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nytimes.com/2014/04/28/business/international/china-orders-4-us-shows-off-streaming-sites.html


　BEIJING — Chinese regulators have ordered streaming video websites nationwide to take down four popular American TV series, a move that precedes new regulations seeking to close a loophole that has allowed foreign shows to flourish online, even as censors have limited them on broadcast television.

　　Censors with the State Administration of Press, Publication, Radio, Film and Television issued orders for video sites to stop showing “The Big Bang Theory,” “The Good Wife,” “NCIS” and “The Practice,” employees of two online streaming sites said Sunday. According to one employee, the order was issued Friday. Unlike previous take- down orders, this one was accompanied by no explanation from the authorities, the employees said.

　　After years of allowing foreign TV shows to rack up millions of views on Chinese streaming video websites, skirting the strict quotas and censorship enforced on broadcast networks, the government has indicated in private talks with Internet companies that it plans to close this control gap with new rules this year, company employees say.

　　In recent years, American shows like AMC’s “The Walking Dead,” the CW’s “The Vampire Diaries” and Netflix’s “House of Cards” have found avid online audiences in China, particularly among the growing middle class. With plenty of violence, superstition and scandal — all themes Chinese government censors frown upon — these shows would most likely never have made it onto Chinese television. But through the Internet, where censorship of online videos is looser than on TV, they have gained millions of fans through video websites that legally license the shows. And the government has taken note.

　　“Sapprft truly is currently actively studying a set of plans to specifically manage imported shows on the Internet,” Spenser Wang, director of government cooperation at the streaming site iQiyi, said in an interview, referring to the State Administration of Press, Publication, Radio, Film and Television, the country’s top broadcast regulator. The plans would include foreign dramas as well as films, he said.

　　China’s streaming video industry has grown exponentially in recent years, as more people have eschewed TV sets to watch their favorite shows online, on demand. This has been facilitated by the growth of Chinese video websites, which are turning away from piracy and providing an increasingly diverse selection of licensed content.

　　The Shanghai-based Internet research firm iResearch estimated that China’s online video revenue increased 41.9 percent in 2013, reaching 12.81 billion renminbi, or about $2 billion. The firm predicts that revenue will increase 38.7 percent this year and triple by 2017.

　　The online video sphere also takes advantage of loopholes in policy to broadcast far more foreign programming than is allowed on film and TV. Officially, the government caps foreign films at 34 a year and imposes quotas on the number of foreign shows on Chinese television.

　　Yet websites like iQiyi, Youku Tudou and Sohu provide China’s 600 million Internet users with largely free access to nearly all the latest foreign TV shows, as well as hundreds of films and documentaries. Chinese viewers can often watch shows the same day they air in the United States. The video websites feature legal content licensed through contracts signed directly with American networks like NBC and CBS.
　　Continue reading the main story

　　Officials at the agency have been preparing their new regulations “for at least a year,” Mr. Wang said. The agency has been discussing the new measures “on a small scale” with streaming video companies like iQiyi, a private company founded in 2010. Mr. Wang said he believed the new regulations would “definitely be published this year.”

　　Domestic dramas and variety shows are still significantly more popular than foreign programing. But American dramas have grown in popularity in recent years, particularly among younger, urban audiences. Youku Tudou, a leading Internet portal, noted last year that American dramas represented the “fastest-growing content category” in China, and their viewership had increased an estimated 400 percent from 2011 to 2012.

　 　When the state broadcast regulator published a notice last month reiterating rules about original web dramas, like Netflix series, “microfilms” and other online audiovisual content, it led to a rapid backlash on Chinese social media among users who suspected their access to foreign shows was at risk.

　　More than 130,000 respondents in an online poll hosted by the Internet giant Sina — 95 percent of those polled — voted against “banning” American television series. The uproar was such that Xinhua, China’s state-run news agency, immediately published an article denying that the regulations would apply to foreign programming. But the government had been formulating a new set of policies entirely.

　　Interviewees at video companies were unsure what the final regulations would look like, but they said the new policies could affect the number of shows websites could broadcast, how the shows were censored and cooperation models with foreign copyright holders.

　　According to a senior employee at another leading Chinese video website, who was not authorized to speak to the news media, the State Administration of Press, Publication, Radio, Film and Television is considering at least two measures, either of which would force video websites to overhaul their business models.

　　One option being considered is setting up a single agency to act as the middleman between foreign copyright holders and Chinese Internet companies. Chinese streaming video websites now typically negotiate licensing contracts directly with copyright holders.

　　“Frankly, it’d basically be saying, ‘Don’t directly contact foreign parties anymore,"’ the employee said. The person added that this was “possibly the least-hoped-for outcome” for the industry.

　　Another possibility is the creation of “a unified censorship unit” to decide what programs can be broadcast and the degree of editing, if necessary. Video websites now rely mostly on self-

　　ensorship for foreign TV shows, as well as for other material. According to Mr. Wang, most foreign TV shows are “basically not edited” at all before being streamed.

　　An example of the looser censorship controls online is Netflix’s political drama “House of Cards.” Despite touching on some of the thorniest challenges confronting United States-China relations in reality, the show was not screened in any way by government censors before being streamed on Sohu.com, said its chief executive, Charles Zhang. The first episode of Season 2 drew nearly 20 million views.

　 　Mr. Wang agrees that distribution is a likely target for new regulations. But he said that one possible policy could be a “dual-channel” process in which websites negotiate broadcasting licenses with copyright holders but purchase a “Sapprft-approved version” from the state agency. He also fears the implementation of a quota on how many foreign shows websites can broadcast and being issued a list of approved shows, a practice akin to network controls.

　　“We’d be like online TV stations,” he said.
　　

　 　Ultimately, however, strengthened control of the online video industry does not come as a surprise to many, given the government’s tight monitoring of all other forms of entertainment.

　　Ivan Li, China digital sales manager at BBC Worldwide, said the industry had a sense years ago, when online videos first became popular, that further controls would hit, once the industry “comes to a certain scale.” He added that the company “welcomes examination” and was “very confident” that its programs could meet censorship standards.

　　In China, domestic TV shows and films undergo a rigorous and lengthy pre- and post-filming government approval process. Though the government sees culture as a key platform for the soft power influence it craves, rigid censorship means some of the most acclaimed works by Chinese producers are banned in China. Notably, Jia Zhangke’s “A Touch of Sin,” which follows four protagonists as they face corruption and social inequality in China, was recently barred from domestic release despite being lauded in the Chinese news media for its best screenplay award at Cannes.

　 　What is left after censorship is a proliferation of family-friendly soaps, revolutionary dramas where there is little room for character nuance, and costume dramas set in Imperial China.

　　TV shows in China typically reflect “conservative ideals” that are out of touch with the public, said Cai Yucheng, an editor at Sohu TV. Ms. Cai, who is involved in coordinating the web-only productions that were the target of the state regulations in March, said the category was growing in popularity among audiences younger than 35, partly because their story lines reflected modern Chinese society.

　　But it is exactly these kinds of ideas that foreign TV and web-only productions invoke that concern the broadcast regulator.

　 　Government censors care about topics like ethnic relations, violence and sexual content, but “what they’re more worried about is ideological issues,” said the senior employee at a Chinese video website. Audiences grew up watching Yugoslavian programs, but now, “everybody watches American dramas.”

nytimes.com/2014/04/28/business/international/china-orders-4-us-shows-off-streaming-sites.html


　BEIJING — Chinese regulators have ordered streaming video websites nationwide to take down four popular American TV series, a move that precedes new regulations seeking to close a loophole that has allowed foreign shows to flourish online, even as censors have limited them on broadcast television.

　　Censors with the State Administration of Press, Publication, Radio, Film and Television issued orders for video sites to stop showing “The Big Bang Theory,” “The Good Wife,” “NCIS” and “The Practice,” employees of two online streaming sites said Sunday. According to one employee, the order was issued Friday. Unlike previous take- down orders, this one was accompanied by no explanation from the authorities, the employees said.

　　After years of allowing foreign TV shows to rack up millions of views on Chinese streaming video websites, skirting the strict quotas and censorship enforced on broadcast networks, the government has indicated in private talks with Internet companies that it plans to close this control gap with new rules this year, company employees say.

　　In recent years, American shows like AMC’s “The Walking Dead,” the CW’s “The Vampire Diaries” and Netflix’s “House of Cards” have found avid online audiences in China, particularly among the growing middle class. With plenty of violence, superstition and scandal — all themes Chinese government censors frown upon — these shows would most likely never have made it onto Chinese television. But through the Internet, where censorship of online videos is looser than on TV, they have gained millions of fans through video websites that legally license the shows. And the government has taken note.

　　“Sapprft truly is currently actively studying a set of plans to specifically manage imported shows on the Internet,” Spenser Wang, director of government cooperation at the streaming site iQiyi, said in an interview, referring to the State Administration of Press, Publication, Radio, Film and Television, the country’s top broadcast regulator. The plans would include foreign dramas as well as films, he said.

　　China’s streaming video industry has grown exponentially in recent years, as more people have eschewed TV sets to watch their favorite shows online, on demand. This has been facilitated by the growth of Chinese video websites, which are turning away from piracy and providing an increasingly diverse selection of licensed content.

　　The Shanghai-based Internet research firm iResearch estimated that China’s online video revenue increased 41.9 percent in 2013, reaching 12.81 billion renminbi, or about $2 billion. The firm predicts that revenue will increase 38.7 percent this year and triple by 2017.

　　The online video sphere also takes advantage of loopholes in policy to broadcast far more foreign programming than is allowed on film and TV. Officially, the government caps foreign films at 34 a year and imposes quotas on the number of foreign shows on Chinese television.

　　Yet websites like iQiyi, Youku Tudou and Sohu provide China’s 600 million Internet users with largely free access to nearly all the latest foreign TV shows, as well as hundreds of films and documentaries. Chinese viewers can often watch shows the same day they air in the United States. The video websites feature legal content licensed through contracts signed directly with American networks like NBC and CBS.
　　Continue reading the main story

　　Officials at the agency have been preparing their new regulations “for at least a year,” Mr. Wang said. The agency has been discussing the new measures “on a small scale” with streaming video companies like iQiyi, a private company founded in 2010. Mr. Wang said he believed the new regulations would “definitely be published this year.”

　　Domestic dramas and variety shows are still significantly more popular than foreign programing. But American dramas have grown in popularity in recent years, particularly among younger, urban audiences. Youku Tudou, a leading Internet portal, noted last year that American dramas represented the “fastest-growing content category” in China, and their viewership had increased an estimated 400 percent from 2011 to 2012.

　 　When the state broadcast regulator published a notice last month reiterating rules about original web dramas, like Netflix series, “microfilms” and other online audiovisual content, it led to a rapid backlash on Chinese social media among users who suspected their access to foreign shows was at risk.

　　More than 130,000 respondents in an online poll hosted by the Internet giant Sina — 95 percent of those polled — voted against “banning” American television series. The uproar was such that Xinhua, China’s state-run news agency, immediately published an article denying that the regulations would apply to foreign programming. But the government had been formulating a new set of policies entirely.

　　Interviewees at video companies were unsure what the final regulations would look like, but they said the new policies could affect the number of shows websites could broadcast, how the shows were censored and cooperation models with foreign copyright holders.

　　According to a senior employee at another leading Chinese video website, who was not authorized to speak to the news media, the State Administration of Press, Publication, Radio, Film and Television is considering at least two measures, either of which would force video websites to overhaul their business models.

　　One option being considered is setting up a single agency to act as the middleman between foreign copyright holders and Chinese Internet companies. Chinese streaming video websites now typically negotiate licensing contracts directly with copyright holders.

　　“Frankly, it’d basically be saying, ‘Don’t directly contact foreign parties anymore,"’ the employee said. The person added that this was “possibly the least-hoped-for outcome” for the industry.

　　Another possibility is the creation of “a unified censorship unit” to decide what programs can be broadcast and the degree of editing, if necessary. Video websites now rely mostly on self-

　　ensorship for foreign TV shows, as well as for other material. According to Mr. Wang, most foreign TV shows are “basically not edited” at all before being streamed.

　　An example of the looser censorship controls online is Netflix’s political drama “House of Cards.” Despite touching on some of the thorniest challenges confronting United States-China relations in reality, the show was not screened in any way by government censors before being streamed on Sohu.com, said its chief executive, Charles Zhang. The first episode of Season 2 drew nearly 20 million views.

　 　Mr. Wang agrees that distribution is a likely target for new regulations. But he said that one possible policy could be a “dual-channel” process in which websites negotiate broadcasting licenses with copyright holders but purchase a “Sapprft-approved version” from the state agency. He also fears the implementation of a quota on how many foreign shows websites can broadcast and being issued a list of approved shows, a practice akin to network controls.

　　“We’d be like online TV stations,” he said.
　　

　 　Ultimately, however, strengthened control of the online video industry does not come as a surprise to many, given the government’s tight monitoring of all other forms of entertainment.

　　Ivan Li, China digital sales manager at BBC Worldwide, said the industry had a sense years ago, when online videos first became popular, that further controls would hit, once the industry “comes to a certain scale.” He added that the company “welcomes examination” and was “very confident” that its programs could meet censorship standards.

　　In China, domestic TV shows and films undergo a rigorous and lengthy pre- and post-filming government approval process. Though the government sees culture as a key platform for the soft power influence it craves, rigid censorship means some of the most acclaimed works by Chinese producers are banned in China. Notably, Jia Zhangke’s “A Touch of Sin,” which follows four protagonists as they face corruption and social inequality in China, was recently barred from domestic release despite being lauded in the Chinese news media for its best screenplay award at Cannes.

　 　What is left after censorship is a proliferation of family-friendly soaps, revolutionary dramas where there is little room for character nuance, and costume dramas set in Imperial China.

　　TV shows in China typically reflect “conservative ideals” that are out of touch with the public, said Cai Yucheng, an editor at Sohu TV. Ms. Cai, who is involved in coordinating the web-only productions that were the target of the state regulations in March, said the category was growing in popularity among audiences younger than 35, partly because their story lines reflected modern Chinese society.

　　But it is exactly these kinds of ideas that foreign TV and web-only productions invoke that concern the broadcast regulator.

　 　Government censors care about topics like ethnic relations, violence and sexual content, but “what they’re more worried about is ideological issues,” said the senior employee at a Chinese video website. Audiences grew up watching Yugoslavian programs, but now, “everybody watches American dramas.”