An Interview With CMC Chairman: It Takes Time To Build China's Hollywood and Premier League

(Chinese Version)

Whenever Chinese leaders are on a state visit, there will be Li Ruigang, board chairman of Media Capital and the most authoritative investor in the Chinese culture and entertainment field, in the delegation. Near the end of 2016, he was even named by some media as “King of Content”.

Indeed, he deserves the title. In the past year, Chinese Media Capital (CMC) not only teamed with IMAX and IMAX China and founded China Film Fund, but also invested in various companies including mini-video community Kuaishou and American tech company NextVR as well as female idol group SHN48. Besides, Chinese Culture Group became the biggest shareholder of Shaw Brothers and TVB. Li was also appointed as board president and non-executive director of TVB.

Earlier, CMC teamed up with CITIC and invested $400 million in City Football Group, the owner of major football-related clubs and businesses during Chinese President Xi’s state visit to the UK. Moreover, CMC joined Warner’ Brothers and established Flagship Entertainment, with a dominant stake of 51 per cent. CMC’s subsidiary Ti'ao Dongli purchased the broadcasting rights of Chinese Super League over the next five years for 8 billion yuan ($1.26 billion). He was named as executive member of the Chinese Football Association near the end of 2015.

In a recent feature report “Chinese Entertainment” by Hollywood Reporter, Li was mentioned together with Wang Jianin(head of Wanda Group), Jack Ma (head of Alibaba), Pony Ma (head of Tencent) as the most influential figure in China’s future entertainment.

As a matter of fact, if you research into CMC’s investment layout, you might find that CMC is involved everywhere, from film, TV series, sports, technology, data to young community, news and theme parks, all of which will constitute the major part of young Chinese consumers in the future.

Can China have its own Hollywood-like entertainment industry? Can Chinese Super League become as influential as Premier League?

For this year’s Davos meetings, he was also accompanying Chinese leaders in the delegation. During his visit, Li accepted an interview with Sina Tech and shared his thoughts and understandings over culture & entertainment investment as well as technological innovation.

Sina Tech: What’s your feeling when Chinese president Xi’s speech was interrupted by prolonged applause several times?

Li Ruigang: To me, President Xi’s speech was very exciting. He not only talked about China’s historical responsibility as a big country in the process of globalization, but also resistance China encountered, such as trade protection, maybe because some big powers did not assume due responsibilities. While there are some negative and skeptical views over China, President Xi said something exactly opposite. His speech was widely welcomed because what he talked about was also what most countries wanted to. Therefore, President Xi’s speech was of great significance to globalization.

Sina Tech: The most important topic of this year’s Davos meetings is “globalization”. In fact, many topics have to do with China. CMC’s investment into Manchester’s mother company is a typical example. What’s your consideration, back then?

Li Ruigang: Above all, we chose to invest in City Football Group due to financial concerns, since we’ve conducted a thorough analysis of its business and financial potential. Besides, we have strategic concerns, since we can learn much from City Football Group as to their football team management, youth training system, etc., which will also be a good thing for the nurturing of China’s football team.

Sina Tech: Is it possible for Chinese Super League to possess as high commercial value as Premier League? Which areas should we focus more attention on?

Li Ruigang: It is possible, but it’s going to take a long time. Fundamentally, market forces have to be in full control in the management of Chinese Super League, just like Premier League. Moreover, head of different clubs should all belong to the same system. For example, CEO of Manchester Club is former CEO of Barcelona Club and football clubs are managed like enterprises in Europe. In fact, we have much to learn from them.

Sina Tech: Is it a normal phenomenon for Chinese Super League to sign overseas football players at a high price?

Li Ruigang: Of course, big-name players will make Chinese Super League’s games more attractive. After all, it is great football players that make the league more valuable. However, this might backfire if we put too much resource in football players, since a vicious cycle might be formed in the long run.

Therefore, there’s a salary management mechanism whether for sports stars or for actors and actresses, which not only ensures they are properly paid, but also strikes a good balance and allows the industry to make profit continuously.

However, such mechanism is formed after a long period of trial and error. I guess it will also take a long time for us to form a mature mechanism, but as a start, we can introduce their advanced management concepts, mechanism and approaches, apply them based on Chinese characteristics and let market forces testify if they are fit for China or not.

Fortunately, some experiences can be directly applied, so it is likely we can develop such a mature mechanism more quickly. Moreover, with the rise of the internet, development of the entire system has sped up.

Sina Tech: What about films and TV series? Is it possible our entertainment industry become as prosperous as Hollywood?

Li Ruigang: Of course it’s possible, but it will take time. Our main problem now is over-pursuit of profitability. For example, some filmmakers want to make a fortune in a short time, through just one or two films. This is certainly detrimental for the development of the entire industry chain.

Sina Tech: What do we need to build China’s own “Hollywood”?

Li Ruigang: Patience, as well as investment. After all, there’s huge industry chain out there: from talents nurturing, producing companies, agent companies, workers’ association to investment negotiation and screenplay writers and directors. Still, if we look back on the development of Hollywood, we might also find that there were bubbles and disorderly development. Maybe, China is also at this period right now. So it is likely that what we can accumulate at this period will pave the way for our development at the next stage.

Sina Tech: Are we lacking in high-quality IPs in the culture and entertainment industry?

Li Ruigang: There’s always good IPs in China. However, there isn’t a good division of work and cooperation mechanism in the past. We’ve always had great IPs. For example, nobody knows how many times have Journey to the West been adapted into films and TV series. The reason why IPs are so popular right now is that our industry chain is getting more mature.

Sina Tech: Is the internet speeding up this maturity process?

Li Ruigang: Of course. Big data and artificial intelligence technologies have already been adopted to the research and analysis of the sports and entertainment industry. Other cutting-edge technologies such as VR will even have revolutionary impact on sports and entertainment industry.

Sina Tech: What’s the impact of the internet toward media? We noticed that CMC also invested in many short-video platforms this year.

Li Ruigang: Internally, we refer to short-video and other similar media as “internet-borne media”. These media are based on the internet since birth, the way they are organized also relies on the internet. I believe that influence of these kinds of media will be even stronger in the future.

Besides media, we also focus our attention on some high-quality IPs, such as Voice of China, Nirvana in Fire and Kungfu Panda, etc.

Sina Tech: You’ve also invested in many young people’s entertainment platforms, such as Bilibili.com.

Li Ruigang: We decided to invest in Bilibili.com mainly due to consumer-end concerns. Bilibili.com’s target consumers are mainly born in the 2000s. This group of people is also called “The Millennial Generation”. They are impacted by the internet since birth, so their demands are completely new in the entertainment-end and consumer-end. Different from our previous judgment, they have their own aesthetics standards.

Sina Tech: In the internet circle, we have three giants known as BAT (Baidu, Alibaba and Tencent). Is it possible that there will be BAT-like giants in the sports and entertainment circle after the integration of the internet?

Li Ruigang: In fact, BAT aren’t confined to their circles. For example, Tencent is not merely about a social networking platform. As a matter of fact, it has already become one of the biggest media in China. Alibaba has also been investing in this area for the past year and has already invested in UC, Youku Tudou, etc. Therefore, BAT will also play their role in content-related industries.

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[The article is published and edited with authorization from the author @Sina Tech, please note source and hyperlink when reproduce.]

Translated by Levin Feng (Senior Translator at PAGE TO PAGE), working for TMTpost.

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