Forbes 2014.3.27
Since its online release two weeks ago, the first short film from Gary Wang’s Light Chaser Animation Studio has scored close to 30 million clicks on Chinese video sites. The three-minute 3D film titled “Little Yeyos”, which means “Little Night Wanderers,” tells the simple story of seven chubby and baby-faced fairies roughhousing over a light-reflecting lapel pin.
Chinese audience online has mostly praised the production quality of the short film, especially its visual effects and the vivacity of the characters. Yet many found the storyline too plain, and the fairies somewhat similar to the “minions” in “Despicable Me,” except, the minions are cuter.
The short film offers a sneak peek into the production potential of a company run by someone who has zero prior experience or training in animation. Wang is known as the founder and former CEO of the popular video site Tudou.com, which he sold to competitor Youku for over $1 billion in 2012. Unsatisfied with his early “retirement” at age 40, Wang founded Light Chaser in March 2013 after taking a “Journey to the West” to visit Hollywood producers.
The Chinese animation industry that Wang has plunged into is one with high speed growth but low quality products. Since 2010, its total output value has grown at an average rate of 30% a year, to $12 billion at the end of 2012. The most successful animation film series, Pleasant Goat and Big Big Wolf, took in $100 million in box office receipts with its five episodes. Yet with their simple storylines and crude visual effects, Chinese animations almost exclusively target young children. The production quality is nowhere near that of American animations such as Kungfu Panda and Despicable Me—each has easily reaped hundreds of millions from Chinese moviegoers.
Money is an important part of the problem. Chinese TV channels and even theatre chains often do not pay animation producers for what they put in, according to the 2013 Chinese Animation Industry Report by the Beijing Film Academy. The production cost of an animation averages $2000 per minute in China, but most Chinese TV channels pay less than $50 per minute for the airing. Whereas in countries like U.S. or Japan, animation derivatives such as toys and video games constitute the bulk of the industry revenue, inadequate copyright protection has significantly hindered such potential in China.
For Wang’s Light Chaser, nonetheless, money seems to be the least of his concerns. He has built extensive contacts with venture capitalists through Tudou’s six rounds of financing. His loyal supporters include IDG China, which invested $8.5 million in Tudou before its IPO on Nasdaq.
The budget for Light Chaser’s first film, to be released in the second half of 2015, is $11 million. In comparison, the production cost for the first “Pleasant Goat and Big Big Wolf” movie was less than $1 million. Already backed by an unnamed fund, Wang is in the process of securing B-round financing.
“Gary knows a lot of people, and many trust him. [Interested investors] keep coming to us. We’ve never had to go out of our way to find them,” says Zhongrui Yin, executive assistant to Wang, who has declined to name specific investors.
Wang is more concerned with producing quality work within the proposed budget and timeline. Having written a play and a novel, he took on the role of the screenwriter, along with CEO, director and producer. The 80-member team that he has assembled is led by head of animation Colin Brady, one of the early directors of Toy Story 2, and visual effects supervisor Han Lei, who was a lighting artist for seven years at DreamWorks. They have purchased a software called “Shotgun” to manage work flows, the same one that was deployed in the production of Frozen, Gravity and Hugo.
The only downside: as the one that oversees the most important aspect of animation production, Brady works from home in Los Angeles and communicates with Wang on Google Hangout at night. Wang is looking to purchase a Double Telepresence Robot – a remotely controlled, Segway-like robot with an iPad attached as its “head”—so that Brady can virtually “walk around” in the Beijing office.
The vast majority of the Light Chaser employees have worked at other Chinese animation studios. Each employee was given stock options upon joining the company to keep up their motivation and loyalty. But passion is the most important consideration, says Yin, noting that they have turned away talented people who see animation production more as a routine job.
Yin admits that the short film is not the best of what the company can offer. After having a data-analysis company collect and analyze viewers’ comments, Light Chaser modified certain details in the film and released a “Little Yeyos 2.0.” But the primary purpose of the film was to run the team in and test out the production procedure, per the advice of a Hollywood producer. “We found many problems in the process,” says Yin, “documents got lost while being transferred from one team to another; some teams worked on the wrong prototype; designs were delayed by the approval system, etc. etc.”
These issues will have to be resolved when the first movie goes into digital production – so far the team has only drawn out the storyline on paper. Written by Wang himself, the story is about the adventures of two Chinese celestial figures who try to revive human faith in fairies after a faith and financial crisis has prompted layoffs in fairyland. It would require $40 million of box office receipts for the company to break even. That’s more than what Harry Potter and the Deathly Hallows Part I or The Hunger Games has scored in China.
Animation derivatives will be another source of revenue. Light Chaser is in talks with videogames and toys companies, though Wang has high standards for the products. They have to be something “cool and fun,” Yin explains. One example is an alarm clock featured in the short film. They are hoping to make a real one that is capable of monitoring indoor temperature, moisture and PM 2.5 level, and connecting with mobile phone apps.
Asked about copyright concerns, Yin says the team has not thought that far yet. It should not be far from Wang’s radar, nonetheless, given all those years that Tudou.com has wrestled with copyrights lawsuits.