With an attractive plot and star-studded cast that included Sean Lau, Jiang Yiyan and Li Xiaolu, The Vanished Murderer was expected to be the winter’s cinema blockbuster when it debuted on November 27.
But anyone hoping to see the murderer at a domestic cinema might be surprised to learn it has almost vanished.
The film faces a near complete boycott by a Chinese cinema industry furious about the release tactics of its producer, Le Vision Pictures, a subsidiary of one of China’s top steaming video companies LeTV.
Grabbing Cinema’s “Cake”
The rules of the Chinese cinema industry require that film producers and production companies must host several lavish media activities and private screenings of their upcoming releases.
Those requirements have as much to do with advertising as they do with marketing. Theatre chains – the agencies which operate almost all of China’s cinemas – depend on such events to gauge whether a new film will meet their viewers’ tastes and to plan which outlets will get a film and how often they will play it.
Le Vision Pictures did not follow these unwritten rules.
Rather than grant exclusive access through media events, LeTV offered every service subscriber with a 3D LeTV a chance to catch The Vanished Murderer at home the day before its theatrical release. In addition, the company’s 2,700 LePar stores hosted free screenings for an estimated 120,000 viewers.
Jia Yueting, CEO of LeTV, announced his plan to follow this new screening pattern in October. “LeTV will be the first company in the world to attempt this kind of early screening pattern,” Jia said.
He said The Vanished Murderer would be the first film to attempt the company’s new pattern, and that LeTV would follow its release with eight 3D films every year.
LeTV’s move may have been an attempt to capitalize on media skepticism. There was certainly no shortage of articles that indirectly promoted The Vanished Murderer by discussing the merits and shortcomings of its new release model.
But LeTV’s ambition was not merely to promote this film. It also wants to increase LeTV subscriptions and spread its brand.
China’s domestic Internet giants have sunk their hands into the media business one after another. But LeTV has always been a weakling when compared to its neighbors: Baidu, Alibaba and Tencent.
“Whether we talk about LeTV’s video website or its 3D LeTV business, video resources are the key to LeTV’s survival and development. Without abundant video resources, it can hardly survive in a competitive market,” an analyst wrote on Huxiu.com.
But even in this area the company has remained weak.
At the start of 2015, LeTV had only Le Vision Pictures and Flower Film & TV offering its video resources. Faced with a disadvantage in video resources, the company had to innovate.
If LeTV’s distribution model worked, it would put the company ahead of its competitors in its ability to offer a kind of video resource that its competitors could not. When young consumers learn that only LeTV has the ability to broadcast its films, many will be willing to pay to watch.
Distributing the show over its own network also allows LeTV to capitalize on advertising revenue. The profits from ads could be vast, considering the company has an existing install base of 4 million LeTV sets.
Or at least that was how it was supposed to work.
Stonewalled by Cinemas
On November 26, every theatre chain in China issued a statement stating their plans to cancel or postpone the release of the The Vanished Murderer.
“LeTV did not given any formal notice to theatre operators that it planned to screen this film on TV as well as at the cinema,” a theater manager wrote on Huxiu.com.
Theatre chains were not only angry about LeTV’s private action, but also afraid that their profits could be damaged.
“LeTV has seriously damaged the regulation of the film industry and injured the profits of theatre chains and cinema,” Time Antaeus Group said in a public statement.
With the exception of 5 percent that goes to special funds and 3.3 percent that goes to business tax, China’s large box office takes are split between three parties: the cinemas, the producers and the promoters. Of the three, the cinemas claim the lion’s share.
LeTV’s plan could cost cinemas 5 million yuan on November 27, assuming a price of 45 yuan per ticket. LeTV’s 2,700 LePar stores function as miniature cinemas that threaten national chains’ profits with their free screenings.
If LeTV’s survives the boycott, other producers could be inspired to follow its example. And looking ahead, young people who become accustomed to watching new releases at home could spell the death of the cinema industry.
In spite of record profits, box offices are still bleeding money as Internet piracy eats into their ticket sales. When combined with the threat of advanced screenings, their battle with LeTV becomes a fight for survival.
To ensure The Vanished Murderer will be screened as scheduled, LeTV immediately cancelled its original plan and compensated members with two film tickets and a one-month Full Screen membership.
LeTV’s public apology did little to relieve the theater chains’ anger. While the film hit screens on time, the scope of its release was greatly reduced.
Gewara.com, an online ticketing website, found only seven screenings of The Vanished Murderer at three theaters in Dongcheng District on December 2.
Chaoyang District has 28 cinemas planning to screen the film the same day: three cinemas will screen it once; six cinemas will screen it twice; and six cinemas will screen it three times.
LeTV had planned to distribute Chronicles of the Ghostly Tribe through the same pattern in September but backed out due to fears of similar backlash.
But while cinemas have managed to stop its plans twice, it’s hard to see an old media platform surviving in the long term.
China has 650 million Internet users, and most of its youth are already used to watching pirated movies online. A shift in commercial film consumption is almost guaranteed.
“Theatre chains are worried that this new media channel will eat their ‘cake,’ but the trend is inevitable,” a film critic told Xinmin Evening News. “In the future, there will be new channels for film distribution. I support LeTV’s effort.”