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Experts from leading Chinese companies and Wharton alumni in the cultural and creative industries gathered at Penn Wharton China Center (PWCC) to explore the rise of these industries in China and the new opportunities and challenges they pose.
Co-hosted by the Penn Club of Beijing and PWCC, the panel discussion on May 24 included companies such as China Culture Industrial Investment Fund, China Media Capital, Fosun Film and Entertainment Group, Tencent Music Entertainment Group (TME), and Geekhouse Capital. Wharton alumna Teresa Chen Xing, WG’14, deputy manager of Tencent Music Entertainment Group’s merger department, moderated the panel.
The cultural and creative industries in China comprise a large number of sectors that are often interconnected and related, such as film, music, television, publishing, design, fashion, video games, and advertising. China’s music-streaming market also fits into this picture, while widely viewed as a piece of the market that has untapped potential.
In recent years, these industries have played a bigger role in driving broad economic growth in the country. The pattern of consumption has changed in China, with families spending more than 7 percent of their overall expenditure on cultural products and services, according to a report from the EU SME Centre.
Chen Hang, managing director of the China Culture Industrial Investment Fund, suggested that China’s improving economic situation along with the growth of a demanding urban middle class are creating a favorable situation for the development of the creative industries.
“The pattern of consumption has changed in China. Families spend more on cultural products and services now,” Hang said. “That’s why we have so much success in paid content online. People nowadays are more willing to spend on learning.”
Competing in the Global Market
More private firms are making their way onto this burgeoning scene in China. Wharton alumnus Chuan Peter Li, WG’99, managing director of China Media Capital, said he noticed this trend growing along with the state media such as China Central Television (CCTV).
“The competition is on. The state media are also adapting to the new challenges,” he said. “As digital media becomes the most promising platform, so some of the services at CCTV are being run in a way much more like the Western conglomerate Comcast.”
Li also noted that the state-run media are trying to establish more cooperation with Western companies and competing on the international market. Good content is a crucial piece of developing a competitive strategy for any movie/TV investment, according to Rong Yang, president of the newly founded film & television company under Chinese investment group Fosun International.
“A good publisher is only touching up the product, you‘ll need to have good content to win and relate with audiences,” Yang said.
Fu Jianzhong, co-founder of Geekhouse Capital, agreed and talked about the importance of continuing to generate content that resonates with audiences. “We all talk about the ‘fans economy’, how irrational people can be, and how emotions can be of value. So, when you have hit content, or viral content, you should start to think how it can be reproduced and create a sequel.”
The audience of industry insiders and Penn and Wharton alumni left the event with new and valuable insights into the cultural and creative industries, which are creating new markets that have vast potential, new patterns of online spending, and new technologies making the seemingly impossible possible.
Posted: June 25, 2018