For local audiences, the movie theater is the prime place to watch the latest movies. If the opportunity is missed, most wait to view free online versions of the film on video websites. But as more domestic video websites are establishing their own "web cinemas," or paid rental services for new release movies, a new market is opening for both commercial industries and home audiences.
The idea of paid rental services has already become common in Europe and the US. Like real cinemas, these services provide the latest movies to netizens, and those who watch pay for "a ticket."
Web cinema
"In the US, most movies are available on paid TV channels, DVDs, and websites, immediately after they are screened in cinemas. The amount of income from these three platforms is comparable to box office revenue from cinemas," said Yang Xianghua, vice president at iqiyi.com, one of the leading video websites in China. "But in China, 80 to 90 percent of a movie's income is generated at the theaters. The channel is too narrow."
Iqiyi started their movie rental service last year, according to Yang.
"Last year, we uploaded movies that just came out of cinemas. During the first two weeks, customers paid 5 yuan ($0.79) for each movie," Yang told the Global Times. "Subscribers can finish watching the movie within 48 hours; they [can also] pay for more time."
Iqiyi is not the only video website that launched this service. In October 2010, youku.com started a trial of paid online movies. In July 2011, Youku launced Youku Premium, the first paid rental service in China.
"Compared with the traditional cinema, this channel offers more choices," said Zhu Huilong, vice president of Youku. He told the Global Times about the advantage in options that consumers have in using paid rental services. "There are about 500 movies made in China every year, but less than 200 movies enter cinemas."
Launching this service not only interests video websites but also movie companies. At a forum held at the Shanghai International Film Festival last week, leading movie companies like Bona Film Group and Lion Gate Films all expressed their willingness to cooperate with websites to gain new forms of income.
With more Hollywood blockbusters coming to China, Yu Dong, CEO of Bona, said that Chinese movies are disadvantaged in special effects and technology. It is thus difficult to compete with Hollywood blockbusters in cinemas. Utilizing new media is a way to make profits.
Freebies
But not everyone is happy about the new service. Many netizens, used to finding free online services, find the concept of paying difficult to accept.
"I would never pay to watch a movie online, even if it is not that expensive," said Gu Jing, a 27-year-old moviegoer. "I can find free movies online as soon as they come out. If I want good [visual and sound] effects, then I will go to a real cinema. It's not that much more expensive than paying for a movie online."
Some think that without the right environment, the movie experience is not as authentic.
"You pay for movies to get the [whole experience] of a wide screen and an up-close experience. [Watching them online] makes going to the theaters less special," said a netizen named Liefu Zai Shenggang.
An anonymous movie producer told Beijing Business Today that at the moment, video websites and movie copy right owners split profits from sales.
As the tickets sold online are cheaper in comparison to movie tickets, there are few economic benefits for copyright owners.
Changing norms
Despite all doubts, for Yang, the key lies in changing the way audiences approach movies.
"The Internet does not mean that everything is free. Many insiders working in the industry agree," Yang said in a phone interview. "I came across a survey that showed that 50 percent of participating netizens had paid before to watch movies online, and another 39 percent will consider paying."
This figure is optimistic, he said. It's possible people can accept new cinematic experiences.
Paid movies include the latest releases, in high definition. Free movies found online often need several weeks of waiting time. Pirated copies are the exception.
"We are considering making the rental time longer, from two weeks to 60 to 90 days," Yang told the Global Times. "More people will be willing to pay, instead of waiting additional days to [download] a movie for free."
He listed services in the US as an example, where rental periods last up to five years.
Yang suggests copyright owners see the long term benefits of putting up films online. He said copyright owners should not be satisfied with receiving a large amount of money through the sales of one movie and should consider other venues.
"It is also impossible to rely on advertisements for the profit of movies," Yang said.
"The screening time online will not be the same as in cinemas. Therefore, they will not just influence ticket sales at real cinemas, but can also supplement them," said Zhu.
Yang added that preventing bootleg copies of new movies from surfacing both on the Internet and DVDs is crucial for the development of these online movie rentals.