China’s biggest Internet companies are moving on to a greener pasture with the gradual boom of the country’s film industry.
Tencent Holdings Ltd. leads all other Web giants in the new trend called "IP" with the revelation of their plans for their "pan-entertainment" strategy.
According to China Daily, the company will be combining its online gaming prowess with its newly established film branch, Tencent Pictures, to give birth to IPs or the so-called fan-driven productions that open up other franchise opportunities such as literary works, games, TV shows and spin-offs.
"Technological revolutions in the digital era have unleashed human emotions and imagination . . . IPs come from imagination and emotions," Tencent Holdings Ltd. Vice President and Tencent Pictures CEO Cheng Wu explained.
According to him, the Internet provides an avenue for people from all walks of life with the opportunity to create an IP or to share their talents in the entertainment industry.
Tencent's First Try
Tencent Holdings' brave attempt at venturing into the big screen opened up numerous possibilities for other companies to do the same.
With their first supported movie "Monster Hunt" gaining success, analysts now see how a trend involving Internet companies venturing into film is unfolding.
"Filmmaking will be new media-oriented and characterized by the Internet. It is possible that all movie companies in China will work for Chinese Internet companies in the future," EntGroup senior analyst Feng Jun told the South China Morning Post August last year.
Possible Risks
While it has promising aspects, Internet giants venturing into the entertainment industry does not go without risks.
Some critics believe that the success of Tencent's live-action and animation mash up can be attributed to timing of its release as well as the company's marketing support.
It is also reliant on the fact that audiences have constantly changing taste when it comes to movies, something which can only be determined if you closely watch how people react to things and what they shared over the social media.
"In the future, the model will be: we find out what you want to watch, then we make it for you. Only those investors who understand the Internet and mobile users will be able to turn a handsome profit from filmmaking," Guangdong Film Industry Association secretary-general Cheng Dai-wai stated.
The IP Phenomenon
Tencent currently has the upper hand when it comes to IP because of its "pan-entertainment" strategy.
According to a July 2015 report from Venture Beat, this strategy will be the Internet giant's way of transforming itself into an "Internet juggernaut."
"In terms of content, we have broad coverage, especially in games, from chess games to the complicated competition games to the big and massive online games. Tencent has covered them all," Tencent Chief Operating Officer Mark Ren said at the time.
With its already-booming online gaming business, Tencent appears to be on the right track of the IP phenomenon--for now.