China becomes giant VR content production house

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It was big news last week when Palo Alto-based virtual reality firm Jaunt Inc. announced its partnership with two influential state-backed media and entertainment investment groups in China, but the big boys have been circling the VR content creation prize for a while now. There have been interesting developments at Digital Domain Holdings which operates the world’s biggest independent special-effects company; China’s three digital giants Baidu, Alibaba and Tencent have all placed in a big bet on VR; and then there is ArtLordChina, IQiyi and the Beijing Film Academy.

With millions of VR headsets being shipped this year and global interest in VR rising, virtual reality production and distribution platforms are being established globally at an unprecedented rate. China being the world’s second largest movie market, a lot of the attention is focused on the country with its millions of potential VR consumers.

While Jaunt is the first US-based company to launch a full-scale, end-to-end virtual reality production and distribution platform in China, Digital Domain Holdings, which operates the world’s biggest independent special-effects company is also working on becoming a bridge to China.

In January this year, Digital Domain established DDPO as a subsidiary to expand Digital Domain’s visual special effects, computer graphics, virtual reality, 360 panorama video recording, and digital human rendering services in the Chinese market. Digital Domain runs award-winning movie visual special-effects studio Digital Domain 3.0, which also provides services to major commercial advertisers like Nike and Apple.

DDPO was created when Digital Domain acquired Hong Kong actor and entrepreneur Nicholas Tse Ting-fung’s post production services business. Tse’s company, which has worked for big-budget, special effects-intensive Chinese movies, has also earned a high standing in the advertising sector. In another development to accelerate penetration of the China market with its VR content, Digital Domain has formed a partnership with Youku Tudou, a leading Chinese online video services provider. Youku Tudou was acquired by Alibaba for US$4 billion in November 2015. Under the agreement Youku Tudou will buy VR content from Digital Domain and distribute it through its platform and the two companies plan to collaborate on producing augmented reality and immersive, 360-degree, live-streamed video content.

Alibaba’s other VR interest is to use the technology to enhance its primary business. The e-commerce giant set up GnomeMagic Lab, an in-house VR research Lab to create VR shopping content.

In competition with YoukuTudou is another video streaming giant iQiyi, a subsidiary of internet search giant Baidu. iQiyi announced in May its intention to establish the world’s largest Chinese VR content platform. The company has a comprehensive plan to establish itself as a major player in VR. The plan entails the production of copyrighted online films, drama shows and games plus marketing, production and other operational assistance to more than 300 partners involved in VR content and device manufacturing. iQiyi expects to reach 10 million users in China within twelve months.

Tencent has announced its own VR project and is investing in VR platforms to attract more developers to its own ecosystem. In November 2015 the company announced its ministation, which is a gaming console developed in partnership with Lenovo and which will connect to Tencent’s VR head-mounted device.

Original Force, a digital animation studio backed by Tencent, is working on VR movies for Tencent Pictures. Li Shuxin, chief technology designer with Tencent's VR team told the China Daily in March that the company will mainly provide software support to developers. The company also plans to establish an online store and an advertising platform to help developers distribute their products. Another competitor in cinematic VR content development is Artlord China, a VR studio based in Beijing. The founders, Mike Yang and Eddie Lou have deep experience in movie making that stems from working on a number of Academy Award winning and nominated movies including Life of Pi, Snow White and the Huntsman, Matrix 3: Revolution, and The Golden Compass. The studio is working with prominent Chinese talent to create premium VR storytelling content.

Magic Dumpling Entertainment, founded in 2009 and led by a team of former Disney creative executives, is currently developing high-quality Chinese animation, augmented reality and virtual reality content. Partner at Magic Dumpling Entertainment and Executive Director of the Beijing Film Academy’s International Animation & Virtual Reality Research Center (iAVRrc) is Kevin Geiger.

The iAVRrc has launched iAVRrc PROJECTS, to produce AR, VR and MR (mixed reality) content. The first four projects centre on Chinese culture as a common thread and encompass a VR story, an AR treasure hunt, a VR short film and a MR “holopresense” experience.

Analysts predict that the Chinese VR market will be worth $8.5 billion by 2020.