Market Insight

Chinese media watchdog tightens online video content censorship

February 04, 2016  | Subscribers Only


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The Chinese media regulator has banned several original web dramas (Go Princess Go, The Lost Tomb, Death Notice, Blind Spot, Psychological Crime, The Ferry Man) in January 2016 due to excessive violence, sex, vulgarity, and superstition. The ban comes at a time when there is an increasing number of companies creating original content and overall investment is growing rapidly in China. Original content has helped online operators to retain audiences and bring in new subscription members, but online video companies have had to step a fine line regarding state media regulations. The expansion of TV censorship to original online content means online video hosting sites have limited space to generate revenue and will slow down the development of online video market in China. 

Our analysis

An ending of self-regulated online content process

The vast majority of the original content produced for online services feature content rarely broadcast on traditional TV shows. Web dramas commonly contain scenes of violence, sex, and strong language that would not be permitted by the regulator for broadcast on TV.

Until now, online content has enjoyed relatively little control. TV content is regulated before broadcast whereas online content has been allowed a system of self-regulation. Online content providers have to follow similar rules to TV content, but online content is only censored if there are issues raised after it goes online. The current practice is that online operators should ‘self-examine and self-verify’ their own content. However, given the fierce competition for eyeballs, many operators have pushing the boundaries with these regulations. There has been an ongoing conversation to bring censorship for online content to be in line with TV content and so far the top media watchdog has not made clear whether this would the case going forward. But what is clear is the media regulator is stretching its arms and the ban of such content will likely increase. Original content providers worry that the self-regulation system might be coming to an end with more censorship announcements in 2016.

Further limiting online video operators’ options to generate revenue and harms online video development

Increased competition means Chinese online video companies are finding it increasingly difficult to offer attractive content to audiences. Online video hosting sites normally get content either or both from domestic TV content producers or importing foreign TV shows. The former can create expensive domestic bidding wars among video providers and the latter is restricted by central government’s limit cap, which demands the amount of foreign TV shows no more than 30% of the total content offered by the online video companies. Consequently this has pushed online operators to produce their own content.

In the last few years, the Chinese video market has seen a huge surge in original content. In 2009, fewer than five shows were created by online content providers; in 2015 over 300 shows were online originals. Original content has proven to be popular among the younger generation (those born in the 1990s and 2000s) and has often dominated conversations on social media. One of hit shows removed was ‘Go Princess Go’, which had generated Le.com (formerly known as LeTV.com) ¥10m ($1.52m, €1.36m) and added an extra of 500,000 paid membership, totalled to 12m.

Online video companies will continue to produce their own web dramas but they will be more restrained in their investment. Not only because the tightening control of online content means online content creators might run into a red light, but it is also unclear where the top media regulator draws the line for original online video.

The current content regulations are broad and vague. For example any content that involves religion, top state officials or the political system are banned, but the state media watchdog also has power to make its own judgment on content that does not fall into these categories. Going forward, such vague media censorship will be increasingly applied to online content and video companies will face more uncertainties.

Furthermore, intervention of the top media regulators in the online domain will restrict what online video producers can create. This is likely to put a brake to the development of online video, which is growing rapidly in the US and Western European markets and moving quickly to China. Viewers will be limited to content similar to domestic TV series pushing audiences to continue to favour foreign TV shows and seeking pirated content. 

 

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Asia Asia Pacific China
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Media & Advertising
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