January 25, 2020 / 3:26 AM / 25 days ago

China's theaters, studios protest against deal to stream movie online for free

BEIJING/SHANGHAI (Reuters) - Chinese theaters and film studios are protesting a deal by Huanxi Media Group to premiere its new movie “Lost in Russia” on Bytedance’s online platforms, with some saying it was “trampling” and “destroying” China’s cinema industry.

The week-long Lunar New Year holiday usually sees audiences flock to cinemas with distributors taking advantage of the crowds to launch films but the premieres of at least seven movies, including “Lost in Russia”, were postponed due to a virus outbreak which by Saturday had killed 41 people and infected more than 1,300 people globally.

But Huanxi Media Group announced on Friday that it would show “Lost in Russia” for free on Beijing Bytedance Network’s platforms on Jan. 25, and that the social media giant would in turn pay it at least 630 million yuan ($91.25 million)for new movies and dramas.

Financial magazine Yicai reported on Friday on a statement issued by the film industry of eastern China’s Zhejiang province, which threatened to boycott films made by Huanxi and one of the actors in “Lost in Russia” if the internet premiere went ahead.

Another letter signed by 23 theaters and films studios was also circulated heavily in Chinese social media and reported by media outlets like the government-backed Beijing Youth Daily newspaper. Two industry sources familiar with the letter confirmed its authenticity to Reuters.

The second letter, which was addressed to industry regulator China Film Administration, said the movie would mark the first time in history a Spring Festival blockbuster would be screened for free online, and while it was legal to do so, it would break the current industry model.

“This goes against the payment and revenue model that the movie industry has cultivated over many years, is trampling and intentionally destroying the movie industry and premiere models, and play a lead role in causing destruction,” said the letter, whose signatories include Wanda Film Holding, Bona Film Group, and Henan Oscar Theatre Chain.

Wanda confirmed to Reuters that it had signed the statement but declined to comment. Bona Film Group and Henan Oscar Theatre did not immediately respond to calls for comment. Many offices are shut in China due to the national holiday.

A Bytedance spokeswoman said that its cooperation with Huanxi was a normal commercial deal to benefit the creators, adding that it also allowed more people to stay at home, rather than go out, given the viral outbreak situation.

Huanxi did not immediately respond to a request for comment.

Many public areas including cinemas in Shanghai, the city’s Disneyland resort and even Beijing’s Forbidden City have been shut due to concerns about the virus.

Reporting by Pei Li, Lusha Zhang and Brenda Goh; Additional reporting by Roxanne Liu in Beijing; Editing by Michael Perry

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