A group of nine film and television companies, led by China’s giant online video streamers, including iQIYI, Tencent Video and YOUKU, issued an appeal letter calling for solidarity and self-preservation on May 7, in an attempt to restore confidence in the industry.
China’s film and television industry has been suffering a catastrophic blow as the global pandemic forced more than 6,600 companies to close their doors and online video providers are struggling with sluggish user growth and a decline in advertising revenue.
The letter proposes a five-point initiative on promoting a healthy industry, highlighting that film companies will start to cut budgets throughout the whole process of show making, including pay caps for actors within a reasonable range to meet market demand.
High fees asked by Chinese stars has always sparked debate online and the country escalated its crackdown on celebrity pay in 2018. Three prominent players of video streaming (Baidu-backed iQIYI, Alibaba-backed YOUKU and Tencent-Backed Tencent Video) said that they would strictly follow the regulation, limiting the pay of actors at that time.
The letter also states that film companies will cooperate with online video platforms to avoid potential corruption and will launch a blacklist system to hold employees involved in illegal misconduct accountable.
These proposals will benefit money-bleeding video steaming giants such as iQIYI, which saw a 9.3-billion-yuan loss in 2019, and Tencent Video, which lost about 3 billion yuan the same year.