As Netflix, Amazon and many other video platforms join in the filmmaking race, the Chinese internet film industry is also booming and could possibly grow bigger than conventional theatrical releases, said industry veterans at a forum on Wednesday in Beijing.

Gong Yu, iQiyi founder and CEO, showed statistics at the Internet Film Forum themed "The Era of Mega Films On the Internet," which was a major event during the ongoing Beijing International Film Festival. In his presentation, Gong showed that the Chinese domestic box office gross revenue reached 6.09 billion yuan (US$912 million) in 2018 while in the same year the online video industry made 20.17 billion yuan (US$3.01 billion). Of this figure, the revenue of pay-per-view video content similar to that of the traditional box office revenue was 5.36 billion yuan (US$802.3 million).

Gong believed the pay-per-view revenue will surpass the theatrical box office gross revenue this year, and also pointed out that "though this is a small industry by looking at the figures, the online video industry is very influential in society."

The rise of the internet film industry is one of the most important features of the new era of the internet, and its development and impact on the traditional film industry are receiving increasingly more attention. The integration and competition between internet and traditional films is a becoming new trend in the development of the film and television industry. 

The executive suggested that theatrical releases should find more models to grow its income besides selling online broadcast rights. In addition, the development model should be changed from current sole box office revenue maximization to one of box office plus internet revenue maximization.

Wang Zhonglei, co-founder and CEO of Huayi Brothers Media, said it only took seven years for the concept of "internet plus movie," which started in 2012, to take its current form where the internet and film are basically integrated. 

"The internet has indeed brought a lot of convenience to the overall movie industry and the development of films," he said, "It has changed the mode of production, distribution, ticketing and the profitability of traditional movies. It has also changed the consumption habits of viewers and the business model of cinemas."

However, he vigorously denies the theory that big data can alter the process of film creation, like what Netflix did. "Big data cannot replace the original idea of film creation, the essence of film and content production will not be changed by the internet," he said. Wang added that the future is where there will be a coexistence and fusion of internet films and traditional films, and where internet film companies can rapidly connect audiences and content, and fund traditional companies.

William Feng, vice president of the Motion Picture Association (MPA) Asia Pacific, analyzed the competition and cooperation between the traditional American film industry and the internet giants in the changing American film and television entertainment industry. He said although the game between the internet and traditional movie industries in the United States is different, the American film industry is essentially the same as film industries in other countries. It too is trying to figure out a new development model that can allow it to coexist with the internet.

Taking the example of Netflix which has joined the Motion Picture Association of America in January, Feng said Netflix has integrated itself into the traditional American film industry and established a cooperative relationship by morphing from an internet and platform company to a content creator. Of course, he said, this move does not mean that Netflix has become a traditional film company, it is still based on the internet, but it now combines that with traditional film approaches and finds a way to carry out successful integration. 

Li Jie, senior vice president of Alibaba Pictures and CEO of Taopiaopiao under China's e-commerce giant Alibaba Group, emphasized that the internet brings only opportunities and not challenges for film development. Internet companies do not affect the film industry itself, but it changes the old patterns and rules of the industry, and those who had interests in them. "Eliminating information asymmetry, reducing costs, and improving convenience are three things the internet has done for film development," Li Jie said, describing the internet as just a tool which only changes industry patterns.

Jerry Ye, CEO of Huayi Brothers Pictures, added that one future development for the "film plus internet" model is to achieve both content as well as technological innovation. "These two innovations are where the entire industry and its engine are heading in future. This is its opportunity."

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