Are video streaming platforms killing film studios in China?

Dominance of Youku, iQiyi and Tencent Video adds to film industry’s “cold winter,” a state newspaper says

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The Story of Yanxi Palace, a 70-episode drama set during the reign of Qing dynasty emperor Qianlong, is a show produced by iQiyi that took China by storm last year. (Picture: Handout)

Xinmei Shen

Published: 10:17pm, 2 Dec 2019Updated: 12:19am, 3 Dec 2019

This article originally appeared on ABACUS

Last year was tough for China’s entertainment industry, with professionals calling 2018 “a cold winter.” The winter didn’t end in 2019, and some people are blaming video streaming platforms.

This year alone, 1,884 film and television production companies shut down, according to a report by China’s state-run Securities Daily based on data by Tianyancha, an enterprise information and data provider. The newspaper singles out China’s three dominant streaming platforms as one reason production companies are having a tough time.

An anonymous broker-dealer quoted in the report said Alibaba’s Youku, Baidu’s iQiyi and Tencent Video still aren’t profitable, so they’re “jointly restraining” actor wages and production costs.

(Abacus is a unit of the South China Morning Post, which is owned by Alibaba.)

The concern isn’t new. The claim echoes one made earlier this year by Yu Dong, chairman of leading Chinese film distributor Bona Film Group.

“I said something at the 2014 Shanghai International Film Festival and it’s still lingering in my ears,” Yu said. “[I said] in the future, film production companies will all work for BAT (Baidu, Tencent and Alibaba). It’s almost like that now.”