Regulatory Stalemate Opens the Content Door

BEIJING --- At the recent China RFT Expo, a senior leader from the central government publicly urged China's traditional electronic media organs to embrace new technology including the Internet (see Events).

This open entreaty at the major State Administration of Radio, Film and TV (SARFT) backed event of the year reveals the growing sense of urgency in central government about the virtually uncontrolled explosion of video content now being distributed over new media platforms.    

The headlines in this month's China Media Monitor reveal a flurry of regulatory activity involving areas of the media business that fall awkwardly between the responsibilities of SARFT, telecoms regulator the Ministry of Information Industries (MII) and the General Administration of Press & Publications (GAPP), which governs the print sector, including online publications.

While GAPP is issuing new regulations that require installation of anti-addiction software for online games, it is the National Copyright Administration, the Ministry of Public Security and MII that are trying to crack down on online piracy by stiffening the penalties for infringement.

Meanwhile, having failed repeatedly to stop phone companies cheating audiences of TV shows that use callbacks to drive revenue, SARFT has handed the problem over to the MII, which regulates the companies making money out of these dodgy mechanisms. In turn, given the involvement of SARFT-regulated partners who share in those revenues, even official commentators doubt that telecom players will take much notice.

The same types of contradictions are appearing in regulation of mobile content. While SARFT continues to claim that content rights must remain in the hands of Chinese broadcasters, everyone and their uncle is now producing video products and distributing direct to the market without any production or censorship clearance.

Again, the mobile phone companies have strong financial incentives to ignore these pleas for censorship controls and find it easy to absolve themselves of responsibility for another Ministry's problems.

The result is that CCTV and other traditional media are struggling to compete in a market where technically illegal IPTV providers (SARFT has only issued a handful of licenses) are buying large volumes of both foreign and domestic content without having to undergo normal SARFT censorship procedures.

At the RFT Expo, CMM-I spoke to one leading IPTV buyer who enthused that “we can import as much as we want, when we want. There are no clear editorial rules to govern our activities as we are not regulated by SARFT.”

In its attempt to maintain close controls over the media while developing digital technologies, the central government’s inability to adapt traditional areas of responsibility to reflect the modern media landscape is resulting in a massive and, as yet, unplugged loophole.

This not only makes a mockery of SARFT's stringent content controls (which affect only SARFT organizations), it also undermines the Communist Party's entire propaganda system. Normally, this would be enough to spur the government into action, but the opposite seems to be true as turf wars end with stalemate in the trenches.

According to insiders, the IPTV sector is banking on the government being unable to develop, pass and implement suitable legislation for at least another two years, by which time it will already be too late they say.

Revealing that he had purchased several hundred hours of US and European movies and dramas around the time of the fair, the smiling IPTV buyer summed up the situation, asking CMM-I, “Why do you think so many professionals from traditional media such as CCTV are leaving to join IPTV companies? We can broadcast ourselves!”