Online/TV drama cast salary will be limited
华策影视(300133)
What's new? Pay limit for cast salaries has been launched.
On September 22, State Alliance of Radio, Film and T elevision (SARFT) issued aproposal to limit the pay of actor/actress in Chinese online/TV drama.
Cast salaries should be no more than 40% of the total production costsfor online/TV drama series.
In addition, the salary of the leading actor/actress cannot exceed 70% ofthe total cast salaries.
If cast salaries exceed 40% of total costs, the production company mustlodge an explanation with their association.
DB's view - regulated cast salaries may lead to quality content
Actor/actress' income has risen in recent years. As per Huace’sdisclosure, c.50% of TV drama production costs are for actors/actresses’compensation in 2016. However , this is only 10-20% in developedmarkets such as US, Korea and Japan.
The pay limit proposal confirms our view that actor/actress salary will notcontinue to increase because of regulation.
To recall, SARFT announced in August 2016 that the currently highcompensation for famous actors/actresses should be regulated.
We believe that production costs will shift from cast salaries to visualeffects/good scripts/quality IP , which should result in quality content.