China's 360 Tests Shorter SVOD Release Windows

China Quota Wheel Illustration 2014

The company is using Wilson Yip and Matt Chow's 'Triumph in the Skies' to see how the market takes to the idea.

Chinese video website 360 is testing shorter release windows with the Hong Kong movie Triumph in the Skies, which analysts say could give a major boost to the subscription video-on-demand market in China.

Until now, production companies in China have kept the window lengthy to protest the box office, but with piracy widespread in China, a shorter window would appear to make sense.

China's netizen population, the world's largest, reached 649 million by the end of 2014, and big online players such as Baidu, Alibaba and Tencent are investing billions of dollars in boosting their presence in the entertainment sector.

Starring Louis Koo, Sammi Cheng, Charmaine Sheh and Amber Kuo, Triumph in the Skies had run up a cume of $24.59 million by March 9.

Chen Shaofeng, vice president at the Institute for Cultural Industries at Peking University, said a shorter window period or day-and-date releasing could boost video websites because the promotional work for the movie would still resonate with online audience.

"Comparing to paying 40 yuan ($6.39) for a ticket at the cinema, users can spend only five yuan (80 cents) to watch the film simultaneously, which will for sure increase the users for the video websites," Chen told Mtime, the country's leading movie site.

Qiu Mingchun, an executive at the Shengzhan film company, said many viewers in China went to the cinema for visual effects such as 3D, and so shortening the release window couldn't have that big an impact on the theatrical revenues from showy blockbusters.

"However, for sure it will have some impact on 2D films. In order to compensate for the loss, they will definitely increase the licensing fees for online release. For example, with (Jiang Wen's) Gone with the Bullets, the online licensing fee was up to 30 million yuan ($4.79 million)," said Qiu.

Netflix remains the biggest player in SVOD, expected to spend $3 billion for content this year, $3.4 billion next year and $3.9 billion in 2017. About 10 percent of that budget goes for original programming.

The Netflix threat has let to some countries, such as France, to consider shortening the SVOD window to strengthen the access of online video companies to content. 

Imax is releasing Crouching Tiger, Hidden Dragon 2 simultaneously on Netflix and in select Imax theaters, despite opposition from major chains.