The pandemic has also changed the landscape for investment in China’s film industry, insiders said.
Liu Lei, the film investment manager with financial service provider Far East Horizon, told NewsChina that most capital investment projects have been suspended or withdrawn, while ongoing projects are basically fueled by industrial capital.
“There are inherent contradictions between capital investment and the film industry. Capital craves certainty but the film industry is full of uncertainties, which is why the two cannot integrate completely,” Liu said.
“During the time when the entire industry was developing with support from the authorities, we still could find a way to merge capital investment and the film industry. But in the last few years, the drastic shift in policies put more restrictions on the film industry, which saw the withdrawal of a sizeable amount of capital,” she said. “The pandemic has laid bare the intrinsic contradictions between them.”
Yin Hong, however, argued that the continuous withdrawal of hot money would help the industry in the long run. “If capital craving quick returns from other sectors withdraws from the industry and leaves the capital aiming to make quality films, film financing will become more professional. It doesn’t matter if it leads to a reduction in total productions, since most films normally can’t get into major theaters,” Yin said.
“In the past, the blind influx of hot money distorted the film market and drove up production prices. The unbelievably high fees for A-list actors is a consequence. Now, the withdrawal of hot money will benefit the film market’s recovery,” Yin said. For years, Chinese film celebrities were among the highest-paid in the world as studios offered eye-popping salaries to lure audiences.
Liu said that while capital support may weaken, the pandemic would cause the film industry to merge and integrate more deeply.
“Because of policy changes and other incidents, the industry has been merging since 2018, but progress was slow. The pandemic has sped things up, changing previous thinking, boundaries and relationships in the industry. Every aspect is in a state of flux and being reshaped,” Liu told NewsChina.
Liu added that while smaller production companies have closed, most large studios, relying on new investments and financing, are undergoing transformation.
Ni Shuang, principal media analyst of the investment firm Pacific Securities, said that studios making high-quality films would emerge from the industrial reshuffle caused by the coronavirus pandemic.
“In the future, film companies will concentrate further and large film production studios will expand. It’s worth noting that more internet companies will enter the film industry. Film studios are highly likely to become part of their ecosystems,” Ni told NewsChina.