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.

BEIJING/SHANGHAI — 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 Theater Chain.

Wanda confirmed to Reuters that it had signed the statement but declined to comment. Bona Film Group and Henan Oscar Theater 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.

CANCELATIONS
Movie makers canceled a slew of films set for the Lunar New Year holiday in China, while cinema chains suspended operations as a deadly coronavirus outbreak thwarted what is typically the biggest week of the year for theaters.

Detective Chinatown 3, the third installment in one of China’s most commercially successful comedies, would not open Friday, as planned, according to a post on the film’s Weibo social media sites. Producers of Leap, based on the true story of the Chinese women’s volleyball team, announced similar cancellations, as did the makers of Jiang Ziya: Legend of Deification, one of the most anticipated films to have been released over the seven-day holiday.

The lineup of potential Lunar New Year blockbusters had set expectations high for box-office sales in a market that is projected to overtake the US as the world’s largest this year. The potential hits were also set to increase the dominance of local-language films in China’s estimated $29 billion movie market, which US filmmakers are counting on to backstop ticket sales for big-budget franchise pictures.

Chains including Dadi Cinema, Jinyi Cinemas and the local affiliate of CJ CGV Co. announced on their websites they were halting operations Jan. 24 through Jan. 27.

The cancellations follow announcements by Chinese health officials urging residents to avoid gathering in public places where the virus could spread. The government has also halted travel from the city where the outbreak is believed to have originated. Wuhan, a city of 11 million, is essentially locked down as officials try to contain the virus.

IMAX Corp. shares fell for a fourth day Thursday in New York, while the cinema operator announced it would postpone New Year holiday releases. The step was the “best course of action in an unfortunate situation,” the company said in a statement. Imax China Holding Inc., the local affiliate, fell as much as 2.2% in Hong Kong trading Friday.

Other China film-related shares fell Thursday, though mainland markets were closed Friday for the start of the New Year holiday.

Shares of Wanda Film Holding Co., a film exhibitor and producer of the Detective Chinatown series, fell 7% Thursday in Shenzhen, bringing their decline this week to 21%, the biggest four-day slide since 2018. Beijing Enlight Media Co., the company behind Jiang Ziya, slumped 5%, bringing the four-day drop to about 15%. — Reuters/Bloomberg

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