China Tightens Control Over Online Video

Chinese fans of US TV shows are bracing for a cold winter as Chinese censors have announced that they will now be requiring all TV from outside China to submit to a (lengthy?) review by censors before it hits the Chinese internet.

And, despite what many Westerners have been lead to believe about rampant "piracy" in China, Hollywood isn't celebrating the possibility of (6 month?) delays before a new censored episode might reach Chinese fans.

That's because 2 Broke Girls, The Vampire Diaries, Masters of Sex and many other US TV shows were generating real revenue from advertisers on the Chinese internet. 

And outlets like Youku and Sohu were paying real money to Western companies for license fees. 

Suddenly Hollywood execs are worried that the Chinese market - a potentially huge new source of revenue that was just opening up - may become closed to them. 

Will fans in China who want to see Western content wait around for censored shows - or will they find alternatives like uncensored 山寨 ("pirated") copies of US TV on DVD?

Will newly-inked license deals make sense if content is delayed and heavily censored?

Will the youthful Chinese audience that was just getting a taste of Western TV now shift their loyalty to Chinese produced shows (as the Chinese authorities apparently prefer)?

If you doubt that real money was being made by Western distributors in China, consider this: As of March 2014, The Big Bang Theory had been streamed more than 1.3 billion times with license fees in China said to top US$500,000 per episode. 

And it wasn't just sitcoms. Netflix's House of Cards, with it's "unflattering portrayal of US politics," premiered on Sohu in China on Valentine's Day 2014 and rapidly amassed over 80 million views in its first month.

And in early 2014 Warner Brothers had arranged for “The Ellen DeGeneres Show” to be the first American talk show to be subtitled and available in China just 48 hours after airing in the US.

The closing of the Chinese market (if that is indeed what we are seeing) could have profound effects on how the Western television business weathers the next few years.

2014 has already seen traditional broadcasters in the West facing challenges, but US TV producers had reasons to be optimistic about their chances in China at the beginning of 2014...

Then, in July of 2014, the Chinese authorities told seven online video companies operating in China they would henceforth need to have their foreign programming approved before it could be streamed on their channels. 

And it was clear that SAPPRFT, the Chinese state arm that regulates the internet and TV, wasn't afraid of using its muscle to shut down recalcitrant online video companies: "In April [2014],, China's largest news portal, saw its Online Audio-Video Program License revoked."

If that wasn't bad enough, in late November 2014 (as reported by The Wall Street Journal, on November 25th, 2014): ", a local site that offers Chinese and English subtitles for pirated overseas online content, was shut down... [and], a popular video and subtitle sharing site, was also shut down... with a statement on its front page declaring that it was “cleaning up its content.”"

The shutdown of subtitling sites for pirated content - sites that crowd sourced Mandarin subtitles for unlicensed Western TV shows - even though it might please "anti-piracy" absolutists - might paradoxically be the nail in the coffin for Western TV content online in China.

If legally licensed shows are delayed and censored, and the online channels for unlicensed TV shows are shut down, how will Chinese audiences become familiar with Western TV content? In a world where frictionless access is increasingly the key to earning revenue, will the recent moves in China squelch the potential for a robust legal market for Western TV content?

Which leaves one very important question unanswered.

Why is the Chinese government cracking down?

The censorship of Western TV shows, the shuttering of (which allowed amateurs to upload videos) and the closing of the subtitling sites (which made illegally copied Western content accessible to millions of Chinese) might all be seen as part of a larger effort to rein in the potential power of the internet. 

As reported by CNN on December 28th, 2014the recent moves by Chinese authorities may have been prompted by the number of people watching Western TV shows in China: "What alarms censors, fans and analysts argue, is the immense popularity of those shows."

Jeremy Goldkorn, a consultant who has lived in Beijing since 1995 and follows China's media landscape through the media tracking website he founded in 2003, Danwei, told CNN: "They are now putting these measures in place to make sure it doesn't become an ideological threat."

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