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China Web Industry Film Wins U.S. Accolades Yet Faces Distribution Challenges At Home

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China is keen to promote its film industry, so you might think an internationally award-winning documentary that looks at a colorful, fast-growing part of the country's online world – live streaming, also known as live broadcasting -- might find a local audience.

Not so far. “The People’s Republic of Desire,” released outside of China last year, has yet to obtain regulatory permits for large-scale distribution. “We are talking to the streaming platforms about a potential online release but there is no guarantee that we will find online distribution in China,” director Hao Wu explained.  Release for movie theaters seems even less likely anytime soon. “Live streaming is kind of controversial in China,” he said after a private showing in Shanghai.  “They don’t want to give it more aura of approval by releasing a film about live streaming.”  All in all, Wu said, he’d describe distribution as “a challenge.”

The former advertising executive at Alibaba Group and China boss at TripAdvisor started work on “Desire” in 2014 as a way to explore the impact of the Internet on society. The often hilarious yet provocative film uses China’s live streaming industry, which boasts hundreds of millions of regular viewers, to examine hot-button social issues raised by the country’s wealth gap and youth isolation.  Funded in part by ITVS and the Ford Foundation, “Desire” has won several awards, including from SXSW and the Los Angeles Asian Pacific Film Festival. It’s scheduled to be broadcast in the U.S. on PBS “Independent Lens” on Feb. 25 this month.  The dialog is in Mandarin Chinese, with English-language captions that manage to keep much of the spirited native vernacular.

The documentary focuses on two live streaming hosts, Shen Man and Big Li, their fans, and their efforts to win money “gifts” from a supporting online audience. Well-heeled patrons like “King” and the anonymous “YY Fish” spend the equivalent of millions of U.S. dollars – eye-popping to the low-earning “diaosi” that form much of their large male following -- to encourage hosts to sing, dance, tell crude jokes, serve up personal details, and tell inspirational stories. Profit-seeking agencies promote their online stars, and then get a cut of the money. Hosts face off in annual online competition to win gifts and votes on streaming platform YY, a $4.3 billion Nasdaq-traded company whose chairman, David Li, had an estimated fortune worth $1 billion on the 2018 Forbes China Rich List.

China’s government approval process for films is in the spotlight this month after one of the country’s most celebrated directors, Zhang Yimou, unexpectedly pulled his latest film, “One Second,” from the Berlin Film Festival for “technical reasons."  Zhang’s newest movie is set in the Mao-era’s politically sensitive Cultural Revolution. Whereas “One Second” wasn’t shown and “Desire” hasn’t been approved for wide distribution, China’s Foreign Ministry officials have recently lauded a new sci-fi movie that casts the country in a positive light, “The Wandering Earth,” as well as a U.S.-made documentary, “Better Angels,” that explores the shared aspirations of ordinary people in the two countries at a time of trade and military tension.  Ironically, the struggles and aspirations of the Chinese hosts in “Desire” in some respects have an universality doesn’t differ from that of counterpart American social media stars on Facebook. If China wants greater global acceptance, it may do well to allow wider discussion about these real-world web figures, flaws and all, and not just glossed-over personalities.

The big financial stakes in China’s entertainment and media industry were on display just this week with word that New York-listed Chinese e-commerce heavyweight Alibaba Group took an 8% stake in social media firm Bilibili. Alibaba Group wants to link Nasdaq-traded Bilibili’s universe of young web personalities with its giant e-commerce platform.  This news comes after Alibaba Group’s film arm, Hong Kong-listed Alibaba Pictures, last month announced a plan to hook up with Chinese film studio Huayi, a business backed by Alibaba's chairman Jack Ma; Alibaba Group said on Friday that it helped finance five of the eight top-grossing films in China during the recent Chinese New Year holiday period.  For its part, on-the-move Bilibili said in December it would buy comic assets from NetEase, one of China’s largest online gaming businesses.

Successful live steaming hosts such as Shen Man and Big Li form part of a China marketing and business landscape in which celebrities and “KOLs” (key opinion leaders) make money from product placements, sales of own-brand items, and endorsement deals. As a form of entertainment, however, live streaming is increasingly up against fast-changing tastes among China’s young “Generation Z” and the exploding popularity of short-form videos on sites such as TikTok, itself part of powerful social media giant ByteDance. That constant rise of new social media stars provides marketers with fresh faces and options for advertising and promotions.

The money-making dynamic on display in “Desire” isn’t ready to fade, however, at least for now, said director Wu, a native of the western Chinese city of Chengdu who currently lives in New York. Though its stock has dropped in the past year, Guangzhou-headquartered YY is still reporting higher profits “because so many rich people want to show off and spend money,” he said. “As long as the social condition exists in China where the poor worship the rich, the rich want to show off, and live-streaming (can be) a conduit in this social relationship, this type of business model will exist.”

--Follow me @rflannerychina