Bao Yaming Currently, the cultural industry has been deeply integrated with the digital economy and real economy, and digital cultural consumption has been expanding continuously both in quantity and scale. This will exert a positive and far-reaching influence on improving the quality and efficiency of development and promoting consumption upgrade in China’s cultural and creative industries, as well as accelerating the formation of a new economic pattern with “dual circulation” in the country. In the era of digital economy, given the huge digital cultural consumption demands, how to explore new driving forces for economic growth and promote the new development of regional economy has become an important task. Strong momentum in the scale, volume and growth rate The Yangtze River Delta takes a leading position in digital cultural consumption nationwide. The 2020 Yangtze River Delta Digital Cultural Consumption Research Report jointly released by the Shanghai Cultural Research Center and Tencent Research Institute a few days ago focuses on the five typical areas of digital cultural consumption, namely online games, online video (long video, short video, live streaming), digital reading, digital music (including sound clips) and cultural information services. It elaborates on the characteristics and development trends of digital cultural consumption in the Yangtze River Delta Urban Agglomeration (YRDUA), and discusses the impacts of new cultural business forms and consumption models on the development of cultural and creative industries. As China’s first report that integrates data from consumers and enterprises in the Yangtze River Delta, its analysis, observation, description and summarization of the development status of and thoughts on digital cultural consumption in the Yangtze River Delta can provide references for predicting and identifying the overall situation and development trend of digital cultural consumption in the country. The 2020 Yangtze River Delta Digital Cultural Consumption Research Report observes that the digital culture index of YRDUA is experiencing rapid and stable growth, with strong momentum in the scale, volume and growth rate. Among the 11 major urban agglomerations in China, the Yangtze River Delta ranks first in terms of both the total score and the growth rate of digital culture index. The region’s total score of digital culture index accounts for 17.2% of the national total, and its average digital culture index is 2.23 times of the national average. The research report provides 17 important findings, covering the regional distribution of digital cultural consumption, the roles of digital engines, online games, online videos, digital music, digital reading, demand for movies, and performance of emerging industries such as the esports industry. The business side forms a pattern of “one hub, two poles and four tiers” In terms of the business side of digital culture, 34.1% of the cities in the Yangtze River Delta have listed companies in the online culture and entertainment industry, showing a distribution pattern of “one hub, two poles and four tiers”. In the first tier, Shanghai has 36 listed companies in the online culture and entertainment industry, ranking first among all the cities, and serving as the absolute development hub of the online culture and entertainment industry in the Yangtze River Delta. Hangzhou and Nanjing that rank second and third respectively have become the two obvious regional growth poles. The cities in the second tier include Hefei and Suzhou, those in the third tier include Jiaxing, Jinhua, Ningbo and Shaoxing, and those in the fourth tier include Huzhou, Wenzhou, Zhoushan, Zhenjiang and Wuhu. In terms of the revenues of various industries, cultural information, online games and digital reading industries rank among the top. The culture-related industries in the Yangtze River Delta are accelerating digital transformation with “cloud services” becoming the main feature, which can be fully reflected by the scale and changes of “cloud usage” in the four typical industries, namely broadcasting industry, tourism industry, cultural and creative industry, and game industry. The digital cultural industry is becoming the key sector or even the pillar of the next round of urban economic development in some cities in the Yangtze River Delta. It plays an important role in transforming the development model, optimizing economic structure, expanding domestic demand, promoting consumption, and increasing employment, able to help advance supply-side structural reforms and form new supply and driving forces. YRDUA is promoting the digital transformation and upgrading of the competitive cultural and creative industries according to local conditions, building local cultural brands through the integration of culture and technology, and promoting the local cultural industry to enter a stage of high-quality development. In terms of the consumer side of digital culture, YRDUA has formed an online-merge-offline development model with distinctive characteristics, various levels, wide coverage, diverse forms and great vitality. During the Covid-19 pandemic, people’s demands for offline cultural and entertainment services went online, forcing the offline supply side to make transformation, promoting O2O (Offline-to-Online) development in turn, leading to online digital cultural supply in more categories, and facilitating the booming development of “cultural services on cloud”, such as cloud exhibitions, cloud concerts, cloud travel, etc. The “cloud+” model has not only changed the characteristic of such activities for now, which is the focus on on-site experience, but also redefined consumer culture in the future with its features of convenience and openness. For example, Shanghai Museum launched the exhibition Spring Blowing in the Wind: Jiangnan Culture Art Exhibition on cloud, presenting various art treasures to the audience via video; thanks to a 3D wrap-around page design, the exhibition Lustre Revealed - Jingdezhen Porcelain Wares in Mid-Fifteenth Century China held via video in a three-dimensional form made the audience feel like “walking” in the exhibition hall by clicking the mouse and enjoy the exhibits freely. Offline activities support the development of online IPs to stimulate new consumption vitality The deepening integration between digital cultural IPs and offline commercial entities in YRDUA has enabled offline activities to support online IPs, which has become an effective way to stimulate new cultural consumption vitality. The limited-time pop-up shops under the theme of cultural IPs has created a new model of using IPs to empower business development, and provided consumers with a visual feast of “creative ideas and experience”. According to incomplete statistics, the renewal and iteration cycles of such shops in Shanghai’s popular business districts range from two weeks to a month, and their inherent cultural attribute of instantaneousness is similar to digital cultural consumption at the core. Online video and games can break the barriers of internet with the help of the shops and bring a brand-new digital cultural consumption trend. In the shops, online video apps use membership rights, popular variety shows, and film and television plays as media to make interactions and establish connections with consumers in real life. Online games leverage on-site competition and immersive experience to attract customers. Experienced players can invite their friends to join in the competition and get gifts such as limited-edition skins, while inexperienced players who are interested in the game can have a try with a full set of equipment. As online dividends disappear and it becomes more difficult to obtain new customers online, limited-time pop-up shops have become a new way for the apps such as online videos and online games to effectively acquire customers. Apart from enabling the efficient online-and-offline linkage, they have promoted the horizontal development of digital cultural apps (such as those in e-sports livestreaming and introduction of mobile games) and deepened the exploration of ways to remonetize IPs (such as selling peripheral souvenirs), thus greatly diversifying the consumption forms in the pop-up shops. For example, at Huawei Video Pop-up Shop in Hangzhou Xixi SCPG INCITY, users can watch TV series adapted from popular IPs such as Go Ahead offline and obtain the rights to watch them freely online, and gain an immersive experience of Huawei’s various terminal products. The “Brawl Stars × Line Friends” is a pop-up shop under the theme of a mobile game IP in Shanghai Joy City Shopping Mall, which attracts players to show their skills with the large screen and cool interface on the scene. Beside it is a LINE FRIENDS co-branded pop-up shop that sells skins of characters in the game and peripheral products of Brown Bear. It invites players to take creative photos and shoot videos, and post their works under the topic of “Brawl Stars × Line Friends” to platforms such as Bilibili, Xiaohongshu and TapTap to get extra benefits. “Living room economy” returns to the public eye The two-way interactions and integration between online and offline cultural consumption have penetrated into the daily life of people in YRDUA. As online video users become more active, interactions among several screens are driving the return of the living room economy. Apart from being highly active, they show a high level of user stickiness, the times to turn on screens and duration of use. Moreover, most of the users belong to the 18-24 age group, and tend to become younger, which is an obvious characteristic. They especially prefer short-video apps. With terminal upgrades, the tools to play online videos keep innovating and developing. For example, in addition to its traditional function of allowing the audience to watch live streaming programs, smart TVs have a video-on-demand function on online video platforms. Compared with the small screens of mobile phones, the large screens and 4K technologies of smart TVs can provide the audience with better visual enjoyment. The linkage of large and small screens has won the favor of consumers who prefer immersive experience. The “living room economy” has returned to the public eye at the time when the mobile internet enters a period of steady growth. The Yangtze River Delta region has made early deployments in “big screen ecology” and “smart living room”. In 2018, National Radio and Television Administration signed the Strategic Cooperation Agreement on the Integration and Innovation of Smart Radio & Television and Artificial Intelligence for Speech Recognition in the Yangtze River Delta Region with local radio and television stations in Shanghai, Zhejiang, Jiangsu and Anhui, and iFLYTEK, a digital giant in Anhui, to build an integrated artificial intelligence platform focusing on intelligent speech interaction based on smart TV operating systems, and jointly create a smart home ecosystem in the region. In 2019, Oriental Pearl Group, a leading new media company in Shanghai, developed an intelligent fusion product for large screens - Stage TV, and had a cumulative of 5+ million users. At the Yangtze River Delta High-tech Visual & Audio Expo held in October 2020, iFLYTEK launched a series of products regarding smart voice remote controls, artificial intelligence and large-screen advertising and marketing to give users a new experience of human-computer interaction. Through continuous exploration and innovation in the field of smart home, the Yangtze River Delta has accelerated the development of “living room economy” in all application scenarios. Expressing ideas via videos is becoming a development trend New business forms of the digital culture are restructuring the cultural industry by trans-boundary integration and concurrent multi-business operations, which produces new industrial links based on new division of labor. The new business forms and trends have not only brought new development dividends to the cultural and creative industries, but also provided drivers to unleash the potential of cultural consumption. As the market vitality and individual creativity are being further activated, the accelerating development of the digital cultural economy and its deep integration with the real economy will surely optimize the overall structure of YRDUA, and promote its shift from rapid growth to high-quality development. Shanghai is the first city in China that has proposed the idea of overall digital transformation of the city. The endeavor including promoting digital cultural production and consumption has led to the emergence of many new disruptive models and business forms, and become a powerful engine for Shanghai to achieve rapid economic recovery. The efforts to build Shanghai into an international digital capital will comprehensively transform, empower and reshape digital cultural production and consumption. While restructuring the cultural industry, the new business forms of digital culture are also changing people’s thinking. According to the current situation of digital cultural consumption in the Yangtze River Delta, presenting ideas via video is becoming a trend, especially the rapid growth of short videos integrated with recommender algorithms, and the continuous lowering of content production thresholds. Whether the short videos made by individuals or institutions will affect our access to information and knowledge, and even our understanding of the world, is a major issue that deserves attention from the whole society instead of merely an issue in the industry. Undoubtedly, visual media can spread information and knowledge. But it poses a challenge to the acquisition, retrieval and judgment of high-quality information. In particular, whether the fact that short videos can’t touch upon complex topics has a negative impact on the habit and pattern of deep thinking is worthy of attention. While sharing benefits brought by the continuous advancement of visual media and algorithm technologies, we need to take the effectiveness of smart technologies in a critical way. While advancing deeper integration of the digital culture and real economy, we should enjoy the dividends of new business forms of digital culture objectively and rationally. (Author: Bao Yaming, Deputy Director of Shanghai Culture Research Center, Research Fellow at Institute of Literature at Shanghai Academy of Social Sciences)