Major Chinese video streaming platforms Tencent Video, iQiyi, and Youku, together with six local production studios, have issued a proposal on Thursday calling for an “industry self-rescue action” to survive the post-pandemic period.
According to the letter, the movie and television business has been dramatically disrupted by the coronavirus pandemic, with more than 60 productions halted and 100 programs shelved. In the first quarter alone, 6,600 firms in the entertainment industry have shut down for good, and it is expected that 2020 will see about 30% fewer TV dramas compared to last year.
The industry’s main players proposed several measures for sustaining the market. For example, they emphasized budget cuts in all aspects of production, including the pay of actors and other staff, and for content acquisition.
The proposal also reiterated a recent requirement by the Chinese National Radio and Television Administration that limits TV series to 40 episodes each to improve the quality of creative output. Also, these companies suggested the production of TV dramas with a shorter time length.
Additionally, the nine firms agreed to establish a blacklist system to monitor industry members who might have been involved in corruption, in a bid to regulate the market.
While the first quarter of 2020 saw the number of daily active users on streaming platforms increase to 310 million from 264 million in early January due to the Chinese New Year holiday, which coincided with the beginning of the coronavirus outbreak, the chaotic period of movement restrictions, lockdowns, and business closures may lead to a reduction of fresh content in the foreseeable future and a decline in ads revenue.
This comes at an inopportune time, as all three major streaming platforms are still far away from being profitable. For example, in 2019, Baidu’s streaming arm iQiyi generated USD 4.2 billion in total revenue, while its net loss continued to widen, up 13% year-on-year to USD 1.5 billion.