Under this model, viewers did not have to pay for the content but they had to watch some ads at the beginning of the film (a similar model to YT advertising-based streamed content). They could then watch the film for free. This company had already 2 million regular viewers online in December 2008 but its services failed to secure a license from the government. This model was retained by the other successful platforms as well as subscriptions, prime content in PPV, and the production of in-house content. As seen in Chaps. 5 and 7, until it was taken over by Alibaba and despite its large user base of over 500 million viewers, YT was still unprofitable in 2016 until it was integrated to the IP and retail cross-promotion and cross-sale strategy of Alibaba Group.

Pricing Issues

While trying to define reasons why the respondents used Internet as a viewing platform, the survey showed that they were primarily motivated by the ease and convenience to find the movies they wanted to watch (this was cited as the main reason by 71% of the respondents), followed by the range of films available (cited by 62% of the respondents) (Graph 8.4). Only in third position came the price factor, although most of the cited websites provided films for free (only 54% of the respondents gave this criterion as a reason to use Internet to watch films). The fact that content was not readily available in its

Cons (In %) Ease and convenience Poor Visual Quality Pros (In %) of use

Range of Films Available Small Screen 10% 1% Online 1% 5% Downloading Speed 6% Free Films / Price 11% 30% 10% 39% Poor Audio Quality 13% 22% Latest release Difficult to find a specific 26% film 26% Subtitling Music Videos

No problem with the platform Other

Graph 8.4 Pros and cons of internet (piracy) as a film-viewing platform: 2009. (Courtesy of Patrice Poujol) 8.3 New Viewing Contexts: Physically Isolated but Virtually Interconnected 313 original form in Mainland China due to slow censorship procedures (up to 6 months) and quotas, forced young audiences to use alternative methods to access it. This is one of the facets of piracy that Lobato describes as ‘access’ (Lobato 2012, 69). Pirate DVDs and Internet downloads were the only options available. This issue was later solved by a combination of subscriptions, PPV and free but advertised viewing. Films became cheaper to watch legally online through the government-licenced platforms that provided streaming and download services of higher quality than the pirate websites and were free of malware, spyware and other viruses. The convenience of payment platforms such as Wechat wallet or Alipay later in 2014 gave few reasons for audiences to watch pirated content. In 2008–9, urban young Chinese audiences started escaping the control of traditional entertainment industries. Although they were not immune to the industry promotion and advertising push strategy, they adopted different practices than the previous generations that resulted in loss of revenue for the traditional industries. These audiences instead fell into the hands of even larger players; the online platform capitalist system.

8.3.2 Film-Viewing and Social Isolation

The previously observed changes in technological adoption and circulation windows have defined a new frame for viewing contexts in China and new audiences’ viewing practices. In 2008–9, the respondents perceived the theatrical viewing context as a prime place for social gathering with 90% of the respondents who answered that they never or seldom went to the cinema on their own. This trend remains true and theatrical exhibition has become even more spectacular and eventful with the success of Imax, stereoscopic technology, Auro-3D, and Dolby atmos. These features have also justified a consistent increase in the price of cinema tickets to achieve faster return on investment for theatre investors. Over the past 3 years in China, most films have been turned into 3D (even if they were not originally designed as such) many times in post-production. This led sometimes to some counter-productive incidents such as 3D screenings of Jason Bourne (Greengrass 2016) provoking nausea amongst the audience as the film, mostly shot handheld, was not designed to be screened in 3D (Brzeski 2017). In comparison with the theatrical viewing context, home-viewing platforms generated more isolated film consumption in 2008–9. Eighty five percent of the respondents viewed films online alone rather than with friends and family. Comparatively DVD/VCDs were screened in isolation by 78% of the respondents and 70% of the respondents watched TV on their own. It seemed that the Chinese home had also become the ‘Fortress of Solitude’ that Barbara Klinger illustrates in her work on US home film-viewing platforms (Klinger2006 , 9–10). This trend became stronger after 2006, during a criminal incident, entitled ‘The Chinese Columbine’ when teenagers set fire to an Internet café. This incident gave 314 8 Chinese Audiences: Evolution and Change of Media Consciousness the government an excuse to retaliate and close about 50,000 cybercafés that mostly operated underground and were the core of a rich underground creative fabric in China (Jenkins 2006, 222–5). It was also a collective place where online audiences could meet and share content and experiences. With the roll out of Internet and the stringent rules associated with Internet cafes, these communities tended to disappear and young urban audiences started watching creative content from home, physically isolated from the wider community. This phenomenon was observed across all the home platforms: respondents who watched TV alone also tended to watch films alone on other platforms such as DVD/ VCDs, online and cable as well.16 There was a significant correlation of isolated film-viewing behaviours across all platforms with an even stronger correlation of lone Internet film-viewing17: Frequent Internet users tended to watch films alone more often. A phenomenon of film-viewing in isolation was observed across all the film platforms but was stronger with online platforms making it a rather individualistic viewing context. Socially isolated film-viewing resulted in higher volumes of films being watched. This phenomenon was also associated to piracy. According to this survey, the more young urban Chinese persons watched films on their own, the more likely they were to watch higher volumes of pirated content. This indicated that both the local and foreign film industries should rethink their business strategies in order to reach their audience. But this trend seems to have been somewhat short-lived as platforms such as YT introduced online interactive comment bubble boxes through which audiences could communicate with each other and leave comments in real time while they were watching films online. Even if this meant that there was no physical proximity between the viewers, they started to act as virtual networks. This network sharing effect sprang from the same intent as the Zimuzu and other fans or collaborative communities (Meng 2012; Yeh and Davis 2017). This phenomenon has created tensions with the rest of their families as they disconnected from their families leading to a form of societal isolation while they came closer to virtual communities and online friends. In terms of geographical differences, Mainland respondents tended to be more subject to watching films on their own than Hong Kong respondents where the presence of siblings and the lack of space may have limited such practices. A factor that contributed to this situation is the policy of birth control practiced in Mainland China since 1979 under Deng Xiaoping. The one child policy in Mainland China that was still in full force at the time may have contributed to this

16 Thirty four percent of the respondents who frequently watch TV alone also frequently watch DVD/VCDs on their own, whereas only 8% of the respondents who never watch TV alone frequently watch DVD/VCDs alone. 17 For instance, 69% of the respondents who frequently watch films on the Internet alone also frequently watch DVD/VCDs on their own, whereas only 18% of the respondents who never watch films on the Internet alone frequently watch DVD/VCDs alone. 8.3 New Viewing Contexts: Physically Isolated but Virtually Interconnected 315 phenomenon of isolation too. The policy has since been relaxed progressively. Although both in Mainland and Hong Kong the structure of the family is strong, I could observe that individuals raised as only children tended to be more socially independent and individualistic in their viewing patterns. This individualistic behaviour was confirmed in youth survey around the same period and thereafter (Rosen 2009; Russell and Chiu 2016). These patterns revealed the characteristics presented by Williams, Rice and Rogers in their work on the theories of diffusion of innovation applied to new media such as the interactive nature of videodiscs, Internet and portable devices. They also observed the phenomena of de-massification and asynchronicity (Williams et al. 1988, 10–13). • De-massification: ‘a certain degree of the control of mass communication systems moves from the message producer to the media consumer’ (Williams et al. 1988, 10–13). Audiences started becoming involved in promoting, producing and controlling both the nature of their creative content consumption and their viewing context. 2008 coincided with the creation of the Tudou online film festival seen in Chap. 7 and it may not be a coincidence if this platform was popular with this age group in Mainland China (See Graph 8.3), but not so much in Hong Kong where US platforms such as YouTube dominated the viewing market. Also, thanks to Tudou’s interactive features and the growing importance of social media, viewers communicated through interface and interact face-to-face less frequently which fostered the phenomenon of virtual social isolation. • Asynchroneity: Viewers could already watch film at a time that was convenient to them. Time is a valuable resource and it was more convenient for the young viewers to watch films on their own than having to compromise, for instance, on the content that they were all going to view as a group. These trends have grown stronger over the years with the acceptance of ‘virtual’ friends and communities that have been revealing deeper changes in the long run such as the new role of media in child socialisation and the change in the concept of literacy (computer literacy). The birth of virtual community networks and pro-active interconnected individual audiences such as fan groups, zimuzus, open source communities, P2P communities, Creative Commons and ultimately blockchain disruptive communities spring out from this virtual interconnected space. This evolution contrasts with the idea that urban Chinese millennials are selfish and individualistic. Whereas they focus more on ‘individuality and freedom’, they also have a strong communitarian sense (Russell and Chiu 2016). However, while those who belong to the golden circles tend to chase their dreams and are open to creative endeavours, those who do not have a special economic or political network tend to become more conservative as they need to provide for their family elders (this is quite a responsibility with a set of parents and two sets of grand-parents – multiplied by two if they are a couple). Essentially, couples sometimes have to cater for a dozen immediate family members. Despite these constraints 74% of them have the ambition to start their own enterprise (Russell and Chiu 2016). 316 8 Chinese Audiences: Evolution and Change of Media Consciousness

With the emergence of online platforms, these groups started to create their own communities and building their own audiences through dedicated and decentralised channels. Even if they are not located physically in the same place and if they are mediated by the platforms, these communities connect with each other as independent channels from the traditional media industries. This is a first step in the disintermediation and the decentralisation of creative media that (as seen under Chap. 5) could be enhanced once blockchain technology is further developed, particularly since certain ZMZ groups have already developed their own virtual currencies. They are a first step in creating a reward system based on values other than financial profits although these cannot be used outside of the community. These virtual currencies give access, for instance, to prime or scarce digital creative content and they define status within the group (Meng 2012). Over the past 10 years, the rise of virtual community Internet networks has somewhat counter-balanced the physically isolating nature of increasing online activities. While young urban audiences tend to watch more content in physical isolation, they also connect with peers across the country and sometimes internationally. They exchange ideas, may work on creative projects together, while not necessarily all being physically connected. Meanwhile, the piracy of physical and online content has been limited that has given IP a more central role (as seen in Chaps. 4 and 7). However, new talents rarely own this IP and it is mostly appropriated within the framework of platform capitalism as seen in Chap. 7. This situation has also given rise to a tighter control from the government and the platforms over the creative content circulated in practically all viewing contexts and across all distribution windows. The relationship between the nascent creative communities and the changing nature of content viewing has created tensions between formal and informal economies, IP ownership and audiences’ sense of control and freedom.

8.4 Content Adoption and Protectionism

8.4.1 Asian Films and Cooperation

According to the survey, the most popular types of Asian films by origin were Hong Kong films18 with a total of 78% of all respondents claiming that they watched these films.19 Moreover, the success of Mainland and Hong Kong films was asymmetric;

18 Film origin: it is important in the current transnational context to define what the country of origin means. For instance, if we refer to Hong Kong, it means a film produced and financed in Hong Kong and screened in Cantonese with or without subtitles. 19 At the time the three largest viewing origins were in decreasing order Hong Kong, Mainland China, and Taiwan with 78%, 62%, and 49% film or TV series viewing frequencies, respectively. Korea scored lower at 37% viewing frequency, but has since increased significantly. Other Asian films featured much lower. 8.4 Content Adoption and Protectionism 317 there was a strong penetration of Hong Kong films with Mainland respondents compared with the relatively weaker penetration of Mainland film with the Hong Kong audiences. Hong Kong seems to remain a local market with its own cultural identity and taste. The success of Hong Kong films could also be explained in 2008 by the fact that since 2003, the CEPA (Closer Economic Partnership Agreement) signed between Mainland China and Hong Kong had facilitated the export of Hong Kong Films into Mainland China with no quota restrictions as long as they complied with SARFT rules. In 2014, Cantonese language films were also accepted in Mainland China on a national scale as long as they were subtitled. Over the years China has integrated Hong Kong creative talents and their expertise into the Chinese film industry. This was the case early on of Tsui Hark, Stephen Chow or John Woo who regularly co-operated with Mainland to co-produce films that were essentially designed for the Mainland Chinese Market. Sometimes these internationally renowned filmmakers have had an educational role in the training of Mainland crews and talents. A notable example was Red Cliff (Woo 2008) which benefited from a US$60 million investment from Mainland China or All About Women (Hark 2008) which was primarily geared toward female urban Mainland Chinese audiences. Painted Skin (Chan et al. 2008) was also distributed in China while it featured a story involving ghosts (which was prohibited under SARFT rules); it may have been challenging for a foreign film to be distributed in Mainland China under these circumstances. Nonetheless, Painted Skin was a co-production between Hong Kong, Singapore and Mainland China significantly funded by the latter. More recently, some of the most high profile cases are the cooperation of Jackie Chan, John Woo and Wong Kar-Wai with Alibaba Pictures Group (see Chap. 5). China has become a goal for most Hong Kong filmmakers that they perceive as a lucrative market. With the new CEPA rules the Hong Kong film industry even sees the market for Cantonese films expanding.20 This highlights the importance of Hong Kong as a bridge between East and West (through CEPA and the special rules that the HK film industry benefits from in China). It also means that Hong Kong may be progressively swallowed in terms of resources and culturally into China’s prospec- tive gigantic market.21

20 CEPA offers a prime position for Hong Kong to export films to the South of China without quotas and with more flexible rules in regard to the timing of the releases. Cantonese speaking population is estimated to 140 million people between Southern Mainland China, Hong Kong, Macau, Zhuhai, and even Taiwan whose official language in Mandarin but has been a readily market for Hong Kong. 21 The lack of interest of the local Hong Kong population in the arts and lack of succession planning are two critical factors that may have contributed to the slow death of Hong Kong film productions. Several experts concurred on this idea: Prof. James Kenny (CUHK, October 2008), Tony Ngai (Salon Films, October 2008), Gordon Cheung (Celestial Pictures, March 2009), Bey Logan (Weinstein Company Hong Kong, October 2008), Tsui Hark (Distribution workshop, December 2008). 318 8 Chinese Audiences: Evolution and Change of Media Consciousness

8.4.2 Foreign Films Penetration: US and EU Content

US films were by far ahead of all the other types of films in terms of viewing frequencies, with 93% of the respondents admitting to watch them. European films came second with 66% of the respondents. Both Mainland and Hong Kong respondents clearly illustrated the dominant penetration of US films in their respective geographies with a higher proportion of Mainland Chinese respondents (98%) watching US film than their Hong Kong counterparts (89%). In regard to Hong Kong respondents, this may have been an expected result since most young generations speak English. US and foreign film penetration was already strong: for instance in the Top 10 films with highest grossing revenues, 8 of them were US productions and co-productions grossing 78% of the total revenue of the top 10 films (US$34 million out of US$44 million) in 2008. However, in regard to Mainland respondents, this was a surprising set of results that conflicted with China’s protectionist policy on censorship and quotas. For instance, only 20 US films were allowed to be theatrically distributed and only 3 US films were part of the Top 10 films highest grossing revenues in Mainland China in 2008. In the same year, the theatrical market share of all foreign films in volume was only officially 39% (including US films) in Mainland China and it increased officially to 50% in 2015 with a larger import quota of 34 films per year.22 DVD and Internet piracy both contributed to widen the variety of content available to the Chinese audience. European films while less popular than US films had a high penetration, particularly with the Mainland respondents. All these films circulated online through the informal economy bypassed censorship rules from the Film Bureau that resulted in a lack of control of Internet as a distribution and viewing platform. In a sense, piracy initially helped foreign films circulated in China, even if they did not get any financial return for the use of their IP (Wang2010 ; Pang 2012). However, the proportion of the Chinese audience exposed to this material was rather limited. It was mostly through the urban young population who had enough financial means to access online and mobile devices. As seen in the survey, the latter devices, which did not have the features of the smartphones that we know today, had a very limited use in terms of creative content viewing. Therefore, the influence of Hollywood and their adoption by local audiences may not be as strong as the US and MPAA advocates would like it to be. This may explain the recent decreasing growth of film franchises such as Transformers at the box office and the increasing interest of Chinese production

22 However, these official figures have been vehemently contradicted by industry professionals such as Peter Shiao, CEO of Orb Media who claim that the official figures are misleading and that the proportion of foreign films at the Chinese box office is closer to 80–90%. The enforcement of blackout dates for foreign films at strategic periods of the year such as summertime or Chinese New Year or the manipulation of box office ticketing is also claimed to give a protectionist advantage to local films (Shaffer2015 ). 8.4 Content Adoption and Protectionism 319 companies for Europe when it comes to co-productions. The examples of Luc Besson’s Europacorp or UK-based BB88 confirm this growing trend (Frater 2017a, b). European films are on average about ten times less costly than Hollywood films. Aside from representing a lower investment risk, European audiences despite being more fragmented culturally and in terms of their distribution networks are generally not averse to subtitling, they are otherwise used to dubbing in their own respective languages, they are more open to international cinema and they represent in numbers a potentially larger market than the US, with a total population of 400 million individuals. Additionally, we are currently at a pivotal point that may see these viewing habits change. For instance, in 2012, the number of Chinese films released in theatres had already increased by 33% year-on-year. The production process for local films was made easier as the SAPPRFT film permit was generally made faster and easier to obtain at provincial level, with censorship offices delegated across the country to decentralise and ease censorship (Han Kun Law Offices2015 ). Meanwhile the process for co-productions with foreign entities remained centralised in Beijing. As a result, competition increases at national level and the production value of Chinese content may improve (the example of the recent success of Wolf Warrior II supports this point). This trend is strongly encouraged as part of the Chinese Government’s soft power efforts, even if it implies using Hollywood consultants and crews to increase production value (Rosen 2017). This changing context could fuel a stronger local viewership of Chinese films, particularly as it is accompanied by neo- nationalism and patriotism that has been exacerbated by Trump’s antagonist stance against China. However, this shift may not be immediate. In 2016, the box office’s growth declined for the first time in nearly a decade and China had to increase the quota of foreign films (mostly Hollywood commercial films) to maintain the box office growth23 (Ryan 2016). In 2017, as the film quotas had already increased both for revenue sharing imports (39 films imported) and flat fee imports (51 imported films – these films are not subject to a strict import quota), a hybrid model of flat-fee and revenue sharing was introduced (Papish 2017). This hybrid model allowed Chinese distributors to give foreign Producers a negotiated flat fee and to share part of the revenues if the film’s box office was superior to CNY500 million (US$78 million equivalent): Resident Evil: The Final Chapter (Anderson 2016) was the first foreign film to benefit from such a treatment (Papish 2017).24 This stance shows two important points: Firstly, foreign Producers (including Hollywood professionals) generally seem to know little about the actual mecha-

23 The quotas was actually exceeded in 2016 and reached 39 imported foreign films for the theatrical window. Spokespersons at SAPPRFT and China Film Group saved face by denying that quotas had been exceeded and justified the surplus as ‘cultural exchange projects’. This shows the ambiguous nature of Chinese regulations (Brzeski 2017). 24 This information was confirmed in a November 2017 interview at the AFM, Los Angeles by Mr. Sélim Oulmekki, International Affairs Executive for Hi-Show Entertainment since 2017. 320 8 Chinese Audiences: Evolution and Change of Media Consciousness nisms of distribution in China. For example, The Hollywood Reporter and Deadline, two US-based trade journals that industry professionals read to gather information, regularly claim that China only allows 34 films per year and exceptionally relaxed the quotas to 39 in 2016. Resident Evil is a Hollywood film. Therefore, it is more likely that US-trade journals act in favour of the Hollywood narrative so as to increase trade pressure on the Chinese Government. Secondly, SAPPRFT and the Chinese Government have a difficult task to balance their political and economic agendas of engineering a growing box office while maintaining cultural and ideological dominance over the circulation of films in China. In the same way that the Chinese Government is attached to its GDP performance, which justifies its legitimacy to the masses (as seen in Chap. 3), maintaining a box office growth and overtaking the US in that domain has become as much of a nationalist political agenda as it is an economic goal. In this context, supporting new local talents would help solve both issues. However, building a film industry takes time and it is mostly based on creative talent and experience. Capital alone can do very little. It takes time to identify these talents, to train them, and nurture them. As Keane pointed in his three Ts theory, talents is the hardest component to come by (Keane 2007, 27). The globalisation argument that US content dictates the content that audiences want to watch may fall short. Like India, local cultural and creative content does not exactly follow the Hollywood ideology. We can instead talk about global creativity and aesthetics with local characteristics. This is further evidenced by the recent Bollywood successes such as Dangal (Tiwari 2016) or Secret Superstar (Chandan 2017) in China (Cain 2017; Bloomberg News 2018). Commentators believe that these films share common social values with Chinese audiences (Cain 2017). Another change is the increasing scrutiny over the online platforms. Since 2009 and at regular intervals, several pirate platforms circulating foreign content as well as foreign films and TV series circulated on officially approved platforms (YT, LeTV, iQiyi, Tencent Video) were taken down (Yu et al. 2009; Carsten 2014; Sun 2017). The Chinese Government wants to limit foreign content viewership online as well as on other viewing contexts and distribution windows. Even the nascent partnership between Alibaba and Disney was halted (Dou and Abkowitz 2016). The online window, which had up to now enjoyed relative freedom, is now being redefined.

8.4.3 National and Global Political Dimensions

The antagonist stance between the foreign film industry that is essentially commercially driven and the politically controlled Chinese film industry aspiring to social stability (recently mixed with an appeal for commercial benefits) can be observed in 8.4 Content Adoption and Protectionism 321 terms of diverging policies. China adopts a protectionist stance in favour of its local industry and culture as well as its social stability.25 The areas of tension already visible in 2008–9 have now intensified. Young audiences are more accepting of the adoption of new technology. However they are also more vulnerable to its undesirable effects and more unprepared than adults (Williams et al. 1988, 19). One of the issues that the Chinese Government has been encountering is that it does not want to be held responsible for contributing to potential undesirable effects of the adoption of new content (displaying violence or sex for instance) which could be potentially harmful to young Chinese audiences (all films in China currently have to comply with the equivalent of PG rating in the West. There is in fact no rating system in China yet. The censorship office is responsible for enforcing the rules).26 As described in Chap. 2, while the effects theory has been unproven and despite some tests in regard to potential rating systems, 10 years later, the situation has not changed yet. There is no rating system for any of the film distribution windows and the censorship rules are still enforced, sometimes ambiguously. In that sense, the Chinese Government, which is ultimately the central driver of the Chinese film industry has been experiencing a dilemma of a different nature from Hollywood: This is a dilemma between the efforts to conserve its control over media and the application of the concept that film is also a commercial product and a soft power instrument. It is a dilemma between what the government decides to be the best way to maintain political stability at home and the accumulation of capital through the development of its film industry and digital platforms. This last point is complemented by the intent to spread its political influence abroad. Regardless of the tensions created by this dilemma, the past 10 years have shown that the national political agenda supersedes the economic and soft power agendas. Maintaining stability at home has remained the key focus. As much as the traditional creative industries have been trying to react to the adoption of online platforms by young urban audiences, the Chinese Government has taken a leading role in the shaping of these changes and in attracting viewers into controlled spaces (Montgomery 2010). The trend has actually strengthened and the system is now attracting both viewers and content creators into controlled spaces with YT, Tencent Video, and iQiyi as a first step and with blockchain platforms as a potential second step. Most of these audiences were born with the online creative industries rather than the traditional industries and they are becoming more familiar with its mechanisms.

25 Mr. Gao Feng, Cultural Attache for the Chinese Embassy in Dublin, Ireland, declared in a 2010 interview in Dublin that China has recently discovered that film is not only an educational or cultural medium but also a commercial product and a soft power tool. The Chinese Government is juggling with these multiple priorities. 26 Mr. Liu Chun, SARFT, December 2008. 322 8 Chinese Audiences: Evolution and Change of Media Consciousness

Online platforms have established an affective relationship with their creative audiences through emotionally engaging media such as social networks (Tencent), search engines (Baidu), or payment and content creation (YT and Alibaba). As described in Chap. 7, engaging active audiences with the platforms in a participatory community has been a long-term goal to retain audiences’ loyalty and to gain access to exclusive inexpensive IP.

8.5 Audience Evolution: Towards the Emergence of Local Creative Talents

In the previous sections, I described the successive technological adoptions by the market between 2008 and 2017, the evolution of the viewing contexts and practices in this timeframe, and changes in the content circulated on all platforms. These successive changes have defined a new audience media consciousness and they have accompanied deep transformations in the way audiences reposition themselves in relation to the traditional and the online creative industries.

8.5.1 Creative Industries and Active Audiences: The Disruptive Nature of a Changing Relationship

In 2008–9, the population under study had a high frequency of use of the Internet platform for leisure. Intensive users were a larger group than expected and they represented nearly one third of all respondents. Using the Internet for 5 h or more daily meant that they spent over 35 h per week online. This trend has intensified in 2015; the average (including the intensive users) now spends over 3 h online and more than half of the millennials watch content online for at least 1 h daily and 40% of this population spend 1 h a day gaming. The total population is spending more than 50% of their media time online (Incitez-China 2016; Tung and Foo 2016; EMarketer 2017). This phenomenon reveals two trends: • The importance given by millennials to leisure and its shift toward digital platforms. • The possible social disconnection with the outside world, since most respondents answered that they frequently watched films on their own when using the Internet (in one third of the case). If we focus on the former trend, new entrants disrupted the balance of power of the traditional industries and challenged the type of film-viewing technologies and contexts proposed to the audiences. In 2008–9, telecom companies, electronic Manufacturers, the computer industry, and Internet based corporations were already leading the changes. This trend has been maintained and convergence between 8.5 Audience Evolution: Towards the Emergence of Local Creative Talents 323 xiaomi, Lenovo and companies such as Baidu, Alibaba and Tencent are now much larger entities that the local or even Hollywood film studios. These players such as Lenovo in China, Microsoft and Apple in the West also offered Home media management devices that facilitated media convergence. The convergence in technological innovations significantly influenced the convergence of the film-viewing platforms. Micro-electronics, digitisation of signals (ISDN), and optical transmission systems (‘laser’ beam and optical fibre) made mass communication systems such as film more reliable, faster and less expensive to develop and transmit. It also allowed the industry to develop portable devices with extended storage capacity to view films in any place at any time. Therefore, the impact of these new entrants on the diffusion of the film-viewing platforms was fundamental and supported by the Chinese Government. New players started to take diffusion control through the adoption of the audiences of film distribution platforms such as the Internet, mobile platforms and sometimes of physical formats such as DVDs or High Definition Discs. This disruptive digital paradigm influenced the way in which creative content was distributed to the audience both in China and Western countries. It also influenced the way in which audiences watched films. Nonetheless, the big issue for the traditional creative industries was to find ways to monetise these new platforms and beyond this to be able to reach their audience with the content that they developed. It was an even more significant issue in China given the size of the population, the limited purchasing power, and the fact that most Chinese nationals had never had to pay for audio-visual media content before. As a result of their inability to adapt to the new paradigm, the traditional creative industries including state companies in China and the US studios in the West lost ground to the digital and online creative industries. Unlike in Europe or the US, which had a long period of transition and successive adoption of media platforms starting with the theatre, TV, VHS, DVD, Cable TV, Satellite TV and Internet, China until very recently only had theatre and TV. The Chinese Government sponsored both media platforms and their content. This resulted in free TV (reaching up to 1 billion people in China in 2008) and subsidised (and sometimes free) theatre entertainment. Then, then VHS, VCD and DVD markets collided with each other at a fast pace, most of them being subsidized by pirate networks. Finally, the Internet broadband developments in urban areas brought another free platform to the Chinese audiences who were originally very unfamiliar and unprepared for the concept of pay TV.27 The traditional creative industries lost control over ancillary distribution windows outside of theatrical circulation as online platforms reduced intermediation and attracted more audiences than TV or Video (traditional physical formats: VHS/ DVD/Blu-Ray) (Cunningham and Silver 2012a, b). They tried to compensate by increasing the price of their content to the online platform that contributed to significant losses at first and then motivated the online industries to create their own

27 Mr. Liu Chun, SARFT. Prof Lu Di, Peking University. 324 8 Chinese Audiences: Evolution and Change of Media Consciousness

content in-house and to collaborate with their audience to create original content for which the platforms would keep the rights (Chaps. 5 and 7). Besides infrastructures such as 3G, 4G, Wi-Fi and broadband, the circulation of information was a key element in the adoption of mobile phones – Users regularly sought and shared information with near-peers.

8.5.2 Participatory Media Culture and Active Audiences

When asked how they became aware of the Internet film-viewing platforms that they are using, the respondents were given the option between 7 sub-categories: ‘TV’, ‘Newspapers’, ‘family and friends’ (word of mouth), ‘online Community groups’, ‘search engines’, ‘magazines’ or ‘other sources (to specify)’ (Graph 8.5). Word of mouth came as the main factor of publicity with 50% of the respondents admitting that they found their Internet film-viewing platform of choice this way. Word of mouth here means that family or friends have recommended a website to the respondents, it may also include what has recently been referred to as ‘viral marketing’ (early adopters can actually be located and contacted in this context: they are the ‘bloggers’ (Jenkins 2006, 4) and organisers of the community groups who diffuse information about innovations). If someone finds a website particularly useful or effective, they literally send mass-emails to their friends advising them that they should try it. It increases the speed of diffusion of innovative products that emerge from the immensity and sometimes the confusing nature of the Internet. This trend was referred to as spreadable media by Jenkins (Jenkins et al. 2013). Beside word of mouth, community groups and search engines were the most cited answers with 31% and 28% of the respondents respectively claiming that they find their Internet website through these media. Traditional promotional channels such magazines, newspapers, and TV scored rather low between 3% and 5%. It looks that the Internet platform self-promotes itself and self diffuses its own innovations through a mixture of technology and use of social dynamics. This free form of advertising makes Internet a particularly efficient platform that relies on very low costs. It also reminds us that although there is an element of

Graph 8.5 Frequency of 2% 3% 2% diffusion of internet film Word of Mouth / Friends platforms per media (in 3% %). (Courtesy of Patrice Online Community Groups Poujol) 19% / BBS 50% Search Engines TV

21% Newspapers

Magazines 8.5 Audience Evolution: Towards the Emergence of Local Creative Talents 325

virtual community with Internet, the use of interfaces to communicate with others as well as intelligent databases (search engines) contributes to the isolation of the individual who may not need to talk to others face-to-face. Nonetheless, the argument that it cuts the individual from the fabric of society fails here, as word of mouth or friends’ advice is a form of social interaction. The survey shows that the use of the cumulative use of community based promotion and advice was paramount for the respondents in becoming aware and using specific film-viewing platforms on the Internet: a total 71% of all respondents admitted to rely on word of mouth or collaborative spaces for their adoption decision. The influence of converging communication networks in the adoption of the Internet platform, for instance, was key as the new platforms were self-promoting through their own communication channels. The innovation became its own diffusion channel. This mechanism is still relevant today in a system prone to cross-promotion and cross-sale as seen in Chap. 5. It resonates with Alibaba’s convergence strategy and the recent integration of all its entertainment subsidiaries including YT under the umbrella of its Digital Media and Entertainment division in October 2016. This word of mouth phenomenon (peers who met face-to-face in daily activities or online in growing social network platforms) was instrumental in creating networks such as the growing communities on Wechat (Gentlemen 2016). Social network platforms such as Tencent’s Wechat and Weibo (co-owned by Tencent and Alibaba) have become an integrated tool of ‘social engagement’ for the young active audiences which appeal to their ‘individualistic personalities’ and their will to choose their life experiences in a generally ‘wealthier’ Chinese context (Russell and Chiu 2016). In terms of social networks, the 80s wave tends to be more socially concerned about their image to the wider society, while the 90s wave is generally only concerned about the perception of their immediate social circle (friends, family, close community). In that sense, the latter operates more like a fragmented set of tribes compared to the former. Both groups display hybrid mindsets, while there are more individualistic than their elders, their aspire to a collective engagement with society or close social circles and while they aspire to freedom of choice, they also respect Confucian principles or ‘hinterland traditions’, particularly very often in regard to their responsibilities to their families (Fewsmith 2001; Cohen 1974, 141–142). These active audiences have a strong sense of the ‘collective’ (Russell and Chiu 2016). Both Napoli and Carpentier consider that audiences in their active and participatory development state have become a ‘marketplace’ both producing content and consuming it – at last giving their attention to it, which is then co-opted and monetised by online operators (Napoli 2003, 15; Carpentier et al. 2014, 1–12). While UGC and PGC represent a first series of steps in transforming the participatory activities of the audiences into creative activities, these are in the realm of the mimicry or remix culture as opposed to a pure original creative intent. These creations are also non-professional (Napoli 2011). This first step builds up on audience ‘engagement’ in the promotion or the production of the creative content (Napoli 2011, 90). 326 8 Chinese Audiences: Evolution and Change of Media Consciousness

8.5.3 Influence of Film Aesthetics and Creative Content

One of the last questions of the 2008–9 survey showed the reasons which generally attract the respondents to watch a particular film (regardless of the platform used). The respondents were asked to prioritise the three most important reasons that influence them to make the decision to watch a particular film rather than another (These could be assimilated to the three main factors of content adoption). A set of ten options was available to the respondents who had to select the three most important factors to them: ‘The lead actor/actress’, ‘The Country of Origin’, ‘The Producer’, ‘The Director’, ‘The Trailer’, ‘The Genre’, ‘The Plot’, ‘The music’, ‘The Studio’, ‘The Special Effects’. The researcher added one open category ‘other (please specify)’ where the respondents could give another reason: Only one extra category was added by two of the respondents, ‘The language’ (Graph 8.6). Fifty one percent of the respondents answered that ‘Plot’ was the first reason that motivated them to watch films. Followed by ‘Genre’ (which strongly relates to ‘Plot’) by 21% of the respondents. The ‘Lead Actor/Actress’ came as first choice for 15% of the respondents. The Trailer influenced a significant part of the respondents (10%) who chose it as the main determining factor to watch a film (the ‘Director’ was selected as first choice by only 2% of the respondents). Given the above answers, it is fair to deduct that in order of importance, what motivates and influences the respondents in their choice of films are primarily ‘Plot’ and ‘Genre’, followed by the ‘Lead Actor/Actress’. To a smaller extent, the ‘trailer’ and the Director of the film may also influence their decision. This shows that China is no different in its core than the US or Europe, people strive for a story and characters. Likewise, the Chinese and Hong Kong film industries promote the marketing ploy of the ‘Lead Actor/Actress’ in the same way Hollywood does. This is even more obvious in Hong Kong where the same Directors and the same Stars keep rotating. This creates a potentially significant succession planning issue

Graph 8.6 Reasons for content adoption by sample Factor of Adopon of Film Content: First audience (first choice Choice mentioned). (Courtesy of Patrice Poujol) 2% 1% Plot 10% Genre 15% Actor / Actress 51% Trailer Director 21% Producer 8.5 Audience Evolution: Towards the Emergence of Local Creative Talents 327 for the future.28 This situation may also partly explain the decline of repetitive commercial formulas at the Chinese box office recently: Chinese audiences have become more sophisticated viewers (Chow 2018).

8.5.4 The Rise of Community-Based Creative Audiences

The Zimuzus (ZMZ) or fansubber networks described by Meng, Yeh and Davis, who systematically subtitled foreign films in Chinese in an industrial and quasi- professional manner is an example of the creation of such community networks (Meng 2012; Yeh and Davis 2017). In the survey, 92% found that it was easy to navigate the pirate platforms and 99 were satisfied with the level of subtitling as early as 2009. While the ZMZ started from 2001, they started consolidating from 2009, so this date was a key milestone in the creation of these online communities. Yeh and Davis describe them as ‘young professionals with an ethic of teamwork commitment and passion’: they evolved into ‘hierarchical associations, much like any IT company or startup’ (Yeh and Davis 2017). This maturing network of the Chinese creative audience is further described by Chu as a ‘community of practice’ driven by a ‘work of passion’ (Chu 2012, 264–5). This description confirms the original frame of definition of the Chinese urban millennials. Yeh and Davis add that the urban Chinese ‘iGeneration’ represented by a ‘sphere of young, individualist netizens’ drove these networked communities (Yeh and Davis 2017). They express that ‘the ZMZ discipline is startling, as they are not a business seeking revenue, or profit’, but instead they operate as an informal industry which use a ‘participatory model’ with ‘greater agency, agency, control and empowerment’ (Yeh and Davis 2017). While these creative communities, sometimes operating in P2P mode, are in the realm of the informal, they can offer like the ZMZ or P2P pirate networks a large-scale far-reaching alternative to mainstream circulation of media content by public or private institutions (Meng 2012). Jenkins’ and Lessig’s theories and arguments of the fan and remix culture as a collective creative endeavour is also connected to this phenomenon on a global scale (Jenkins 2006; Jenkins et al. 2013; Lessig 2008). Gubbins and Livingstone complement this description by calling these groups ‘active’, ‘pro-active’ and ‘participatory’ audiences (Gubbins 2012, 68; Livingstone 2003, 338). Without advocating the agency rhetoric, they admit that communities developed within the contained system and the creative corporate industries, which sometimes re-appropriated their promotional power and their creative works to their own benefits. Nonetheless,

28 In an interview at Filmart in March 2009, Tony Ngai (Salon Films) and Gordon Cheung (Celestial Pictures) outlined problems of succession planning and an aversion to risk and trying new talent from the industry. 328 8 Chinese Audiences: Evolution and Change of Media Consciousness while these groups operate within the global sphere and can be criticised for promoting commercial and Western content, there is a fundamental difference between such informal communities in the West like pirate or hacker groups and these Chinese communities. While these Chinese creative communities such as the ZMZ are by nature disruptive for the traditional creative industries, they are not politically engaged or ‘revo- lutionaries’ (Yeh and Davis 2017). They know that their work can be shutdown by the government if they become politically disruptive. In this sense these creative communities which can be re-appropriated by platform capitalism and which have to navigate a sometimes ambiguous political agenda differ significantly from the ‘Western neoliberal market economy’ (Yeh and Davis 2017). UGC remix culture eventually transformed into original content such as PGC and a participatory culture which was not only based on the re-appropriation of original and licensed existing content.

8.5.5 Active Audiences, Collaborative Creative Audiences and the Emergence of Local Creative Talents

The early social networked communities described in the previous section have eventually given birth to what Hartley, Wen and Li named ‘creative audiences’ or ‘creative citizens’, and which I choose to call emerging creative talents (Hartley et al. 2015, 70, 210). This section of the urban millennial audiences developed different values than those manifested by the industry (Hartley et al. 2015; Hartley 2009). While these communities displayed professional skills and industrial characteristics in their discipline and their organisation, their motivations were not solely motivated by profits but by the idea of sharing their work with others. In that sense they belong to the ‘grey’ or informal industries, yet, they are still relevant as collective creative groups. Easier access to digital creative tools such as cameras and sound equipment and software enabled this transition. As seen in Chap. 7, this trend was reinforced with the appearance of open distribution windows and platforms such as YT to circulate UGC content online. Young urban audiences have been involved in the promotion as well as the production and the circulation of creative content. Because they are a highly fragmented set of groups, they are harder to frame by traditionally led industries and these have to resort to the use of AI and big data analysis to interpret the very complex set of metrics which emanate from this heterogeneous section of the population (as seen in Chap. 5). Alibaba, for example, openly considers its consumers as ‘active’. Alibaba’s Chief Financial Officer, Maggie Wu advised that the group would ‘start reporting “active consumers” as opposed to just buyers’ during the company’s annual investor-day conference in 2017 (Chen 2017). 8.5 Audience Evolution: Towards the Emergence of Local Creative Talents 329

Sonia Livingstone surmises that the public has evolved from ‘passive observer to active participant in a virtual world’ (Livingstone 2003, 338). It does not necessarily mean that the audience is active or free as argued by the supporters of the audience agency, but that the users can find a certain level of interactivity or a degree of autonomy in what is after all a formalised virtual enclosed system (Lobato et al. 2011). Jaffe argues that ‘consumers’ are now ‘devastatingly in control’ and they can alter the marketplace (Jaffe 2005, 43). Napoli, Lobato and Thomas bring a nuance to this argument by asserting that this is merely an illusion of control, as audiences now provide the industry with more refined audience data and metrics than ever (Napoli 2011; Lobato and Thomas 2012; Lobato 2012). McQuail (2010) contrasts this view and emphasises the importance of new media and new viewing platforms which have induced different behaviours through interactivity, where the original ‘subject’ is not just a passive spectator. He asserts that the line between Producers and audiences has become blurred because audiences have become both a ‘product of social context and a response to a particular pattern of media provision’ (McQuail 2010, 398). Springel claims that the blurring of the changing audiences status to participatory audiences changes their ‘perception of media’ and it may even ‘dis-inhibit’ their creative potential as part of ‘group play’ (Springel 1999, 153–9). This paradigm could give rise to a virtuous cycle of creative productions in which part of the audience could participate at different levels. This situation alludes to Marx’s citation seen in Chap. 5; ‘in changing the technical world, Man changes his own nature’ (Bell 1995, 13). Nevertheless, assuming that the emergence of a creative citizenship will eventually lead to a democratisation of the political system is farfetched. Yeh, Davis and Rosen all concur with the view that while they are passionate and emotionally engaged in the creative process and despite their rebellious and individualistic nature, they are apolitical in the macrocosm of political economy but economically disruptive in the microcosm of the creative industries (Rosen 2009; Yeh and Davis 2017). The acceptance of the CCP and the Communist state respectively as legitimate political leader and system correlates with a study from Rosen (2009), in which younger generations claimed that they would be unlikely to engage in politics whether as a dissident or a CCP member unless it gave them an opportunity to improve their professional or financial situation. Zheng adds that young professionals in modern China are less likely to become CCP members than their elders as the most interesting and best rewarded jobs are perceived to be in the private sector and are ‘not dependent on Party membership’ (Zheng 2010, 10). This underlines the lack of engagement of new generations into the realm of politics. As argued by Rosen, Yeh and Davis, while they may have a social involvement into environmental issues, education, corruption or poverty, these creative communities are not necessarily motivated about getting involved in macro-politics but would rather make a difference in micro-politics, community engagement, or politics of proximity (Rosen 2009; Yeh and Davis 2017). 330 8 Chinese Audiences: Evolution and Change of Media Consciousness

8.6 Conclusion

The quantitative study conducted in 2008–9 and its subsequent update until 2017 illustrate that technological adoptions, content consumption and the evolution of audiences were strongly influenced by the geographical location (Mainland China or Hong Kong), followed by the gender and age of the respondents. It is important to note that the millennials interviewed in 2008–9 were from the 80s (the first wave of millennials), whereas, some millennials of the second wave (who were in their teens in 2008–9) have been interviewed in our qualitative study in Chap. 9. To some extent, the results of our survey show that the urban versus suburban background divide and that the disposable income discrepancies played a role in the adoption of high-end expensive technological devices. It is also important to remind the reader that this study featured respondents exclusively from urban or suburban backgrounds. Rural areas are developing fast and groups such as Alibaba or Tencent, as seen in Chap. 5, now target them. While this is outside of the remits of this research, it will be interesting to observe the developments of rural areas in the years to come. The quantitative study shows that cinema going even if saturated in Hong Kong has been growing exponentially in Mainland China partly driven by female audiences (like most of the other viewing contexts). It originally indicated market opportunities for Hong Kong filmmakers across the border. Whether they may be absorbed by greater China in the process remains to be seen. A phenomenon of film-viewing in isolation was observed across all the film platforms but it was stronger with online platforms. In our survey, the isolated film- viewing context showed higher volumes of films being watched. Higher frequencies of film-viewing seemed to be associated to piracy: pirate users watched more films in isolation. This phenomenon prompted the traditional and the online creative industries to adapt to the millennials’ adoption of new viewing contexts. Powerful new entrants (online platforms) supported by the government disrupted the balance of power within the film industry. While some did not exist 15–20 years ago (or at least they were not directly involved in the creative industries), most of these institutions have now established themselves as central key players. These are the search engines, the e-commerce platforms, the social network provider, the real estate and telecom companies such as the BATs, Wanda, Fosun, or China Mobile for instance who have diversified their activities with the support of large cash revenues and who now have a stronghold on the Chinese creative industries. In response to these changes, the traditional industries first tried to raise the price of content and then reduced it to remain competitive while the online creative industries relied on a model based on advertising revenues, subscriptions and PPV as seen in Chap. 7. However, the pricing strategies of the traditional industries had little effect: in our survey, the young audiences revealed that price was not their primary concern in their choice of viewing platforms, but rather the ease of access and convenience factors as well as the quality of the content accessible. In addition, companies like YT started creating their content in-house and in collaboration with creative audiences. 8.6 Conclusion 331

Meanwhile, the drop in price of mobile and computer device hardware (also pushed in Chinese factories by international demand) was a decisive factor in the adoption of new viewing platforms. The creation and the development of national brands with no interference from foreign patents or IP licenses to pay supported this trend. In the end, the traditional creative industries were not very successful at adapting to technological changes and to the evolution of the audiences from passive, to active, to creative audiences into emerging creative talents. In 2017, large online conglomerates and other companies such as Fosun and Wanda control the industry, while purely dedicated film companies such as Huayi or Bona are bound to sign deals with these behemoths. Only State-owned China Film Group and Huaxia that have directly represented the Chinese Government for foreign imports have remained at the centre of the new creative industries map. The online creative industries moved one step further by engaging their ‘active’ audiences emotionally in participatory media creation and circulation. The online creative industries harnessed the production of UGC and PGC by creative audiences to circulate it to large online communities, sometimes built and maintained into channels by the creators themselves. This system benefited the online platforms that acquired low cost content and remained the owners and custodians of the created IP. As seen in Part II, these institutions such as Baidu, Alibaba (YT), and Tencent displayed characteristics of parasitic capitalism or platform capitalism. Such systems claim to be decentralised and disintermediated, but they are effectively centralised and monopolistically intermediated. From 2008 to 2017, young Chinese online audiences evolved from passive to active in their participatory role to circulate and produce creative content. While in 2008–9 they were in the first phase of transition, which was a progressive control from the audience over the circulated narratives and the time at which they chose to watch the content (asynchroneity), they progressively became active audiences. They shared spreadable media and promoted it. It was an intermediary step towards a phase which Hartley calls the creative audience or creative citizenship (Hartley et al. 2015; Hartley 2009). In terms of the content watched, the survey shows that the penetration of US films both in Hong Kong and Mainland China across all viewing platforms was second to none. European and Hong Kong films were the most frequent alternatives to US content followed by Mainland Chinese and Taiwanese films. This situation has contrasted significantly with the stance taken by the Chinese Government and the official figures provided by the Film Bureau. The Chinese Government which ultimately represents the central power of the Chinese film industry (as explained in Chaps. 3 and 4) experiences a point of tension between the conservation of its political control over the media and the application of the concept that film is also a commercial product. Driven by the political agenda, the government has developed its creative industries with a view to increase its influence and its soft power abroad. It has consistently and progressively increased its monitoring of online platforms thanks to its great firewall which was first established in the 1990s, with the regular 332 8 Chinese Audiences: Evolution and Change of Media Consciousness crackdown on pirate platforms starting in 2009, with the presence of police officials in the headquarters of all the online platforms from 2015, and with the use of quotas against foreign content online. These measures are now more practically implemented through the use of AI, big data analysis, and potentially the use of blockchain technology as seen in Chap. 5. The 2013 merger of GAPP into SARFT to form SAPPRFT seems to have sprung from these tighter measures rather than a more open debate on content creation. This is confirmed by the recent abolition of SAPPRFT to allow the government direct control over the media at cabinet-level. In addition, the slow but steady improvement in the quality and the range of local creative content may in term allow the local creative industries to rely on their own content and IP, but this may only be possible if local talents are trained and nurtured accordingly. In this chapter, I observed and analysed the successive evolution of local young urban audiences from a passive to an active state through the adoption of technology and the increasing exposure to varied, but increasingly monitored creative content. These transformations eventually gave rise to a participatory mindset. Through a change of media consciousness, this situation evolved into the birth of creative audiences, which I argue was the first necessary step towards the emergence of young local creative talents. Within the section of the urban creative audiences, the young emerging creative talents form a sub-section of the audience that I observe in the next chapter: Chap. 9.

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Napoli, Philip. 2003. Audience Economics: Media Institutions and The Audience Marketplace. Chichester; New York: Columbia University Press. Napoli, Philip. 2011. Audience Evolution: New Technologies and the Transformation of Media Audiences. Chichester; New York: Columbia University Press. Pang, Laikwan. 2012. Creativity and Its Discontents: China’s Creative Industries and Intellectual Property Rights Offenses. Durham, NC; London: Duke University Press. Papish, Jonathan. 2017. “Foreign Films in China: How Does It Work?” China Film Insider, March 2. http://chinafilminsider.com/foreign-films-in-china-how-does-it-work/. Pesce, Mark. 2005. Hyperpeople. Mark Pesce. https://www.goodreads.com/book/ show/4004511-hyperpeople. Robehmed, Natalie. 2017. “China Set To Become IMAX ’ S Biggest Market As Wanda Buys 150 Theatres.” Forbes, August 2. https://www.forbes.com/sites/natalierobehmed/2016/08/02/ china-set-to-become-imaxs-biggest-market-as-wanda-buys-150-theatres/#f2a180d696c6. Rogers, Everett M. 2003. Diffusion of Innovations. Free Press. Rosen, Stanley. 2009. “Contemporary Chinese Youth and the State.” The Journal of Asian Studies. 68:359–69. ———. 2017. “Lessons From China’s Unexpected Year In Film.” HuffPost, September 7. https:// www.huffingtonpost.com/entry/wolf-warrior-2-chinese-hollywood_us_59a058d5e4b0821444 c2f056. Russell, Chris, and Francesca Chiu. 2016. “New Youth: Understanding China’s Millennials.” CKGSB Knowledge, February 3. http://knowledge.ckgsb.edu.cn/2016/02/03/demographics/ new-youth-understanding-chinas-millennials/. Ryan, Fergus. 2016. “China Exceeds Quota on Hollywood Films amid Box- Office Slowdown.” China Film Insider, October 24. http://chinafilminsider.com/ china-abandons-quota-hollywood-films-amid-box-office-slowdown/. Shaffer, Leslie. 2015. “Is There Really Money to Be Made in Chinese Movies?” CNBC., September 23. https://www.cnbc.com/2015/09/23/monster-hunt-broke-china-movie-records-but-cinema- profitability-unclear.html. Silver, Jon, and Frank Alpert. 2003. “Digital Dawn: A Revolution in Movie Distribution?” Business Horizons. 46 (5):57–66. Springel, Sharon. 1999. “The New Media Paradigm: Users as Creators of Content.” Personal Technologies. 3:153–59. Sun, Wanning. 2017. “How Users Are Bypassing China’s Video Crackdown after Streaming ‘gold Rush.’” Mumbrella Asia, August 3. http://www.mumbrella.asia/2017/08/ users-bypassing-chinas-video-crackdown-streaming-gold-rush. Sychowski, Patrick Von. 2014. “Chinese Box Office Growth Driven by Women and Millennials.” Celluloid Junkie, September 3. https://celluloidjunkie.com/2014/09/03/ chinese-box-office-growth-driven-women-millenials/. Tashiro, Charles Shiro. 1991. “Videophilia: What Happens When You Wait for It on Video.” Film Quarterly 45 (1). University of California Press:7–17. Tiwari, Nitesh. “Dangal.” India: UTV Motion Pictures, 2016. Tung, Hans, and Jixun Foo. 2016. “200 Million Trendsetters: China’s Millennials Are Shaping the Global Economy.” Medium.com, January 14. https://medium.com/ggv-capital/200-million- trendsetters-china-s-millennials-are-shaping-the-global-economy-f52c392d54bb. Wang, Shujen. 2010. “Piracy and the DVED/VCD Market: Contradictions and Paradoxes.” In Arts, Politics, and Commerce in Chinese Cinema, edited by Ying Zhu and Stanley Rosen. Hong Kong: Hong Kong University Press. Williams, Frederick, Ronald E. Rice, and Everett M. Rogers. 1988. Research Methods and the New Media. Free Press. Woo, John. “Red Cliff (Chi-Bi).” China, Hong Kong: Mei Ah Entertainment, Magnolia Pictures, 2008. Yeh, Yueh-yu Emilie, and Darrell William Davis. 2017. “Zimuzu and Media Industry in China.” Media Industries Journal 4 (1). 336 8 Chinese Audiences: Evolution and Change of Media Consciousness

Yu, Le, Nick Macfie, and Sanjeev Miglani. 2009. “China Closes 91 Web Sites In Crackdown.” Reuters UK, January 12. http://uk.reuters.com/article/2009/01/12/ oukin-uk-china-internet-idUKTRE50B0NP20090112. Zheng, Yongnian (2010). The Chinese Communist Party as Organizational Emperor. New York: Routledge. Zheng, Yangpeng. 2017. “China’s Internet Users Grew in 2016 by the Size of Ukraine’s Population to 731 Million.” South China Morning Post, January 22. http://www.scmp.com/tech/china-tech/ article/2064396/chinas-internet-users-grew-2016-size-ukraines-population-731-million. Chapter 9 Participatory Involvement and Focus Groups with Emerging Creative Talents

This chapter explores the young local emerging creative talents, their artistic aspirations and obstacles encountered in their attempt to achieve their creative vision. These are active and collaborative audiences who aspire to become professional filmmakers and creative participants working on linear or non-linear film narratives (and derived IP such as books, graphic novels, music, or videogames). In regard to Peterson’s model they relate to both labour and market: the boundaries between producers and viewers of content have been particularly blurred for this section of the audience, as they actively create and consume films (as evidenced in Chaps. 2, 7, and 8). This small section of the larger young urban audiences studied in Chap. 8 is at the intersection of the macrocosmic market forces (which interact with political, economic, regulatory, and technological macro-forces) and of the microcosmic labour and organisational forces (the target group under study represents professionals operating with the structural and the organisational aspects of the creative industries microcosm). Moreover, this particular population is most likely to use the model proposed in Chap. 10, therefore it is crucial to know their perspective to better adapt its design. Finally, at the core of this research, the young local emerging creative talents represent the new generation of artists and filmmakers who produce content. This chapter aims to complement the answer to one of the main questions raised in the introduction of this research: to what extent is the current creative industries’ environment in China supportive of the development and the promotion of local emerging creative talents?

© Springer Nature Switzerland AG 2019 337 P. Poujol, Online Film Production in China Using Blockchain and Smart Contracts, International Series on Computer Entertainment and Media Technology, https://doi.org/10.1007/978-3-030-02468-0_9 338 9 Participatory Involvement and Focus Groups with Emerging Creative Talents

9.1 Introduction and Methodology

From April 2015 until July 2017, I had the opportunity to organise focus groups and to initiate and develop a dialogue with young emerging filmmakers from both Mainland China and Hong Kong about their aspirations to make films and the obstacles that they encountered in trying to develop, finance and produce their projects to achieve their creative dreams. These filmmakers and creative workers are part of the section of the creative audience that manifests the evolution of audiences in China into an affectively engaged and creative driving force (as described in Chap. 8). They are mostly from the second wave of Chinese millennials (born after 1990) and from an urban background. While Chap. 6 deals more with the production of the movie as an organisational and a power structure, this chapter is more a study of creative talents not only as labour in the strict sense of the term, but also as independently developing professionals. I met several of these respondents while observing the production of The Last Race (covered in Chap. 6)1 and other creative talents at various festivals including the Beijing International Film Festival in April 2015, the Hong Kong Filmart and Hong Kong International Film Festival in March 2015, 2016 and 2017 and the Macau Film Production Investment Trade Fair in July 2017.2 These creative talents were urban male and female individuals aged between 18 and 35. Some of these talents were already involved in the film industry where they were working and others were just finishing their Bachelor or MFA studies at the BFA, City University of Hong Kong, Hong Kong Baptist University, The Hong Kong APA, NTU in Singapore, The London Film School, or UCLA.3 Most already had experience working in the traditional film industry. Some did go to film school or learnt from a professional institute, others were self-taught or learnt their creative skills and craft directly on the job. All had at least been involved in writing, directing or producing a short creative piece. While in Beijing, I organised several focus groups, meeting some of these artists from June 2015 until August 2015, in January 2016 and in June and July 2016. I organised other focus groups in Hong Kong between October and December 2016 and I met these talents individually on an ad hoc basis when their schedules allowed. I also contacted them through social network applications such as Wechat, Whatsapp,

1 These young professionals were representative in age, gender. Socio-economic and educational background with the rest of the population observed. 2 The young professionals selected on the production set of The Last Race are representative of this young urban millennials creative elite which is the core of the study of this chapter. In terms of the feasibility of the study, I also needed privileged access to these young professionals and the shooting of the movie was a wonderful opportunity to identify them, to build rapport with them, and to get deeper insights from them. 3 Some of the professionals identified on set were studying or had already studied at these institutions as well. 9.1 Introduction and Methodology 339 or Telegram and by email for specific questions and to keep in contact with them on a one-on-one basis. This 28 months long process provided me with some in-depth knowledge about the types of films that this specific section of the creative audience, namely the young urban emerging local creative talents, wanted to make, the reasons they wanted to make them, the type of content that they like watching, the type of platforms they relied on to view such content, the way they envisioned their career, and the perceived obstacles and opportunities which were paving the way to their potential achievements. Ultimately, I discussed with them the possibility of creating a model that would best suit their needs in directing and producing the films that they wanted to make and share with others (audiences). I sometimes made use of short questionnaires that I filled myself during the interviews; I occasionally sent these questionnaires to them by email to clarify certain points. I took notes during these meetings and focus groups, for example when these were conducted onsite, whether on shooting locations or at festivals. Out of these 20 creative talents, 10 were female and 10 male, all of them belonged to an urban context (cities of at least 5 million inhabitants), and all had access to Internet and smartphone mobile devices. Five of them were from Hong Kong and 15 of them from Mainland China.4 All were from middle or higher middle-class families, with three particular cases who were coming from very wealthy backgrounds. A majority of the Mainland Chinese talents interviewed watched streamed films online through websites such as YT or iQiyi. They claim that they get some of their creative influences from these platforms and the content that they watch on them: ‘We get influenced artistically by what we watch and how we watch it; it gives us creative ideas’ admitted one of the Beijing-based respondents, aged 21. Some watch films at the theatres, but they are very selective about this circulation window given its entry price. None watched films on DVDs, which is a big difference with the 2008–9 survey from the previous chapter. DVD has become what VHS was when the quantitative survey was conducted, a medium in decline. To compile and analyse all this information in a meaningful way, I have chosen to focus most of my attention and reported analysis on five of these Chinese creative talents: These participants are representative of the key trends observed and studied while collecting data through focus groups and the formalised interviews described above and while engaging in an open dialogue with all of them. Occasionally, given the representativity of their profile, I may signal and refer to other respondents to strengthen or contrast some of the arguments. During our conversations, we came to an agreement, like with some of the other film professionals interviewed and referenced earlier, that I would not disclose their real names in my published work as this may put them at odds within the film industry and tarnish their reputation in case they wanted to work as assistant directors for example or in other capacities. While my analysis remains faithful to their personal

4 While this reduced qualitative sample does not pretend to be representative or extrapolatable for the Chinese population, I decided to include respondents from Hong Kong SAR, like I had done for the quantitative survey in Chap. 8, to contrast the findings. 340 9 Participatory Involvement and Focus Groups with Emerging Creative Talents background, their creative and professional characteristics, and their socio-economic background, I refer to them with coded names, I sometimes changed some of the context, and I modified their age in some cases so that they are not readily identifiable.5 This point is in itself quite interesting and it coincides with the observations already made in Chap. 6 about the opacity of the traditional film industry, its power structure, and its influence to create a form of self-censorship. People are often reluctant to talk about issues openly for fear of being blacklisted or sued. It is a manifestation of the lack of transparency that characterises the creative industries in China and particularly the film powerhouse described in Chap. 2. It shows that the creative system is currently highly centralised in its power structures.

9.2 Golden Circle, Foreign Mimicry and Self-Censorship

9.2.1 Genre Mimicry and Financial Freedom

Qing, 31 years old is one of the eldest emerging talents interviewed. He is a native from Beijing and spent 11 years in London where he studied. His English accent and his grasp of British culture are absolutely perfect; he even went as far as teaching me some English jokes and puns. Qing’s family is wealthy. Qing likes watching films and has a passion for it accompanied with a very sharp set of skills in writing, directing, editing and filming that he has developed on his own and while working on film sets. Nonetheless, he does not know how he ended in film and the creative industries. He knows that he wants to direct his own films later and that he wants to make money out of it, be professionally recognised, and become famous. He has already directed, edited and filmed a number of short films, some of which he won commercial awards for; mostly in microfilm festivals dedicated to brand promotion and advertising. Comedies and action films have a particular appeal for him and they are the types of films that he would like to direct himself. I want to direct films that I would like to watch myself. I like comedy because it is a challenging genre; it’s not easy to make people laugh. You have to observe people in real life situations and then you use comedy as a mirror to highlight things that they consider normal, but which are not so normal once they are out of context… people would say… ‘of course he is so right!’ and they will laugh at themselves. [He laughs] One thing that Qing regrets is that comedy is rarely recognised for the main prizes such as the Oscars and the same goes with comedians. Qing belongs to the golden circle and says that when he works on a film set, it is for pocket money, he does not really need it. By working on co-productions which he hears about through his own

5 While most respondents were from the 1990s wave, a few were from the 1980s wave: When I changed their age, I have ensured that I kept these respondents within their respective age bracket. 9.2 Golden Circle, Foreign Mimicry and Self-Censorship 341 network of relations (guanxi [关系]), he learns skills and builds a professional network which he intends to use later on. Qing has encountered many film stars and worked with award winning producers. He is able to establish good working relationship both in Chinese productions and foreign productions thanks to his language skills and his very effective diplomatic approach. When I ask him how he plans to make the films that he has at heart and whether finance might be an issue and whether he would consider running a YT video or a crowdfunding campaign, he laughs. He claims: At the moment, I am working for my family’s business for a few years. When this is done, I will never have to beg for money like Stephen [producer / director of The Last Race]… people will come to me with good scripts and good projects and I will just have to choose. Money really won’t be an issue.

9.2.2 Government Censorship

When I ask Qing whether censorship might be an obstacle to his film projects and his creative ambitions, he responds that comedy is an interesting genre because all the issues can be toned-down in it and the message is subtler than in a straightfor- ward drama. He says that action films are often in line with government regulations so they do not present a big risk. As Rosen discovered, some of the millennials and particularly Qing’s wave (from the 1980s) have become ‘apolitical’ (Rosen 2009). They do not interfere with the government as long as they can achieve a certain comfort in life, make money and get recognition. This is particularly true of the affluent classes or what Yang names the ‘Capitalists’ in China6 (Yang 2013). The acceptance of the CCP and the Communist state respectively as legitimate political leader and system correlates with the study from Rosen (2009) seen in Chap. 8, in which even younger generations claimed that they would be unlikely to engage in politics whether as a dissident or a CCP member unless it gave them an opportunity to improve their professional or financial situation. Zheng adds that young professionals in modern China are less likely to become CCP members than their elders as the most interesting and best rewarded jobs are perceived to be in the private sector and are ‘not dependent on Party membership’ (Zheng 2010, 10). This underlines the lack of engagement of new generations into the realm of politics. V., 22, another young emerging talent is from an affluent family based in the North-West of China, where the Wanda studios were built. V. wants to become a film director too. He is less certain about the type of films that he wants to make, but he travelled to California to study film at a top university where he made a lot of connections in the Chinese-American filmmaking community. He did so to be able to gain education and professional credentials as well as an industry network, planning for his return in China when he would look for work in ‘big international film co- productions.’ He is thinking about writing and directing a romantic comedy taking

6 Also see Chaps. 2 and 3. 342 9 Participatory Involvement and Focus Groups with Emerging Creative Talents place in Japan a la Lost in Translation (Coppola 2003) between an older Chinese man and a Japanese woman, which is a film he pitched at the 8th Beijing International Film Festival (BJIFF). Both V. and Qing’s status and their influential families, position them outside of the issues young emerging filmmakers normally face.

9.2.3 Self-Censorship Through Mimicry

Looking at Qing and V’s aspirations, it is obvious that creative talents in this situation may not have the same financial needs as other independent emerging talents. However, they both aim for action and comedy genre films that they admit they have mostly watched on pirate platforms when they were teens and which influenced them. While arthouse films as well as commercial films attract Qing, V. is exclusively interested in commercial films and blockbusters. Both are only interested to make commercial films and if possible co-productions or films which would have an ‘international’ appeal, mostly meaning an appeal in the US and to some extent Europe. This is done to avoid running the risk to ‘offend’ the government as much as to attract capital and the spotlight of recognition and fame to them. These two cases display a risk of Western ‘Mimicry’ already seen in previous chapters (Chaps. 2 and 5) and discussed widely in film scholarship (Yeh and Davis 2017; Meng 2012; Berry and Farquhar 2006; Bhabha 1994). In the context of China, it translates potentially into the cultural promotion and an informal invasion of Western content, which the government is increasingly trying to contain and to fight with the ‘founding of…’ films and more recently Wolf Warriors II (Wu 2017). As seen in Chap. 8, this confirms Western influences in terms of creative content aesthetics and genre highlighted in the quantitative survey. Despite efforts from the Chinese Government to keep foreign content at the door, Hollywood film culture and its underlying ideology risks making its way into the minds of the young creative emerging talents. Moreover, it does not translate into any displayable creative soft power vehicle for China. Quite the opposite, it could be argued to play as ‘colonial mimicry.’ (Bhabha 1994; Berry and Farquhar 2006; Berry 2003) But the example of Wolf Warrior II shows that such aesthetics can be re-appropriated by the local creative industries and serve Chinese characteristics. Nonetheless, this form of filmmaking is arguably not conducive to true creative endeavours and stamp of originality. For instance, Wolf Warrior II was compared to a ‘Chinese Rambo’ film (VornDick 2017). As an illustration, during a pitching at the 8th BJIFF in April 2014, out of 8 films including a social drama presented by a female director, the two winners were pitch- ers who presented respectively a copycat of The Matrix (Wachowski and Wachowski 1999) and as seen previously, a copycat of Lost in Translation (Coppola 2003) adapted for China and which did not display any real creativity or originality. Additionally, after the film festivals are over and the journalists, promotion camera- men and photographers are gone, there is little follow up on the promises made in the festivals as a film consultant Mr. Sélim Oulmekki confides (Oulmekki 2015). 9.3 BFA Training, Local TV Productions, the Vicious Circle of Traditional Industries 343

9.2.4 Passion Factor and Motivation

Despite his financial stability, Qing was a little discouraged by his experience on set; he already had experience on a few co-productions and local film productions, won awards for his short films as a writer and director, and also knows how to edit. He is polishing his craft. But he is also working in his family business, which is his top priority.

9.2.5 Financial Censorship

As observed during the series of dialogues with emerging filmmakers, one of the key obstacles has been funding. Because these emerging creative talents do not have a bankable name yet, financial institutions often refuse to lend them the necessary funds to make their first film. It is only possible to those who are part of the golden circle and who can leverage connections with rich friends and family. This has the disadvantage to limit opportunities for the majority of the artists who are not part of this circle. It also poses the risk to create an elitist filmmaking society that is detached from the rest of the population and audiences.

9.3 BFA Training, Local TV Productions, the Vicious Circle of Traditional Industries

9.3.1 Locally Bred Filmmakers

Maoxi, 28, is originally from Guangzhou and speaks both Mandarin and Cantonese fluently. He studied at the BFA and intends to be a professional film director. Having lived in Beijing for several years, he considers himself a Beijinger. Of all the emerging talents interviewed, Maoxi is one of the few participants who do not speak English at all.7 After his training at the BFA as a director, he took on a lot of roles as first AD on local productions both in Mandarin and Cantonese, mostly TV and some feature films. Maoxi indicated early on that he did not need to speak English because his main focus is to further his career in China. He wants to make local films for the local audience. When I asked him the type of films that he wanted to make, his choices were largely tainted by dreams of making ‘big’ action films and potentially romantic comedies. His film references were ranging from SPL II (Cheang 2015) to Crazy

7 It should be noted that the emerging talents were not selected on the basis of their command of the English language; many just happened to speak English with varying degrees of proficiency. This is generally correlated with their aspirations to work on foreign productions or co-productions to polish their skills as much as for the attraction of a better salary. It is also correlated to their dreams to appeal not solely to the Chinese market but to share their work internationally. 344 9 Participatory Involvement and Focus Groups with Emerging Creative Talents

Stone (Ning 2006), which he did not realise were heavily influenced by foreign blockbuster models. SPL II is very reminiscent to The Transporter series (Leterrier and Yuen 2002) and Crazy Stone’s aesthetics and story are considered as largely copied from Guy Ritchie’s Snatch (Ritchie 2000) and Lock, Stock and Two Smoking Barrels (Ritchie 1998). Maoxi aspires to become a famous director for Chinese films and if international audiences like his work, it would be a bonus, but it is not a priority for him at this juncture. He is grateful for the training he took at the BFA that he says helped him develop the necessary skills to work in the creative industries. During the course, he directed his own films and mostly local filmmakers taught him. When asked about government censorship, he explains that it is not a problem for him with the types of films that he wants to make. Although the BFA also teach artistic skills, he feel that the main focus was on making films which would be commercially viable and which would not interfere with the government’s priorities. After interviewing Maoxi, I felt that he would never really challenge the rules set by SAPPRFT, in fact he did not see the point in doing so. Self-censorship seemed to be deeply ingrained in his mindset. Maoxi nevertheless worked on the US-Hong Kong- China co-production The Last Race as he thought that working with foreign talents would be a good experience to add to his CV and he could network on the job.

9.3.2 Central Power and Micro-Authority: The Chinese TV Effect

Maoxi’s attitude was quite authoritarian on the set. Maoxi rarely hesitated to shout his orders to the rest of the crew and to manhandle both extras and lead cast. According to Maoxi this was the only way to have a Chinese production team to work effectively, but certainly not actors for that matter, foreign or otherwise. Maoxi’s line of thought probably holds quite true since most of the crews and lesser role actors and extras were essentially exploited and badly treated. As explained in Chap. 6, by the third week of shoot most had lost their motivation about the film already. This situation caused other crew members to move departments in the middle of the production that proved very counter-productive. Caught in a fixed mindset attitude, neither Maoxi or Mr Shin realised that the reason why the cast and crews had lost their original collective spirit and their passion factor was because they were badly treated and exploited. They both fuelled this vicious circle by shouting even louder at the creative team which in turn low- ered the spirits even more. According to professionals who worked on several Chinese productions and co-productions, this seems to be a reminiscent scenario of their own experiences (Pilarski 2016; Shershow 2015). Maoxi followed his regimental training and had a clear priority that was to stick to the schedule, thereby saving time and money on the production. While the Drama Coach needed time to rehearse with the actors and the extras to provide the best performance on screen. This created tensions with the drama department and other creative department such as art design whose agenda was to provide a quality work 9.4 Docu Ghetto, Local Government Support, and Financial Hurdles 345 and production value. Maoxi and Mr. Shin prioritised the schedule over the dramatic and artistic content.8 Maoxi is mostly a TV director and his creative view of film production was largely dictated by his BFA training and his previous experience in TV. TV productions are meant to have a very fast and high turnover. Maoxi operates very fast with a lot of authority, like in TV, but the downside is that the overall quality of the film and the performance of the actors and the extras suffered a lot from this.9

9.3.3 The Traditional Industries’ Vicious Circle

Maoxi admitted that money was a big issue for him in directing the films that he wanted to make. He was not blessed like Qing to belong to the rich classes and he considered his experience in TV and local productions as a journey to eventually direct his own films. But while serving other local directors as their assistant to gain experience and to make both ends meet, his creative aspirations also took a lesser priority. When I asked whether he was working on a script or with screenwriters, he said that he did not have the time. The financial imperatives seem to have enslaved him and a few other assistants as servants of the traditional film industries rather than its creative driving force.

9.4 Docu Ghetto, Local Government Support, and Financial Hurdles

9.4.1 Balancing Commercial and Independent Filmmaking

The case of Navi, 23 tells us a different story from Maoxi, she is a Mainland provincial filmmaker who studied film in Hong Kong. It is interesting to note the diver- gence of mindsets between the emerging talents who studied at the BFA, like Maoxi,

8 Both Maoxi and Mr. Shin’s view of drama was rather melodramatic and they liked sometimes for the actors to exaggerate their feelings. While this could work for a TVB or some of the Chinese audience, it would have a hard time appealing to an international audience or a sophisticated Chinese audience. 9 Standard TV productions in China are very different from theatrical productions. TV and theatrical productions serve different purposes and are targeted to different audiences. A TV production aims largely to sell advertising in between its episodes and many ad breaks. It also comes to its audience free of charge. A theatrical film aims at an audience who made the investment to purchase a ticket. While TV audiences are captive and accustomed to the show, in terms of viewing context, the show is displayed on a rather small screen (whether it is a TV set, a laptop or a mobile phone) and they don’t necessarily expect the same level of quality as a film released theatrically. Theatrically released films are projected on a big screen, any mistake is immediately spotted. The creative aesthetics of theatrically released films are significantly different from TV films as wide shots are used more often while TV makes an extensive use of close up shots. 346 9 Participatory Involvement and Focus Groups with Emerging Creative Talents and those who studied abroad, in Hong Kong, Singapore or in the West. Navi’s views seem to be more liberal than Maoxi, she is aiming to make films which are both commercially successful and feature strong moral and societal components. Her dream is to direct (more than to write) a romantic drama that would ‘share the complexities of human relationships, without making it a joke, like romantic comedies tend to.’ She thinks that Lost in Translation (Coppola 2003) was a good step forward in that direction, but that the concept could be pushed and explored further. Whereas Qing and Maoxi seemed very much influenced by foreign content in their creative aspirations, Navi, seems to be able to detach herself from the risk of foreign mimicry. Nonetheless, most of the cinematic references that she gives me are essentially Western. So, this reinforces the idea that mimicry and foreign aesthetics and codes can act at a more subtle or unconscious level as originally perceived. Ironically, while Maoxi seems to be anti-Western, most of his aspirations are to make a film rather similar in its contents and aesthetics to Hollywood commercial films. It can be argued, for example, that the very commercially successful Wolf Warrior II (Wu 2017) is almost a Chinese copycat of the US soft power and propaganda films such as Rambo: First Blood Part II (Cosmatos 1985) and Rambo III (McDonald 1988) or more recently The expendables II (West 2012) in which some of the Wolf Warrior II film’s cast already featured. It will be interesting to see how the Alibaba and Fosun film academy handle the training of new talent in Shanghai when and if it is effectively established. Will the training harness the students’ creativity or will it contribute re-appropriate foreign genres to the Chinese national cause? The re- appropriation of foreign aesthetics and genre is a form of mimicry (Bhabha 1994) described in Sect. 9.2.3 which may limit the original creation of local aesthetics and storytelling. While Navi’s openness and exposure to foreign cultures is no match to Qing for instance, Navi has a mature, disciplined and focused mind for her age. She practices yoga and meditation, she is also very health conscious and is vegetarian (which is quite rare in China). She says that this lifestyle helps her find creative inspiration. In that she also displays a strong set of values and explains that while money is important to function in society, it is not the reason why she started her creative ambitions. Neither money nor fame seem to drive her value system. She believes that making a film is before all a human experience and that a good film cannot be made if there is no common passion and bonding between all the participants. She admits, ‘the directors are only the custodians of the creative vision, but on their own, they are nothing.’ Navi started by making short films and inspired teams of amateur and professional filmmakers to work with her. She directed a professional documentary with a team of seven people who she managed. The documentary was a good quality piece, that gives her solid credentials and exposure. In the editing room, she insists that all the participants who help her get a fair credit in the end roller. She says ‘it’s important that everyone benefits from this opportunity. Plus, it’s a small world, 9.4 Docu Ghetto, Local Government Support, and Financial Hurdles 347

I am sure that we will work again together at some point.’ Navi’s idea of fair and equitable reward sharing is quite uncommon in the traditional film and creative industries where the participants often fight to get the share of the lion as seen in Chap. 6. Navi worked as an assistant for Wong Kar-Wai on Alibaba’s financed and copro- duced The Ferryman (Zhang 2016). She admits that while her tertiary filmeducation helped her a lot to find her creative inspiration and to develop her skills, she learnt a lot on the job as well.

9.4.2 The Documentary Ghetto

Navi recognises that being a female filmmaker limits her to become a feature film director. She laments that a lot of Chinese talented female directors are pushed to making documentaries or becoming production assistants because the traditional industries still fail to recongnise the potential of women as creative directors. She claims: A lot of female directors start off with documentary filmmaking because it’s cheaper to make and it can bring them exposure at film festivals, particularly if they don’t have guanxi. It can give them a network. Nonetheless, Navi recognises that making documentaries, which can sometimes take a sensitive societal angle, can place them in a situation of risk in case they offend the government. There are more girls represented in documentary as a way into the industry now. It seems to be a calling card for them to enter a man run business. But whether a real bridge between documentary and fiction exist remains to be seen. Ocean Heaven (Xue 2010) was one of the few exceptions but the number of cases since then is scarce. Sometimes, well-known actresses try themselves as film directors, on the back of their ‘bankability’ as celebrities and the potential to attract an audience, but this still remains a rare practice (Pilarski 2016). Navi notes that this is a very awkward situation since young women now drive the box office in urban China. Yet, films continue to be directed almost exclusively by men. Navi believes that a shift has to be operated to reflect these societal changes and to balance creative visions and film productions towards increasing numbers of local female talents. This is all the more topical as the situation and the status of women in China is rapidly changing, in terms of films, with the increase of technology and lighter equipment, women do not need to be physically strong like men to handle heavy camera equipment, this is no longer a requirement. Also demographi- cally, with the one child policy, demographic power has tilted in favour of women: it is expected that there will be 30 million more men than women in 2020 (Budden 2017). This means that women may have more power as a large amount of men may find it hard to find a partner. 348 9 Participatory Involvement and Focus Groups with Emerging Creative Talents

9.4.3 Working with the Local Government

Meanwhile, Navi continues her industrious path and managed to negotiate a partnership with a large city in Mainland China. This partnership should help her produce a short film to be used by the tourist office to promote the area. I managed to see a rough cut of it and I was impressed with Navi’s visual compositions, her sense of narrative rhythm, and her creative skills. Navi gathered amateur and professional help to make this short piece and made use of new technological advancements such as drone for tracking and aerial shots, some of which are daringly passing under bridges on the local freeway. When I ask her whether it was easy to get a shooting permit for this piece, she laughs and says ‘once you have the provincial government on your side, it becomes easy to film.’ Whereas China is still run as a central system, there has been a recent tendency to decentralise some of the power in regard to media and creative industries, if not for co-productions and foreign productions, at least for local productions. This springs from the government’s aim to develop local talents not just from Beijing, but also from across China. Sometimes, the rules are kept ambiguous to help be more flexible and accommodate the local level. As seen in Chap. 6, emerging filmmakers who seek professional experience and networking opportunities on local film shoots often get exploited, both in terms of working hours and in terms of financial rewards. Almost half of the assistants on The Last Race were students recruited by director Stephen Shin out of film schools. They had started with passion and strong aspirations to become film directors. By the end of the film, several of these emerging talents had changed their mind about their creative careers. For those who do not belong to the golden circle or do not have rich friends who belong to this circle, the exploitative and the precarious nature of traditional filmmaking can be a major obstacle. Of all the emerging talents who worked on The Last Race, about 40% of them expressed that they were disheartened and that they may pursue a different career. A few months after the shoot, one of the ADs went to Shenzhen to create a technological startup. Another young talent just dropped her ambitions to get work in the creative sector and said that she would apply for a ‘normal job’, while another managed to get an executive position for a local TV network, where his creative talents are not necessarily used. According to the interviews and discussions that I conducted, it seems that local talents are currently not recognised by the traditional film system that exploits them. In order to get professional recognition, they sometimes have to go abroad to be recognised by a foreign audience (Schwankert 2016). Likewise, when the basic requirements of resources and financial rewards are not met, all the other values tend to disappear; they are the foundation to everything else and to building other types of values. It is fair to say that access to funding for local emerging talents is probably the single most important obstacle to overcome. As seen while interviewing emerging talents about their motivation to work in the creative industries, once this element is fulfilled other intangible values can be 9.5 Journey to the West: Studying Abroad as a Quest for Independence 349 found for instance in personal development, achieving a creative goal together (as a collective: something which could appeal to the Chinese Government as a federating tool), long-term professional development (learning skills and gaining experience), getting recognition within the industry circle (slightly different form fame, because instead of being praised for market success, one is praised for their hard-work and hard-earned talent and skills), the type of work performed: far from the 9 to 5 pm daily routine. This creative lifestyle not set on a routine is what most filmmakers seem to be keen on, at least they accept it as long as they can create and share their work with others. There is a need for emerging talents to find ways to finance their work in a sustainable manner, particularly if they are not part of the golden circle.

9.5 Journey to the West: Studying Abroad as a Quest for Independence

9.5.1 Learning the Ropes

The case of Lian is of particular interest as it complements the previous analysis of Navi. Lian, 25 year old, was based in Beijing for many years and she is originally from another part of China. She is from a modest middle-class background and started writing stories very early as a child as a hobby. She was not part of The Last Race crew. When she was in her late teen as digital medium started offering the opportunity to be able to shoot her own project, she made the decision to become a professional storyteller. She continued to write and directed several short films. But, being from a modest financial background, she also needed to make both ends meet. She started working on larger film projects as assistant director or production assistant. She also had to take on other jobs, as film production alone was not enough for her to survive. When she had saved enough money, Lian studied in Singapore at Lasalle’s Puttnam School of Film and Animation, which was named after David Puttnam, the Oscar winning producer of Chariots of Fire (Hudson 1981), Midnight Express (Parker 1978), The Killing Fields (Joffé 1984), and The Mission (Joffé 1986). A passionate and legendary producer who influenced generations of film- goers and filmmakers. Lian was rapidly on demand on co-production projects after her studies in Singapore, because of her regimental and professional business ethics as well as her fluency in English. She moved to the production team ofThe Warriors Gate (Hoene 2016) (a French co-production), met with French producer Isabelle Glachant (Now head of Unifrance) and she worked on Wolf Totem (Annaud 2015).10

10 Wolf Totem is to this day one of the rare co-productions to have worked commercially well both in China and the so-called ‘West’, Europe in this case. 350 9 Participatory Involvement and Focus Groups with Emerging Creative Talents

9.5.2 Film Auteurship and Censorship

Lian aspires to become an auteur and to write as well as direct her own films. She wants to make what she calls ‘films with a social and moral story’ and ‘movies with a conscience’. When I asked Lian about censorship and whether she thought that it was also an obstacle to her career as a creative filmmaking talent, she did not seem to think censorship was her biggest challenge. She even revealed that it was ‘fun’ to create within the boundaries of censorship, like a game. She also admitted that it was important not to self-censor too much and to embrace one’s creative mind. She added: Of course you have to occasionally negotiate and engage with the boundaries of censorship by testing them and by sending subtle messages rather than obvious ones. According to Lian, the ambiguous nature of censorship in China makes it sometimes possible to produce work that would otherwise not be allowed: It’s all about knowing the form and to save the face and authority of the ruler. Once creators know that they can operate more freely than they originally think. She recognises that there are taboo topics such as politics and religion, but this is true in other countries or with sexual display in the US, which sometimes seems more open in China. When I talked to her about The Last Race, despite not working on the film, she indicates that this creative work seems to be riddled with bibles, crucifixes and religious overtones. How could it not be as it describes the life and death of a foreign missionary? But, yet the government gave its approval to film it in China. Lian admits that ‘it is not all going to change in one day, it will be a journey of thousands of steps, but eventually, our role as filmmakers and creative workers is to embark on this journey.’

9.5.3 The Challenge of Film Finance, Trust, and Microfilms

In Lian’s opinion, there are more pressing challenges to tackle than government censorship. She explains for example that access to financial resources to make a film is a greater challenge, particularly for someone with little connections or ‘Guanxi.’ There is money in China for those who are connected to the golden circle, but the other creative talents seem to watch on the sidelines. When I asked her whether she thinks that making more short or microfilms could help, she answers that it is good to sharpen one’s skills and imagination, to push one’s comfort zone, but ‘unless struck by luck, one would have a hard time making a living from a video they posted on YT for example. Most filmmakers who post on Youku do not make money.’ While she recognises that short form creative content can be a calling card, she considers it as a lottery ticket that means nothing if one does not have the right connections. This issue has been largely covered in the previous chapters and by trade journals (Dong 2015). 9.5 Journey to the West: Studying Abroad as a Quest for Independence 351

While microfilms help both the industry creatively and the creative talents to develop their skills and creativity, they have arguably become an industry themselves. As seen in Chap. 7, the recent example of Alibaba’s use of Tudou to engage new creators to produce high quality Professionally Generated Content (PGC) to promote its retails products confirms these corporate appropriation and platform capitalism trends (Keane 2016). The connection with the Tudou Online Video Festival and the example of young Chinese artist Corndog was already a step in that direction (Hartley et al. 2015). But many are bound to spend their entire creative career producing these short works without the professional opportunity to experience longer form content. Lian mentions the issue of distribution and circulation opportunities to gain exposure. She expresses her concerns that there are limitations to how films are currently distributed and promoted in China. This situation takes place regardless of government censorship. If a film is not perceived as commercial enough, it may just simply not be released in theatres, even if the government certifies it. The film may not receive the amount of promotion it needs to be noticed by potential audiences. This is particularly noticeable if one is positioned outside of the circles of influence. It becomes even more difficult when filmmakers want to share their work with international audiences. While platforms like YT can help promote and circulate content within China, they currently have relatively little viewership outside of China. This situation is a vicious circle, if there is a perception that the story will not be commercial enough, then the film is not financed to start with, which equates to a form of economic censorship. If despite all the efforts and the finance provided to make the film, the film is successfully completed, it may not find an outlet to be released and recoup its investment.11 This is a reason why a lot of Chinese filmmakers are tempted by foreign festivals, which give them a window of opportunity to display their work abroad. This has given rise to an almost stereotypical film genre between documentary and drama that often criticises the government and seeks to be sensational to increase chances of selection abroad. I mention the possibility to fund her film through a crowdfunding campaign. Lian, recalls that there are not such platforms for large scale finance in China (Zhongchou operates at a micro-financing level). Alternatively, using a foreign platform such as Kickstarter or Indiegogo for instance would require a VPN which is now illegal in China. Also, getting access to the funds raised would require a sly manoeuvre to eventually finance the film. She believes that beside the government control over the film industry to avoid too many derogatory films on such platforms, Chinese people are maybe not yet ready to use crowdfunding for filmmakers that they don’t know. ‘There is an issue of trust’ she says: They simply don’t know if the filmmakers are just posting an idea and will eventually run away with the money… there is one or two websites like Kickstarter or Zhongchou, but it’s marginal; you can’t raise enough capital to fund a feature film project and hire professionals with it anyway.

11 This phenomenon was described as a ‘distribution bottleneck’ (Montgomery 2010, 47–48; Hartley et al. 2015). 352 9 Participatory Involvement and Focus Groups with Emerging Creative Talents

9.5.4 The Challenge of Female Filmmakers

Lian admits that another prominent challenge for her to develop a career as a film director in the Chinese creative industries is the gender issue. While it is relatively easy for a woman to work as a production assistant or an assistant director on films in China compared to other countries, it is much harder for a fresh female director to get financed. She says: At the end of the day, the film industry in China is ruled by men and most of the times they objectify women both in front and behind the camera. I have no doubt that this is the case in other countries, but this is a key obstacle for young female filmmakers. It is changing, but only very slowly, one step at a time. Lian expresses the opinion that in China businessmen and tradesmen reinforce trust and bonding through cultural rituals such as drinking strong spirits or going to Karaoke lounges or even saunas. Scholars such as Bell have described this cultural trait (Bell 2008, 63). These widespread practices not only tend to objectify women who work as escorts and prostitutes in these institutions, but by the same token, they significantly limits access to these rituals for young female professionals like Lian. ‘Women are not part of that trusted exclusive club’ she concludes. She adds that the issue of gender has ramifications even outside of the creative industries, into the realm of the family. Lian like most of the young emerging Chinese talents of her generation is an only child. She describes how her family originally disapproved her creative choice and how they keep putting pressure on her to start a family and have children as she soon reaches 26. ‘The problem’ she says is that ‘their concern becomes my concern and it is sometimes holding me back in the pursuit of my dreams.’ While I do not have enough elements to be conclusive on this matter, these areas of tension are reminiscent of the key features of traditional and Confucian values revived by the Chinese Government and observed in Chap. 3.12 This remark was also shared and formulated by other respondents both from Mainland China and Hong Kong also by male and female alike. However as evidenced by Chu, it is difficult even during interviews to discern whether these claims are ‘attitudes’ (what respondents say) or ‘behaviours’ (what they actually believe) (Chu and Ju 1993, 21). Confucian values are so ‘internalised’ and mixed with other beliefs, values and ideologies such as Daoism, Buddhism, socialism, or Western influence that it is very

12 In Confucian Teachings, the Chinese were ‘very much concerned with the perfection of the self as well as of those in their immediate environment’ such as family members (Chu 1978, 242). ‘Personal Loyalty’ was traditionally nurtured as well as the ‘de-emphasis on individualism’ (Chu 1978, 239). This traditional set of values can be seen as conflicting with the new way of life propa- gated by foreign films and new technology that promote individualistic ideas. We can observe that individuals who have been raised as only children tend to be more socially independent. 9.5 Journey to the West: Studying Abroad as a Quest for Independence 353 challenging to isolate the effects of Confucian values at the individual level.13 However, Confucian values are thought to be predominant when they relate to the traditional values of the family: In this family context, these traditional values have survived the Great Leap Forward and the Cultural Revolution (Chu and Ju 1993, 225–6).14 These traditional values can act as an obstacle as the creative talents’ families can consider their artistic endeavours as financially precarious and they seem to be both concerned for their children and potential grand-children’s future as they are concerned about their own support. In Chinese society, particularly for the modest middle-classes the child is the provider of retirement benefits and healthcare when parents start ageing. The pursuit of one’s dreams and the perceived lack of consideration for one’s family is considered irresponsible and selfish, particularly for older generations who feel that they have sacrificed a lot for the new generations’ well-being. According to Keith, a Hong Kong talent who is thinking of interrupting his creative dreams, this area of tension is ‘responsible for bright talents giving up every year; the guilt, it is too hard to bear.’ The tension and the fracture between older and younger generations is also a source of inspirations for film. For instance, Jane, another female filmmaker from Wuhan who was successfully selected to pitch her first film project at the 8th Beijing Film Festival in 2008 presented a dark social comedy with an original premise in which the father of a family commits suicide as a sacrifice as he thinks that he has become a financial burden. His suicide fails and when he wakes up, his family makes him believe that he is indeed dead and in paradise. In the end, Lian decided to solve this family tension that impaired her creativity by taking a journey to the West. She saved money, applied for a prestigious film school in England and managed to get a place there on the basis of her previous work and experience. She clarifies that she did not necessarily choose to go to England just because she felt that her continuing film education would be better there; she received a scholarship and she wanted to be inspired creatively as much as she wanted to put some distance between her and her family’s expectations about her private life: I guess that going abroad is for me an opportunity to write interesting stories from a woman’s point of view, potentially to gain more experience in filmmaking abroad and a way to gain a certain level of independence. Lian’s journey to become a director and to tell stories about modern life in China is a reminiscent example of the limitations of both the traditional filmmaking model as much as the new digital alternatives. This is particularly true when one is a female director and outside of the golden circle. There needs to be other steps for Chinese emerging talents to be able to create and manifest their skills, their creativity and their passion.

13 Communication with Prof. Stanley Rosen on February 21, 2018. 354 9 Participatory Involvement and Focus Groups with Emerging Creative Talents

9.6 The Mini Decentralised Studio Approach: IP Ownership and Collective Work

9.6.1 A Collective Approach to Filmmaking

The last emerging talent case is about an artist I chose to nickname Ayam. Ayam is a 30-year-old, was born in Hong Kong and continues to live there where he has siblings. He received a tertiary level education in creative media, and decided very early on that he wanted to work in the creative industries. He had a series of jobs in the local industry as a designer and an animation artist. While many talents from Hong Kong gave up their Cantonese culture to go and work on films across the border, a trend which was intensified during the various installments of the CEPA agreements to strengthen the trade cooperation between Hong Kong and China, Ayam has chosen to stay in Hong Kong to produce universal content which would resonate with both local Hong Kong and international audiences. Ayam follows the trend of the Hong Kong ‘Fresh Wave’. The term ‘Fresh Wave’ was created by Johnnie To Kei-fung in 2005, who helped build a programme and a film festival with the Hong Kong Arts Development Council to support local young talents. Johnnie To created a window for local talents to showcase their work in Hong Kong. He also sought to give them the resources for them to develop their creative projects and assigned them professional mentors (Lu 2015). In 2016, Johnnie To produced the film Trivisa (Au et al. 2016), co-directed by Frank Hui, Jevons Au (also one of the co-directors of Ten Years Au et al. 2015), and Vicky Wong; all graduates from Hong Kong universities and former participants of the Fresh Wave Festival (The Chinese Film Market 2016). Other filmmakers of the Hong Kong ‘Fresh Wave’ include Chan Chi-fat’s with Weeds on Fire (Chan 2016) and CityU graduate Wong Chun with Madworld (Wong 2016).14 These filmmakers all have in common their ability to work with ‘small budgets’, they are usually supported by experienced producers (such as Johnnie To or Derek Chiu Sung-kee), they are ‘passionate’ about their craft, they produce original creative content ‘without necessarily aiming for the Mainland Chinese film market’, they want to ‘tell local stories with a social conscience’ and they are working in the sector to ‘share their ideas and their art’ as Vicky Wong expresses it.15 The Hong Kong Free Press also confirmed these elements (Mopotu 2017). Ayam has no interest in chasing potential financial rewards and the large Chinese film market across the border. He admits: I prefer to work in an environment that I know. Here I am familiar with the audiences and I don’t need to worry about censorship and changing regulations. I feel that I am more

14 Madworld received several nominations and awards including Best New Director for Wong Chun at the Hong Kong Film Awards 2017 and at Golden Horse Film Festival 2016. 15 Conversation with Vicky Wong at a ‘Fresh Wave’ event organised by the Hong Kong Trade Development Council (HKTDC) at the American Film Market (AFM), Los Angeles, November 2017. 9.6 The Mini Decentralised Studio Approach: IP Ownership and Collective Work 355

independent to create the content I want to develop without any restrictions. With some luck, I could maybe get international exposure as well. However, for Ayam the main restrictions are time and money, like any other independent filmmaker around the world. He has managed to minimise these obstacles by employing a very smart and effective strategy. Ayam uses a balanced cocktail of crowdsourcing, his own savings and eventually crowdfunding.16 By using creative commons such as DeviantArt and crowdsourcing websites such as Guru.com, Freelancer.com, Fiverr.com, Peopleperhour.com, and Upwork. com, he is making use of a large worldwide talented artistic network and he is maximising his time. His savings and the use of crowdfunding, although it comes as a sacrifice in terms of his lifestyle and his leisure, ensure than he remains in control of his project both creatively and that he retains ownership of his IP. Ayam has developed a very fresh creative work, which blends a modern-life saga with elements of fantasy and magic. A sort of modern day fantasy crossover between Pan’s Labyrinth (Del Toro 2006) or Fantastic Beasts and Where to Find Them (Yates 2016). Ayam’s ambition is to create several works derived for his original IP, ranging from a novel, a graphic novel, to an animation, a video game and potentially a VR application. But with his hard-earned savings and even with the prospects of crowdfunds, Ayam does not have even close to the finance that Pan’s Labyrinth or ‘Fantastic Beasts…’ benefited from. This is where Ayam took a practical approach; he decided to advance in his project step by step by creating a short novel first, to lock in and prove publicly the origin of his idea and his ownership of his original IP. He then used the extensive crowdsourcing creative resources of existing networks such as Guru or DeviantArt to create an illustrated novel, which he intends to sell online both in Chinese and English on iTunes, Amazon and Google Books. As a result, he intends to get feedback from his audience and use the graphics which best work for them all the while keeping his overall creative vision. While gathering crowd-wisdom and with the revenues he expects from the sale of the illustrated novel, he plans to produce a graphic novel, an animation, and a music soundtrack as a second step. If his project is met with popular recognition, he plans to roll out step 3, which is to produce the video game, the VR application, and the merchandising on the back of his project’s success. To do so, Ayam has been carefully selecting a network of creators all around the world, each one with an allocated task and paid according to a separate negotiated agreement and delivery deadlines. Ayam is now managing a network of half a dozen people on several time zones and geographical areas ranging from Japan, China,

16 Ayam is planning to deploy his time and resources to raise finance for his project in its second phase when he will have to record music with London Symphonic Orchestra and find partnership with Industrial Light and Magic for his animation. He is then looking to use Kickstarter to raise finance and emotional engagement from building a pre-audience for certain elements of his multimedia project and he may use Indiegogo, Tubestart, Rockethub, Seed&spark, or Patreon for other features – Patreon most probably for music. 356 9 Participatory Involvement and Focus Groups with Emerging Creative Talents

Russia, India, and Latin America. He has learnt the skills of managing a collaboration team with different cultural backgrounds. In effect, Ayam has become an instant producer who develops and expands his IP independently from the traditional creative industries. Ayam argues that his creative freedom comes from his own personal creative vision, his self-empowerment, and the power of his collaborative network.

9.6.2 Financial Restrictions and Indirect Influence of Censorship on SARs

However, despite his ambitions and professional drive, Ayam still suffers from financial restrictions. This has been an issue raised by other emerging talents in Macau, for instance, Vince a 31 year old local filmmaker who has written, directed and produced films (long and short form) for over a decade complains that there are now less opportunities to raise funding than there used to be.17 Vince blames the attraction of investors purely for commercial projects, particularly investors from China. Him and one of his colleagues claim that it is because: Local investors are not educated in film; they think it is risky or they do not even think of film as a potential investment – most of their money goes into real estate, stocks or tech investments now… at least in Hong Kong and Macau. Vince comments that it used to be easier to make films ‘five years ago’ [in 2012. He claims that he could make a feature film for US$14,000 (around 140,000 Patacas at the time). He was using US$7000 from his own money and US$7000 from the local government. But now and particularly since the Macau government has attracted large budget films, prices for talent and industry professionals have raised sharply, so making feature films has almost become impossible. He adds that even crowdsourcing is getting more expensive now. Finding a film production designer for his project has become a challenging task. Moreover, Vince highlights that raising the necessary finance to produce his films professionally through crowdfunding is difficult in Macau; either the project is a local project with a local scope and it is not enough to raise the necessary US$130,000–260,000 (1–2 million Patacas equivalent) or the project needs to have an ‘international scale’ and the film more often than none becomes underground; it cannot be released in China.18 Unlike Ayam, Vince is critical about the indirect influence of China on his creative work: Censorship is an issue, particularly with Xi now who restrains freedom, he is still liked because he is seen as tackling corruption, whereas he shuts down his rivals and takes their money. Supposedly, Xi is only paid 5,000 Patacas equivalent per month but he has a

17 Data collected at the Macau Film Production Investment Trade Fair on 25 and 26 July 2017. 18 For instance this was the case of Chris Doyle’s trilogy of the three Ps with the central part on students and the umbrella movement. 9.6 The Mini Decentralised Studio Approach: IP Ownership and Collective Work 357

daughter studying in the US and houses in Canada; how could he afford it? One country, two systems within China. Local filmmakers like Vince are severely tested, condemned to take on several jobs, unable to focus on their writing and directing skills, as Vince says it I am ‘getting rusty’. Commercials are less well paid than they used to be with new entrants coming into the market and competing every year. Commercials are also more seldom. As a result, Vince now animates a radio station on his spare time with a theme on film to make a living. Despite being selected and winning awards in several film festivals over the years, he lives a precarious situation that significantly challenges the pursuit of his creative endeavours. Meanwhile, Ayam effectively acts as a mini-studio producer harnessing the power of distributed crowdsourcing, Creative Commons and freelancers to create a multimedia cross-promotional platform involving an illustrated novel, an animation and a video game. However, on the path to achieve his creative dreams Ayam is encountering issues of a different nature from Xi’s government and its rules on censorship.

9.6.3 Issues for Emerging Talents with Online Distribution and Circulation Platforms

Ayam argues that one of his biggest problems to progress his creative projects is the centralised and intermediated nature of existing platforms, particularly the US-based ones. The proprietary systems of Amazon or Google Books centralised hubs for instance, make it hard for independent talents to produce and circulate their work freely and directly to the audiences. These organisations seek to place themselves as sole intermediaries and to monetise every single transaction. For example, PDF format files with interactive content such as music or video are not supported by these platforms which all have different standards to comply with and which are not compatible with each other. Ayam indicates that ‘each platform is making it as hard as possible within the legal framework for independent talent to switch from one platform to another.’ Fees are also charged for larger files (including typically multimedia content). For instance Ayam complains that a file over 100Mb is charged for downloading capacity in such a way that if the interactive book is sold US$5 per item, only US$1 is left to the producer, the platform would in effect take 80% of the fees paid by the audiences for the work accomplished by the producer. The latter would only get 20% back for his work (which is still the double of a traditional publisher). Ayam comments that there are also limiting rules in platforms such as Apple iTunes. Ayam declares that these rules are ‘set so that starting and unknown talents are almost immediately kept at the door’: One now needs minimum credentials to be able to pass the Apple selection successfully. 358 9 Participatory Involvement and Focus Groups with Emerging Creative Talents

Moreover, if a creative talent’s total sales do not exceed US$150, Apple is legally entitled to keep the funds. Multiplied by millions of potential creators, it means that Apple essentially reserves the right to rob the long tail of underperforming creators.19 While in theory, technology has given unlimited opportunities for independent talents to share their content with audiences worldwide, in practice the distribution and the circulation of content have become restrained and the potential financial rewards very limited under the guise of platform capitalism. To strengthen this argument, even renowned filmmaker Christopher Doyle who received the Pierre Angénieux ExcelLens in Cinematography award at the 70th Cannes film festival in 2017 and who crowdfunded his Hong Kong Trilogy project, Preschooled, Preoccupied, Preposterous, by raising over US$124,000 on Kickstarter20 had issues distributing it and eventually had to use a mixture of DVD and Vimeo circulation to share his film with wider audiences (Chow 2015). This situation is reminiscent of Napoli’s description of the industry’s structure of ‘resistance’ against creative audiences who are trying to create content (Napoli 2011, 125). The industry uses many such tactics and strategies to resist and negotiate the evolution of the audience into what Napoli has described as ‘the autonomous audience’ (Napoli 2011, 84–87). This is also an example of IP limiting creativity as it holds back the creative powers of the online communities (Montgomery 2010). This idea converges with the concept of ‘parasitic capitalism’ as described by Bauwens and Kostakis (Bauwens 2014; Bauwens and Kostakis 2014, 33–34). The current system, even if it has departed from the traditional film and creative industries intermediated and centralised model is still limiting. The hybridisation of platform capitalism with the traditional industries are arguably less intermediated in terms of the numbers of intermediaries, but oligopolistic giant intermediaries such as Apple, Google, Amazon or Alibaba run the risk of staling the entire creative system. The system is effectively still intermediated and semi-centralised, but with fewer intermediary players who funnel most of the transactions and the resources. For creative talents such as Ayam, there is a need for a truly distributed, disintermediated, and collaborative platform. This is a need not just materialising in China but also in the West.

9.7 Conclusion

The successive series of focus groups, interviews and informal talks with the 20 emerging filmmakers from China and Hong Kong provided me with a rich first- hand information about their general background, the types of creative content they wanted to make, the obstacles they were facing and their immediate needs to design a potential creative ecosystem which would allow them to achieve their artistic

19 Paragraph 5(c) of the Apple Ebook Agency/Commissionaire Distribution Agreement. 20 https://www.kickstarter.com/projects/722057066/hong-kong-trilogy-preschooled-preoccupied- preposte 9.7 Conclusion 359 dreams. As mentioned in the introduction of this chapter, the respondents were positioned at the crossroads of Peterson’s definition of labour and market forces – All of these emerging talents were themselves a multimedia audience who watched films in various contexts ranging from mobile phones to online streaming (legitimate and illegal), as well as theatrical screenings. Overall, many of these young filmmakers and creators were attracted by mainstream films and by the promise of financial rewards and fame. But several also had the ambition to make films that would not solely be financially viable, but would also have a narrative intertwined with a moral conscience. When asked about censorship, few admitted that it was a problem in the pursuit of their creative career, but they admitted more or less consciously that they were self-censoring or ‘playing it safe’ as some of the respondents said. As Rosen argued, the Chinese millennials whether from the first (1980s) or second wave (1990s), tend to be quite ‘apolitical’ and they do not have the desire to interfere with the plans of the party as long as they are given the opportunity to make a living and pursue their professional careers (Rosen 2009). This was tainted with different thoughts when I interviewed Hong Kong based filmmakers who thought that it was crucial for them not to be censored in their creative works. Many of the participants indicated that financial censorship was a bigger problem. Despite the capital flowing into the Chinese creative industries, the main issues for emerging filmmakers remain access to finance and key resources such as experienced and professional talent and equipment (particularly if they do not have a chance to be in a film school or if they are not connected to the golden circle) and distribution (how they share and circulate their film). With an average salary of CNY2000–4000 (US$300–600) per month, only the very rich like Qing and V. can afford to continue to learn from professional directors on large scale shoots. The creative talents who can afford to be paid so little for a long period of time often come from wealthy upper middle classes. The less financially fortunate talents often get deterred from the traditional film industries. If this issue persists, this could potentially create a fracture and lack of access for people who are not from an urban area, who are women, and who are not part of this golden circle. In the medium to long-term, this means that the middle-class or lower middle- class that is the majority of the population in China (c. 1 billion individuals) may not have a representative voice in film. Consequently, it means that eventually, there could be a real social fracture between the well-off filmmakers and their audience. If so, this could literally harm cinema, as the filmmakers would be less and less able to relate and connect with their audience particularly when they copy the aesthetics, style and topics coming from Hollywood. While the filmmakers agreed that platforms such as YT, iQiyi or Tencent Video, were a first step in nurturing their skills and offering them financial rewards and access to an audience, it was still a limited option. The same was witnessed with foreign-based platforms such as Apple iTunes or Amazon that are still intermediated and centralised platform capitalist systems. 360 9 Participatory Involvement and Focus Groups with Emerging Creative Talents

The respondents almost unanimously claimed that they relied on traditional creative and film industries to network, find a mentor, and develop professional opportunities. While some admitted that online opportunities could be used as a calling card, they also acknowledged that in its current form, it was an uncertain path to take straight after formal and theoretical training from a creative media institution. This often sprung from some of the respondents’ lack of experience as much as their lack of confidence in their craft and their creative talent. While most respondents reckoned that they did not like their mechanisms and highlighted their current flaws, the traditional industries still represent a reliable spring board, a necessary intermediary step, for emerging talents to polish their skills before they can develop their own projects. Such experience is also regarded as financially rewarding, even if very little. Qing argued, ‘you get paid to learn stuff, it’s a good deal.’ The traditional industries still occupy a central position between the emerging talent’s education and their full development as creative professionals. These are formative years that the interviewed talents think are necessary to carry out their creative endeavours successfully. Meanwhile educational institutions such as foreign based film schools, Hong Kong-based creative education, the BFA or potentially the Alibaba-Fosun Film Academy could provide the training to develop emerging talents’ skills and creative vision. This formal education can be complemented by professional experience on the job with the traditional industries. In between professional experience and practical education also feature few quality programmes such as Johnnie To’s Fresh Wave that aim to give Hong Kong filmmakers their own creative voice. But these private and government initiatives currently have a limited access and they do not act as a collaborative and coordinated network that can provide financial resources, a professional network, and skill development opportunities in both Mainland China and Hong Kong. When asked about the reason why they wanted to work in the creative industries, almost all talents responded that money mattered, but that they preferred to take a creative job even if it was paid less than a well-paid but unchallenging routinely work. They expressed that ‘personal development’ as well as ‘creative experience’ with likeminded people and artists were rewards and values that were important in their creative career choices. The emerging creative talents also had issues regarding the pressure from their family. This was particularly true for the female filmmakers who suffered from gender bias within the traditional industries and increased pressure from their own families. These family traditions connected to the ‘hinterland traditions’ (Fewsmith 2001; Cohen 1974, 141–142) observed under Sects. 3.2.2 and 8.5.2 tended to hold some of the participants back from their creative projects. For those who can overcome this cultural obstacle, the platform-capitalist corpo- rative structures of companies such as Alibaba and YT in Mainland China or US-based iTunes or Amazon in Hong Kong provide the resources and a first step to create and support a network of experienced creative talents. To answer the question raised in the introduction, I argue that despite being parasitic and exploitative, the practices described above and in previous chapters could References 361 represent an intermediary step and a foundation from where local emerging talents could grow and form their own creative networks. It is what Yeh describes as benevolent ‘Serious fun’ in P2P networks (Yeh and Davis 2017). This argument is supported by Meng and Yeh’s correlated studies between open-source and Zimuzu philosophies, the collaborative movements with flat structures, and the role of informal industries in the development of creative processes (Meng 2012; Yeh and Davis 2017) – These communities work similarly to blockchain networks’ mindset and dynamics. The formation of collaborative ecosystems could subsequently give rise to disintermediated, distributed networks such as those found in blockchain and smart-contract technology collaborative networks that could help coordinate initiatives related to the support of creative talents.

References

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In the previous chapters, I observed how the production process of the Chinese creative industries sector evolved since 2001. I have studied the dynamics of this system from a macro to a micro level and I have identified obstacles that potentially affect both production efficiency and the emergence of new local creative talents. There is a need for a new model, at least for a model that encompasses certain changes. In the wake of the threat of receding box office revenues (Yan 2016), how can Chinese cinema further develop and support the emerging film makers? It is understood that supporting emerging creative talents goes beyond the concept of financial survival or thriving, and also encompasses the filmmakers’ passion factor, their development and recognition within the film industry. In this final chapter, firstly, I will look at the gaps of the existing micro and macro-systems and propose solutions to fill these gaps. Secondly, I will look at existing models that have been developed to address these concerns. Some of them have irreconcilable limitations and others are interesting first steps in the direction of identifying and promoting local emerging creative talents. Thirdly, I will propose a brand new triarchic model which could address the issues highlighted previously and meet the immediate needs of the emerging creative talent as much as those from the corporate giants and the Chinese Government.

10.1 Filling the Creative Industries’ Gaps

The case studies observed previously and the participatory dialogue with emerging creative talent are particularly relevant to this research as they highlighted a series of gaps from which a new model could be created. These gaps are fundamental to assess the possibility to develop a participatory film production model in China. The financier, producer and distributor, Internet giant Alibaba, occupies the centre stage in terms of power and influence on the new online production chain. Throughout the

© Springer Nature Switzerland AG 2019 365 P. Poujol, Online Film Production in China Using Blockchain and Smart Contracts, International Series on Computer Entertainment and Media Technology, https://doi.org/10.1007/978-3-030-02468-0_10 366 10 Proposal for a New Participatory Creative Production Model previous chapters, I have established the mutual activities and interactions of a traditional production with an Internet fast-moving company such as Alibaba Pictures. Alibaba’s strategic decisions and its approach to international promotion, sales and local sales and distribution could be argued to have been detrimental (or at least limiting) to the success of The Last Race. Nonetheless, the creation of Alibaba Pictures is quite recent and these are only the first steps of the creative champion in approaching media content creation. Also of great interest are the feedback, opinions and participatory suggestions provided by the emerging filmmakers and the creative content creators who I interviewed. It is key to triangulate the three elements of this new triarchic model highlighted by Bauwens (Bauwens and Kostakis 2014, 9, 70): the government (public sector or hierarchy), the corporate (private sector or heterarchy), and the participatory audience (or commons) angles. During this research, I have identified six key gaps in traditional film making in China: (1) Issues of transparency and accountability throughout the entire production chain, (2) problems of structural efficiency, (3) issues pertaining to the central nature of the system, (4) problems caused by rigid intermediation, (5) the lack of fair distribution of resources and rewards, (6) the deterioration of core non-financial values.

10.1.1 Transparency and Accountability

Lack of transparency has been identified as a major area of concern throughout the entire production chain. It goes from the development and the production of the film where investors’ money is sometimes wasted for the production’s lack of accountability and the manifestation of private interests. This manifests with micro-politics, lack of judgement, and corruption. Directors and producers alike sometimes spend more money than they can afford. The hiring of talent on film also lacks transparency. This was confirmed by the emerging filmmakers who felt that productions generally tend to rely on hiring friends or family members as opposed to the person who would be more suitable for the role. There seems to be recurring issues of biases regarding gender, ethnicity, or socio-economic in the hiring process. Issues of transparency also impact box office revenues after the film is released. Although the government is trying to tackle this issue along with issues of BO manipulation (Burkitt 2015), it is still a concern for producers and investors who rarely see the proceeds of the sales of their film. As a result, Producers and key participants try to get as much financial rewards from the production budget as opposed to the potential film revenues as a complementary reward for their work. This generates impacts on the quality of the films and encourages widespread corruption. Investors often get to lose some of their stake in the films (Shaffer2015 ). The example of Ms. Xu vanishing with the production funds after the release of the film illustrates this lack of long-term vision and the endemic nature of corruption on productions. It is estimated that The Last Race used CNY10 million for promotion 10.1 Filling the Creative Industries’ Gaps 367 for just a CNY1 million box office return. This raises the issue of the lack of transparency in the distribution and circulation phases. The increase of transparency and the limitation of corruption on film productions should be the main focus. This is also in line with Xi Jinping’s recent anti-corruption campaign. Issues regarding lack of transparency, corruption and micro-politics have an immediate and significant impact on the structure of film productions.

10.1.2 Structural Efficiency

As seen previously, beyond censorship concerns, the most significant set of issues was structural. Although the director and the producers had to negotiate a fine line with the Film Bureau (formerly SAPPRFT), they managed to display some elements of Christianity in the film, which shows a novel way to manage censorship constraints in China. This case study showed that films shot in China could easily be hindered by the very microcosm by which they are bound. The concept of central power that prevails on a film shoot generates peripheral activities that can hinder the production, such as elements of corruption and mismanagement, decrease of efficiency and lower crew morale. This can be detrimental to a production and has nothing to do with the issue of censorship that is currently so politically and widely debated in the discourse on Chinese studies. Issues of transparency are meshed with generally poor organisation and planning. Productions hire many ‘small hands’ who are not skilled without the intention to train them. According to both film professionals (Pilarski 2016; Oulmekki 2015, 2017) and emerging creative talents, there is a sense that productions are often ‘rushed’ to save more money for the Producers and to make up for the funds which have been misused by corrupted parties. This again impacts the quality of films produced and undermines the chances of higher box office sales, critical, and popular success. It also undermines the potential for international sales as the aesthetic and narrative contents of the films generally remain quite low. Paradoxically despite the central structure of the system, there are many loop- holes in the production due to the sheer unnecessary numbers of employees to administrate and too many parties gain access and power to withdraw funds from the production accounts.1 ‘Fixed-minded’ and ‘groupthink’ spread within the production chain behaviours (Dweck 2008, 134–136). This translates to micro-politics, blame game where one tries to out-shine his/her colleagues and a general lack of communication. Lack of useful feedback that could alert Producers on structural issues is also a common symptom. Cast and crew are afraid to voice their opinions. This shows the extremely different approach from the exploitative traditional film industries

1 In a flatter structure, this role is delegated to one trusted central line Producer with sole authority with the Producers to access and disburse the production accounts. 368 10 Proposal for a New Participatory Creative Production Model

(Chap. 6) compared with the way online media companies such as Alibaba are run and how these companies give more importance to their employees and their creative talents (Chap. 5). Even if large conglomerate like Alibaba are ultimately centralised organisations seeking profits and sometimes used as surveillance hubs, they can be considered a moderate step forward in the way they treat their employees and creative talents. A flatter, less intermediated and more efficient structure could foster more collaboration. A more open communication approach from bottom to top would also greatly improve structural issues. In order to avoid loss of face for Directors and Producers, one could imagine an ‘out of the box’ communication channel where cast and crew could leave ideas and concerns anonymously in a box at any point in time (Dweck 2008, 143). This would give a means for the heads of production to address and trouble-shoot any nascent issues very early on. At the moment, good creative and organisational ideas get lost in the pipeline and the rigidity of the centralised system.

10.1.3 Decentralised Collaborative Sphere

The case studies and the interviews with emerging filmmakers confirmed that the power structure of Chinese film productions is currently highly centralised. It is a mirror image of the central macro-power that is in place in China. Nonetheless, it does not have to be this way at a micro-level. The results of this observation calls for a better organisation of film shoots, a greater scrutiny into the accounts to avoid budget drains, communication improvements and less pressure from money-related stakeholders to ensure higher creativity. This means that a flatter production and hierarchical structure would work better. This would mean that the central structure would have to be transformed in a decentralised model where the participants would be trusted to perform delegated tasks. This delegation would mean that each participant would be granted a degree of autonomy and authority to perform their role. At the moment, the model does not take into account the development of the participants or their collaborative role in the creation process. This is also due to the lack of definition of the roles of the participants. Individual responsibility and accountability can only come from a tighter and more accurate definition of the roles. This implies that the number of unskilled workers (‘small hands’) hired in a film production should be limited. This flatter structure of distributed power would have to integrate a good level of control and supervision, with set milestones to avoid the propagation of individual corruption. If done in the right way, it could give rise to a truly collaborative atmosphere where ideas and creative participation would be encouraged. This would unlock the ‘groupthink’ mentality that currently tends to be present on film productions. In a decentralised system, feedback and development should also be rewarded. This would avoid the production repeating the same mistakes and it would turn the entire creative project towards a growth-minded behaviour. 10.1 Filling the Creative Industries’ Gaps 369

In the case of The Last Race, Mr. Shin, as Director and Producer, did not trust the people he should have trusted. He antagonised the participating departments and players, which blocked creativity instead of nurturing it. As he was too busy trying to please all the stakeholders and intermediaries2 involved in the project, he got caught in his own power dynamics of acting as central power or Emperor. He did not listen to his creative departments.3 In the end, the institutions that he was trying so hard to gratify decided on the content of the film and revised their decision that it did not suit the market. The film was effectively made by committee, but not collaboratively. Nonetheless, the collaborative creative process is what most of the emerging local creative talent seemed to be keen on; to embark on a collective journey into creation through which all the participants are given the opportunity to learn. Trying to satisfy the long chain of intermediaries in a series of bad compromises, films like The Last Race fail at many levels: they are neither satisfying works of art, effective government propaganda, or commercial successes.

10.1.4 Disintermediation

In 2003, Jon Silver and Frank Alpert were already describing George Lucas and Francis Ford Coppola championing the decentralisation and the disintermediation of cinema production, distribution, and exhibition. Their vision implied that Producers could release their films directly to the theatres by transferring the creative content by satellite or high-speed Internet (Silver and Alpert 2003, 65). This means that distributors, agents, and many other non-creative intermediaries would be out of a job. Thirteen years later, many non-creative participant players and institutions are centrally involved in the creative process. Sometimes these players even disrupt the creative flow of the film production whereas it is not their responsibility and they do not have the skills and the experience to do so. This type of situation manifested through corporate intervention at production and promotion levels in the case of The Last Race or the influence of the investors in The Heart of Konba.4 Disruptive intermediation occurs at all the levels of the production such as with Mr. Dou’s agent and other casting agents, distributors, and sales agent who all take a significant commission in the film sometimes without creating much value. Although this a generalised attitude which is not specific to China, these intermediaries sometimes block the film making process by using their power as leverage for business negotiation. In terms of distribution and circulation, both the music and the film industries still suffer from high fees levied by intermediaries. These fees are sometimes unjus-

2 Investors, government, corporate partners. 3 Including, music, camera, sound, art, and drama departments. 4 Renamed just 10 days before production in broken English Sword Hidden To Pull. 370 10 Proposal for a New Participatory Creative Production Model tified such as the breakage fee5 which Universal only recently chose to share with its creative talents (Ingham 2015). The same type of fee was charged by distributors as Virtual Print Fee (VPF) in film6 to contribute to the change of theatres from traditional 35 mm projection to digital projection. Now, these fees merely justify the distributors’ existence as intermediaries. The other distributors’ responsibility was Promotion and Advertising (P&A) which has now generally reduced publicity costs through the use of social media. However, distributors’ fees and advertising budgets have increased at the same pace as the film budgets. Instead of making the film medium more accessible to new entrants, it has actually made it more exclusive. Many creative talents in the film complained that sometimes Alibaba imposed more censoring and rigid constraints on the production than SAPPRFT itself. The same was witnessed with talent agencies and notably Chinese star’s Mr. Dou, which had the production to spend additional time and capital in production and post- production due to contractual demands and availability issues. The dynamics observed with the case of The Last Race and The Heart of Konba questions the validity of the agent as a middle-person. On the one hand, the agents7 fight for the financial and general well-being of their clients. On the other hand, they can slowdown and be detrimental to the production and its collaborative efforts. In regard to background actors and actresses they can even turn to be exploitative towards their talent. The alternative with no agent is to leave the actors at the mercy of a corrupt and exploitative production system. There must be a model which finds a balance between the two and which could ensure the fair operability of talent without having to resort to intermediaries.8 The central structure and multiple hierarchic layers also act as many intermediaries in the process that they tend to slow down. Disintermediating the creative agents in a transparent distributed model would solve that issue and rebalance power across the entire structure. Reducing the influence of key stakeholders and operating in a distributed power structure would give the film back to its creative makers. This could be achieved economically by giving total transparency to the stakeholders on how the money is used and how they recoup the earnings. Distribution intermediaries can decide on the success or the failure of a film by opening or blocking its circulation. However, decentralising and disintermediating the film process may go against the accepted cultural central system in China. The effects of transforming such a system are unknown. If such a transformation were possible even at a micro-level, what would be its effects? As seen with P2P piracy, the use of a distributed structure in a central system can be very disruptive (Meng 2012).

5 Originally a commission charged for risks associated with discs breaking during the distribution process. Except for the niche Vinyl market, this process is now obsolete in a digital distribution model and the fee is therefore unjustified. 6 This fee was charged initially to cover the cost of printing and transporting 35 mm copies of films: each copy could cost an average of US$6000–8000 and weighted about 28 kg for a feature film. Depending on the circulation territory, a popular film would typically require a few hundreds of copies for a release. 7 Be it casting or sales agent. 8 This will be developed in the Sect. 10.3 of this chapter. 10.1 Filling the Creative Industries’ Gaps 371

10.1.5 Fair Redistribution of Resources and Rewards

The corruption and individualism seen previously can put a strain on film production’s cash flows. In the case of independent productions likeThe Last Race, these cash flows are often frail because of the tight production budgets. In addition, rampant microcosmic corruption and the lack of accounting safeguards damage the accounts even more. Lack of transparency greatly affects the fair distribution of resources within the production. It encourages the corruption of the system at an individual level. Each individual tries to survive in what they consider a corrupt system. A micro-political and blame game mentality develops. Attracting negative attention to one’s co-workers in order to perform one’s deals undercover more safely and not to get caught becomes a widespread practice. This endemic level of corruption is extremely destructive within the production as it antagonises and divides people instead of creating artistic project collaboration. The 1/8 or 1/10 scale ideal presented by Bauwens and Kostakis (2014, 67) could disengage this vicious circle. The open ledger concept of blockchain, although it is still a nascent and experimental technology, is a very attractive proposition to bring transparency and a fair redistribution of capital to film productions (Marr2016 ). The blockchain technology has drawn a lot of attention from Alibaba already, particularly in the payment and transaction area9 (Mendoza 2016). As seen previously in the case study and interviews with emerging filmmakers, when people are not rewarded for their work, be it in terms of credit (recognition) or financially, it can become very damaging in the short-term but even more problematic in the long-term: People simply cannot sustain a living from their art and skills. Disheartened professional crew and talent leave the industry to find a living in another sector unless they belong to the golden circle and are already financially independent. In this situation, the long-term development of these creative talents and their skills is not possible because newcomers keep coming in without being properly trained and the wheel keeps being reinvented every time. The lack of financial rewards as a foundation can also distort other values that the creative participants may have in the project and the industry as a whole.

10.1.6 Non-financial Values

Exploitation and lack of fair redistribution of the non-financial resources and capital impact other aspects of the production at an individual level. Creative talent feel disrespected. They also feel a lack of empathy and a lack of consideration, which deteriorate their level of commitment into the production. In the same way as in the macro-dynamics of Chinese society, these mechanisms can give rise to a super

9 This will be discussed into more details over Sects. 10.2 and 10.3. 372 10 Proposal for a New Participatory Creative Production Model individualistic and corrupt system down to its roots where basic work etiquette and quality procedures are not adhered to. This goes from the emergence of micro- politics and back-end deals on the production10 to pure negligence due to lack of commitment in the creative work at hand. For instance, a few weeks after the production phase started on The Last Race, it was surprising to see that phones and walkie-talkies were not switched off after the Director had shouted the word ‘action’. Joseph Fiennes as well as the Drama Coach and several directorial team members complained many times that phones were not switched off before filming,11 that the general public was not pushed out of the shooting area, or that absolute silence was not reigning before action. This lack of basic work etiquette was a symptom of the negligence, which had emerged as a direct result of lack of commitment. This lack of commitment was due to the distor- tion of and lack of values other than direct financial rewards and capital. Lack of commitment in the production is also illustrated when crews start sleeping wherever they can on set or at the back of the transportation vans (Pilarski 2016). When the distribution of resources and rewards is lacking and that crews are exploited, the key value seems to become capital. Interviews with the emerging filmmakers confirmed that money and to some extent illusions of fame seem to be the main drivers of their motivation. It also creates fixed-minded, short-term ambitions as opposed to the development of a creative industry based on solid foundations. Very few of the people involved in film displayed the ‘passion factor’ described by Philip Lee that allows people to go beyond the line of duty to collaborate towards the creation of a collaborative project and to see it through. Capital and resources seem to act as basic foundations of the value system. Capital is what ensures the basic life function of the creative participants. Other resources enable the participants to perform their creative jobs in decent conditions and therefore strive to be recognised as professionals. It could be argued that the latter at an individual level is connected to fame.12 Fame as value is simply a form of social recognition, which can take many shapes. Social recognition, whatever its manifestation might be, is a fundamental human value that complements the financial rewards (Graeber 2001, 8). When the basic physical requirements (resources and financial rewards) are not met, all the other values tend to disappear. As evidenced while interviewing emerging talents about their motivation to work in the creative industries, these other intangible values can be found for instance in personal development, free time, achieving a creative goal together, long-term professional development (learning skills and gaining experience), getting recognition within the industry circle,13 the

10 As previously explained in Chap. 6. 11 Phones being kept outside of the set or being switched off is customary during a film shoot. This is as much to avoid embarrassing pictures to be leaked to the press as to limit distractions among cast and crew. For instance on Ghost in The Shell, no pictures were taken on set unless people were accredited to do so. A Non-Disclosure form was signed by all the people allowed to access the shooting location. 12 Fame in terms of business is also connected to capital, where actors and Directors can become bankable. 10.1 Filling the Creative Industries’ Gaps 373 type of work performed (far from the 9 to 5 pm daily routine) which is what most filmmakers seem to be keen on. In addition to the access of basic resources and monetary rewards, during the interviews and focus groups, these core non-financial values were what seemed to motivate the emerging talent to work in the creative industries. This reinforces Mauss’ argument that creative talent should lose themselves in their art without any other motivation (Mauss 1965, 67). Although the material aspects were essential values that needed to be met, they led the emerging talent to prefer the participatory system of crowdfunding and crowdsourcing as a means to express their creative vision more freely. They felt that regardless of their individual background, socio- economic make-up or gender, crowdfunding and crowdsourcing were opening financing and production opportunities to them by letting future audiences decide on which films would get made. The fair distribution of resources and rewards is seen by most crew members and creative agents as a form of basic respect and consideration. It generally gives rise to other long-lasting values that nurture the passion factor and are strong foundations for the creative industries. Having directors and producers to listen and exchange with creative teams in a collaborative atmosphere with respect is paramount lesson going forward to make quality films. Unlike in the manufacturing sector, the cheap look and the poor quality of a film are immediately apparent. With the word of mouth from new media collaborative audiences poorly executed films cannot attract much revenue and they become rapidly redundant. They end up not selling as much as planned and the investors get burnt, which means they will probably not invest again in another film for a long while. In conclusion, the lack of transparency and the corrupt nature of the system can create a three-pronged deeply rooted instability within the creative industries: it can deter the investors from investing in other films, it discourages the creative talents from pursuing a career in media and it refrains audiences form paying a full price ticket to see lower quality films in theatres – as experienced recently (Chen 2016; Frater 2016; Ryan 2016). There is a genuine risk that if financial investments, revenues and talent desert the creative industries, the whole system would collapse. This is also connected to the values of each of the participants in the system would have lost their other non-financial, intrinsic values in the process. As a whole, it is detrimental to both the entire media industry, the creative potential of the country, and its capacity to generate effective soft power (Keane and Donald 2002; Keane 2013, 2015). While censorship cannot be changed easily and appears to have generally got tighter since the merger of GAPP and SARFT into SAPPRFT, it is considered to be part of the ‘rules of the game’ (Ramsay 2014). Censorship can take many faces: I illustrate the full effect of censorship as concentric circles and levels of censorship in Fig. 10.1 below.

13 Although this has to do with social recognition, it is slightly different from fame, because instead of being praised for market success, one is praised for their hard-work and hard-earned talent and skills. 374 10 Proposal for a New Participatory Creative Production Model

Fig. 10.1 The circles of censorship. (Courtesy of Patrice Poujol)

These censorship circles operate from the macro-level to the micro-level: They start with government guidelines and rules, these rules transform into corporate/ financial censorship, which is usually tighter to avoid government reactions, and they reach the individual level as self-censorship.14 Even if government and corporate censorship are hard to tackle, productions should adapt to these censoring facets in the short-term. Self-censorship certainly can be addressed within the rules outlined by SAPPRFT. Moreover, the value of collaborating towards the completion of a creative project as a collective is an ideal that could greatly appeal to the Chinese Government as a federating tool. To do so, it is crucial to design a viable production model that should satisfy the film industry professionals and the government through a crowd mediated platform. As experimented over 12 years ago by Austin in a similar way, this fieldwork was truly multi-dimensional. In addition to Austin’s approach, this methodology integrated a participatory view, which was necessary to design a model catering for all the parties involved, whether creative, corporate, or institutional. It was a unique experience to be able to network with Hong Kong, Chinese, and international film industry professionals and new aspiring and emerging Chinese filmmakers alike.

14 I have represented the more central and micro-circles with heavier lines as they are more pervasive for the artists. 10.2 Existing Participatory Models and Other Potential Solutions 375

Interviewing them enabled me to derive some trends and conclusions on the needs of new emerging filmmakers in China in regard to a model that would allow them to make films and take the succession of the old guard.

10.2 Existing Participatory Models and Other Potential Solutions

Given the level of exploitation on local shoots, working as an assistant on feature film productions as a learning experience is a very challenging task that only individuals coming from wealthy families can sustain.15 Alternatively, there are a number of instruments, institutions and participatory models aimed to support local film productions and emerging filmmakers. I will study them briefly in this section and outline their current limitations. These initiatives include financial and insurance instruments, public institutions and Internet platforms.

10.2.1 Financial and Insurance Services

While these instruments pertain to the capitalist political-economic model, they are available on the Chinese market with varying degrees of use.

Completion Bonds

Completion bonds and guarantees act as production insurance instruments. They insure that the film will be finished by a certain deadline regardless of negative external or internal events that may affect the production negatively.16 Companies such as Film Finances provide such services internationally including in China (Browning 2011). They have a supervisory role on the production and they act in the investors’ and financiers’ best interest. Whereas they present a genuine solution for productions’ transparency and accountability, they are not yet widely accepted in China. Aside from the large fees taken from a Completion Bond which can be about 3–5% of the production budget, one of the key reasons why these services are not yet commonly used in China is that the insurance services linked to the bond do not offer the same degree of coverage and sophistication as in Europe, Australia or the US for example. Therefore it would have a very limited benefit in case of extreme situations when for instance the lead actor or actress would be injured and unable to work (Chapas 2015).

15 As seen in Chaps. 6 and 9. 16 This responsibility is sometimes mitigated in case of acts of God or unforeseen circumstances. 376 10 Proposal for a New Participatory Creative Production Model

Another issue is that the completion bond company can decide to take over some of the production and the creative control over the film if there is evidence that there is a breach of the terms and if the film will not be completed within budget for example (Coonan 2007; Chapas 2016). In that case another Director can be assigned to the production to complete the film or as in the case of Mathieu Kassovitz’s Babylon A.D. (Kassovitz 2008) for instance, the completion bond company inter- venes to wrap the film within budget and within the agreed deadline. The impact of such measures means that the film is then made by committee and the result is often a BO disaster: Babylon A.D. only grossed US$22.5 million in the US for an estimated US$70 million budget. The film later reached US$72 million in revenues including international sales, but given that c. US$70 million was invested in Promotion and Advertising (P&A), the film lost nearly US$70 million.

Collection Agents: Revenue Transparency

The function of collection agents is to ensure that all the film revenues are collected to a central escrow account and then redistributed from the distributors, broadcast- ers and other revenue channels to all profit participants: The sales agents, the Producers, the investors, creative talents and rights holders. The use of a neutral third-party greatly improves transparency at the end of the production chain, after the film is released on all the circulation windows. Companies such as Fintage House, based in the Netherlands, have provided this type of service for many years in Europe and the US. Collection companies have sometimes used practical and informal techniques to contribute to the transparency of BO revenues. This means for example hiring audience members and students to attend random cinema theatre screenings to ensure the verification and the reconciliation of audience members’ physical presence. These numbers are compared and reconciled with distributors’ and theatre chains’ metrics to highlight potential discrepancies (Oulmekki 2015, 2017; Melchior 2015; Chen 2016). Despite the current BO discrepancies and the issues of revenue distribution, the take up in China is quite slow (Melchior 2015). One of the reasons is that Chinese production companies are not yet familiar with this system. They do not seem to trust the supervision of a foreign company over their accounts and of course these collection services although helpful are subject to fees which Chinese Producers are not willing to pay: around 1% of gross revenues. The process is also quite procedural in terms of legal and administrative documentation to provide. Beijing-based Uni Film Co Ltd. offered similar services in China in March 2016, but the company had been created very recently and Producers did not necessarily trust this newcomer. At the time these lines are written, the company seems to have ceased to operate. In terms of transparency, having a reliable Line producer in charge of the accounts has been up to now the safest method to insure control and transparency over budgets. Line producers are experienced professionals, but there are just a handful of them. The most experienced are to this date foreign line producers and Chinese producers rarely trust a foreigner to take control of their accounts. This is also due 10.2 Existing Participatory Models and Other Potential Solutions 377 to the language barrier issues. Line producers have to deal with all the film’s departments; therefore, communication skills in the local language are paramount. Only a couple of line producers can currently act as cultural bridges between Western and Chinese productions, such as Aaron Shershow who has worked in China over more than 15 years or Dr. Philip Lee originating from Hong Kong and who has now left his role of line producer almost 10 years ago for more prominent roles of executive producer and producer (Shershow 2015). But such professionals are very rare. Most of the times, the production has to rely on young inexperienced talents to take this key role and. Therefore the redistribution of the production resources is generally subject to human bias and to the reliability of the line producer. With the use of the blockchain as a model for transparency, this bias could strongly be mitigated. The human bias and subjectivity could be replaced by technological objectivity, at least for some part of the process. The growing Chinese film industry cannot rely on a handful of trusted professional line producers to produce 600–700 feature films per year.

10.2.2 Public and Semi-public Institutions

The Chinese Government wholly or partly sponsored these institutions to support local filmmaking. There are several institutions that can cater to filmmakers at national and provincial level, but the most notable are the China Film Foundation (CFF) and film festivals which offer exposure and sometimes financial awards to emerging creative participants.

The China Film Foundation (CFF)

China established the CFF17 almost 30 years ago, in 1989, as a way to support the local film industry’s development. As observed during the series of dialogues with emerging filmmakers, one of the key obstacles has been funding. Because these emerging creative talents do not have a bankable name yet, financial institutions refuse to lend them the necessary funds to make their first film. It is only possible to those who are part of the golden circle and enjoy rich friends and family. This has the disadvantage to limit opportunities for the majority of the artists who are not part of this circle. It also poses the risk to create an elitist filmmaking society that is detached from the rest of the population and audiences. The CFF was originally supposed to fill this gap as a funding source to help young moviemakers develop their skills and talent. As a public institution politically tainted with socialism with Chinese characteristics, the foundation is mostly funded with the 8.3% government tax on BO tickets. But the foundation is widely regarded as mismanaged, inefficient, and corrupt (Keane 2013; Fang 2014).

17 As mentioned in Chaps. 4 and 7. 378 10 Proposal for a New Participatory Creative Production Model

The CFF’s role to attract funding for young emerging talent is therefore very limited in contrast for example with Create Hong Kong and the Hong Kong Film Development Council (FDC) who organise Asia Film Financing Forum (HAF) in collaboration with Filmart and the Hong Kong Trade Development Council (HKTDC). Create Hong Kong and the FDC also organise the annual Macau Film Production Investment Trade Fair in July with the collaboration of the Macau Government and the Guangdong Provincial government to promote and finance local emerging Cantonese talents every year.18 Because of corruption and its centralised bureaucratic system, the CFF was unable to reach international opportunities. In addition, it did not adapt sufficiently rapidly to the technological changes in the media sector and the audience’s transformations in media consciousness. Another structure which supports young filmmakers is the China Film Foundation’s Wu Tianming Film Fund for young talents, which also has a screen- writing workshop based in Qingdao. It is the fourth generation legendary filmmaker Wu Tianming’s legacy before he passed away on March 4, 2014 (Zhang 2016). The fund which is now run by his daughter Wu Yanyan (Janet) is a wonderful opportunity for young filmmakers to develop their skills and to produce their projects (Wong 2016b; The Chinese Film Market 2016). However, despite being less bureaucratic than the traditional CFF, the selection process still limits access to a wide array of young filmmakers who do not have the means to move geographically.

Film Festivals

There are several political-economic hybrid film festivals in China, supported both by the government and private sponsors, including the Beijing International Film Festival, the Shanghai International film Festival, the Jilin Film Festival, and many others. These hybrid film festivals feature the country’s soft power by inviting high profile foreign and local celebrities and have little concern for the emerging local filmmakers.19 Two festivals seem to have shown such potential recently; for example The Silk Road Film Festival and the Shenzhen New Media Short film Festival. The Silk Road Film Festival (SRFF) which is held annually between Xian and Fuzhou, started with good intentions of opening bankable and new talent to coproduction opportunities worldwide. The aim of the festival was to increase the cooperation with such areas as Russia, the Middle-East, India and Europe for independent projects free from Hollywood influence. However, shortly after it started in 2013,

18 Although Creative Hong Kong and the FDF are estimated to be much smaller than the CFF’s, they contribute to fund local filmmakers. The HAF contributes expand Hong Kong filmmakers’ reach to Pan-Asian and worldwide creative collaborators. However, their integrity as local fund might be threatened in the near future by the ambitions of the local Hong Kong government to comply with the Chinese market (Wong 2016a). 19 These festivals feature a sub-section for young filmmakers in the margin of the official selection which is mostly buried in the overall programming. Very little access is given to these filmmakers to network with professional filmmakers unlike in the early days of Sundance where Quentin Tarantino started his career by being able to connect with filmmakers such as Terry Gilliam. 10.2 Existing Participatory Models and Other Potential Solutions 379 the festival seems to have been taken over by corruption and self-interest (Sun 2016). Well-known filmmakers visited the SRFF exclusively to be seen by local and central government agencies and officials. Mr. Shin, for example, presented his next soft power project about the story of Zheng He at that festival.20 Nonetheless the SRFF raised little effective international collaboration on actual film projects and particularly none with emerging filmmaking talent (Sun 2016). These state-financed festivals consume public funding with very little return to be seen. As seen in Chap. 9, high profile film festivals are notorious for their lack of follow up once the events and their promotions are over and very few of the promises made in front of the cameras are actually kept (Oulmekki 2015, 2017). Launched in 2010, the China International New Media Short Film Festival (CSFF) that is based in Shenzhen is probably one of the most promising Chinese film festivals for young emerging filmmakers. It is sponsored by public institutions and by the private sector: Local and national manufacturers support the event, making it a semi-public or hybrid film festival. The CSFF has one of the highest financial prize for short films in the world; CNY300,000 (c. US$45,000 equivalent) for best Director. The festival features many other prizes as well as a screen writing competition. The festival also features a short film market that is concerned about protecting and promoting local talents’ IP. Thanks to the level of financial rewards, the opening to international entries and its recent interest for new non-linear narrative film art forms such as Virtual Reality (VR), the festival has managed to foster a strong local, national and international collaboration. This was combined with the participation of its international partners such as the MPAA, Unifrance, the British Council, Hong Kong partners such as the Hong Kong Productivity Council and Baptist University as well as national and provincial partners such as the Beijing Film academy, China Film Group, Huayi Brothers and Shenzhen Media Group. The CSFF has generated a true competitive spirit and an educational journey among local emerging talents. But a lot of the work and the true ambition of the festival are geared towards promoting the city of Shenzhen21 and the sponsor brands for which CSFF seems to be created. Ultimately, the festival has to balance political and economic considerations between the government and corporate sponsors. This comes sometimes at the expense of the filmmakers as there is a large element of product placement and promotion in it (Sun 2016). Nonetheless like Alibaba and YT’s models, it is a step in the right direction as it gives a window of opportunity to local filmmakers to get local and international exposure. Jonny To’s ‘Fresh Wave’ festival described in Chap. 9 is also a very effective springboard for Hong Kong emerging talents and for the past 2 years as a connector with Chinese and international talents. But in the context of China, it is a Hong Kong local and still a rather limited scope initiative which cannot identify and sup-

20 As mentioned in Chap. 6. 21 One of the film category is about Shenzhen theme related films. 380 10 Proposal for a New Participatory Creative Production Model port an entire generation of Chinese filmmakers. Access to the festival is also limited. Even if they successfully manage to enter the festival and its network, it may be difficult at the moment for Chinese talents to reach out internationally in a meaningful way with the ‘Fresh Wave’ festival, unless it features prominently in large international class-A festivals such as Toronto, Sundance, Cannes, Berlin, or Venice. While the festival has worked successfully to establish connections with these international events and while it has managed to showcase some of its films in these international festivals, its worldwide recognition may still take time to mature. Some of the emerging talents have also remarked that in the past instalments, the Fresh Wave had been tainted by a certain style, aesthetics and signature that sometimes preclude ground-breaking and risky artistic attempts. As an alternative, the First Film Festival offers pitching and finance opportunities for young emerging film maker’s first films. The government did not support this and the festival had to move from Beijing to Xining to continue to exist. Jia Zhangke also created the Jia Screen film portal for first time filmmakers’ short films launch- ing in December 2016 (Frater and Ramachandran 2016). This is the Chinese equivalent initiative to Mr. Gordon Levitt’s Hit Record. But the aims of Jia Screen seem to be currently more emphasised on circulating and promoting films than generating direct creative collaboration like Hit Record. The results of such film festival initiatives are yet to be proven. There does not seem to have been any real follow up on previous winners of the prizes. There are exceptions for filmmakers who have managed to be distributed to foreign film festivals such as Bi Gan, Director of Kaili Blues [路边野餐] (Gan 2016). Bi Gan is now able to finance his next film thanks to a coproduction with France, like Wang Xiaoshuai before him. French producer Isabelle Glachant supported Wang Xiaoshuai thanks to the coproduction system and the French Film Fund (CNC) (Glachant 2009). But these are rare and isolated examples, which cannot constitute a long-term strategic model. Very few of the participating filmmakers seem to have been solidly identified for the long-term, promoted as emerging talent, or are working on their own feature film projects yet.

10.2.3 On-line Platforms

Internet portals offer in principle the opportunity for emerging local talents to get access to funding, creative resources, and sometimes national or worldwide exposure.

International Participatory Platforms

More than a dozen crowdfunding and crowdsourcing projects targeting for film and media content were created from the mid-2000s. The following is not an exhaustive list, but a selection of some of the highest-profile projects at the time this research is being written. 10.2 Existing Participatory Models and Other Potential Solutions 381

It is hard to keep track of these portals primarily because the lifespan of some of these companies has sometimes been rather short. For example, My Mini Major only existed for a few months before shutting down in 2012. As a result, crowd investors’ funds were lost. Loosely associated with CineCrowd, another crowdfunding platform, MovieStarter, was never actually launched and remained at concept stage.22 This situation and the few cases where projects failed to deliver what they had promised despite being fully funded puts a high risk on the crowd investments. It impairs the trust of potential audiences who can feel manipulated and get confused by so many crowdfunding platform options. Kickstarter, Hit Record, Slated, Indiegogo, Crowdrise or Wreckamovie have become mainstream websites for participatory filmmaking.23 These websites have expanded worldwide but they have had a limited success in China so far. Each one has managed to grow within a defined niche. Kickstarter and Indiegogo tend to cater for nascent filmmakers, whereas Slated and Hit Record are designed for more seasoned, experienced or professional filmmakers. Kickstarter differentiates itself from Indiegogo with different terms,24 its larger community and its ‘all or nothing’ mechanism: On Kickstarter if a project does not reach its target funding levels, it does not get financed, whereas Indiegogo allows the filmmakers to take the money pledged. Filmmakers and crowd investors have varying and sometimes conflicting views about which system is better; some argue that if a project is not funded, it simply does not attract enough following in the market, while others consider whatever money is raised as seed funding, which can eventually help the project flourish. Other projects such as CineCrowd25 (created in the Netherlands in 2010) or Ulule (French project created in 2010 and which has since expanded in Europe) are open internationally, but they have too much of a local appeal to reach China. To some extent, platforms such as Kickstarter or Indiegogo have tried to expand from the US worldwide, but the projects proposed locally have had a harder time to find investors than US-based projects (Duruz 2015, b). In 2011, after it helped financePOLLUTED 26 through its portal, Kickstarter has now changed its stance with the Chinese authorities. One of the platform’s aims is not to be blocked in China particularly after it opened a recent office in Hong Kong to increase its appeal with local crowd investors in 2015. Kickstarter has limited its selection to a couple of arts project mostly in the more liberal Shanghai area. Other

22 https://prezi.com/nufnchy_rejn/moviestarter/ 23 They feature crowdfunding and sometimes crowdsourcing simultaneously like in the case of Hit Record, Slated or Wreckamovie. 24 Kickstarter takes a 5% brokerage commission, while Indiegogo takes a 4% commission on accepted and funded projects. 25 https://cinecrowd.com/nl/seeltje-van-boeckel 26 POLLUTED: ecological disaster meets human tragedy in China is an environmental documentary project from a US filmmaker originally blocked by the Chinese censor: https://www.kickstarter.com/projects/richardtrombly/polluted-ecological-disaster-meets-human-tragedy-i/ posts/51233 and https://shanghaifilm.wordpress.com/2011/01/28/judy-li-director-launches- her-crowd-sourced-funding-drive/ 382 10 Proposal for a New Participatory Creative Production Model projects include mostly technological innovations and only four non-controversial documentary projects now populate the Kickstarter slate, including one which is a series about Americans living in China (Black in China, Beijing Being Feature Film).27 A feature film with few Chinese elements,Everything Before Us (Wang et al. 2016), managed to be entirely crowd financed for a budget of US$358,308. Nonetheless, it was produced in the US by Wong Fu LA-based productions and it did not directly involve China (creatively and in terms of its distribution).28 Kickstarter is trying to address the Chinese market, but it is doing so from abroad. This can translate in obstacles such as access to funds and money transfer issues. Moreover, the Chinese Government may decide to close the site down as it did in the past with ‘Google’, ‘YouTube’ or ‘Facebook’ to protect its own market and control the content on these websites. Therefore, Kickstarter as a crowdfunding platform has probably a very limited scope and future to support the Chinese emerging creative talents. Hit Record combines crowdsourcing and crowdfunding as an online collaborative project. It was a model which started as a website in 2005 and was set as a platform from 2010 with a worldwide launch in 2011 by celebrity actor Joseph Gordon-Levitt, who calls himself ‘Joe’ in the platform promotion to appear more reachable to crowd sourcing talent and the crowd investors (Blackbook 2011). Hit Record attracted a lot of attention particularly after Mr. Gordon-Levitt’s roles in Inception (Nolan 2010), Looper (Johnson 2012)29 and after directing Don Jon (Gordon-Levitt 2013). Don Jon was a film created through the Hit Record collaborative model. The venture probably started with a good intent to challenge all aspects of artistic creativity, not just film. About what motivated the creation of Hit Record, Mr. Gordon-Levitt says ‘I no longer wanted anyone to tell me how I was allowed to express myself’ (Blackbook 2011). However, in the same way as Kickstarter and Indiegogo function, these platforms run the risk of becoming parasitic and exploitative models (Terranova 2000, 2004; Johnson 2007; Sennett 2008; Lobato, Thomas and Hunter 2011; Gubbins 2012; Bauwens and Kostakis 2014). The exploitative danger of the distributed economy has been widely identified by academics. For Bauwens and Kostakis 2014( ), Kickstarter falls into that category. Hit Record is particularly exploitative as it rests on a trusted brand name to attract freelancers while the creative and financial decision power remains controlled and centralised. Kickstarter and Indiegogo take on a significant commission of 4–5% as intermediary to connect people. In 11 years since its creation, while its staff tripled from 4 to 12 people, Hit Record redistributed only US$2 million over dozen of projects including an HBO broadcast TV series, a Pivot TV network show and a theatrical

27 https://www.kickstarter.com/projects/kmatikc/black-in-china-season-2 28 https://www.indiegogo.com/projects/wong-fu-productions-first-feature-film#/ 29 Looper also had Chinese elements due to the partnership with Chinese production company DMG entertainment. The film was also partly shot in Shanghai to increase its chances to be distributed in China. 10.2 Existing Participatory Models and Other Potential Solutions 383 release with Don Jon. These projects were negotiated for more than the US$2 million redistribution to collaborators. All these platform projects as Bauwens and Kostakis claim are part of ‘Netarchical’ and ‘distributed Capitalism’ categories, which means that they intrinsically serve the system already in place and exploit cheaper labor (Bauwens and Kostakis 2014, 26, 34). Kickstarter, Hit Record, Indiegogo and other foreign crowdfunding websites have limitations and are not very active in China partly because of lack of transparency and adaptation. While these Western-based websites do not widely operate in China, Australian project Pozible was the first crowdfunding startup to have expanded in China in 2013 with offices there and therefore a possibility for local filmmakers to withdraw funds, but little attention has been given to the film potential of the model and it mostly finances technological innovations (Clune 2014).

International Blockchain Collaborative Platforms

In 2015, when I started studying the potential advantages and shortcoming of blockchain and smart contract technologies for the media sector, there were no official companies launched to cater for the creative industries. In 2016, at the exception of the gaming sector, less than half a dozen decentralised applications (Dapps) had been created (one for movies and a handful for music). In 2018, at the time the first edition of this book is being released, there are more than 30 Dapps identified in the creative industries.30 If we focus solely on filmmaking more than a dozen aim to transform the film and audiovisual content industry.31 Most of these companies concentrate on the end audience (B2C solutions) and the distribution holy grail, very few cater for B2B solutions. Up to September 2018, very few films had been financed with cryptocurrencies. It was the case of Braid,32 which would have probably not been financed by the traditional system. Braid is an inspiring story which shows progress through the use of crypto-currencies as a funding mechanism. Mitzi Peirone, an emerging female Director had the opportunity to raise the funding within two weeks in Ethereum and this example gives a great example for content diversity, which blockchain technology can enable. But beside the lukewarm reception of the film (Harvey 2018), when we look closer at this case, we realise that the Director knew New York-based Joseph Lubin (cofounder of Ethereum and founder of Consensys which greenlit creative industries Ethereum projects such as Ujo, Cellarius and SingularDTV (Breaker)). Lubin’s Consensys crowdfunding platform, Weifund, organised the fundraising. Lubin also took on the role of one of the Executive Producers on the film (Crypto Insider 2017; Solsman 2018). This raises the question on whether Ethereum is a truly decentralised system open to all emerging artists or whether it continues to foster centralised creative circles. In this case, will the films emerging from the

30 Many of these companies are in gaming which is outside of the direct remits of this work. 31 See Appendix 10 and 11 for more details about these companies. 32 Braid raised over US$1.4 million equivalent in Ethereum for its production budget in 2017 (Arnon 2017; Token Talk 2018). 384 10 Proposal for a New Participatory Creative Production Model blockchain model be better or worse than those already produced by the traditional studio system? Braid had its debut at the 17th Tribeca Film Festival (Blocktribune 2018). This may not be surprising given Tribeca’s Director, Geoffrey Gilmore, his pioneering mindset and strategy regarding the digital transformations of the festival over many years and his previous work at Sundance. The involvement of Tribeca33 may have also been facilitated by the fact that Lubin’s operations are in New York not so far remote from Tribeca Film Festival offices. Nonetheless, Braid was a good starting point for other projects to be financed with the same model. According to the legal firm involved in the fundraising of Braid, Perkins Coie LLP, the tokens used for financing the film were equity tokens (Crypto Insider 2018). This is an interesting departure from most of the ERC20- based ICOs witnessed between 2016 and 2018, which claimed that they were utility tokens. These companies were not held accountable for the funds raised as they were escaping the SEC rules and token holders had no shares in these businesses. These types of practices would raise serious concerns generally for IP and Film shared investors’ ownership. In effect, the SEC since announced that ICOs were now considered security token schemes (Hurtado et al. 2018). Therefore even if the film was not critically acclaimed, Braid was a visionary project from the point of view of its financing structure and it paved the way for more films being funded this way. In a similar way, funding access was given to Ujo for music. Ujo which means container in Esperanto34 and has worldwide aspirations uses the blockchain and cryptocurrencies to make sure that artists get the royalties that they should earn, the system is transparent and collaborative. Based on the same model, a blockchain company Musicoin issued token and set up a platform to ensure that artists who upload their work on their platform get rewarded for the use of their work systematically and in real time. The use of cryptocurrency options mean that artists can be paid anywhere in the world without banks or other institutions taking large commission or transaction fees. It is a good premise for a participatory creative system, but Ujo and Musicoin are currently only aimed for music and they are not fully available in China yet. Other platforms such as Po.et focus on publishing, but they suffer the same limitations as Ujo and Musicoin for instance. Also because they are foreign-based companies, the corresponding websites face a potential risk of shut down if it becomes too widely used by Chinese creative audiences. Bitfilmfund is a film version of Ujo, but it mostly caters to the US and does not offer pages in Chinese.35 Since I started writing this project, Bitfilmfund has closed its doors, but I will comment briefly on it as a case study because it is still a representative example of the ecosystem which is taking shape in regard to the tokenisa-

33 https://s3.amazonaws.com/tribeca_cms_production/uploads/document/document/5ad9602cb5b 6e23e1cf747ea/Braid_Press_Notes.pdf. 34 Esperanto was originally proposed as an international language by Dr. Ludwig L. Zamenhof, a Polish physician, who published it in 1887. 35 http://www.bitfilmfund.com/ (at the time of the publication of this work, bitfilmfund has already stopped its activities and the portal is closed). 10.2 Existing Participatory Models and Other Potential Solutions 385 tion of creative rewards. The Bitfilmfund system was innovative as crowd investors could use Bitcoins and other crypto currencies (Altcoins) such as Dogecoin, Litecoin, or Ripple to fund films. The website also supported Paylpal. No system seems to be in place to mitigate the volatility of some of these coins as some of their financial value can surge or plummet by 300% in a couple of days, which makes managing the film budget very risky and almost impossible.36 SingularDTV (Breaker) and 21 M also successfully raised several million US dollars in a few days to create film and creative content-based platforms. SingularDTV (Breaker) based out of New York had the advantage to be backed by Steven Spielberg’s production collaborators and it was valuated at US$140 million in July 2017, quite a rapid increase for a company only created in 2014. Other tokenised initiatives such as Steem allow creative talents to either publish or post video content on their website and get instantly rewarded for their work in the form of tokens, which they can then redeem for Ethereum or Bitcoins and convert into fiat currencies if they wish so. While others try to position themselves as streaming platforms (PROPS) or creative decentralised distribution platforms to protect the content Producers’ IP through blockchain technology (Viuly.io or Cinemarket.io), they may manage to disrupt the existing centralised platforms over the next few year (Virk 2018). Before they become a dominant force, they will have to face the immediate challenge of competing against large centralised circulation platforms such as YouTube, YT or iQiYi who already have a large audience base as seen in Chap. 7. In the year 2017 and in the first few months of 2018, there has been a multiplica- tion of such projects. These ventures are trying to use the blockchain technology hype to raise funding for films which could have been financed traditionally such as horror platform. Shivers, launched in February 2018 by the Producers of The Blair witch Project and with controversial but influential blockchain figure John McAfee as advisor.37 Other projects adopt a good brand and marketing name that they use to lure crowd investors into their fund raising campaign while providing very little details of their project and their team or any guarantees in return.38 Chris Woodrow, one of the Producers of Birdman and Hacksaw Ridge also announced that he was going to launch Moviecoin in the hope of raising US$100 million to finance his film projects (Jacob2017 ; Russo 2017). Woodrow is thought to have opted for the cryptocurrency fundraising opportunity after a series of production issues. He was being suspected of stealing funds on Birdman and was let go of Worldview Entertainment before also losing his co-founding position at Vendian Entertainment for ‘over spending’ (Marsh 2014). It remains to be seen after Moviecoin is launched how transparent this platform may be.

36 Another potential issue about Altcoins and Blockchain is security. In light of recent hacks on the DAO (April 2016) and several exchanges including Gate Coin and Bitfinex, it is still a model in its infancy which needs to be well designed and experimented if translated to film production. Starting with short films or low budget independent films would be a wise way to operate. 37 http://shivers.io 38 https://www.ukfilm.io/ 386 10 Proposal for a New Participatory Creative Production Model

Other sets of platforms such as The Film Alliance created by emerging filmmaker Paul Brenner and Lars Björck, third generation film Producer who was involved in the production of Apocalypse Now (Coppola 1979) seem to have halted their development since the drop of the cryptocurrency markets from January 2018. Paul and Lars wanted want to create an ERC-20 token (Framecoin, which would function on the Ethereum protocol) to finance their independent film projects. With their project they wanted to give the opportunity to their audiences to own at least a frame of the film (each Framecoin would be the equivalent of a frame of a produced film). They had a slate of 4–5 films ready to go on production and they intended to raise US$1.4 million to finance the first film by the summer of 2018. Eventually, they wanted to develop their platform into a decentralised system that could cater for all the geographical areas and become a market place for independent films.39 Cinemarket offers an interesting model. The Berlin-based startup Cinemarket uses blockchain technology to create a secure and transparent online platform for rights transactions. Unlike other ventures with mass market ambitions, Cinemarket pitches itself as a tightly curated venue. It aims to put an emphasis on work by emerging directors, adding completed films on a monthly basis. Buyers can scout for available rights, watch films, submit offers, negotiate contracts and make minimum guarantee and royalty payments through the platform. The use of blockchain’s Ethereum technology as well as decentralised document storage solutions like IPFS enable safe storage and timestamping of contracts, licenses and transactions, safe from falsification or alteration. With Cinemarket, film professionals can make deals online in a secure manner that does not rely on trust, but rather on the seamless verification process of the blockchain. The platform serves as a democratising tool for young filmmakers and industry players of tomorrow who may not be in a position to budget in attendance at all the yearly markets. Initial selections include American artist Chris Gude’s experimental road movie “Mambo Cool,” shot in the hills of Colombia; “The Future Perfect,” which won the Locarno Opera Prima award; and post-apocalyptic Brazilian sci-fi fable, “Blue Desert.” Recently, Netflix approached the young company to buy a license to an Asian documentary piece. Another platform named Matryx and run by Scott Morgan combines crowfund- ing and crowdsourcing for 3D design and VR.40 Their system is based on tokenised ‘bounties’, which offer the opportunity to share talent as much as the ownership of creative IP in a decentralised collaborative space. Matryx works as a repository space. Once someone uses a collective work from this collaborative space, for example a design, a smart contract system automatically pays the talents and design- ers involved in it. This system could be adapted for other types of content than VR or 3D design such as film. Matryx has not reached a critical adoption in China yet, but it has performed better than the previously mentioned platforms. Given that China is reluctant to use

39 Interviews with Lars Bjorck on 6th December 2017, Los Angeles, US and 2nd January 2018, Bangkok, Thailand. 40 https://matryx.ai/matryx-whitepaper.pdf 10.2 Existing Participatory Models and Other Potential Solutions 387 foreign platforms, the Matryx team has managed to use Wechat groups as a way to raise interest for their ICO. Matryx has developed a bilingual, multi-cultural team to that end. While the Chinese Government did not stop them in their progress, their success has been limited in China. Critical information has not reached early adopters yet and the Chinese Government has recently pressurised local exchanges to ban ICOs and the use of Bitcoin. This has largely contributed to regulate and reduce the use of foreign tokens: It has pushed away many of the potential users and forced them to self-regulate (this practice is reminiscent of the Chinese Government protectionist tactics seen in Chaps. 4 and 7). However, there may be other ways to develop blockchain projects and integrate these nascent companies. At the ETHIS conference about Ethereum scalability held in Hong Kong on 8th September 2018, Graham De Barra, founder of Festy.ie, an Ireland-based transaction and ticketing startup that uses a decentralised model, informed me that systems can be decentralised along three main features: (1) One is to decentralise data (data in this sense can be for example actual stored data, transactions, or content), (2) Another way is through ‘collusion’ which is in fact semi- decentralised as players of an ecosystem act as decentralised nodes but collude on key decisions like a cartel, (3) The last possibility is through decentralised governance, where the players of an ecosystem make key decisions through consensus. In an ideal decentralised world the first and last methods would limit conflicts of interest. Ethereum, Consensys, and Braid have managed to decentralise data and the financing of a film but their governance is still quite centralised and the film is still officially distributed in the US by a traditional company (Blue Fox Entertainment). In comparison, a system like Bitcoin is decentralised in theory both with its data and governance. Other examples such as Cardano, created by Charles Hoskinson (co-founder of Ethereum) took a departure from centralised governance. Cardano is separated in three entities the Cardano Foundation, IOHK, and Emurgo, each with their own CEOs, to avoid conflicts of interest as much as possible. As per October 2018, Cardano is in charge of the community and regulatory aspects, IOHK led by Charles Hoskinson is in charge of the development of the platform and its underlying software, while Emurgo’s delegated regional offices in Japan, Hong Kong and Indonesia are in charge of developing startup ventures and business solutions.41 Emurgo has recently shown an interest to develop ventures connected to entertainment and the creative industries. With this in mind, the Lumière model could be developed as part of a larger creative ecosystem, which would limit conflicts of interest and Lumière becoming a single point of failure of the entire system. There is, in theory, the possibility for a creative ecosystem to grow through co-operation and collaboration between several independent entities. At the Cannes Film Festival 2018, Arie Levy-Cohen, the CFO of SingularDTV (Breaker) admitted himself that for blockchain technology to be adopted widely in the media sector, companies involved with this technology should practice ‘co-opetition’. A cooperative creative space could be developed

41 https://www.cardano.org/en/team/. 388 10 Proposal for a New Participatory Creative Production Model by using a convertible token.42 Reaching this level of cooperation and decentralised governance while managing micro-politics would of course be challenging, but not impossible. This is when technology must be accompanied by a change of mindsets. Such a system would have the advantage to limit collusion, it would be more resilient to the failure of a company or an individual, and it would be more effective to reach critical mass, gain wide adoption from various communities of users around the world than one single company. This would allow the cooperation and meshing of local Chinese blockchain platforms with international blockchain-using ventures and solutions. For example, complementarities between companies such as SmartCinema (a tokenised film financing model developed by Versus Entertainment), Cinemarket, White Rabbit, Demand Film, and the Lumière model (studied in this chapter) could be used to create synergies in the development of this new ecosystem.43 This truly decentralised creative ecosystem run by consensus, and illustrated in graph 3 of Appendix 12, could also integrate companies such as SingularDTV (Breaker), Cinezen, Vuulr, Slated Entertainment Group, Treeti, Tatatu, Big Couch, Lino, and Icoin Studios for films (Bo 2018), Festy for live performances and ticketing and Ujo, Musicoin, Musiconomi, Peers Tracks for music, Matryx for VR to form a meaningful counter-power and balance versus global platforms like Netflix, Amazon or YT.44

Chinese Participatory Platforms

Given the general lack of success and the limitations of foreign participatory platforms in China observed in the previous section, I am studying the local platforms in this section. Mr. Henry Chen Weibang, co-founder of Dreamore, believes that ‘crowd funding platforms have a bright future in China, because the concept is in line with the central government’s goal of encouraging technological innovation in cultural industries’ (Sun 2014). It also encourages the creation of Chinese IP and a creative federating move, which bring audiences, creators, and the Internet ecosystem together in a very constructive way. However, and despite estimates, which

42 One idea is the possibility for all the nodes of this decentralised system to agree on one token (preferably a stablecoin) or to exchange tokens instantly without the intermediary of a centralised exchange (atomic swap). Cardano has been working on a model which would also interoperate different chains and tokens. If this system is rolled out, it would also greatly facilitate this process. 43 Lumiere or Lumière [芦明] (c) 2016 is based of an idea developed by the author from 2014. Not to be associated or mistaken for copycat name Lumiere Token (lumiere.blocktoken.ai and lumieretoken.io), which has recently emerged in 2018 while this book was published. It seems that Lumiere Token have been trying to take the opportunity to raise funds through an ICO first before switching to STO mode during the bear crypto-market. 44 See Appendix 10 for web references and short descriptions of some of these models and solutions. Amazon Web Services (AWS) is however currently promoting blockchain-based solutions, which the blockchain and crypto communities have been so far rather critical about (how can a large centralized entity promote decentralization?). 10.2 Existing Participatory Models and Other Potential Solutions 389 forecast the total amount of crowdfunds to be raised in China to reach US$50 billion by the 2020s, there are only a few projects of this kind in China at the moment. When Demohour45 was created in April 2011 it was among the first crowdfunding initiatives in China (Zou 2014). However, Demohour is not a media oriented participatory model as it mostly caters for technical innovation and product inventions. Until 2012, Demohour was the only website officially offering this type of service in China. It has now been joined by a dozen of similar startups such as Coufenzi, Zhongchou, Dreamore, Knewbie, Angelcrunch, Fundator, Musikid, CTQuan,46 and iChuangye47 (Bischoff 2014; Briggman 2014; Lee 2014; Seaman 2016). Since their launch, some of these projects seem to have been taken down while others are still striving mostly through the funding of industrial innovations more than media projects proposals. Knewbie for instance does not seem to be reachable online. There is generally very little emphasis on film as Chinese crowd investors are different from US funders for instance. Chinese crowdfunders appear to be more pragmatic in their funding choices and they often do not trust the websites. Even if scandals have erupted in other P2P sectors such as lending (Connor and Tang 2016), this is particularly true of media content which is perceived as more intangible than technological innovations (Alois 2014). Investors typically like to invest in projects that have already started (Sun 2014). This situation is quite difficult for the filmmakers, who typically require a large upfront investment to satisfy certain requirements such as hiring professional cast, crew, and equipment, as well as securing locations in pre-production before filming even starts. As seen in Chap. 5, Yulebao, Alibaba’s film crowdfunding platform, is another example of crowdfunding platform. It currently has its own limitations due to the very nature of its framework. Yulebao offers VIP crowdfunding. The platform has a strong drive to give films on demand to Chinese audiences. Audiences can vote to choose their actors, actresses and even Directors. Yulebao works really well at gathering crowd attention and funding, but the content it funds does not need crowdfunding to start with; this C2B model is more about building an engaged audience for the film (Horwitz 2014). For example, Mission Impossible and a slate of 12 Jackie Chan films were successfully and rapidly co-funded through Yulebao, but none of the projects were yet given to young emerging talents nor did it solve the issues of production transparency and the fair redistribution of rewards to the creative agents working on the film. While it is a step forward in allowing local audiences to choose the types of films they want to finance within a restricted slate of projects, the Yulebao model does not seem to be focused on the support of local emerging creative talent. Zhongchou is one of the largest crowdfunding platforms in China. The website Zhongchou (literally meaning ‘crowd funding’ in Mandarin) started as a crowdfunded website catering for many innovative projects including crowdfunded journalism in February 2013 (Liu 2016). Several Executives from online giant Tencent

45 http://www.demohour.com/ 46 CTQuan is a hybrid system also positioning itself as co-Producer of projects. 47 iChuangye proposes to give its crowd-investors equity ownership in exchange for funding. 390 10 Proposal for a New Participatory Creative Production Model supported the platform from its inception. The company later accepted film and media content projects and it recently partnered on a film co-financed with Kickstarter who had issues reaching the Chinese market (as explained in the previous section). The film entitled King of Peking (Voutas 2017) successfully screened in the US at the Tribeca film festival and at the Los Angeles Chinese film festival in 2017 but it was written and helmed by Australian Director Sam Voutas (not an emerging Chinese talent).48 The budget sizes on the Zhongchou platform are generally fairly small, with an average of CNY20,000 (c. US$3100) raised per project, which is not sufficient for a professionally made feature project.49 More importantly, the overarching company behind Zhongchou is Tencent. In addition to Tencent, the platform has partnered with local TV channel Hunan TV to raise the largest crowdfunded budget for a documentary; CNY5 million (US$820,000) which is c. US$300,000 above Kickstarter’s largest budget. This documentary entitled Super Boy, is a cross- promotional project about Hunan TV’s show of the same title.50 While Zhongchou is not a C2B model like Alibaba’s Yulebao and it is a first step towards the support of creative talents online, their platform is not independent. As much as the filmmakers are expected to apply self-restraint and prove that they are filmmaking students, Zhongchou is ultimately under the surveillance and corporate censorship of one of the government controlled BATs. As seen in previous chapters, these online giants also tend to use creative talents in a centralised exploitative system: users pay to see monitored, controlled and censored content produced by exploited semi-professional creative labourers. Zhongchou takes a 3% commission (including payments and third-party fees) on all the funds raised,51 which is less than Kickstarter or Indiegogo, but as seen in Chaps. 4, 5 and 7, it is characteristic of a centralised platform capitalist system (Bauwens and Kostakis 2014). While it is outside of the timeframe of study of this research, I should note that independent blockchain initiatives have emerged in China in 2017 and 2018, such as repository platform for creative content, Tron (TRX). In terms of reputation and transparency some of these platforms have adopted unethical practices, for example, in January 2018, Tron that catered to the Chinese market was accused of copy- ing and plagiarising a significant part of its business plan and code (white paper) from other ICOs (Harper 2018). Tron that has since been regarded as a scam by

48 https://www.kickstarter.com/projects/1884136390/king-of-peking-a-film-about-juggling-father- hood-an/posts/2052528 49 http://www.zhongchou.com/deals-tags/t-%E7%94%B5%E5%BD%B1 50 https://www.documentarytelevision.com/commissioning-process/chinas-super-boy-%E5%BF% AB%E4%B9%90%E7%94%B7%E5%A3%B0-smashes-documentary-crowdfunding-record- takeaway-1-science-congress/ 51 http://www.zhongchou.com/help-term 52 Tron could however surprise since they purchased P2P network BitTorrent in 2018 and set a strategic alliance with one of the largest crypto-exchanges in the world, Binance. 10.2 Existing Participatory Models and Other Potential Solutions 391 some professionals in the blockchain sector may face a challenge when they will try to develop.52 The NEO platform reviewed in Chap. 5 could contribute to create an ecosystem where local creative content could be created in a semi-controlled protocol. This would imply that China’s ban on ICOs is lifted and becomes a regulatory framework rather than a set of strong prohibitive measures. Whether NEO only serves the purpose to control and monitor creative content and its associated IP even more tightly or whether it is a first step forward for creative communities to emerge remains to be seen. One thing is certain, we need to keep observing the developments of the fast evolving blockchain and smart contract tokenised ecosystem in China as it may bring a paradigm shift in the way creative content is financed, produced, and circulated. Tencent is also very advanced in terms of its blockchain embrace, but it has not yet created a decentralised platform for creative content. All these platforms currently follow the idea that the model should start from a decentralisation of the distribution rather than a decentralisation of the production. In doing so, they compete directly against already well established players such as Netflix, YouTube or Amazon in the US or against iQiYi or Alibaba’s YT in China.53 Moreover, by developing such initiatives (in the US or in China), platforms such as Tron, Steem, Viuly, Ziyou TV, 21M or PROPs focus on the container instead of developing quality creative content, and focusing on the art, the craft of storytelling and filmmaking, which is what ultimately attracts savvy audiences. More recent initiatives such as Ziyou TV, founded by Hong Kong B-movie Producer Peter Cheung Wing-yiu, which launched its Chinese ICO in February 2018 are not actually decentralised (See Appendix 11). In the same way, NEO uses a private pre-mined chain, these platforms only use the lure of a cryptocurrency such as the Puttakan in the case of Ziyou TV to attract investors’ capital into a centralised system which does not change much from regular online platforms such as YT, iQiyi or YouTube. The difference is that the users’ and the investors’ capital will be locked in a system and a centralised cryptocurrency which may or may not be liquid, instead of centralised fiat currency.

YT and Tudou’s On-line Video Festival

As explained in Chap. 7, it is not a coincidence that YT was taken over by Alibaba. Combined with the First Film Festival and the CSFF, YT offers a real step forward for emerging creative talent to be recognised and to be given the chance to develop their skills.54 YT is more proactive than the government initiatives seem to be (Keane 2015). In that sense, YT is faster to adapt and to accompany the media challenges which meet the new emerging creators. YT can also connect with their audiences and their

53 Most of these large organisations are developing blockchain technology in the form of private chains. 54 As seen previously in Chap. 7. 392 10 Proposal for a New Participatory Creative Production Model change in media consciousness. This is partly because YT are themselves at the epicentre of such transformations and they have not inherited the bureaucratic system from which State-owned companies and institutions suffer (Keane 2015). Nonetheless, the YT and Tudou On-line Video Festival model, like the First Film Festival and the CSFF, are principally tied to financial incentives, not in their fair redistribution. In addition, YT’s festival mostly consists in creating videos that aesthetically and content-wise pertain more to advertising and web series than cinema. Moreover, it is essentially governed by a corporate agenda supported by the government’s political framework. The festival has also recently been sidelined in favour of the Big Fish Program geared towards short films and advertising content that belongs more to UGC than PGC (Chap. 7). As seen in Chaps. 5 and 6, the effects of such a central platform model tends to lead to corporate and product placement imperatives as well as self-censorship that can be more adverse than direct government censorship. These successive circles of censorship are very effective and constrain artists beyond the original government guidelines (see Fig. 10.1 in Sect. 10.1.6). Where both capitalist instruments and Communist institutions had very limited success in bringing more transparency and higher creative collaboration within the Chinese film industry, the corporate portals present a step towards an alternative to identify and develop local talent. This would have been unthinkable just 10–15 years ago when China entered the WTO. However, whether they are foreign or Chinese- based, these Internet portals are part of a corporatist and sometimes exploitative system. In China, this system is closely connected to political-economic ambitions that are intrinsically linked to the State and to some extent to a market logic. So, how much space and latitude does this alternative leave for young creative talent to develop and express their creativity and their art in such a framework? Similar concepts to the YT Tudou Video Festival exist in the UK, with microfilms (Microwave) and a first feature film competition, iFeature, similar to the X Factor concept, but dedicated to film (MacNab 2016). There is a significant gap between a microfilm and a feature film in the case of microwave and the model does not differ significantly from the Tudou Video Festival except that microwave is not monitored by an online corporation. However, in terms of exposure, it does not have the number of potential viewers that YT can reach. In regard to iFeature, this initiative has helped local filmmakers get their feature film projects produced and promoted internationally regardless of their gender, socio-economic or diversity background. It gave them free rein to unleash their creative work and talent, while developing their skills (MacNab 2016). It also served as a springboard for all the creative agents involved in the films from the writers, to the actors and the music composers. Nonetheless, there is an entry barrier due to a selection panel and this model may limit access to other talented filmmakers.

55 As seen previously in the case of the CFF (Chap. 4 and this chapter), Chinese Government initiatives have been limited by bureaucracy and corruption. 10.2 Existing Participatory Models and Other Potential Solutions 393

These development projects are not independent; government institutions such as The BFI, Creative England, Film London, South West Screen, and the BBC back them55 (MacNab 2016). Moreover, if they ever get distributed, the produced films are in the hands of traditional agents and film distributors: This situation does not solve the issue of intermediation. As much as these models can be used as examples as they have been successful to support new creative talents at a local level and in various geographies worldwide, they are not open to Chinese or Hong Kong residents yet. Chinese emerging local creative talents cannot participate in such schemes. Ujo, Bitfilmfund, and SingularDTV (Breaker)56 have recently developed their model around the blockchain technology and crypto-currencies. While Bitfilmfund is a centralised disintermediated system which gives the option to filmmakers to receive funding in the form of crypto currencies, Ujo and SingularDTV (Breaker) are decentralised, disintermediated emerging models using the blockchain technology. The main principles of the blockchain as a technology are its capacity to bring transparency, decentralised and disintermediated features to transactions and protocols. Alibaba is embracing Blockchain technology, particularly for transactional purposes and the use of smart contracts57 (Mendoza 2016). But it has not yet proposed a model based on this technology to render the film production process more transparent, accountable, and decentralised from the development to the release of the film. Such a model has not yet been developed to facilitate the identification, the promotion and the development of new local emerging creative talents. Ujo is so far dedicated to music and SingularDTV (Breaker) had not yet produced any content 2 years after its ICO and released its first documentary Trust Machine at the end of 2018.58 Also, while SingularDTV (Breaker) has now offices in Hong Kong and a pro-active marketing approach in Hong Kong and Japan, both models do not explicitly cater for Chinese emerging talents. Blockchain technology accompanied with a well-designed model could reveal interesting opportunities and address key issues such as the fair and transparent financial reward distribution throughout the entire production chain of artistic and creative agents. While a local VC-backed platform, Lino, has emerged in 2018 and uses some of the blockchain features described above, it has had a difficult time attracting curated and quality audiovisual projects. There should be a ‘made in China’ or ‘created in China’ online platform, which caters for new filmmakers in the region and respects its system with ‘Chinese characteristics’ but which would cater for more transparency, accountability and collaboration from the filmmakers while promoting a fair redistribution of resources. These features could be accompanied by the development of values that may go beyond financial incentives.

56 See Appendix 10 for the corresponding websites. 57 As seen previously in Chap. 5 – Smart contracts imply the transfer of any documents which can be documents, sound or video files and which can act as part of a set protocol. 58 At the Microwave Festival on 11th November 2018, Jack Cheng, CMO at SingularDTV (Breaker) Hong Kong announced SingularDTV’s ownership and release of Prospect (by Christopher Caldwell and Zeek Earl) and Happy Workers (Executive Produced by David Lynch). Launchpad, the crowdfunding module of SingularDTV (Breaker) is also working with a local Hong Kong talent, Ho Fung, on funding his film After Graduation, what’s next? 394 10 Proposal for a New Participatory Creative Production Model

In summary, at the moment there is no wide-scale, systematic, and dedicated collaborative model combining crowdfunding and crowdsourcing, which allows Chinese emerging talents to create films and to distribute them locally and internationally and which would be risk-free, transparent, decentralised, disintermediated, and structurally efficient while rewarding fairly all the creative participants involved.

10.3 The Proposal

The following project proposal has been designed in response to the issues observed in the previous chapters and sections. It caters specifically to the growing community of independent filmmakers and the rising new talents in China. It is also designed to allow greater cooperation between Chinese filmmakers and international creative professionals and emerging film talents. The proposal described in this section aims to offer solutions to fill the previously identified gaps within the traditional creative industries. This proposal aims to complement and to integrate and maybe disrupt the remedies that already exist in terms of technology, industry and government.

10.3.1 Features of the Participatory Creative Production Model

It has been established that the Chinese film industry (be it privately funded or crowdfunded) currently lacks transparency. Creative talents do not get paid what they should be and there are many occurrences of funds mismanagement which in turn translates into a decreasing morale and involvement of such talents in films. It also potentially rebuts investors from taking the risk to invest in film and media content. The same issue exists with crowdfunding where personal investors do not know where their money is going and how it is used. The following platform proposal could change this situation by transforming filmmaking into a more transparent process from the onset. There are many international and Chinese crowdfunding and crowdsourcing models. Some models like Indiegogo even offer crowdsales for the creation of crowdfunding platforms.59 However none of these models seem to integrate crowdfunding, crowdsourcing, the use of blockchain and smart-contract technologies for transparency, and the possibility to issue donations or payments in crypto-currencies to help emerging filmmakers create their projects collectively and across borders.

59 Example of a multi-crypto crowdfunding platform crowd funded on Indiegogo: https://www. indiegogo.com/projects/cryptocrowding-multi-cryptocurrency-crowdfunding-Bitcoin-money#/ 10.3 The Proposal 395

In 2016, such projects as Cryptomex emerged. These are crowdfunding projects using Bitcoins (Seaman 2016). By using blockchain cryptographic technology derived from Bitcoin, they offer a transparent, decentralised, and distributed system that could be applied to the linear process of film production. A Chinese hybrid system combining the Kickstarter crowdfunding principle, the Slated or Hit Record crowdsourcing features and the possibility to use cryptomex or Bitfilmfund as crowdsale and crypto payment systems with an option to create feedback for the community and transparency would seem to solve many of the issues previously observed.

Transparency and Redistribution of Financial Rewards

By using blockchain technology, all the creative participants involved in a project would have access to its common (semi-public) ledger. This would make the production more accountable for the funds that they are using to make the film. The model would follow the linear production process. The fact that blockchain protocols also tend to be linear by nature makes it easier to implement. All the transactions operated from the original investment, to the production and later to the release of the film would therefore be subject to total transparency. The blockchain validation protocol could therefore operate throughout the entire production chain: from development to release. Smart contracts and blockchain would give the network the task to regulate the core structure of the production resources such as funding, creative participants’ financial rewards, revenue partici- pations, work contracts and IP rights. Given that the blockchain network is essentially an impartial and objective computer protocol, it would limit the corrupt influence of individuals within the current system. The production process would therefore be transparent with very little opportunities for corruption. Moreover, the question of redistribution of film revenues would also be made more transparent. This should remove the temptation from creative agents to become corrupt within the production given that all transaction would be monitored and they would be paid fairly. To this extent, there should be a clear recommendation that all salaries or creative fees earned by all the creative agents should be made available within the production and available to all the parties involved in the project. These salaries should follow a principle that there should not be a larger discrepancy than 1–8 or 1–10 range between the lowest and the highest paid creative participant. For instance, if a make-up artist is paid US$50 per hour for his/her work, a Director or a Producer should not earn more than US$500 per hour. This new situation would have a positive impact on the entire organisational filmmaking structure. Knowing that they would be fairly rewarded financially, the participants would then be able to focus on their creative tasks as a collaborative team instead of trying to find ways to use the system in their favour. They would be able to make a living out of their skills and talent. This transparent structure should help build trust and engagement with the audiences and other investors funding the film. 396 10 Proposal for a New Participatory Creative Production Model

However, attention would need to be paid to set up a Know-Your-Customer (KYC) protocol to trace the origin of finance and avoid tax evasion. This could be done by requiring a copy of the participants’ passport and IDs and proof of where the funds are coming from (Menant 2016). Crowdfund investors would be able to decide on the level of contribution they wish to make at a click of a button, which would make the process very simple to handle from a user’s perspective. Unlike the minimum stake of CNY100 currently observed on Yulebao, donations on the proposed platform should not be subject to any minimum. This would limit the effects of socio-economic biases. To make it easy for crowd investors to fund projects, the platform should accept all types of payments ranging from credit cards, to direct debit, use of Paypal, Alipay, Wechat wallet and crypto-currencies. The currency exchange risk should also be taken into account, particularly for payments in crypto-currencies such as Bitcoin or other coins (Dogecoin, Monero, Ethereum Classic, Ripple, etc.). Due to its early use and its security features, Bitcoin has gained more stability than the other crypto-currencies (Altcoins) but the film production protocol should mitigate crypto-currency or any other currency’s volatility through the use of forward contracts for instance. These instruments are not widely provided yet. Collateralised coins with fiat currency such as Tethers show a potential to stabilise the price of crypto-currencies. At the moment, some Altcoins can vary as much as 300% in 1 day, which would make paying the crew and the cast very challenging in case of a market crash. Forward contracts would ensure that the funds invested keep the same value throughout the entire production chain. Alternatively, the use of stablecoins could solve this issue (Qureshi 2018).60

Decentralised Model

The use of the blockchain protocol would mean that the production power structure would become decentralised. All the funding and the creative participants would operate in a flat micro-distributed structure with a precise role definition through the use of smart contracts. The responsibilities of each agent would be clearly defined along with their salaries and it would be made available to all the participants. While the creative vision of the project would be federated by the Director of the project and the logistics would be handled and coordinated by the Producers, this structure would allow for a greater delegation and should have a positive impact on organisational efficiency: The creative participants would feel fully engaged in their role with little room to overlap with their collaborators. Ideally this would limit internal micro-politics and competition between creative departments and individuals.

60 2018 and 2019 are seeing the rise of such coins in a bear market structures: with the controversy surrounding Tethers (USDT) potential collateralisation issues, coins such as True USD or Circle amongst many others have emerged. 10.3 The Proposal 397

I imagine that if this type of model could be deployed in China, the Director and the Producers would have much more limited roles and responsibilities than they presently have: they would essentially be creative coordinators rather than artistic and economic auteurs. The decentralisation of these roles would motivate the community to redistribute financial rewards more fairly to the other creative agents. If this was the case, the relationships of power would be altered in the microcosm of filmmaking and the creative participants would work on equal terms. Online file sharing and communications allow for an opening to international resources: financial, skills and equipment. Therefore, it would foster greater cooperation for co-productions with China, which would benefit all sides in terms of learning from each other in terms of skills and culture. However, it is understood that this structure goes against the traditional centralised film power structure. In China, it may also conflict with the centralised power structure which seems to be a Chinese cultural trait. Therefore, the system needs to be tested as it may not be applicable in practice or it may need to be adapted.

Disintermediated Model

Unlike most of the existing crowdfunding platforms which position themselves as sole intermediary or broker in the chain, the blockchain platform, which I propose, disintermediates the entire process and positions itself as a creative driving force and an enabler of projects in the short and the long-term. The combination of blockchain and smart contract technologies with direct access to funding, resources, talent and distribution would progressively reduce the roles and the influence of intermediary agents: finders, casting agents, sales agents, legal advisors and other intermediaries (Virk 2018). As seen previously, agents and other intermediaries can help protect talents, but they can also be a source of blockages and sometimes of corruption. They may limit and slowdown the creative participation within the collaborative team. With the proposed platform model, films would be conceived and circulated by a disintermediated and enlarged community involving the audiences, the emerging creative talents, investors (individual and corporate) and the government. It would facilitate the discovery of new talents and their development in the short and long terms. The reduction of intermediaries from fundraising, to casting, hiring skilled crew, and distributing the film would save a lot of budget funding.61 These savings could be used to reward all the participants. Films could be distributed and circulated directly from the platform to online partners such as YT, LeTV, iQiYi or Netflix as well as theatrical chains such as Wanda, Poly or Alibaba’s theatre chain (when it is

61 Each of these intermediaries are typically paid 10% commission. It can go up to 25–35% for distributors in the West. In China, certain background actors’ casting agents take as much as 80% of their talents’ commission. 398 10 Proposal for a New Participatory Creative Production Model operational) for example. Investors would have a direct return on investment without factoring such fees as P&A or large distribution commissions. These early-adopting and active audiences would be offered perks typical to crowdfunding platforms such as a special red-carpet screening, meeting the creative talents including the Director, actors and actresses, low priced ticket, featuring in the film, having a credit on the film and any form of merchandising. Through the blockchain protocol, and when the Directors and the Producers choose to, audiences could be consulted and involved in the decision process. The promotion efforts would be partly undertaken by the funding audiences themselves, since they would be directly involved in the projects. Through the early collaboration with audiences, collaborative promotion and market building would be possible before the film is even made. The early involvement of creative crowds in the project whether financial or in terms of creative input would offer a base for potential viral word of mouth marketing which would benefit the film’s circulation (Livingston 2014). In relation to rewards for crowd investments, depending on the legal framework regulating their place of residence,62 financial contributors would be given the choice to get some proportionate equity ownership in the projects they invested in. This reward system would take the form of revenue participation pari passu if the investors’ local regulations allow them to take profits or they could decide to rein- vest their share into another project on the platform, or to donate to a charity of their choice through the blockchain ecosystem.63

Content Type

In terms of content selection and aesthetics, the project would take a progressive, incremental approach in three steps. In step one, the aim would be to foster creativity by proposing various types of works such as short films, short documentaries, short animations and alternative forms of creative films such as Virtual Reality (VR). In addition and in the same way the Coen brothers funded their first feature film, Blood Simple (Coen and Coen 1984), by showcasing one scene of the film to private investors to finance the rest of the film, the platform would have an option to crowdfund only a scene of the film and get the rest of the film funded the traditional way or by injecting more crowdfunds (Lowenstein 2000, 3–28).

62 For instance, Hong Kong law prohibits crowd investors from taking any profits from their donations. On 5th September, following an ICO ban in China and tighter restrictions in Korea, the Hong Kong Securities authority was looking to regulate the ICO ecosystem in Hong Kong. In either case, it makes the market less prone to fraud and it is a necessary step for blockchain and smart contract technology to be widely adopted by mainstream creative users. Other countries like Singapore have not adopted such measures, which offer an alternative for platforms who do not want to align with Beijing rules. 63 Aside from banking, it is estimated that one of the first sectors to implement blockchain technology for reasons of transparency and fair distribution of funds should be the charity sector (Davies 2015; Allison 2016). 10.3 The Proposal 399

The participatory audience would be left to decide whether the film should be fully funded. This approach offers the possibility of a hybrid model option where crowdfunding could be supplemented by traditional film investments. Hybrid funding has been identified as one of the most realistic features of crowdfunding when it comes to financing feature films (Gubbins 2012, 67–100; Baranova and Lugmayr 2013; Altabás Fernández 2014; Jenkins 2006a; Jenkins et al. 2013). The crowdfunding would serve to secure initial funding while building up an audience early on. If the necessary funds could not be secured through crowdfunding alone, it should make it easier to the filmmaking team to raise the rest of the funding. At this point, the creative team would be able to give traditional investors enough evidence about the general market interest for the film as much as their artistic vision, their creative skills and their organisational efficiency. They may also be able to secure distribution and circulation channels even before the film is finished. In step two, once the model has already been tried and tested successfully, the platform could accommodate full independent feature films. Purely artistic proposals (audio-visual or not) could also be added to the slate of projects at this point to sharpen the emerging creative talents’ creative skills. Literary or musical projects could be developed through the platform after it managed to gather significant popularity and a critical volume of participants. Ultimately, in step three, if the model gained critical-mass adoption and if its transparent, disintermediated, and distributed features were effective and recognised industry-wide, this model could be applied to larger budget or studio film projects as a means to federate and regulate the creative forces on film projects. The focus of such a model should be on the production of quality stories and projects that would affectively involve and connect the audience and the filmmakers. In this sense, similarly to online platforms such as Netflix, Amazon, YT or iQiyi, the model would be more open to creative risk than the traditional studio system that relies heavily on theatrical distribution and its costly promotion.

The Human Factor

The above technological tools can help productions reach a higher level of efficiency by limiting the adverse effects of corruption and micro-politics. Indirectly, such a system would help boost the morale of cast and crew by involving the teams through the delegation of higher responsibilities and the distribution of higher financial rewards. However, the proposed model would work best as a hybrid using blockchain technology accompanied by a change in mindsets in the film industry: this latter area pertains to human psychology and training, but ideally, it would need to take place conjunctly with the implementation of the system to optimise its results. The potential technological benefits formulated previously should be accompanied by the development of a growth mindset to facilitate empathy, respect and communication on film productions as well as a long term learning attitude towards 400 10 Proposal for a New Participatory Creative Production Model training the new generation of filmmakers. This means that they should not be exploited. This aspect would be facilitated by the use of smart contracts. In addition, this system would also be in the hands of line Producers and would ideally make their task of administrating the production’s resources easier in the long-term. Institutional education combined with onset experience should increase the number of good quality, reliable, and ethically driven line Producers. In the case of The Last Race, for example, one of the easy-to-implement solution to improve teamwork and communication with the central power in place could have been an ‘out of the box’, enquiry and an anonymous box for ideas. The crew could have safely deposited their suggestions and complaints in that box. Someone from the production team, for instance, could have collected them on a daily basis and given the feedback to Mr. Shin and Mr. Parker in private when they were not shooting. Some of the key ideas could have been discussed at production meetings. Instead, these ideas were lost in the pipeline and the rigidity of the centralised system while complaints and frustrations gradually grew within people. The platform would include such an ‘out of the box’ online page for creative participants to submit ideas or concerns which they may not necessarily wish to share with the rest of the team or even in private. Ultimately, it would be the directorial team, the production team and the investors who would decide to follow up on these ideas. Even if not all the ideas were implemented, at least it would greatly improve the communication process. Before and during the production phase anonymous and online comments could be submitted for consultation by all desired parties: for instance, investors, Producers, Line Producer, Assistant Directors, and Director. This participatory feedback module would help foster creativity and trouble-shoot logistical or behavioural issues on the project at all the levels of the chain. This would contribute to the production efficiency not just in the production phase but also in development, pre- production or even in the promotion phases for instance with ideas regarding the narrative, the design or logistical aspects of the production. After the production phase, a Rotten Tomatoes, AirBnB or Uber type ranking system would take place for crew members and other creative participants involved in the film to leave comments and ratings on their peers and other creative departments. These reputation ratings would assess various value dimensions within the production. These could be the timeliness of financial rewards, general behaviour on set, communication skills, or technical skills. For example did the creative agents get paid in time? Was it a generally good experience to work with the Director, crew members, cast? Do they have good communication skills? Are they eager to learn and grow with their creative peers? Who is a good team player or not such a good one? How would they assess their peers’ overall technical skills? How was the general organisation on the shoot? What was the general level of empathy and respect on the shoot? Results would be made public and other creative talents could consult this transparent database and decide whether they wish to work with a particular creative 10.3 The Proposal 401 agent or not depending on the public ratings. At least it would make them aware of potential issues ahead of another collaborative project. At the moment, such feedback exists in the film industry, but it is largely informal and based on rumours, informal ‘off the record’ phone calls given between film professionals (Pilarski 2016). This system could help filmmakers making information more accurate and transparent to all. These ratings would be contributed by the sheer mass of creative participants who would have worked on the project. Therefore, even if two or more people had individual issues with each other or personality clashes, it would not affect the overall ratings significantly. These ratings would not be published with the view of blaming or punishing people for their mistakes, but rather to encourage participants of any roles (including Directors and Producers) to learn from the filmmaking project as an experience and to implement positive changes in the future: these could be more transparency, constructive non-exploitative teamwork behaviours, better planning, etc. It could contribute to the positive development of creative talent and the industry as a whole. Film is, after all, a human enterprise that strives on the development of skills and the expression of creativity passed from one generation of filmmakers to the next. With fair financial rewards and the effective redistribution of resources as well as a tool to monitor individual accountability, other values would be given space and scope to grow. Such values could be, as Graeber argues (2001), the recognition for the work well done,64 the recognition within the professional circle and the film industry, the passion of sharing a story or an artistic expressive work of art, and the overall benefits of creative projects as a learning experience. In the long term, this model should contribute to recognise and reward fairly the creative participants for their talent and for the skills that they developed. Given that the model is based on crowdfunding, in theory it also gives an unbiased access to filmmaking to all the creative talents regardless of their gender, their socio-economic background, their ethnicity, their age or any other criteria which may have impaired their project if they had pitched it within the traditional film industry’s financing system. In terms of gender for instance, crowd investors are both male and female (unlike most film industry investors who are mostly male) and they may invest on the idea developed by a creative individual (male or female) rather than their specific background. Given the proportionate gender make up of crowds, this model could help expand the number of female filmmakers who are still unfairly under-represented today. It could also give a voice to creative individuals who are not part of the golden circle as observed in Chap. 9.

64 This would be rewarded as much by the online feedback as by the personal satisfaction and passion factor. 402 10 Proposal for a New Participatory Creative Production Model

10.3.2 Limitations of the Proposed Model

The platform described above and presented as a tentative project in a series of graphs in Appendix 12 comes with a set of limitations. Firstly, while this participatory system is open to all creative collaborators, it assumes that the blockchain, Internet connections and computers are used. Nonetheless, as see in Chap. 2, this presents issues of computer and Internet access and of Internet literacy. Not everyone has access to technology and not everyone understands it. This means that the system created is in essence not truly fair and democratic. Secondly, it remains to be seen whether this system can influence individual and group mindsets positively or whether it would create a general form of paranoia. This paranoia could potentially be induced by the fact that the model is perma- nently monitored as another version of Foucault’s panopticon. There could be a strong resistance from the government in promoting a system that allows audiences to vote and choose their content. A seen in Chap. 5, the Chinese TV show Super Girl based on the same audience voting model as British show Pop Idol allowed the viewers to choose their favourite performers (Keane 2013, 52, 146). The government thought that the voting process could induce democratic thinking and later removed it. Thirdly, the blockchain technology is still experimental (Buterin 2016; Coppola 2016). The many hacks that have accompanied its development, including the US$60 million DAO one, just 10 days after its launch illustrate this reality. Blockchain technology such as Ethereum or NEO needs to improve its security levels and develop more user-friendly and scalable features before it can be fully introduced as a widely adopted set of decentralised applications. This is what the Chinese Government, the Hong Kong Monetary Authority, or the SEC in the US are trying to do all the while ensuring that they do not lose their grip on a fast changing and hard to control technology. Fourthly, it is understood that this structure goes against the traditional centralised film power structure. In China, it may also conflict with the centralised power structure, which seems to be a Chinese cultural trait. This model is theoretical and it needs to be implemented in order to test its many features in practice. It would need to be tested and probably adapted on a small scale first by financing a short film for example and then to move on to larger projects eventually once the system has satisfactorily proven its reliability. It needs further research, testing and integration with individual human and cultural values before it can be fully implemented on a large scale. Fifthly and lastly, this model would, in principle, have to obey the Chinese Government set of rules regulating media content. Therefore, the scope of its media projects would be limited in the context of China. There is still the risk that blockchain technology and Bitcoin are prohibited in China in which case it may not be officially and legitimately developed further. 10.3 The Proposal 403

10.3.3 Model Development and Launch: Three Potential Scenarios

A handful of films such asBraid , Kevcoin: The Movie, or The Man from Bitcoin65 using Ethereum or Bitcoin crowdfunding platforms have already been developed in the US and the UK, but they do not integrate crowdsourcing and they do not feature the blockchain characteristics such as transparency, decentralisation and disintermediation. Essentially they are the same centralised, intermediated and ultimately exploitative capitalistic and corporate models as Kickstarter or Uber. The only difference is that they use Bitcoin or other crypto-currencies as a way to raise capital. As mentioned in Sect. 10.2.3, in terms of content production, platforms such as Framecoin as well as Cinemarket, Slated, or Treeti, which have been developed by independent filmmakers are potentially interesting blockchain projects as they seem more focused on content creation and production than cryptocurrency fundraising and the idea of an immediate decentralised film distribution model (as of September 2018, issues of scalability and network adoption currently prevent the implementation of a truly global decentralised distribution system). Can such a participatory film production model be developed and implemented in China at the moment? Following the previous political-economic observations, certain parameters would have to be respected for the application to be successfully launched in the current context of China. It seems that the most viable way to develop and launch this model would be to create it as a government-backed Chinese company branching out to source international talent. However, there may be other alternatives. As seen in the introduction and Chap. 2 of this study, I chose to name this model Lumière [芦明]. I must caution the reader that it may be somewhat early to speculate about the findings of this research at this juncture : blockchain technology is still nascent and the proposed model would largely depend on the success and the adoption of this technology. While it is increasingly adopted at corporate level by the financial sector, blockchain and smart contract technologies still need further testing. In addition, assuming that no other such models would be developed in the meantime or that any other models would present a competitive advantage to Lumière [芦明], the following three scenarios could be envisaged and are visually supplemented by a series of three integrated graphs in Appendix 12 for the purpose of summarising and clarifying this concept:

65 The Man from Bitcoin was looking to raise CNY30 million: http://Bitcoinworldtour. org/2016/05/17/imovie-crowdfunding/ 404 10 Proposal for a New Participatory Creative Production Model

Scenario 1: Alibaba 66 Collaborative Transparency Project The first scenario is that the State department replaces SAPPRFT while the Internet giants such as Alibaba/YT, Tencent Video, iQiYi, Sohu Video, LeTV/ Leshi as well as Telecom company China Mobile accept The Lumière Project model in its totality or with readjustments. This scenario would imply that the proposed model would develop with the support of a Chinese corporate online media giant such as Alibaba in agreement with the Chinese Government. One of the key forces of Alibaba’s online presence was to reduce intermediaries in the retail market and to bring manufacturers and wholesalers directly to the end customers. This centralised but relatively disintermediated system model similar to eBay, Amazon, Uber, or AirBnB allowed end customers to get better prices and Producers to get higher margins. In principle, this should have enabled them to pay their employees better. It was also a way for Producers to regain power over trade intermediaries and distributors. In practice, as Bauwens and Kostakis argued, this type of model can give rise to exploitation if the redistribution of financial rewards is not fairly operated (Bauwens and Kostakis 2014). However, Bauwens also advises that it is utopian to think that the world will simply switch to a distributed, disintermediated mode overnight. Instead, he advises that the best strategy to reach this post-capitalist goal is to integrate the system within the existing corporate and public institutions and to legitimise it before expanding it further so that it reaches its full potential. Films could be directly produced and distributed by using the blockchain model explained previously (The Lumière Project [芦明]) in partnership with Alibaba and NEO platform for instance and released simultaneously67 online and in theatres. In a blockchain environment, this would mean that all payments and transaction would be transparent: They could be traceable and monitored by the government. In this scenario, the implementation of The Lumière Project [芦明] would benefit from Alibaba’s large existing user base. Educational video modules could be created to teach technical skills, creative expression and growth- mindsets to the emerging creative talents. YT would be an ideal channel to broadcast such material, particularly the Tudou On-line Video Festival. It would also be a continuity of their training programme. With the partnership of Alibaba, the model would also make use of very accurate and non-mediated metrics regarding revenues and popularity of the films made. This would facilitate the integration of the blockchain protocol to reconcile accurately all the revenues generated by the films viewed online or screened in theatres. Alibaba could simultaneously embrace blockchain

66 Or other Chinese online corporate champion. 67 Or following the distribution window chronology. 10.3 The Proposal 405

technology, film production, online film-viewing and the construction of theatres. With the international expansion of companies such as Alibaba, particularly as it has been evidenced by an agreement signed with Steven Spielberg, it could be possible to have a same day/date release of certain films globally (Abkowitz and Schwartzel 2016). Beside the use of a controlled private chain on NEO’s platform, the incon- venience of such a system is that it would ultimately have to be fully accepted by the Chinese Government and to satisfy certain political and corporate restrictions. It remains to be seen who would claim the new generated IP in such a system: would it belong to all the creative and funding participants involved in the system or to Alibaba? Also, would the emerging creative talent discovered in this system be free to progress professionally as free agents or would they be constrained to continue to produce primarily for the Alibaba and the Chinese Government?

Scenario 2: Anonymous Blockchain Dissident Protocol The second scenario is that corporate and government key institutions would reject the proposal. Given the recent issues with the Chinese Government initiating a ban on both ICOs and the use of Bitcoin (Leng 2017). This scenario is possible and it would imply that the corporate champions and the government would reject The Lumière model. The creators of the model would then have real control over it as the project would have no territoriality and could function globally. It would operate under a protocol similar to Skype (as opposed to a website that could be shutdown) and be based for example in Singapore (or Switzerland), which offers a very credible base and a neutral ground with potential reach into China and South East Asia. Deep-web Internet protocols such as Tor and distributed censorship resistant as well as anonymous blockchain protocols such as Monero, Zcash or Zk-Snarks (under Ethereum) could be used to develop the project. These systems would allow to by-pass the Great Firewall. It would be very hard to ban or prohibit such a system as the government would have to shut down every single node of the protocol to eradicate it entirely. It remains to be seen how the Chinese Government’s stance toward cryptocurrencies and blockchain technology evolves over the coming months and years. At the moment, it seems that the official stance is left ambiguous enough to allow for China to create and use their own protocol (Yang et al. 2017). In addition, the Chinese ban on crypto-currency exchanges has not yet prevented Chinese users to purchase Bitcoins through third parties or by using VPNs. There is a consensus amongst Chinese crypto-currency experts that this strong reaction to blockchain technology was to reassert the CPC power 406 10 Proposal for a New Participatory Creative Production Model

during its 19th National Congress starting on 18th October 2017 and that it was only temporary. Some clear guidelines have not come to this date. If we take into account that China is a driving force behind crypto-currency mining and their circulation and that the CPC’s 13th 5 year plan states that China’s priorities are to ‘Ensure Innovation in Science and Technology Takes a Leading Role’ (Chap. 8) and to ‘Encourage Public Startups and Innovations’ (Chaps. 5 and 9) one may argue that blockchain and smart contract technologies are not likely to be outlawed.68 Moreover, if crypto-currencies were used to pay creative talents across borders, it would also prevent the government from tracing their salaries. This is particularly true if payment methods use a zero-knowledge proof technology, which conveys anonymity such as Zcash, Monero, or Dash for example. Coincidentally, the use of these three currencies (and their price) increased shortly after the Chinese Government announced its ban in early September 2017. This indicates that blockchain technology is hard to stop and control. Nonetheless, to keep ethical control and positive values over the Lumière project [芦明] and to avoid such political tensions, any creative content that would incite people to dehumanising or exploitative behaviour such as racial hatred, terrorist content, snuff material, or pornography would have to be taken down by a blockchain majority vote or by the administrators themselves. Some of the content might at times conflict with the soft power or political-economic guidelines of certain governments, including China. 69 While the Lumière project [芦明] would be a completely independent structure, there could be a non-negligible potential for the system to be re- appropriated or copied by the Chinese Government or by the corporate sector once it would become sufficiently popular. However, the creative and funding parties would keep their IP rights collectively. If the content created by the emerging filmmakers was judged to be potentially disruptive to the power in place, it would create political frictions. Another possible course for this scenario would be the prohibition of such a system: It could be targeted politically by the government in the same way Megaupload or Napster were early economic targets for the MPAA and the US government. This could manifest in Lumière [芦明] being subject to propaganda, cyber-attacks, or more coercive methods such as the use of police or military action. The Chinese Government could also decide to condemn all Lumière’s users (creative talent, crowdfunders, or audience) to severe punishments (such as prohibitive and exemplary fines or prison sentences) to try and close it down. If the central government was unable to close down the system, the Chinese emerging creative talents using it would be considered dissidents and would face coercive sanctions.

68 http://en.ndrc.gov.cn/newsrelease/201612/P020161207645765233498.pdf 69 Although neither China nor any other countries would be particularly or consistently targeted. 10.3 The Proposal 407

Scenario 3: Hybrid Implementation Another option would be to start the project in beta version as an independent disruptive project (Scenario 2) and to integrate it to a company such as Alibaba once it is operational until the blockchain technology is fully tested and integrated in the Chinese and global corporate system (Scenario 1). As argued by Bauwens and Kostakis, this is the most viable way to introduce the blockchain concept and its revolutionary features (Bauwens and Kostakis 2014). In the long term, with enough projects gaining popularity, this approach would eventually contribute to make the entire global ecosystem more transparent, disintermediated, and distributed. It could bring a fairer system, particularly if it were combined with growth mindset attitudes and behaviours. Regardless of which scenario eventually emerges, a way to roll this platform would be with smaller productions first (crowdfunding type). Once this step has been successfully rolled out, the platform could expand to larger Chinese productions and international co-productions with China where investors and creative talents (cast and crews) are demanding for increasing transparency and accountability. However, in this case, the IP status of the content created and the ownership of such IP by the collective rights holders would be difficult to establish and claim. This would be particularly true if Lumière [芦明] was a successful model. It could be acquired by a corporate giant such as Alibaba Tencent or Baidu, or simply grow organically from their ecosystem. In each case the IP structure would dramatically change or NEO’s. If Alibaba reappropriated the model, it would become inherently re-intermediated and re-centralised. Alibaba would then probably want to claim ownership of the system as much as its participatory users and the IP of their creative content. If the project grew organically on NEO (or another chain accepted by China), the IP resulting from the system would be shared by the creative talents who would then be rewarded for their work in real time. But a more interesting model studied in the previous section. Would be the development of a truly decentralised creative eco-system which would integrate companies globally, including Chinese venture. However, in this case, the question would be: are governments worldwide (not just the Chinese government) ready for such a decentralised system, not only in terms of its data flows but also its governance? As concluding notes, it must be emphasised that the model that I intend to propose is to create original and new content and not to remix existing IP. This project is experimental and therefore it may progress through reflection, trials and errors. Its ultimate goal is to balance monetary rewards for the participants with affective values, such as professional and social recognition (for filmmaking skills, for creative talent, for belonging to a creative group or to be part of a specific project), the employability of the participants involved, the accomplishment of working within an engaged team, and the passion 408 10 Proposal for a New Participatory Creative Production Model

factor of filmmaking which is to share a story with the larger community (Lee 2005). Whether such a vision can be successfully implemented remains to be seen. To go back to Hartley, Jenkins, Graeber, Bauwens and Kostakis this project is about sharing a craft and an art while creating a microcosm that would allow a measure of freedom, transparency, and a greater sense of equality. This new model presents a genuine and groundbreaking alternative aligned with the government’s underlying policies of anti-corruption, while uniting audiences and creative industries in collaborative projects. It would also be in line with the corporate world that would gain from the benefits of transparency. The corporate world would also benefit from the production of better quality content which would generate revenues in China and abroad, create local IP and promote Chinese creative talents. Such a model would work to rebalance the ‘triarchical’ macro-participatory system were society, the State and corporations would operate in equilibrium (Bauwens and Kostakis 2014, 51). Therefore, this would complement the government’s soft power strategy to expand outside of the Chinese borders. Moreover and not the least, emerging talents, the new wave of filmmakers could build local and international audiences which would offer them new opportunities to showcase their work beyond their borders. This would also greatly contribute to expand China’s soft power abroad by promoting true creative talent as opposed to mainly rely- ing on corporate brands and foreign mimicry. However, this model would need to be tried and tested and integrated with a change in mindsets. Technology (Blockchain) even if it has benefits and proposes solutions is just a tool that can be used to increase fairness, accountability and transparency. In conjunction with this technology, filmmakers also need to adopt a natural collaborative approach for it to work. This can be inspired by other values than money or fame, such as the sheer enjoyment of making an artistic project (like a film or any other type of creative content) together (Mauss 1965; Lee 2005; Graeber 2001; Jenkins, Ford and Green 2013, 58–59). Dweck’s Mindsets theory combined with her practical applications could be an interesting interdisciplinary path to take and a further step into transforming the rigid powerhouse of film production. By marrying humanity and technological tools such as the blockchain as a truly collaborative approach, such a model could greatly contribute to change the conservative traditional film industry powerhouse and its old ways in regard to financials, gender and minority prejudices, and to make filmmaking more of a participatory and open creative effort. 10.4 Limitation of Blockchain Technology 409

10.4 Limitation of Blockchain Technology

It is important to emphasise that Lumière [芦明] is so far only a theoretical proposal for a model. Beside the challenges associated with the development of Lumière [芦明], as seen previously, there are also limitations connected with blockchain and smart contract technologies. A lot of these shortcomings relate to the forces analysed throughout this book with the combined model of Peterson, Anand, and Lemaire: environmental, political, regulatory, technological, economic and market- related, and societal dimensions. Environmentally, the extensive use of energy and resources particularly for decentralised systems using Proof of Work (POW) like Bitcoin is concerning. POW systems also end up not being as decentralised as they were originally intended to be as mining pools can gain advantage through more powerful hardware and lower electricity costs for example. Ethereum are developing a hybrid system including POW and Proof of Stake (POS where miners are replaced by validators who keep a token stake locked to validate transactions) called Casper to solve this issue smoothly transition to a POS only system where consumption of hardware resources and energy would be drastically reduced (Blockgeeks 2018). Cardano primarily and a few other chains are also developing solutions to tackle this issue. Politically, blockchain technology offers a transparent model, which can be considered a double-edge sword. In theory, it is a great tool for disintermediated creative freedom and decentralised censorship-resistant models, but in practice, processes can be more traceable, more controlled, invite more scrutiny, bringing creative agents and viewers in even more controlled spaces. This is particularly true if the chain is not subject to mining, if it is centralised and private. For example, Ripple and Hyperledger Fabric models were embraced by large banking groups worldwide as they give them the benefits of blockchain technology regarding traceability without the disruptive nature of decentralisation. These models can be compared to private Intranet networks when The Internet was first developed and adopted. Legally, adopting blockchain technology and smart contracts means that they have to be either integrated with the current legal system and securities regulations or that the legal framework has to change (changing laws takes a lot of thought, lobbying, and time). Regulators are still wondering how to treat assets created in the crypto world. For instance since late 2017 and throughout 2018, the SEC has decided that most ICO-issued coins should be treated as securities while ETH is not treated as such (Hurtado et al. 2018). Each country has a different set of rules (or sometimes no clear rules at all) to define the legal framework associated with these new classes of assets. Coming to a general and global legal framework regarding this issue may take some time and friction, if even a general consensus can be reached. Some countries such as Malta, Gibraltar, Estonia or Liechtenstein have started to define a clearer legal framework for security tokens and Security Token Offerings (STO). But the potential rise of interest in security tokens displayed by institutional clients and accredited investors has appeared to some experts as a way of traditional industry players to formalize and re-appropriate the technology and its financial 410 10 Proposal for a New Participatory Creative Production Model prospects to their benefits more than a framework to protect retail customers as originally claimed. In 2018, there was no liquid functioning secondary markets for security tokens. However, since commercial films’ ownership is defined by the participation of the right holders in the finished content, this could be a potentially interesting vehicle for the film industry. Technologically, there are several issues including scalability, latency, custody, quantum computer threats. The issue of scalability which would allow mass-adoption of the technology has not been solved yet. This is particularly critical for B2C solutions. The example of crypto-kitties which jammed the Ethereum network at the end of 2017 just proved that the technology was nascent and needed to be scaled to develop wide-ranging adopted use cases (B2B solutions might be easier to scale in some cases, which is why Hyperledger Fabric solutions developed by IBM have started to be adopted). The BTC lightning network, the creation of larger blocks with Bitcoin Cash, Ethereum’s sharding and Casper, and Cardano’s system are potential answers to this problem. None of them have been fully developed and implemented as of September 2018. For example, Ethereum’s goals for the scalability of its network have been pushed to 2020 (Partz 2018; TrustNodes 2018): Meanwhile, what happens to the companies trying to develop wide-scale B2C solutions? Issues of latency are intrinsically linked to scalability and the decentralised nature of blockchain networks, particularly for globally distributed data and video centres. It translates by slow networks, long response times and it would make a global adoption of the technology almost impossible. Custody: When one keeps custody of assets they own private cryptographic keys. These keys give the owner a total individual control of the asset. This can be problematic when more than one person needs to have access and authorisation to the same assets, in the case of a company for example. Despite the creation of multi-sig wallets and solutions that allow for multiple signatories and authorization on a set of assets, the issue of having to trust the signatories to start with remains. Moreover, some of these solutions have been subjected to hacks, in the case of the parity wallet for example (Lukas K 2018). Finally, the threat of quantum computer attacks has been envisioned. Even if this scenario may not realistically be considered for more than 10 to 15 years, once quantum computing is rolled out, it would allow for the perpetrators to roll back and change the history of the chain, making it purposeless in the process. This is a concern that several companies including Cardano are currently working on. Generally, the development of decentralised blockchain platforms and networks have to balance between security, speed, and decentralisation. The more a system is decentralised, the safer it may be but the slower it becomes and vice-versa, faster networks mean that safety and/or decentralisation have to be compromised (Chu 2018). Some chains, for example Cardano, whose governance model is also decentralised try to maximise all of these features. Market-wise, emerging blockchain companies in the sector of the creative industries have so far been met with limited levels of adoption. As seen with the scalability argument explained previously, most of the existing blockchain models 10.4 Limitation of Blockchain Technology 411 are not yet equipped and developed to handle mass-viewing markets. They also position themselves as direct competitors of large and cash-rich, often government- backed, corporations such as Alibaba’s YT and Netflix. As seen throughout this book, these large online platforms already have a large-scale viewer database of hundreds of millions of users, quality content, big data analysis and AI tools to manage these audiences. These features allow them to finance, produce, and distribute targeted and curated content with unparalleled amounts of financial resources. They benefit from economies of scale and have colossal budgets to spend on P&A, which in turn maintain and increase viewers adoption. For example, Netflix is planning to invest a revised US 13 bn on content in 2018 (Marotta 2018). How can isolated blockchain companies compete against Netflix catalogue and already widely established and adopted products and services? With YT, there is another obstacle which is the Chinese Government support to this platform and the selected local champions as seen in Chaps. 3, 4, 5, and 6. While companies like Netflix are eroding professional opportunities for intermediaries such as sales agents, creative film Dapps that position themselves on the same segment as the large online platforms invite resistance from existing media professionals. These businesses may see their jobs disappear through dis-intermediation. This is why it would be important to integrate these traditional players to a decentralised eco-system as they manage their professional transition smoothly: Gradually disruptive may be preferable to drastically disruptive. Economically, there is a significant risk of depreciation of assets for Dapps. This is particularly true in the case of an ICO or a fund-raising with time-sensitive deadlines, like the funding of a film. For example, if a film company had raised ETH in January 2018 (when it was over US$1000 per Ether) for a shoot in May 2018 (when the value per ETH collapsed to around US$500), the production company’s budget would have lost 50% of its fiat value at the time of the shoot. Unless a long term reliable solution of a stable coin is found, this level of volatility makes it realistically impossible for a film production company to operate its cash flows and complete the film with the ETH raised. Socially, there are at least three pre-occupying issues to be solved. Education of professional talents: core blockchain talents such as software architects, engineers and developers are currently scarce. Even as key chains like Ethereum or Cardano have developed virtual machines (EVM and IELE respectively) allowing the use of more widespread programming languages such as C, C++ and Rust for EVM and Java or Python for IELE (Rosu 2017), there is a pressing need to educate an entire generation of blockchain professionals. Education of end-users: Computer literacy is an issue. Blockchain is in its early adoption phase and the applications are not yet user-friendly (or scalable as seen previously). The other concern regarding the possibility of mass-adoption is that the custody of crypto-assets lies with the end user (instead of a bank with traditional assets and FIAT currencies). This means that end-users are solely responsible for their funds, without the insurance covers provided by banks. Users can be targeted by hackers. They can make mistakes while transferring funds and lose them irreme- diably. In this context, there is an urgent need for education. Some entities such as 412 10 Proposal for a New Participatory Creative Production Model

The Bitcoin Association of Hong Kong (presided by Leonhard Weese), The Ethereum Association (led by Jehan Chu) or Elliott Hoffman’s recent education programme with Paxful in Hong Kong (to name just a few) have taken such initiatives. They educate end-users for free in the areas of cybersecurity and crypto-assets custody and transfers. But these steps are taken more by the communities and sometimes the government than the businesses who develop the Dapps. Affordability and access: The issue of affordability is present in various countries and less fortunate individuals who cannot afford or do not want to purchase a device such as a smartphone, PC, Mac, tablet, or Raspberry Pi. Adding another costly interface layer may not make life any easier for less-financially fortunate end-users.

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Over the past 17 years, the evolution of the Chinese creative media landscape has been fast and economically disruptive both locally and internationally. As seen in Chap. 4 through the analysis facilitated by the combined use of Peterson’s and Lemaire’s models, a set of intertwined political, economic, regulatory, technological, organisational, market, and labour forces have shaped the Chinese creative industries. In China, political forces have taken the lead on all the other forces.1 The political agenda has consistently superseded economic agendas and it is safe to say that all of the reforms and developments which were initiated over the timeframe of study were cautiously implemented, with a two steps forward one step back incremental approach. Economically, the media industry has grown tremendously through the expansion of broadband and mobile adoption as well as the adoption of online platforms and devices, which have expanded the range of viewing contexts. The construction of cinema screens has largely contributed to the expansion of the local BO, which is on track to overtake the US by 2020. This trend has been supported by a strong online ticketing development from online platforms, the rise of ticket prices, the development of 3D and Imax, and the import of foreign films that have helped maintain strong BO revenues when its growth slowed down in 2016. The rise of Internet plus, the Chinese IP centric approach, and the thick tail have recently provided a degree of cooperation between traditional and online industries to maximise revenues of selected IPs. In terms of regulations, the transformation of China’s informal IP system into an IP centric system over the past 17 years has been influenced to some extent by transnational entities such as the WIPO or the MPAA that conditioned China’s entry into the WTO. Nonetheless, most of the formalisation of the local creative industries and

1 This situation reinforces the need to complement Peterson’s model with Lemaire’s political angle in the context of China.

© Springer Nature Switzerland AG 2019 419 P. Poujol, Online Film Production in China Using Blockchain and Smart Contracts, International Series on Computer Entertainment and Media Technology, https://doi.org/10.1007/978-3-030-02468-0_11 420 11 Conclusion the centrality of IP was driven by a Chinese Government political-economic agenda to control the sector and its content, to create local IP, to reinforce propaganda, and to expand its soft power internationally. Technologically, the development and the adoption of mobile, broadband technology and the number of Internet users has increased sevenfold from 2001 to 2017. In 2016, the acquisition of YT by Alibaba manifested a step further into the platformisation of China and the use of more advanced technologies such as cloud computing, AI, blockchain and big data analysis which allow online groups to respond to fragmented audiences and adapt to their tastes as much as to influence them. Organisationally, during these transformations some areas of tensions have opposed the traditional industries against the online creative industries as it was exemplified with the case of The Last Race. One reason for these sources of tension was that the traditional industries are still heavily intermediated and centralised with a strong hierarchical top-down structure whereas the online creative industries represented by companies such as Alibaba traditionally tend to have a flatter structure and a different business culture. However, while the online creative industries claim that they are decentralised and disintermediated, they actually operate as pseudo-decentralised and intermediated capitalist platforms (not just in China but globally). The difference with the traditional industries is that the online creative industries have managed to place themselves in the middle of almost every trade and transaction. This makes the creative industries system centralised and intermediated by a consolidated corporate oligar- chy. This system is controlling and exploitative. Companies such as Alibaba have disrupted the traditional creative industries, but their disruption has only remained economic. The political agenda has firmly remained in the hands of the CPC. Online platforms and companies such as the BATs seem like a first step towards the creation of an ecosystem that could potentially help promote young emerging talents. However, these online platforms’ sole-intermediary and pseudo- decentralised structure as well as their regulations and profit-taking agenda significantly limit their potential as a creative and collaborative space. This approach has contributed to make IP more centric in China and to develop franchises and a concept of thick tail that aims to maximise any given IP. This system also engages audiences through AI, cloud computing, and big data analysis technologies to create emotional engagement in what has become the Internet Plus. In regard to market forces, despite China’s booming BO revenues and its explosive adoption of both online and mobile platforms over the past 10 years, local films have generally had a challenging time to be released and find an audience. This came to the point where foreign film quotas had to be increased in 2016 to keep the national BO levels increasing in the hope to overtake the US BO and legitimise the CPC through national pride and identity. Audiences have evolved rapidly over the past 17 years. With the choice of viewing contexts and the type of content they can watch, they have become generally more active and maybe more creative. But this has a lot to do with remix creativity and mimicry as opposed to original creation. 11 Conclusion 421

In terms of labour, despite the large amount of capital being injected in the Chinese creative industries, these are quite reliant on foreign content and outside crews from Hong Kong to develop and sustain the industry. A minority of the films produced in China is released theatrically and an even smaller section of this minority manages to recoup their investment. There is a pressing need for China to identify and train a solid talent base and build an ecosystem which would make the whole industry more independent from external support. While the online platformised context does not represent an ideal situation to identify, train and nurture young emerging practitioners, I argue that it is a step forward towards more gradual transformations. These transformations may pave the way to the next model. Nonetheless, current solutions to foster emerging local creative practitioners, even if they are steps towards talent creations, are significantly limited. Firstly, there are issues of corruption and trust both with current options such as local film funds or crowdfunding. Secondly, more independent platforms such as Jia Zhangke’s or Gordon Levitt’s Hit Record are centralised structures reminiscent of platform capitalism. They are just using the marketing and branding of a celebrity to build trust and potentially deceive and exploit creative audiences. Thirdly, blockchain platforms such as Ujo, 21M, Moviecoin, Treeti, Cinezen, Slated, Tatatu, Vuulr, or SingularDTV (Breaker) are not Chinese and therefore they may have a hard time being adopted in China. The participatory involvement and analysis coming from the focus groups and conversations with the selected creative talents was enlightening as it revealed some of the pressing needs from the creative audiences and professionals to produce content aligned with their artistic aspirations. The emerging filmmakers who have special connections (guanxi) or those who are coming from the golden circles (or have rich friends) can financially back their film projects. Nonetheless, it is very challenging for young filmmakers outside of these circles to start working professionally on their creative projects. Incidentally, this situation acts as a form of money or capital censorship where only the riches can continue to make films. A lot of their ideas tend to support mimicry of Western aesthetics and genres as seen while interviewing young Chinese emerging talents over the past 3 years. These dynamics contribute to limit local creativity: the centralisation of creative projects in the hands of a few rich connected individuals would be detrimental to the country’s ability to produce a balanced and diversified set of creative works. Moreover, this situation if it persists could have a disastrous effect on the entire country’s ability to sustain its industry in the years to come. There are other issues such as endemic levels of financial corruption and power within the film industry itself. This leads to exploitation either directly in the traditional industries or indirectly through the exploitative nature of the platformisation of content online. Young creative talents are rarely rewarded for their work. They also rarely retain ownership of their work, while they have to pay for the IP promoted by the creative industries. 422 11 Conclusion

Corruption becomes endemic when budgets are substantial and people either steal from productions out of greed or the necessity to survive. This situation is exacerbated by the power of intermediaries who take a cut in the middle and create little value. In addition, structural issues (sometimes combined with corruption) show the need for a professional training for young creative practitioners. This training could be decentralised from the BFA’s quasi-monopoly and open fresher ideas and new horizons. In this context, the film academy proposed by Alibaba in Shanghai might be much needed in filling the gap of certain lacking skills and crafts such as screenwriters or creative Producers. Nevertheless, what Alibaba makes of their academy and whether it is authorised by the government or not (and on which terms) remains to be seen. What happens to Alibaba and its vision after the departure of Jack Ma in 2020 is another unknown area. Without Ma’s entrepreneurial persona and his individual image, it might reinforce the manifestation of company’s corporatist model. Issues of censorship are also problematic. These manifest at different levels. Many criticise more or less openly government censorship, but I argue that this type of censorship is in fact ambiguous and it can occasionally give a certain leeway to the filmmakers. Corporate and above all self-censorship are more dangerous and they significantly reduce the scope of creativity. They act as restraining circles of control that reduce creative expression (see Fig. 10.1 in Sect. 10.1.6). What Keane calls the concept of tolerance remains an issue today (seen in Chap. 2). Aside from censorship, the cultural limitations imposed by traditional values (including Confucian values) make it very difficult for filmmakers, particularly female artists, to focus on their creative careers that are financially precarious while they are expected to support their elders. Under peer-pressure and societal pressure, the emerging creative talents may end up settling down into banking or marketing jobs instead, to make a living and provide means for their families. At the other end of this spectrum, the example of Ayam is particularly refreshing; as a Hong Kong filmmaker who is not subject to censorship and the limited use of Internet, he has connected internationally and managed to build his own creative network and ecosystem in the pursuit of a collaborative project. While he uses a lot of the techniques developed by media studios such as crowd-wisdom, relocation of labor, and cross-promotion/cross-selling strategies, his commercial intent is counterbalanced by a genuine passion for his artistic endeavours and his desire to share his work with local and world audiences. Like several filmmakers from the ‘Fresh Wave’ created by Johnnie To, he has renounced the Chinese market, which he thinks is too complicated and energy drain- ing to focus on the content he wants to create. However, all the existing platforms whether based in Asia or in the US do not currently provide him with the adequate tools to raise sufficient finance and more importantly to distribute his work. US-based platforms such as iTunes, Amazon, or Google Books for instance make it very difficult for emerging artists to distribute, circulate their work online, and make decent profits. These models have become parasitic in a platform capitalist environment that tends to prevent original creations. This is when this platformised system does not 11 Conclusion 423 reappropriate their work almost immediately without paying fair tribute to the IP owners – while demanding fees for the appropriated IP which they then consider their own. The model suggested in Chap. 10 (tentatively named ‘Lumière [芦明]’) proposes to solve some of these issues, particularly the issues regarding corruption and trust. Therefore, the use of blockchain technology could allow a production to eliminate intermediaries. In theory, independent filmmakers could control this ecosystem from its financing to its distribution with an immediate financial reward system agreed from the outset and executed automatically through smart contracts. This disintermediated and distributed system could be the next step into the evolution of Internet Plus seen in Chap. 4 and it brings the creative industries towards the notion of the Internet of Value and the Internet of Trust where a computer and a consensus of the network decide on transactions and decisions without the interference of potentially untrustworthy individuals (as in the many examples observed in the case of The Last Race in Chap. 6). This option also offers cheap crossborder payment solutions compared to the traditional banking system or Western Union for instance and rewards all the creative agents fairly, thereby increasing their morale and commitment into the film projects as they feel valued and respected. However, as seen in Chaps. 5 and 10, this new creative ecosystem also bears significant limitations and challenges that will need to be overcome for this model to deliver its promises. These challenges are: environmental (extensive use of energy and resources), political-economic (risk of increased government scrutiny and control), market-related (economic challenge to reach economies of scale and mass adoption), regulatory (integration with the current legal system and securities regulations), technological (scalability issues, latency, issues of private keys assignment and funds custody, quantum computing threats), and social (issues of computer and technology literacy and affordability). As Zach Le Beau, the CEO of SingularDTV (Breaker), declared during a conversation in April 2017, ‘blockchain is not just a technology, it is also a mindset.’ One cannot blindly rely on a technology to solve all of the issues of an industry that is essentially a human enterprise. This is where the human factor and other values such as the passion factor described by Philip Lee could accompany this technology. This human factor can be defined by a growth mindset. It is like in the case of the Zimuzus, the enthusiasm to perform a professional work well done without having to worry about the precarity of financial rewards and the uncertainties caused by exploitation. Depending on the individual, the value of the reward can also be a form of cama- raderie. It can be recognition – not necessarily fame – but a recognition within the industry which can be facilitated by people grading their peers and giving feedback on each other openly (not as a punishment, but as a constructive endeavour) and help each other improve. The traditional and the online industries currently provide an experimental ground for new talents to practice their skills and their arts, but few have the chance 424 11 Conclusion to be training at film schools or at university level. These options should remain open to those who cannot afford it. Being able to collaborate in a professional creative disintermediated and distributed ecosystem would be the next step to develop a variety of talents. Whether they come directly from school, traditional industries or online industries, this talent diversity could open the minds of the participants and develop growth mindset attitudes and behaviours early on in their careers. This could be facilitated by the industry becoming more transparent through the use of blockchain and smart contracts. This transparency would not just be defined in terms of financial transparency but also in terms of realistic, constructive and honest feedback. This assumes the creation of a distributed power system where even IP becomes decentralised in a form of P2P or commons status: All the creative agents working on the films own a share of that film alongside the crowd and the institutional investors. This system could potentially facilitate the equilibrium between the triarchic forces of government, industry and audiences alongside emerging creative talents. For someone like Ayam, a system with tools such as blockchain and smart contract would enable him to create content more efficiently, to raise the needed capital for his projects more easily, and to distribute his works with more freedom without having to rely on the parasitic nature of platform capitalism such as iTunes or Amazon. With the recent Government regulations in China regarding VPNs, online content and even blockchain, this model may be more challenging to implement as an autonomous system. In that sense, it may offer Hong Kong emerging creative talents an opportunity to differentiate themselves through their art and to create authentic, original, and compelling IPs that they can freely expand into their own shared thick tail model. This model could be viable both financially and creatively as it would not need to be directly connected to the online corporate sector. In that sense it would be truly independent. The main limitation is that if the government does not use the concept of tolerance, the system may become dissident. Even without the influence of corporate censorship (if the funds are raised by ICOs for instance), self-censorship and traditional values may deprive China and potentially Hong Kong from what Keane advises is the hardest thing to develop and to come by in China, which is creative talent. Consequently, the local industry, its online platforms, and its many newly built cinema screens may have to rely on foreign films for a few more years until a sustainable local talent pool can be developed. Otherwise, the creative content industry may simply not survive. In the end, blockchain technology is a tool that could help change mindsets in regard to creativity and its structures of production. But for it to truly work, both technology and human values need to work hand in hand. Beyond this and the CPC governmental stance, a question should be posed, which may explain the recent hard stance of the Chinese Government towards blockchain technology and its nascent ecosystem (the ICOs). 11 Conclusion 425

This question is what will happen when a disintermediated, transparent, and distributed system is hosted by a centralised and intermediated corporate system like Alibaba’s within a context of central political power? Essentially, what may happen when a centralised and intermediated political-economic system adopts at its very core a decentralised and disintermediated system? Would the centralised system change and become decentralised or would it continue as a paradoxical centralised-decentralised political-economic hybrid system with Chinese characteristics like the Communist-capitalist system already in place since the 1990s in China? While we cannot currently answer these questions with 100% certainty and therefore, this is a phenomenon which deserves to be further observed and studied, it is very likely that this system would decentralise data, transactions, and content but would keep a centralised governance. On the one hand, if blockchain and smart contract technologies were limited to private local chains like NEO, these technologies may invite more political and economic control than before: politically, in terms of the type of content being produced and economically in terms of the centralisation of IP ownership and its protection. On the other hand, if they are kept as open source protocols and if they are supported by collaborative creative mindsets and values, these technologies may initiate more disruptions than the Internet. At least they could foster local long-term creative ecosystems and communities. Blockchain and smart contract technologies could potentially transcend the capitalist versus Communist ideological dichotomy to facilitate a transition towards post-capitalism. This would benefit both China and the US, but not so much the current centralised political-economic powers in place. As John McAfee declared during the Global Blockchain Summit that was displaced from Beijing to Hong Kong on 20th–21st September 2017 for security reasons, ‘there will be tremendous resistance and tensions on the path towards the developments and the mainstream adoption of blockchain technology’ (McAfee 2017). In this technological euphoria, we should also not forget the 600 million Chinese people who are not connected to mobile and Internet either because these technologies have not yet reached them, because they cannot afford them, or because they do not know how to use them (computer and technology illiteracy). As concluding words of this book, there could be a third possible scenario; it would be a hybrid between a permanent ban of blockchain and smart contract technologies (and its dissident use) and the possibility for the Chinese Government to exert tolerance for this new ecosystem (this may not happen in the near future given the government’s controlling response to the explosive development of these technologies). This third option is, to my sense, more interesting as it resides in the realm of the informal and makes use of grey areas. It goes beyond the hidden transcripts described by Scott (1990) and Zhao (2016) in Chap. 7 and it is more connected to what Andre Gide once defined as ‘art is born out of constraints, lives out of struggles, and dies with freedom’ (Gide 1921, 14). It is the possibility for decentralised blockchain and smart contracts technologies to become – in appearance at least – compliant with 426 11 Conclusion the technological power in place until they are fully integrated into the central system. At this point, using almost subliminal language and subtle creative messages, they can exert measured but long-term challenges and influence on the power in place. This could be done in the form of coded language.2 One of many examples throughout human History comes to mind; it is the example of former slaves from West Africa in Cuba and Brazil who pretended that they accepted the religion of the coloniser by praying to the Saints. But in reality, through religious transpositions, such as Santeria and Candomblé, the slaves were still praying to their original Yoruba gods. This way, they could survive and continue to assert their resistance in the face of the coercive power in place. This set of adaptive and survival practices gave rise to many forms of original artistic creations. Amongst these were the Capoeira dance form, native sculptures, paintings, and music: all creative pieces made of coded messages born, one could say, from the very core of where both humanity and blockchain technology actually originate: cryptology (the study of codes) and cryptography (the art of creating codes).

References

Gide, André. 1921. Nouveaux Prétextes: Réflexions Sur Quelques Points de Littérature et de Morale. Paris: Mercure de France. McAfee, John. 2017. “Blockchain Global Summit” organised by Bitkan, Grand Hyatt, Hong Kong, September 20–21. Scott, James. 1990. Domination and the Arts of Resistance: Hidden Transcripts. New Haven, CT: Yale University Press. Zhao, Elaine Jing. 2016. “Professionalization of Amateur Production in Online Screen Entertainment in China: Hopes, Frustrations, and Uncertainties.” International Journal of Communication. 10:5444–62.

2 In China, art forms symbolising political protest through coded language are already quite common. Appendices

Appendix 1: List of Interviewees

I would like to thank the following creative industry professionals for their participation in this research (and to all the others who cannot be named here):

Film Professionals

Ahmad-Taylor, Ty, former CEO of THX and currently VP Product Marketing of Global Marketing Solutions at Facebook. Interview in December 2015. Arad, Ari, President of Arad Productions, one of the Producers of Iron Man and Ghost in the Shell. Informal interview in Hong Kong in June 2016. Benard, Pierre, former General Manager of UGC Cinema, Bordeaux, France. Bjorck, Lars, Sales Agent and Executive Producer and Co-Founder of Framecoin. Interviews in Los Angeles, CA and Bangkok, Thailand in December 2017 and January 2018 respectively. Bonefacino, Jean-Luc, CEO of Hong Kong-based production company Mar Vivo. Interviews from March 2015 until March 2018. Browning, Anni, General Manager of Film Finances International, Sydney Office. Meeting face to face in Beijing and Hong Kong and telephone interview on August 8, 2011. Buckham, Robert, Film Producer based in Shanghai. First contacted in March 2017 [ongoing and informal conversations since then]. Chapas, Agustin, Owner of Blacksmith Entertainment (a Shanghai-based animation company) and Chairman of the China Film Networking Group (A networking group of 258 film industry professionals, including representatives from Alibaba, Bona films and Huayi Brothers connected through Wechat with its Administrator physically located in Shanghai). Information was gathered regularly on this

© Springer Nature Switzerland AG 2019 427 P. Poujol, Online Film Production in China Using Blockchain and Smart Contracts, International Series on Computer Entertainment and Media Technology, https://doi.org/10.1007/978-3-030-02468-0 428 Appendices

group and occasionally in private with Mr. Chapas from October 2015 until March 2018. Cheng, Siu-Keung, Director of Photography for Johnnie To. First met on the set of The Last Race, in Tianjin in June 2015 [ongoing and informal conversations since then]. Cheung, Anita, Executive at One Cool Picture, Hong Kong. First met at the Shanghai Film Festival in 2010 [ongoing and informal conversations since then]. Cheung, Gordon, former Executive at Celestial Pictures. Interview in Hong Kong, March 2009. Conway, Leon, former Head of the O’Kane Centre for Film Studies [ongoing and informal conversations since then]. Cox, Joel, series of informal interviews from 2012 onwards and after his collaboration with Clint Eastwood as a film editor on American Sniper (2014) for which he received an Oscar nomination. Joel Cox was Academy Award winner for best film editing for Unforgiven in 1993. Dakaskis, Constantin, Head of the Audiovisual Department of the European Commission, February 2008. Ding, ‘Roy’ ZhuoTao, Head of promotion and communications at YT, August 29, 2015. Doorley, Michael, playwright and novelist. First met in Dublin, Ireland in November 2000. Doyle, Christopher (Du Ke Feng), Director of Photography on Hero and In The Mood For Love. First met in Dublin in 2006 [ongoing and informal conversations since then]. Ellis-Geiger, Robert Dr., formerly Assistant Professor at City University of Hong Kong and now Senior Lecturer at Hong Kong Baptist University. Professional Music Score Composer and Producer. He worked with films professionals such as Johnnie To, Ruby Yang or Patrick Tam. Since Dr. Ellis-Geiger was my supervisor from January 2015 until August 2017, I had the opportunity to get his industry insights in formal and informal interviews over this timeframe. Fang, Yunyu Francesca, former journalist for Global times and China Daily. Interviewed in Beijing from 2011 to 2014 and by email on May 28, 2014. Forkin, Edwina. Producer and owner of Zanzibar Films. First met in Ireland in May 2007 [ongoing and informal conversations since then]. Friel, Alan, formerly Attorney at Law for Wildman, now Attorney specialised in copyright and Digital Rights for major studios at Baker and Hostetler in Los Angeles: Interviews between 2009 and 2017. Fung, Wellington, Assistant Head of CreateHK, interviews from March 2009 until April 2017. Gao, Feng, Cultural Attaché for the Chinese Embassy in Dublin, Ireland. Interview in Dublin, April 2010. Garcia, Roger, former Executive Director of the Hong Kong International Film Festival. On-going conversations since July 2009. Gilmore, Geoffrey, Former Executive Director of Sundance Film Festival. Current Director of the Tribeca Film Festival. First met in August 2009. Appendices 429

Glachant, Isabelle, CEO and Producer at Chinese Shadows, now head of Unifrance China. Interview in Beijing in December 2009 and ongoing conversations and email contact until 2014. Hark, Tsui, Interview at Innocentre, Kowloon Tong, Hong Kong, December 2008. Harris, Eoghan, Screenwriter of Sharpe TV series, Producer and former Irish Senator. From 2006 until present time [ongoing and informal conversations since then]. Johnston, Susan, Owner and CEO of Select Talent Services. Founder of the New Media Festival. Series of conversations and interviews from November 2010 to December 2018 [ongoing and informal conversations since then]. Jumani, Amit, Director of Krisco Media FZC, Mumbai, India. First met at the Cannes Film Festival in 2009 [ongoing and informal conversations since then]. Lam, Stephen, Executive Producer of SPL II. First met at the Shanghai Film Festival in 2010 [ongoing and informal conversations since then]. Lee, Alvin, former Executive Director, International Relations and Public Policy, Asia Pacific at Time Warner. Interviews from March 2009 until 2011. Lee, Audrey, former Head of Sales, Edko, interviews from December 2009 until April 2016. Lee, Newton, Editor of Springer Publishing. Met in Los Angeles, CA. November 2017. Li, Cheuk-to, former Artistic Director at the Hong Kong International Film Festival. First met in Hong Kong in March 2009 [ongoing and informal conversations since then]. Lee, Philip Dr., Executive Producer of Cloud Atlas and co-Producer of The Revenant. First met in April 2011. Liu, Chun, Government Official for SARFT (Chinese Film and Television Bureau). Interview in Beijing, December 2009. Lo, Ken, Ken Lo’s interview, Senior VP Distribution for Sony Pictures Television, Hong Kong, June 6 2017. Loehr, Peter, former General Manager at CAA Beijing and former CEO at Legendary East. Interview in December 2008. Logan, Bey, Executive for the Weinstein Company in Hong Kong. Interview in Hong Kong in October 2008. Ma, Stephen, VFX Supervisor who worked with Stephen Chow. First met in Hong Kong in 2010 [ongoing and informal conversations since then]. Mansolillo, Chris, Head of Amazon Content Acquisitions, Los Angeles, CA. December 2017. McCaul, Brendan, former Head of Buena Vista, Disney Ireland. From 2007 until present time [ongoing and informal conversations since then]. Melchior, Maarten, Key Partner at Netherlands-based collection agency Fintage Collection Account Management B.V. Series of informal interviews at the Beijing International Film Festival (April 2015) and through subsequent emails. Mu, Woody, Head of Alibaba Digital Media and Entertainment, Pasadena, CA. December 2017. 430 Appendices

Ngai, Tony, General Manager – Production and Technical Service at Salon Films (H.K.) Ltd. Series of interviews and informal talks from March 2009 until March 2017. Noonan, James, former Head of Warner Bros. Home Entertainment Division, Los Angeles, CA. Interviews from 2007 until 2014. Oulmekki, Sélim, Media Consultant based in Beijing since 2007 and who worked with Lu Chuan [ ]. Now International Affairs Executive for Hi-Show Entertainment since 2016. Series of informal interviews in Beijing and through Wechat. Penrod, Britt, former Head of Business Development at Raleigh Studios, Los Angeles, California. Interviews from 2012 until December 2017. Pilarski, Aymerick, Cameraman on The Great Wall, Outcast, and DoP on The Heart of Konba. Series of interviews in Beijing and through Wechat between April 2015 and March 2018 [ongoing and informal conversations since then]. Shaw, Soo Wei, former Director at the Hong Kong International Film Festival and previous Director of the Singapore International Film Festival. First met in Hong Kong, in March 2009陆川 [ongoing and informal conversations since then]. Sherak, Tom, former Studio Executive at Paramount, Los Angeles, CA. Interview August 2009. Shershow, Aaron, Line Producer on Iron Man 3 and the Marco Polo TV Series, Producer of Morning Paris. Series of informal interviews in Hong Kong, Beijing and through Wechat between July 2010 and March 2018. Shi, Nansun, Owner at Film Workshop, Hong Kong. Interview, September 2017. Shin, Stephen, Director of On Wings of Eagles. First met at the Shanghai Film Festival in 2010 [ongoing and informal conversations since then]. Song, Li, CEO of Beijing-based Li Hai consulting. Interview in Hong Kong in April 2017. Suarez, David, Sales Agent at Quantum Releasing until 2012. Now Head of Business Development for China at Ytinifni, Shanghai, China. Informal interviews in Cannes and at the Hong Kong International Film Festival between May 2009 and March 2018. Sun, Alexandra, Hong Kong-based Distributor and Film Producer at The Film Library. Series of informal interviews in Hong Kong, Beijing and through Wechat between March 2015 and March 2018. Tang, Belinda, Head of Acquisitions, Golden Harvest. Interview April 2009 and April 2015. Tong, Patrick, Head of the Hong Kong Video Association. Interview in Hong Kong, October 2008. Waller, Tom, CEO of De Warenne Films, Bangkok, Thailand. Interview on 3rd January 2018. Walshe, Peter, former Head Programmer, IFI, December 2007. Wong, Vicky, co-director of Trivisa (2016). Conversation at a ‘Fresh Wave’ event organised by the Hong Kong Trade Development Council (HKTDC) at the American Film Market (AFM), Los Angeles, November 2017. Appendices 431

Startups, IT, and Blockchain Professionals

[unless otherwise specified, ongoing and informal conversations since 2015 through Meet Up events and one on one meetings] Buterin, Vitalik, CEO of Ethereum, met at the Ethereum Association meet up at KPMG offices in Hong Kong in April 2016. Cheng, Jack, CMO at SingularDTV (Breaker), Hong Kong, met in November 2018. Choi, Cliff (Dr.), Liaison Officer and Advisor at Emurgo (Cardano), Hong Kong, met in April 2018. Chu, Jehan, President of the Ethereum and Hyperledger Associations in Hong Kong. Co-founder and Managing Partner at Kenetic, Hong Kong, met from November 2015. Davis, Aaron, Senior Developer at Metamask, Seattle, WA, USA, met in Hong Kong in November 2015. De Barra, Graham, founder and CEO of blockchain startup Festy.ie, Ireland, company specialised in concert and live performance transactions, met in Hong Kong in September 2017. Dey Prasanjit, blockchain system architect who has worked on several projects including EOSrelated projects, New Delhi, Skype conversations since February 2018. D’Haussy, Charles, Head of Fintech, InvestHK, Hong Kong, met in April 2016. Fedak, Gilles (Dr.), CEO and Co-founder of iExec, Lyon, met in Hong Kong in January 2018. Glatz, Florian, co-founder of Cinemarket, Berlin, Skype conversations from May 2018. Hayashi, Alex, CEO of Emurgo (Cardano), Hong Kong, met in March 2018. Haenni, Roger, co-founder and CEO of Datum, Hong Kong, met from April 2017. Hoskinson, Charles, former CEO of Ethereum and current CEO of IOHK (Cardano), Hong Kong, met in April 2016. Kim, Ed, Advisor of San Francisco-based Gameflip, met in December 2017. King, Ryan, Director of Acceleration at Emurgo Hong Kong (Cardano), met in Hong Kong in May and June 2018. Le Beau, Zach, Founder of SingularDTV (Breaker), Skype conversations in March 2017. Lee, Patrick, co-founder of Rotten Tomatoes. First met in Hong Kong in 2008. Lugol, Adrian, founder of Cinemarket, Berlin, met at Cannes Film Festival in May 2018. Maier, Alex, co-founder of Fidem, Singapore, met in Hong Kong in September 2017 and in Singapore in March 2018. McAfee, John, met at the Hong Kong Blockchain Summit organised by Bitkan in September 2017. Menant, Aurélien, original CEO of Hong Kong-based blockchain startup GateCoin, met in Hong Kong from November 2015. Series of interviews in Hong Kong from April 2016 to August 2017. 432 Appendices

Milligan, Alan, co-founder and CEO of White Rabbit, Norway, met at the Cannes Film Festival in May 2018. More, Mikael, IT and blockchain developer, Hong Kong, met in September 2017. Morgan, Scott, founder of San Diego-based Matryx, met in Hong Kong in September 2017. Naithani, Martin, Product Manager and Head of Product Design for Pelotea, Skype conversations since February 2018. Pantyukhin, Andrew, co-founder at Tangem, met in Hong Kong in September 2017. Pfifer, Dan, former CTO of Musicoin and Founder of Musiconomy, Hong Kong, met in March 2018. Roman, Diego, founder of Pelotea, Mentor at Founders Institute, San Francisco, met in December 2017. Song, Jimmy, Bitcoin core developer, met in Hong Kong in May 2018. Tichner, Danielle, founder and CEO of W-Source Hong Kong, met in April 2018. Weese, Leonhard, President of the Bitcoin Association of Hong Kong, met regularly from November 2015. Xia, Wesley, Business Developer at Matryx, San Diego, CA, USA, met in Hong Kong in September 2017. I am also grateful to all my other connections within the Hong Kong and worldwide blockchain community. Appendices 433

Appendix 2: The Case Study of Intertainer/Movielink

Jonathan Taplin, Mean Streets’ producer (1973), created the Intertainer’s VOD service in the US in 1996. As a matter of fact, it was the first VOD service provider that pioneered the concept. Intertainer distributed films to US cable networks and in 1998, with the support of strong shareholders such as Microsoft, Intel and Sony, it reoriented its activities toward VOD on PC. Intertainer was backed by deals with the studios (Sony, Warner/New Line, Universal and MGM), independents such as Artisan and TV channels (ESPN, Arts and Entertainment, NBC, Discovery). Intertainer had entered a deal with the cable provider Comcast and could deliver film both on cable and IP. Shortly before its closure in 2002, it had created also a ‘Film marketplace’: A market dedicated to small independent producers. Since the film market promised to guarantee a vast range of films, Intertainer would transfer all revenues generated by these films back to the small producers. Intertainer also had created, in partnership with a European manufacturer, the concept of an IP decoder (Feedomland) that would allow end users to watch films directly on TV. Films were sold on demand between US$2.00 and US$4.00 (for recent release). There was also a US$8 monthly pack for an unlimited access to 700 h of alternative content programmes and 50,000 h on the Comcast networks. In spite of the rapid expansion of the company that had 147,000 subscribers, Intertainer had to close. Taplin sued the major studios on ‘anti-trust’ grounds. Indeed, he claimed that studios were trying to evict Intertainer from the market after they created their own VOD portal: Movielink. Initially, the studios had agreed on a share of benefits of 50/50 (and a cash advance of US$500,000). However, after Movielink was launched, the studios changed the share to 60/40: This share ratio has since become standard across the VOD channel. Moreover, just before Intertainer had to close its operations, studios were delivering only 10 films out of the 200 originally agreed. Sony which had representatives as Intertainer board members at the time are suspected to have used Intertainer’s business model and technology to create Movielink which was subsequently adopted by most of the majors. In March 2006, the Studios decided to avoid media exposure and settled the lawsuit with Taplin for an ‘undisclosed sum.’ Note: This old case study highlights the underlying ‘informal’ strategies of the studios described by Lobato (2012). It also illustrates that the Hollywood studios control the flow and content of catalogues and most importantly the fees: studios ‘remain in the driver’s seat’ (McDonald 2007, 176–77). (References: Hiltzik, Michael, Was Movie Service’s A Studio Plot?, intertainer. com/articles/82.html, 09/06/03: John Markoff, Miguel Helft, Patent Lawsuit Names Leading Technology Firms, New York Times, 03/01/07: Guillou, 2004, 19). 434 Appendices

Appendix 3: Alibaba Timeline

December 1998, launch of Alibaba Online by Jack Ma and his team from Hangzhou. From 1999 to 2000, Alibaba Group was financed by foreign backers, led by Japan- Based SoftBank and US-based Goldman Sachs who invested US$25 Million in Jack Ma’s company. December 2001, Alibaba.com became profitable. In May 2003, Taobao created and allowed customers to sell products and services to each other very much like eBay in the US. In February 2004, Goldman Sachs sold its stake in Alibaba to Fidelity (one of the earlier backers of the company). In December 2004, Alipay that had facilitated payment transactions on Taobao became a separate subsidiary of the group under ANT Financial Services Group. In October 2005, Alibaba Group operated China Yahoo! in partnership with Yahoo! Inc. In November 2007, Alibaba.com was listed on the Hong Kong Stock Exchange. In April 2008, Taobao created Tmall, a business to customer (B2C) website which worked as supplement to Taobao (C2C). In September 2008, Alibaba Group creates its R&D Institute. In September 2009, as Alibaba Group celebrated its 10th anniversary, it created its cloud computing facilities in conjunction with its 10-year anniversary. In July 2011, Alibaba Cloud launched its own mobile cloud services Aliyun (Alicloud). In May 2012, Alibaba Group de-listed from the Hong Kong stock exchange. In September 2012, Yahoo! sold 40% of its stake in Alibaba which it had acquired in 2005. Yahoo! currently retains 15% of Alibaba’s shares (384 million shares) valued at US$28 billion in Q1 2016. In September 2013, after the Hong Kong Stock Exchange regulators refused Alibaba to re-list on their exchange for disclosure and accounting policy reasons, the company looked for IPO opportunities in the US. In March 2014, Alibaba Group acquired Hong Kong-based ChinaVision for US$804 m. On September 19, 2014, Alibaba completed its successful IPO on the NYSE, raising a total US$25 billion. In December 2015, Alibaba acquired South China Morning Post for US$266 m. In April 2016, Alibaba Group completed US$4 billion Youku Tudou (YT) acquisition from YT CEO Victor Koo. On June 4, 2016, Softbank sold US$10 billion stake in Alibaba Group, Alibaba gains a significant financial independence from one of its first backers. On October 9, 2016, Alibaba Pictures started a film partnership with Steven Spielberg’s Amblin Partners and DreamWorks. On October 23, 2016, ANT Financials deployed its crypto token Antshares. On October 31, 2016, Victor Koo (YT former CEO) became Chair of Alibaba Digital Media and Entertainment Strategy and Investment Committee to lead a US$1.5 billion media fund. Appendices 435

March 2017, Alibaba Group rolled out blockchain technology to tackle counterfeited goods. March 2017–January 2018, multiple failed attempts of Alibaba at acquiring the international payments US-based company Moneygram. September 2018, Alibaba owned 90 blockchain patents (one more than IBM). Jack Ma announced his 2020 retirement plan from Alibaba to focus on philanthropy and education. 436 Appendices

Appendix 4: The Last Race Comments on the First Script (August 2011)

General Notes, Suggestions and Comments (Courtesy of Patrice Poujol)

On the Positive Side –– I know about ‘the Chariots of Fire’ story, which is biographical and historical. Is this war story also based on Eric Liddell’s real life? How much of it is true? –– It’s a great, touching and moving story somewhere between ‘The Children of Huang Si’, ‘Life is Beautiful’ and ‘The Great Escape’… very good narrative structure. –– Great potential for box office and emotional grasp of the audience. On the Minus Side: A Few Points of Detail –– First of all, the script is very short: do you plan any additional scenes? As it is, the film would be about 1 h 10 min (Non-standard script formatting makes it hard to evaluate the actual length). –– Dialogues to be reworked: too wordy sometimes… show more (actions), do not ‘tell’. –– Are some of the flashbacks really necessary? Do they help the story move forward? –– A bit too sentimental at times and perhaps not plausible… wouldn’t it be interesting to show ‘the other side of the mirror’?: for instance, Lidell’s own doubts… after all he is only human… here he looks too much like a super-hero with no flaws, no internal conflict… he’s like a god… with this portrayal of the character, there is a risk of a ‘lack of empathy’ and perhaps boredom to some extent from the audience… also, the end is almost too predictable. –– Perhaps, adding a few more scenes in the prison camp would correct this trait: for example some scenes with Eric Lidell having a good sense of humour to increase empathy from the audience and identification to him. –– The last run while the other prisoner escapes is not that plausible… this is a high security prison war camp… it is unlikely that any prisoners would be able to escape with such a straight plan… perhaps, we could add a few scenes highlight- ing the elaborate plan (perhaps using some of Sun Tzu’s tactics), while bringing the prisoners (Eric Lidell, Xu Niu and the others) closer: brotherhood, like in ‘The Great Escape’. –– This is just my view, but if you need further comments, I would be happy to discuss. –– The title: ‘Chariots of Fire in China’ is a bit too close to the original title and could be misinterpreted: This is a totally different story (even though the same character is involved), therefore, something remote would be acceptable and perhaps more adequate: ‘The Chariots of Life’ or ‘Sons of God’ in case you want a more philosophical or spiritual angle. Appendices 437

Appendix 5: The Press Release – June 24, 2015 Tianjin Press Conference

English Version

UK talent and Chinese top cast and creative team involved in Eric Liddell’s biopic June 24, Hong Kong film Director Stephen Shin brings Joseph Fiennes and Dou Xiao for the press conference of the motion picture “The Last Race” and the documentary “forgotten concentration camps” in Tianjin. “The Last Race” has an intensive production schedule. One of the key locations of the film is a reconstructed Japanese concentration camp from World War II, set up in Shandong, China. The film tells the story of British athlete and gold medallist Eric Liddell a decade after his victory at the Paris Olympics in 1924. As indicated in the “Chariots of Fire”, Eric Liddell returned to his second home, China, as a missionary teacher at the Anglo-Chinese College first, to eventually find a country shattered by the war. In the film, Liddell is helped by a Chinese friend named Xu Niu, who stands up heroically with his fellow citizens against the ruthless Japanese invasion. A group of foreigners are captured and detained in the Weifang concentration camp which has historically held more than a thousand prisoners of war and nationals from over 30 different countries. In the camp, the lack of supplies including medicine became increasingly critical both for the prisoners and the Japanese alike making survival particularly challenging. In the film, Xu Niu is able to raise the necessary funds and uses his connection to the Red Cross to purchase and smuggle the much-needed medical supplies into the camp and increase the prisoners’ chances of survival. Eric Liddell continued his teaching duties even inside the camp, giving hope and inspiring a lot of prisoners and particularly children. A Stellar Sino-British Acting Duo Director Stephen Shin invited UK acting talent Joseph Fiennes to play the role of the selfless and kind-hearted gentleman, Eric Liddell, a natural trait that he seems to share with his character. As a classically trained actor, Joseph Fiennes started his career in the London West End in “The Woman In Black”. He later joined the Royal Shakespeare Company. His past film projects involve “Shakespeare in Love”, “Elizabeth” and more recently in “Risen”. Joseph also starred in Chen Kaige's Hollywood directorial debut film “Kill me softly” in 2002. Chen Kaige said about him that he was a patient, quiet and dedicated professional who received a rigorous acting training. Joseph’s counterpart is played by Dou Xiao who recently featured in Jean- Jacques Annaud’s “Wolf Totem” (Joseph Fiennes has already worked with Annaud as well on “Enemy at The Gates”) and “Under The Hawthorne Tree” directed by Zhang Yimou. In the role of Xu Niu on “The Last race”, Dou Xiao is sparing no 438 Appendices effort to ignite the passion, to resist the Japanese invader, and eventually rescue the imprisoned allied foreign compatriots. A Strong Co-Direction and An Expert Creative Team Senior Director Stephen Shin has directed numerous Hong Kong films at the box office and reputation win, including his masterpiece, “The Great Conqueror’s Concubine” which he re-edited into “Blood Oath” and screened in Dublin, Ireland in 2011. Stephen Shin produced and directed over 30 films in his career. He said that the story of “The Last Race” started about 10 years ago when he was deeply moved by Eric Liddell’s story. He states that “it is not only the perfect movie theme, but it should also make younger generations more aware of their past, all around the world, people gradually forget the importance of staying in alert so that the dark parts of human history do not repeat themselves”. Stephen Shin is determined to bring this message across in the movie. For over a decade, Stephen Shin’s passion and determination drove him to do an extensive data collection, develop the idea and create a story and a film that would best resonate with the context of the time as a tribute to Eric Liddell. His production team took several trips to Canada, the United Kingdom and other locations to look for survivors and collect relevant information in search of the truth and authenticity. He also immersed himself on site, in the camp, to write a true and touching screen- play, he personally penned the script several drafts and was significantly supported in the writing process by his co-Director, Michael Parker who he had already worked with on “Lunch With Charles”. Both Stephen Shin and Michael Parker believe that authenticity is key to the success of the film. The support of the Eric Liddell Centre in Edinburgh, Scotland and of Eric Liddell’s family was instrumental in doing so. The Directing duo is also supported by a strong technical team, such as Cinematographer Cheng Siu-Keung (“Election”, “Exiled”, “Vengeance”), the film will have a sizeable budget for the use of CGI handled by Stephen Ma also a veteran film professional who was the first Hong Kong filmmaker to have used special effects in films. In pursuit of the perfect visu- als, the film is also supported by famous Production Designer Horace Ma and Costume Designer Eddy Mok (“14 Blades”, “White Vengeance”) and their respective teams. The film and its documentary have been shot on location in China, Canada, the United States, England and Scotland.

Chinese Version

电终极胜窦骁扮硬汉真实再现铁血英雄 6 24 ,电影 , 约瑟夫· ,

电影 , ,

影《利》月日《终极胜利》和纪录片《被遗忘的集中营》在天津召开了新闻发布会导演冼杞然携同费因斯和窦骁亮相。据悉两位来自好莱坞和中国的男星将在片中联袂上演一出惊天动地的英雄传奇。《终极胜利》目前正在紧张拍摄中。电影以二战期间日本在中国设立的最大的集中营为背景讲述了一个名叫徐牛的中国人坚忍地对抗凶残毒辣的侵略者救护一批被日军关押在集中营的外国人的故事。集中营曾关押 Appendices 439

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, , , , 1500 , 6 两大男星释放雄性荷尔蒙 , , “ ” , , “ ” , , 来自多个不同国家的千余名战俘和侨民, , 其中包括英国奥运会短跑冠军李, 爱锐、前美国议员戴爱美等很多知名人士。被囚在集中营的外国人缺粮缺, 药生活极为困苦。徐牛历尽艰辛筹募巨款, 分三批秘密送往中立国外交官手, 中再以国际红十字会的名义购买集中营急需的药物与营养品秘密按时分批送往集中营。使得多名被囚禁的外国人在漫长的三年多囚禁生涯里得以约瑟夫· 支撑下来死亡人数仅为人。 , · ,约瑟夫 , , “ 虽然凭借《山楂树之恋》一举成名” 但窦骁坦言, 之前出演文艺片有种被束缚的感觉自《狼图腾》、《破风》开始,约瑟夫· 他终于从文艺男的紧箍咒中成功脱身得以尽情舒展自我的另一面。而在《终极胜利》中: 窦骁更是不遗余力点燃激情充分释放雄性荷尔蒙凭借, 机智以小抗大顽强, 坚持到日本侵略者,投降从而最终“ 解救出被囚禁的” 盟军外国同胞, 。从侧面展现了中国军民在二战约瑟夫· 中亚洲战场上起到的中, 流砥柱作用让中国观众感同身受进,而心中充盈荣耀感、认同感和归属感。, 眼光独到的冼杞然特地邀请了独具英式古典、内敛气质的费因斯扮演无私无畏的救世主李爱锐比起哥哥拉尔夫费因斯的,深沉多了几西分楚霸王迷人的贵族气三人世界他几乎演遍了黑猫莎翁所有的名剧被誉为, 血液里,都是莎士比亚的演员。从《莎翁情史》、《伊莉莎白》, 到《兵临城下》和,“陈凯歌首次执导的好莱坞影片《, 温柔地杀我》费因斯常扮演小说家、剧作” 家、, 诗人等极具文艺气质男主人公。陈凯歌对他评价颇高这是个有脾气、有个性、却相当沉静和敬业的的男人是典型的英国演员受过严谨的科班训练演起戏来简直是胜任有余。值得一提的是和窦骁演对手戏的费因斯气质忧郁、性情阴柔他饰演悲天悯人、情意深长的李爱锐和充满阳刚激情的窦骁形成强烈反差让人耳目一新。资深导演重现硬汉传奇资深导演冼杞然曾执导过众多票房和口碑双赢的港片其代表作包括《》、《》、《》等。冼杞然透露十年前他因介入奥运会接触到英国奥运短跑冠军李爱锐的故事知道了这个集中营它不但是绝好的电影题材更对逐渐遗忘历史的现代年轻人有特殊的警醒意义。于是冼杞然便下决心拍一部与此相关的电影。 440 Appendices

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十年以来执着的冼杞然埋首于《终极胜利》的资料搜集、构思和创作。不仅多次前往加拿大、英国等地寻访生还者并搜集相关资料还长期待在集中营遗址体验生活、观看纪录片为了写出真实而动人的剧本他亲自执笔剧本几易其稿。他认为真实性是这部电影的亮点及关键为此将不惜重金利用计算机技术比照历史数据图片再现年前的集中营。为了追求完美的影像效果该片还将在中国、加拿大、美国、英国等地实地拍摄。

Picture Courtesy of Patrice Poujol Appendices 441

Appendix 6: Selected Newspaper Articles for The Last Race

The Independent (2 Articles) http://www.independent.co.uk/arts-entertainment/films/news/the-last-race-unofficial-chariots-of-fire-sequel-starring-joseph-fiennes-in-the-running-10340745. html http://www.independent.co.uk/arts-entertainment/films/features/joseph-fiennes- interview-the-actor-on-a-mission-in-the-horror-of-war-as-he-makes-an-unofficial-10350289.html The Telegraph http://www.telegraph.co.uk/film/the-last-race/china-gets-chariots-of-fire-sequel- up-and-running/ The Guardian https://www.theguardian.com/film/2015/jun/24/chariots-of-fire-sequel-greenlit-in- china-joseph-fiennes-eric-liddell Empire Magazine Online http://www.empireonline.com/news/story.asp?NID=44706 The Times http://www.thetimes.co.uk/tto/arts/article4480845.ece China Film Insider http://chinafilminsider.com/alibaba-to-release-last-race-about-second-act-of-chariots- of-fire-missionary/ ITV http://www.itv.com/news/2015-07-13/chinese-sequel-to-british-classic-chariots- of-fire/ Cannes Film Festival Promotion http://www.avirtualvoyage.net/2016/05/shawn-dous-the-last-race-enters-cannes- film-festival.html http://www.bbc.com/news/entertainment-arts-36201676 https://www.theguardian.com/film/2016/may/15/joseph-fiennes-what-happened- next https://www.theguardian.com/film/2016/may/15/joseph-fiennes-chariots-of-fire- sequel https://kknews.cc/entertainment/k8bblq.html http://www.telegraph.co.uk/news/2016/05/15/chariots-of-fire-sequel-being-made-by- chinese-film-company-as-it/ 442 Appendices http://www.china.org.cn/world/Off_the_Wire/2016-05/22/content_38509562.htm http://news.xinhuanet.com/english/2016-05/22/c_135379294.htm The Hollywood Reporter http://www.hollywoodreporter.com/news/dueling-projects-explore-what-happened- 815567 http://www.hollywoodreporter.com/review/last-race-zhong-ji-sheng-903887 The Scottish Sun http://www.thescottishsun.co.uk/scotsol/homepage/scotlandfeatures/6642295/I- was-Charlesons-undiestudy-now-Im-taking-up-the-baton-as-hero-Eric.html The South China Morning Post http://www.scmp.com/culture/film-tv/article/1974503/film-review-last-race-strong- contender-worst-movie-2016 Netease and Key Chinese Outlets http://ent.163.com/15/0625/11/ASV08MDC00032DGD.html http://www.wfcmw.cn/pingpai/focus/2016-05-11/230303.html https://kknews.cc/entertainment/o2nyy5.html Appendices 443

Appendix 7: Louis Klein’s Character Biography

Louis Klein1 (Daisy’s father/protector)

Tagline: Coming Out of the Darkness Does Not Necessarily Mean That You Escape Toward the Light

Antisemitism grew constantly in Europe, particularly between the 1920s and the 1930s. France was no exception and aside from the usual insults, the last draw for LOUIS KLEIN, a fine Paris tailor with parents originating the East of France bordering Germany, was when the French Prime Minister Leon Blum was assaulted and beaten up in public just for being Jewish in the 1930s. Louis had become increasingly scared for his safety and particularly the safety and future of his little girl, Daisy. He immediately decided to leave France. He first tried to emigrate to the US, but after the 1929 crisis, the country had closed its doors to immigration and he thought that China might be a good opportunity to start anew and leave the ghosts of the past behind him, such as the early death of his wife and true love.

Louis and Daisy packed for the ‘Middle-Kingdom’ where Louis had connections in Shanghai. They found the environment in Tianjin quite attractive and the architecture was reminding them so much of home that they settled easily while learning Chinese bits by bits. Louis started prospering as a high-end tailor fairly quickly and ensured a good education to little Daisy. He has seldom talked about his roots, but as newspapers displayed a surge in anti-semitic events in Europe, he chose to firmly stay in China where he met Hugh Johnson (an avid amateur of tailored expensive costumes), he even tailored Eric Liddell’s tuxedo for his wedding and Hugh’s later on for his marriage, which brought him to that particular church that day… the day him and Daisy were abducted and sent to Weifang with all the other foreigners. Ironically, Louis survived the Japanese camp with his daughter Daisy and stayed in China after the war… if they had stayed in Europe, they might not have been that fortunate.

Character traits: patience, calm, a certain inherent sadness and nostalgia connected to his treatment in Europe and the sudden and early loss of his loving wife, but can lose temper if confronted to injustice, very protective of Daisy, reads people fairly fast, he is a giver and tailors and fixes the other prisoners’ clothes to ‘help them keep their dignity as much as possible’ as he says… Louis thinks that without dignity, people are momentarily stripped out of their humanhood. Louis wears glasses due to years of working the needle and threads. Despite the harsh conditions, Louis protects Daisy and tries to make her life more bearable, by being her confidant and making her occasionally a beautiful dress.

1 Character of Louis Klein created by Patrice Poujol and courtesy of Patrice Poujol. 444 Appendices

Appendix 8: Final Questionnaire 14th November 20082

Questionnaire for Digital Film Distribution Research (In English: For Reference Purposes Only)

(This survey is anonymous: answers to the questionnaire will be processed with the highest standards of confidentiality)

1 Gender (Tick the appropriate box): Male Female

2 Age: 18 –20 21 -23 24 -25 26 and over

3 Province / country where you are from: Mainland China Hong Kong Other (Please specify): …

4 Do your parents live in the citycentre, suburb or in the countryside? Citycentre Suburb Countryside

5 Total Disposable Income Per Year: No Income 1 - 10,000 RMB/HK$ 10,000 - 20,000 RMB/HK$ 20,000 - 35,400 RMB/HK$ 35,400 - 44,400 RMB/HK$ 44,400 - 70,000 RMB/HK$ Over 70,000 RMB/HK$

6 How often do you go to the cinema (on an average year)? Never Once a month Less than once in 6 months Once in 2 weeks Once in 2-6 months At least once a week

2 Questionnaire courtesy of Patrice Poujol. Appendices 445

7 How many films do you watch on the following media on an average week?(please tick appropriate number of films for each medium) VHS Tape: I never use this medium up to 1 film/week 2-4 films/week 5-7 films/week over 7 films/week DVD / VCD: I never use this medium up to 1 film/week 2-4 films/week 5-7 films/week over 7 films/week Internet: I never use this medium up to1 film/week 2-4 films/week 5-7 films/week over 7 films/week HDDVD / Blu-Ray: I never this medium up to 1 film/week 2-4 films/week 5-7 films/week over 7 films/week PDA / MP4 Video Player-Recorder: I never use this medium up to 1 film/week 2-4 films/week 5-7 films/week over 7 films/week Mobile Phone: I never use this medium up to 1 film/week 2-4 films/week 5-7 films/week over 7 films/week Television (excluding cable and satellite): I never use this medium 1 film/week 2-4 films/week 5-7 films/week over 7 films/week Cable Television I never use this medium 1 film/week 2-4 films/week 5-7 films/week over 7 films/week Satellite Television I never use this medium 1 film/week 2-4 films/week 5-7 films/week over 7 films/week Other (Please Specify): ______up to 1 film/week 2-4 films/week 5-7 films/week over 7 films/week I never watch films on any media. If you answered ‘I never watch films on any media’ thank you for completing this questionnaire, otherwise please go to question 8. 446 Appendices

8 How often do you watch films on the following media on your own? (please tick appropriate number of films for each medium) Cinema / Movie Theatre: Never Occasionally Sometimes Often Always VHS Tape: Never Occasionally Sometimes Often Always DVD / VCD: Never Occasionally Sometimes Often Always Internet: Never Occasionally Sometimes Often Always

HDDVD / Blu-Ray: Never Occasionally Sometimes Often Always PDA / MP4 Video Player-Recorder: Never Occasionally Sometimes Often Always Mobile Phone: Never Occasionally Sometimes Often Always Television (excluding cable and satellite): Never Occasionally Sometimes Often Always Satellite / Cable Television Never Occasionally Sometimes Often Always Other (Please Specify): ______Never Occasionally Sometimes Often Always I never watch films on any media on my own. Appendices 447

9 How many films from the following geographical areas do you watch per monthon average (at the cinema, on TV, DVD, Blu Ray, Internet and on your mobile)? (Please tick your answer for each category). Mainland Chinese Films: None up to 1 film/month 2-4 films/month over 5 films/month Hong Kong Films: None up to 1 film/month 2-4 films/month over 5 films/month Taiwanese Films: None up to 1 film/month 2-4 films/month over 5 films/month Japanese Films: None up to 1 film/month 2-4 films/month over 5 films/month South Korean Films: None up to 1 film/month 2-4 films/month over 5 films/month Other Asian Films: None up to 1 film/month 2-4 films/month over 5 films/month US Films: None up to 1 film/month 2-4 films/month over 5 films/month European Films: None up to 1 film/month 2-4 films/month over 5 films/month Other International Films: None up to 1 film/month 2-4 films/month over 5 films/month

10 How much leisure time do you spend on the Internet per day on average? Less than 1 hour Between 4 hours and 4.59 hours Between 1hours and 1.59 hours Between 5 hours 9.59 hours Between 2 hours and 2.59 hours 10 hours and over Between 3 hours and 3.59 hours I never use the Internet for leisure 448 Appendices

11 Name the three websites you use the most frequently to watch films on the Internet (please write your answers below in pinyin) 1. ______2. ______3. ______-If you named at least one website above or you did not name any butyou watch films on the Internet, please go to question 12 -If you did not name any website above and you never watch films on the Internet, please go to question 15 12 What do you like about the above mentioned websites? (please tick as many options as appropriate) Easy Access to Films Variety of Content Free Films

Range of content available Music Videos Other (Please specify): ______I do not like anything about these websites. 13 What do you dislike about them? (please tick as many options as appropriate) Difficult to find films you are looking for Bad Picture Quality Downloading takes too much time Bad Sound Quality Small Screen Other (Please specify): ______

There is nothing I dislike about these websites

14 How did you hear about the film websites you are using? (Tick as many options as appropriate) TV Newspapers Family and Friends Forums and Online Community Groups Search Engine Magazines Other (please give details): ______

15 Do you buy pirated DVD/ VCD copies of films released in cinemas? Yes No 16 Do you watch pirated Internet downloads of films released in cinemas? (Reminder: this survey is anonymous)

Yes No

-If you answered “Yes” to question 15 and/or 16, please go to question 17 -If you answered “No” to both questions 15 and 16, please go to question 25 Appendices 449

17 How many pirated DVDs / VCDs did you buy over the past 12 months? None 1-5 films 6-10 films 11-20 films 21-30 films 31-50 films Over 50 films If you answered ‘None’ to question 17, please go to question 21, otherwise please go to question 18. 18 How many of these pirated DVDs / VCDs did you buy before or during their film release in cinemas (over the past 12 months)? None of them up to 20% of them 21 to 40% of them 41 to 60% of them 61 to 80% of them 81 to 100% of them

19 How many of these pirated DVDs / VCDs were recent releases (released in cinemas in the past 6 months)? None of them up to 20% of them 21 to 40% of them 41 to 60% of them 61 to 80% of them 81 to 100% of them

20 How many of these pirated DVD / VCD copies have you watched at a cinema over the past 12 months? None of them up to 20% of them 21 to 40% of them 41 to 60% of them 61 to 80% of them 81 to 100% of them 21 How many pirated films did you download through Internet over the past 12 months? None 1-5 films 6-10 films 11-20 films 21-30 films 31-50 films Over 50 films

22 How many of these pirated Internet film downloads did you get before or during their film release in cinemas (over the past 12 months)? None of them up to 20% of them 21 to 40% of them 41 to 60% of them 61 to 80% of them 81 to 100% of them

23 How many of these pirated Internet film downloads were recent releases (released in cinemas in the past 6 months)? None of them up to 20% of them 21 to 40% of them 41 to 60% of them

61 to 80% of them 81 to 100% of them 450 Appendices

24 How many of these pirated films downloaded through Internet have you watched at a cinema over the past 12 months? None of them up to 20% of them 21 to 40% of them 41 to 60% of them 61 to 80% of them 81 to 100% of them

25 Please indicate below your Top 5 favourite films ever (please write down your answer in pinyin or in English where possible): 1. _ _ _ _ _ 2. _ _ _ _ _ 3. _ _ _ _ _ 4. _ _ _ _ _ 5. _ _ _ _ _

26. Please name five foreign film Directors: 1. _ _ _ _ _ 2. _ _ _ _ _ 3. _ _ _ _ _ 4. _ _ _ _ _ 5. _ _ _ _ _

27. Please name five Chinese film Directors: 1. _ _ _ _ _ 2. _ _ _ _ _ 3. _ _ _ _ _ 4. _ _ _ _ _ 5. _ _ _ _ _

28. When you decide to watch a film, what criteria motivate your choice the most (Choose what you think are the three most important criteria and order them from 1 to 3 in the appropriate boxes below, ‘1’ being the most important factor and ‘3’ the least important factor)? The Producer The Actors The Director The Trailer The Film Genre The Music The Story The Special Effects The country of origin The Studio Other (please specify):_____ Appendices 451

29. Please give details on the Topics / Themes that you would really like to see in films and you feel are not covered enough?

Thank you for taking the time to complete this questionnaire. Have a great day! 452 Appendices

Appendix 9: Non-exhaustive List of Existing Participatory Platforms

Crowdfunding Platforms

Australian Platform (Non-film Specific): Pozible: https://pozible.com/ Chinese Platforms: Film Specific: Yulebao (Taobao Wang [ ]): https://www.taobao.com/go/act/kan/yu-le- bao-taobaol-buy.php?spm=608.566530.351794.1 Non-film Specific: Demohour: http://www.demohour.com/ Jingdong (JD)/Coufenzi: https://z.jd.com/sceneIndex.html Dreamore: http://www.dreamore.com/ Angelcrunch: http://angelcrunch.com/ Musikid: http://www.musikid.com/ iChuangye: http://www.ichuangye.com/ Zhongchou: http://www.zhongchou.com/淘宝网 Fundator: http://www.fundator.asia/cgi-sys/defaultwebpage.cgi (website no longer accessible from October 10, 2016) CTQuan: http://ctquan.com/ (website no longer accessible from October 10, 2016) Dutch Platform (Film Specific): CineCrowd: https://prezi.com/2fwd0wzyodns/cinecrowd/ French Platform (Non-film Specific): Ulule: https://fr.ulule.com/ Korea: https://www.yahoo.com/news/busan-crowdfunding-korean-film-industry-slowly- catching-134148441.html Spanish Platforms (Non-film Specific): Goteo: https://en.goteo.org/ Lanzanos: http://www.lanzanos.com/ Partizipa: http://partizipa.com/ Verkami: https://www.verkami.com/ Kifund: http://www.projeggt.com/kifund/ Many other Spanish crowdfunding film or non-film specific portals can be found at:http://www.crowdacy.com/crowdfunding-espana/ Appendices 453

US Platforms: Film Specific: Wreckamovie: http://www.wreckamovie.com Slated: https://www.slated.com/ Bitfilmfund:http://www.bitfilmfund.com/ Non-film Specific: Indiegogo: https://www.indiegogo.com/ Kickstarter: http://www.kickstarter.com/ Crowdrise: http://www.crowdrise.com/ Startup Valley: http://www.startupvalley.com/ Microventures: https://microventures.com/

Crowdsourcing Platforms

German/Polish Incubation Platform: Open Spring: http://www.filmspringopen.eu/room.html Spanish Projects: Film El cosmonauta: http://es.cosmonautexperience.com/ La wikipeli and La tweetpeli: http://blogs.lanacion.com.ar/conectados/cibercultura/ la-wikipeli-un-cortometraje-que-se-hace-entre-todos/ and https://twitter.com/ lawikipeli US: Hit Record: https://www.hitrecord.org/ New Media Film Festival: https://www.charitybuzz.com/catalog_items/ meet-new-media-film-festival-founder-susan-johnston-for-972004

Blockchain and Crypto Currencies Based Creative Content Platforms

[Some of the companies on this list have been kindly contributed by Federico Bo (Bo 2018)] Ambrasia: https://ambrasia.io Bitfilmfund (no longer active):www.bitfilmfund.com Cinemarket (GE): https://www.cinemarket.io/ Cinemawell.com (RU): https://cinemawell.com/ Cinezen (SW): https://cinezen.io/ Crypto Rush (no longer active): http://cryptorushmovie.com/ Ethereum Movie Venture (CH): https://emovieventure.com FilmChain, Big Couch (UK): http://filmchain.co/ 454 Appendices

Framecoin (under construction): https://www.framecoin.io/ Icoin Studios (Canada, US): https://www.facebook.com/pages/category/Arts--- Entertainment/Icoinstudios-681095758896243/ Lino (CN, HK): https://lino.network/ LiveTree (UK): https://secure.livetree.com/#!/seed/ Lumière Project (The) [ ] (CN, HK): https://lumiereproject.io Mogul Studios: https://mogulstudios.com/ Moviecoin (US): https://movie.io Musicoin: https://musicoin.org/ Musiconomi: https://musiconomi.com/ Peertracks: https://peertracks.com/ Proxicoin (US): https://proxicoin.com/ SingularDTV (Breaker) (CH, US): https://singulardtv.com Slate Entertainment Group—SEG (US, Canada): https://slate.io/ StreamSpace (US): https://www.stream.space/ Tatatu: https://tatatutoken.io/芦明 Treeti (US): http://treeti.com/3 Tron (TRX) (CN): https://tron.network/ TVZvar (RU): https://www.tvzavr.ru/ Ujo (US): https://ujomusic.com/ Viuly: https://viuly.com/ Vuulr (SG): https://www.vuulr.com/ White Rabbit (NW): https://whiterabbit.one/ Short Descriptions of Some Selected Blockchain Companies: Big Couch facilitates crew recruitment via crewfunding efforts. A token system helps to screen and rank users based on reputation scores accrued by interacting with other users. Crews also take advantage of smart contracts that synchronize salaries so there is with no risk of projects going over budget. Contracts may include shares in films.4 Cinemarket is a secure online transaction platform for film screening licenses. Cinemarket is a new way for filmmakers to reach audiences by setting them up with distributors and exhibitors. It is easy to use too: via its trading platform, buyers send buy offers directly to rights owners and close contracts, exchange payments and film files in one safe online environment. It puts an emphasis on work by emerging directors, adding completed films on a weekly basis. Ownership and transactions history are stored on the blockchain, simplifying the revenue sharing, managed with smart contract which means full access to accounting data and instant payments to all stakeholders.5

3 https://deadline.com/2018/03/studio-marketing-executive-amorette-jones-launches-blockchain- network-hollywood-1202355517/ 4 https://variety.com/2018/digital/news/blockchain-treeti-independent-filmmaker-project-expanded- 1202744653/ 5 These company descriptions have been generously provided and contributed to by Adrian Lugol and Florian Glatz from Cinemarket. Appendices 455

Cinezen is a blockchain peer-to-peer VoD marketplace. Revenue sharing is managed with smart contract which means full access to accounting data and instant payments to all stakeholders. Any company can create their own VoD store and accept tokens as a medium of exchange. Demand Film is a cinema-on-demand distributor with ticket sales done through the blockchain. Users create and promote screenings for their favourite films. Once enough tickets are reserved, the event is confirmed. The crowd is incentivized with tokens from participation and the marketing of trailers. Lumière [芦明] is a platform to help finance and manage productions and capital flows in the ecosystem. Its interface, Elemis, offers a set of tools focused on chain of titles, fast production payments and increased transparency for investors, cast and crews. Investors have the ability to monitor expenditures and tie them to the delivery of milestones in the system therefore helping ensure their project’s health. Lumière users stake their tokens to cross-validate information and thus ensure the integrity of smart contracts. Moviecoin is a “next-generation financial technology company focused on leveraging blockchain technology, proprietary applications and cryptographic tokens to become the leading entertainment transaction platform for businesses and consumers and the standard currency.” (https://movie.io/). SingularDTV (Breaker) is a “blockchain entertainment studio laying the foundation for a decentralized entertainment industry. By building the future of rights management, project funding, and peer-to-peer distribution, SingularDTV’s platform empowers artists and creators with powerful tools to manage projects from development to distribution.” (Source: https://singulardtv.com/). SLATE is a “blockchain-based entertainment utility protocol powered by a cryp- tographically secure multilayered network. The decentralized system will deliver low-cost, high-speed, high-definition video globally and facilitate live event ticketing on the blockchain. Consumers will be able to spend SLATE cryptocurrency (SLX) on some of the best entertainment the world has to offer. The use of SLATE enables fair and transparent compensation between creators, producers, and distributors. Creators are compensated fairly and consumers get higher quality entertainment. Tickets purchased with SLATE will be forgery resistant, virtually eliminating fraud. Service providers holding SLX can earn even more by storing and delivering content.” (Source: https://slate.io/) Treeti is a direct-to-consumer blockchain network which aims to showcase and improve filmmakers understanding of their audiences. It aims to reduce frictions in terms of payments to creative agents and financial stakeholders of the films produced through this network. Treeti was co-founded by former studio marketing executive Amorette Jones, and has recently partnered with the Independent Film maker Project, which has supported emerging North American talents such as Ava DuVernay, Ryan Coogler, and Denis Villeneuve. White Rabbit is pay-per-view for blockchain. With it, royalty holders such as investors and creators get paid directly every time their content is streamed. Smart contracts take care of accounting, tokens are the medium of exchange and any VoD platform can implement and take advantage of this technology right away. 456 Appendices

Appendix 10: Launch of Ziyou TV

Source: Ziyou.TV web. Courtesy of Ziyou.TV Appendices 457

Source: Ziyou.TV web. Courtesy of Ziyou.TV 458 Appendices

Appendix 11: Graphs Describing the Functionality of ‘The Lumière Project’