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CAA and Youku Tudou Discuss What’s Next for Streaming in China

TheGrill 2017: Both premium content and user-generated content are showing immense potential in China

TheWrap business reporter Matt Pressberg spoke with CAA’s Colin Brady and Youku Tudou’s Catherine Zhang at TheGrill to discuss what’s next for China’s entertainment industry as streaming services and interest in premium content expand.

Zhang, who works as Director of International Content Cooperation at Youku Tudou, discussed the company’s recent acquisition by Alibaba and its plan to invest $1.5 billion in content creation, both for premium TV shows and for user-generated content.

“For the top content, the budget per episode is being set at around $2 million,” said Zhang. “We will also be starting programs to help cultivate our user-generated content from an early stage.”

On the American side, Brady, who is a corporate development executive at CAA, discussed how the relationship between American and Chinese production companies has changed. Rather than just export American shows to China, talent agencies are now providing Chinese studios with production teams and resources to bring that IP to life. As a prime example, he notes CAA’s hand in bringing American action star Frank Grillo into the cast of “Wolf Warrior 2,” which is now China’s biggest box office hit ever.

“The digital part is just gravy to us,” said Brady. “It’s about…the idea that a great writer or producer who’s American who will help make a project happen in China. They’re trying to understand how to make a movie of this scale.”

Brady and Zhang stressed that China’s streaming market is very different from the markets in the rest of the world, thanks to China’s population and access to digital platforms.

“The market just evolved differently,” explained Brady. “There’s something like 700 million active mobile users and about 300 million are connected to the same platform. There’s nothing comparable to that in the U.S. Also, the mobile phone doesn’t have a credit card on file attached to it. It is the card on file…so the potential for a much frictionless form of monetization is there if you can get the eyeballs on your content.”

The panel also discussed the hot trend in China of virtual gifts, in which fans of online stars can send their favorite streamers emojis that can be redeemed for cash.

“The gifts aren’t the only ways creators monetize themselves,” said Zhang. “There are a lot of brands who see the value of this digital platform. For them, the most valuable thing is traffic, so these creators can monetize themselves by pushing traffic to other platforms.”

It’s an entire economy built off personalities, and while YouTube has developed similar stars in America, Brady says that in China there’s far more interest in their stars’ everyday lives.

“There was one streamer who was caught in traffic during Paris Fashion Week, and there was some branding in it and millions of viewers tuned in,” he said. “People want to feel like they know these people, so creators invite them into their everyday lives.”