Market Trends of China Animation, VFX And Post Production Industry
Increased Demand for High-quality Visual Content in the Entertainment Market
- China's leading streaming platforms, including iQiyi, Tencent Video, and Youku, have experienced remarkable growth in recent years. As competition heats up, these platforms run substantial investments into premium content, spanning animated series, VFX-centric films, and advanced post-production effects. Driven by audience demand for immersive experiences, these platforms are committed to producing visually captivating content that aligns with global standards, amplifying the need for advanced VFX and animation services.
- In May 2024, Tencent Video, a leading Chinese online video streaming platform, actively pursued partnerships to introduce its lineup of animation productions tailored for teens and young adults to audiences worldwide. Among its current productions is "Honor of Kings" (13×20′), a 3D adventure/fantasy series inspired by the widely popular multiplayer online battle arena (MOBA) game. Additionally, Tencent runs the Cartoon Channel in China, boasting over 200 million viewers and claiming the title of the top platform for teen and young adult animation.
- As the entertainment industry, particularly TV and film, continues to thrive, there has been a notable surge in the production of large-scale films that require intricate visual effects and sophisticated post-production. China's film industry has witnessed exponential growth, churning out high-budget fantasy and sci-fi films that heavily rely on VFX. This escalating appetite for visually intricate storytelling has been a key driver behind the heightened demand for animation and post-production services.
- Across multiple entertainment industries, including films, TV, and gaming, there has been a pronounced shift in content creation toward 3D animation and CGI (computer-generated imagery). China's animation studios have notably enhanced their capabilities, enabling them to produce high-quality content for the domestic and international markets. Also, the use of CGI in diverse content forms, such as short digital segments on platforms like Douyin, underscores the growing demand for advanced post-production technologies.
- Tencent, one of the largest game development companies, has invested substantially in its gaming business over the past decade. In 2023, Tencent's online games raked in CNY 179.86 billion (USD 25.63 billion), a modest rise from 2022. This revenue accounted for 26% of the tech company's annual earnings. Games use and employ VFX and animation extensively, and with a demand for better and more immersive gaming visuals, it is expected to drive the market.
Understand The Key Trends Shaping This Market
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The Television and OTT Segment is Expected to Hold a Major Share
- Streaming platforms such as iQiyi, Tencent Video, and Youku have transformed how entertainment content is consumed in China. To maintain the competitive edge, these platforms are churning out vast amounts of original content, which undergoes sophisticated VFX and post-production work to align with consumer expectations. As audiences transition from conventional television to streaming services, there has been a meteoric demand for top-tier animation and VFX in series and films on OTT platforms. This evolution is driving significant growth in the market, underscoring the increasing appetite for visually captivating content.
- In response to this trend, leading Chinese OTT platforms are significantly boosting their investments in original series and films, many of which showcase intricate visual effects and animated sequences. With competition heating up, these platforms are carving out their niche by presenting content enriched with superior VFX and animation. Their investment strategy also encompasses animated shows and films, recognizing their widespread appeal across diverse age demographics. By prioritizing visually stunning content, these platforms enhance their offerings and amplify the demand for post-production services, spanning VFX, animation, and CGI (computer-generated imagery).
- OTT platforms are forging partnerships with animation and VFX studios to deliver state-of-the-art content to their audiences. Such partnerships drive innovation in animation and post-production, allowing the creation of content that utilizes the most advanced visual effects technologies. From series and movies to short-form content, these platforms consistently use detailed animation and VFX to captivate viewers. This collaboration not only enhances the offerings of OTT providers but also drives the expansion of the VFX and post-production market in China.
- For instance, in December 2023, Chinese e-commerce giant Alibaba Group partnered with The Walt Disney Company in a multi-year licensing deal. This collaboration aims to introduce Disney's digital subscription service, DisneyLife, to China through Alibaba's Tmall platform. Priced at USD 125, the Mickey Mouse-shaped device offers a one-year subscription and mandates an Internet connection. Alibaba's Chinese customers will enjoy a comprehensive, family-friendly digital experience through this partnership. Offerings will encompass movies, animated series, and games from Disney and Pixar, alongside e-books, songs, travel services, and insights about Disney's theme parks and resorts.
- In 2023, China's television broadcasting industry, as reported by the National Radio and Television Administration (NRTA), generated approximately CNY 9.66 billion (USD 1.38 billion) from over-the-top (OTT) integration services. Additionally, the country witnessed an average of over 300 million monthly active OTT TV users.
