#P04 Chinese Video Websites and State Regulation

Kelly Hu’s “Competition and Collaboration: Chinese video websites, subtitle groups, state regulation and market” takes a deep dive into the world of Chinese online video industry (an example of these sites would be Youku, Tudou) . Hu argues that the development of Chinese video websites throughout the years, since it emerged as early as 2005, is indeed a story of struggle and the self-invention of identity.The article investigates how the increased emphasis on copyright enforcement and the crackdown on unlicensed download since 2009 shifted the operation of the whole industry, resulting in new forms of competition and collaboration in various levels: within private video websites, between private and state-owned video websites, between subtitle groups and video websites. Hu claims that as the state impose tighter controls, the online video industry “developed various strategies in response to the regulation”. This is particularly interesting because it supports Werron’s claim about possible resistance against competitive pressure. When faced with extreme competition, competitors would develop strategies to weaken and undermine the intensity, transform the dynamics of the competition by “openly questioning its legitimacy”. 

Growing up Hong Kong China, I was aware of these websites, but I didn’t know much about them (granted I’ve never been on those sites). So out of curiosity, I chose this article as my topic for this week’s reading response.

What struck me the most from this article, is how the Chinese state embroils itself in this industry, or more specifically, how the state uses anti-piracy policies as means of control and self preservation. User hidard22tk also touched on how the Chinese government “use their political or legislative power” to “make a profit. Needless to say, copyright protection is a contentious issue in China. If you go onto these Chinese websites, you’ll notice how most of them adopt download functions. In economic terms, this poses a huge threat to the free market — when private property rights are not clearly defined and protected by the states, price mechanism would soon collapse. It was against this backdrop that the Chinese government started to impose tighter control on the industry, cracking down on unlicensed downloads. Yeah! More copyright protection, right? Not quite. A closer look into how these anti-privacy policies are enacted would reveal the state’s real intentions: to make financial gains and to centralize power

Since 2007, China’s state Administration of Radio, Film and Television (SARFT) enacted a statute known as the “Administrative Provisions on Internet Audio-visual Program Service” and announced that a government licence for “information network audio-visual programs would be required. To apply for these government license, applicants must be either state-owned or state-controlled companies. Now this is where the Chinese state revealed its true intention. Subsequently, the government announced that established companies with rich venture capital investment could continue, as long as they can afford to buy the copyright. By doing so the state was hoping to have a stronger administrative role in managing this newly-emerged industry, weeding out all the weak players in the game. And this works. By 2012, the number of major private video websites had been drastically reduced from several hundred in the mid-2000s, to little more than ten (unsurprisingly all of which were large-scale business). After transforming the dynamics and the makeup of the industry, the next step would be to leverage control on those remaining large-scale websites, exploiting its power to make financial gains. As the state now has monopoly over the licensed, copyright content, it could then charge those websites crazy amount of money for licensing. In 2013, Youku Tudou spent more than $164 million a year in licensing fees and in the first quarter of 2015 only, the company already paid $80 million for licenses. Additionally, these major video websites have been very keen to “establish a public relations office to cope with government demands”, which is an eloquent way of saying “corruption”. To sum up, here, “copyright” isn’t primarily concerned with “securing the rights of original authors to accumulate capital”, but a tool for the state to “hold broadcasting rights with the capitalist purposes of making profit and competing with private video websites”.

The media is no exception to the Chinese state’s relentless attempts in centralizing power and exploiting that power to make financial gains. It is important for us to keep this in mind, and to not draw premature conclusion when analyzing government’s policies, be reasonably skeptical and acutely aware at all times.


Image: https://techcrunch.com/2016/05/10/please-dont-learn-to-code/

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