Tencent, Wanda in Big-Screen Romance With Filmmaking Tie-Up

Tencent and Wanda Group have formed a joint venture to adapt the former’s popular online literature into movies and TV series made by the latter, taking advantage of their strengths as licensing costs skyrocket.

Wanda Pictures, China’s largest film studio and distributor by revenue, will make some of the best-loved novels from Tencent’s online literature library into movies, inviting the latter’s own filmmaking and gaming divisions into the picture by offering them the opportunity to develop derivative games and other products.

The pair announced the tie-up at a major film festival taking place this week in Shanghai, but declined to provide any details on finances or other arrangements. They vowed to “incubate super intellectual properties (IPs), and forge China’s dream IP factory.”

Many of China’s most popular movies, TV and web series in the past five years have been derived from online literature. Such works usually come in the form of serialized novels distributed though web library operators such as China Reading, the country’s best-stocked online publishing platform and a unit of Tencent Holdings Ltd.

“Tencent has a huge collection of rights to popular novels, but is really at a loss how to make them into films,” said a producer familiar with film adaptation deals. “Currently the rights to make the books into movies are negotiated slowly and tediously on a case-by-case basis — and the transactions occur often in film equity not cash,” he said, adding Tencent’s cache of rights is often wasted on the company’s own inexperienced film production unit.

China Reading holds rights to over 10 million original novels across 200 genres, which have been the source for numerous hit TV, film and game adaptations. Among them are the popular fantasy series The Ghost Blows Out the Light, which has been adapted into a film and web series, and the historical drama The Legend of Mi Yue. The company typically signs contracts with popular novelists, often paying them large salaries while they work, and acquiring permanent rights to their work in return.

Those works of fiction, commonly themed in martial arts, time travel, trashy romance, or set in imaginary universes, have amassed huge fan bases — mostly students and daily commuters who enjoy the quick reads and fast-moving plots.

Popular titles have gained even more traction after being adapted into web series and big screen productions. Film rights to Silent Separation, a best-selling campus romance published online, fetched a price of over 10 million yuan ($1.5 million) in 2015.

Tencent is spinning off and preparing to list China Reading in Hong Kong, the internet giant confirmed in March.

Contact reporter April Ma (fangjingma@caixin.com)