The cancelation of the film’s Feb. 16 theatrical release is another sign that Beijing insiders believe cinemas in China could remain closed for weeks, making streaming services a rare winner amid the dire health crisis.
With China’s vast network of cinemas all closed amidst the growing coronavirus epidemic, a second major Chinese-language film is canceling its theatrical release to cash in on a streaming deal.
Donnie Yen’s action comedy tentpole Enter the Fat Dragon was scheduled to open nationwide in China on Feb. 16., but production company Bona Film Group said Friday that the movie would instead be made available on leading streaming platforms Tencent Video and iQiyi on Feb. 1.
Enter the Fat Dragon is an update and a remake of the classic Hong Kong martial arts comedy of the same name from 1978. The new version, written and directed by genre mainstay Wong Jing, follows a skilled crime fighter (Yen) who loses none of his martial arts prowess despite becoming heavily overweight after having his heart broken.
The decision to stream the film is another blow to China’s exhibitors, which have been left uniquely exposed to the financial damage caused by the country’s coronavirus crisis.
The epidemic began gathering momentum shortly before China’s Lunar New Year holiday, which usually becomes the biggest box office week in the world. After health officials advised the public to avoid congregating in crowded places, studios canceled all of their upcoming holiday tentpole film releases, and the bulk of China’s 70,000 movie screens began going dark shortly after. Nearly all movie theaters in China remain closed.
Analysts estimate that well over $1 billion in ticket revenue has already been lost. Most Beijing industry insiders expect theaters to stay shuttered at least through February, which could soon begin impacting the planned releases of several Oscar-nominated Hollywood films, such as Searchlight’s Jojo Rabbit on Feb. 12, Sony’s Little Women on Feb. 14 and Road House’s Marriage Story on Feb. 28.
With most of the Chinese populace anxiously stuck at home avoiding public spaces, online video platforms have emerged as a rare winner of an otherwise economically devastating health crisis.
Chinese studio Huanxi Media was the first company to respond to the situation by shifting valuable product from cinemas to online. On Jan. 23, the company announced that its comedy tentpole Lost in Russia, which had been set for a nationwide theatrical release on Jan. 25 — the first day of Chinese New Year — would instead be made available online for free. The move generated a way of attention on Chinese social media, thanks to the popularity of the Lost In franchise. Directed by and starring local comedy superstar Xu Zheng, the first two films in the series grossed a combined $473 million at Chinese cinemas in 2012 and 2015 — at a time when China’s box office was much smaller than it is now.
After canceling Lost in Russia‘s theatrical release just 24 hours prior, Huanxi had scrambled to ink a streaming deal with rising video giant ByteDance, best known as the company behind TikTok. The internet company agreed to pay Huanxi a one-time fee of 700 million Hong Kong dollars ($90 million) for the digital rights Lost in Russia. The new partners also agreed to pool other content and to share advertising revenue.
Huanxi’s bold giveaway impressed industry peers and delighted fans, who could now watch at least one of the season’s big holiday movies. According to state-affiliated news source China Times, Lost in Russia was streamed more than 600 million times by 180 million households over the first three days of its release. The views were racked up by Bytedance’s various video platforms including Douyin, Toutiao, Xigua Video, Huoshan and Wasu Fresh Time, as well as Huanxi’s own in-house streaming service Huanxi Premium.
China’s exhibitors, however, have been far less pleased.
A joint letter signed by the country’s biggest theater chains, including Wanda, Dadi and Lumiere Pavilions, promised to boycott all future releases from Huanxi, and urged China’s Film Bureau to intervene. “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 plays a lead role in causing destruction,” the letter said.
The film bureau has yet to take any action, and Huanxi contends that it remains committed to the theatrical release model, but was just trying to do right by its fans and shareholders amidst a historically bad set of circumstances. As of Thursday, shares in the company were up 25 percent since Jan. 23 on the Hong Kong stock exchange.
Bona’s decision to release Enter the Fat Dragon online is certain to generate additional worry within the exhibition sector. From the start, cinema owners’ biggest concern was that other production companies could follow suit, leaving already-hurting movie theaters with less good product to screen once their lights turn back on.