Youku Tudou, China’s largest video hosting website, announced the creation of its own film studio Thursday in a move to capture a larger slice of the film industry.
Victor Koo, chairman and chief executive of the company, said the film division, Heyi Film, would produce eight films per year destined for the big screen and a further nine aimed to premiere on the internet. The group, which last week announced a loss of $26m for the second quarter despite increased revenues, has not revealed how much it plans to spend on the project.
Mr Koo said Youku had $1.6bn in cash to spend after a $1.2bn investment by ecommerce group Alibaba in April. “We’re very strong,” he said.
Youku had been making its own content since 2009, starting with “microfilms” lasting a few minutes, and last year helped produce eight feature films that had a combined box office of 2bn, Mr Koo said. It planned a number of new releases in the coming months such as Golden Era, a film about China writers in the 1920s scheduled for release in October, and The Taking of Tiger Mountain, a 3D epic.
Virtually all of China’s video hosting sites make their own content, and this year has seen a trend to build separate studios or to acquire content producers. In July Iqiyi, which counts Baidu, China’s largest search engine, as an investor, launched an in-house studio with eight films in the works. In June Alibaba completed the acquisition of a majority stake in ChinaVision , a video content maker.
The bid to move from small smartphone screens to big screens, and the reverse, is driven partly by strong growth over the past three years in films. China’s industry is the second largest after the United States, expected to gross between Rmb28bn to Rmb30bn this year.
Cinemas are multiplying, at an average rate of 18 screens a day. Last year China added more screens that the total in France.