Movie and TV productions in China halted by salary cap on celebrities

Business & Technology

On August 10, three of China’s largest streaming websites issued a notice announcing they were capping the pay of China’s stars. According to the notice, the salaries of individual celebrities will no longer be allowed to exceed 1 million RMB ($147,000) per episode and 50 million RMB ($7.35 million) per production.

The joint announcement, made by iQiyi, Youku, and Tencent as well as six production companies, was a response to an announcement issued by five governmental agencies in late June to curb exorbitantly high star payments. The directive stated that lead actors could not be paid more than 70% of total cast pay and that cast remunerations shouldn’t exceed 40% of production costs. Earlier this month, as part of the government’s efforts to increase oversight of China’s entertainment sector, the State Administration of Radio and Television (SART) also issued a new directive that capped the production budget and actors’ salaries of online period and contemporary dramas.

According to Sohu, the announcement made by China’s largest streaming sites has had a palpable chilling effect on China’s entertainment industry. While there are rumors that certain stars have lowered their pay rates to comply with the industry’s new regulations, many productions, ranging from variety shows to movies, have also been stalled because of this new state of business. A producer revealed to Sohu that many actors are apprehensive about signing new contracts right now, but agreed that the salary cap will be beneficial to the industry in the long run as it might lead to more money being spent on production value, rather than talent pay.

Not every production has been affected by the issued pay cuts. Sohu reports that period dramas, idol dramas, and fantasy dramas that rely on notable IP and stars with huge fan followings are the ones that have suffered the most from the regulations because of their high production costs. On the other hand, low-budget dramas and “main melody” dramas — dramas that espouse state-sanctioned values — have largely remain unaffected by the new rules. Usually headlined by actors known for their acting skills rather than their fame, these productions have not had to contend with sky-high pay rates of their period or idol drama counterparts.

The entire cast pay of In the Name of the People (人民的名义 rénmín de míngyì) a political corruption drama that featured more than 80 actors, for instance, only added up to 48 million RMB ($7.06 million). By contrast, the salaries of the two leading actors of Ruyi’s Royal Love in the Palace (如懿传 rú yì chuán), one of China’s most popular period dramas this year, both exceed 50 million RMB ($7.35 million).

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