Viewers turning to video-streaming platforms as cinemas face head winds

With cinemas across China still struggling to make ends meet amid orderly closures, video-streaming platforms are seeing soaring traffic and revenue.

According to industry researcher Endata, video-streaming platforms have seen a surging number of daily active users and total visits in the first quarter, spurred by increasing need for online entertainment from audiences under quarantine or those practicing social distancing amid the coronavirus pandemic.

Web series, which help attract traffic to video-streaming platforms, saw increase in views of 9 percent year-on-year in the first quarter, Endata said.

Web series accounted for about 73 percent of the total series that were newly displayed on video-streaming platforms in the first three months, up 10 percentage points compared with the same period last year, the report said.

Average daily viewership for 26 web films released online during the extended Spring Festival holiday also surged 100 percent year-on-year, according to a report by box office tracker Maoyan.

Industry researcher QuestMobile said the average number of daily active users for video-streaming platforms hit 310 million over the Spring Festival holiday (from Jan 24 to Feb 2), 7.3 percent higher compared with last year's Spring Festival holiday.

Video-streaming platforms were even busier as more new films abandoned theatrical releases and turned to online displays amid widespread cinema shutdowns.

On Jan 24, Lost in Russia became the first feature film to switch from theatrical release to online display. The film was purchased by Byte-Dance for 630 million yuan ($88.96 million) and was provided free for viewing on ByteDance platforms, including Toutiao and TikTok.

Within three days following the film's web debut, total displays surpassed 600 million.

Other films, including Enter the Fat Dragon and The Winners, also debuted online.

While film producers are making money, cinema owners are not happy about the cancellation of theatrical releases.

"The situation (films withdrawing cinema releases and opting to launch online) dealt another blow to cinemas. Even if cinemas open for business, they will find it hard to attract audiences if more films－especially those with high audience expectations－go online," said Wang Zheng, general manager of Mianyang Zhonghuan Culture Communications, a company that owns eight cinemas and manages 22 others across China.

"Currently cinema owners like us are already facing cash flow challenges with little revenue coming in and continuous expenses for rent, equipment and staff," Wang said.

Many entertainment companies whose main business is cinema operations expect to register a loss for the first quarter.

Wanda Film lost about 600 million yuan in the first quarter, the company said, adding that cinema shutdowns and delayed film releases were the main reasons of the loss.

Huayi Brothers reported a loss of over 143 million yuan in the first quarter. Another cinema chain－Guangzhou Jinyi Media Corp－announced losses of 153 million yuan in the first quarter.