How the shift in media affect the competition in China?

It is no surprise that there is an increasing popularity among the younger generation in China that prefers the Internet for audio-visual programmes instead of sitting in front of a television or even heading to a cinema for a movie. As it is no secret that China had held a very firm grip on the control on the content and quality that is shows to its people. In this article, it shows how not only state regulations and market logic, but also Chinese fan subscribers` affection has formed competition and collaboration between Chinese private video websites and subtitle groups.

Heavy competition and collaboration could be seen between private and state-owned video websites between subtitle groups and video websites. As stated in the article before the policy regulations, there were several hundred private Chinese video websites as early as 2005. By 2012, the number of private video website has been drastically reduced to little more 10. Not only did China started to fight online piracy in 2009, China also enacted an act known as the ‘Administrative Provisions on Internet Audiovisual Programme Service’ which forces the website to have license given by the government and the only way to apply for it would require the applicant to be either state-owned or state-controlled companies. On top of that it was also very expensive to be profitable from the high cost of copyright fees. This resulted in a drastic reduction on the number of competitors that could compete.

As there are very little competitors in the field due to the strict rules, it could also cause a vicious market competition which has made copyright prices to have unreasonably high pricing. It can be argued that copyright symbolizes the power of exclusion and control in the realm of market competition. Also, as stated in the article “Chinese government leaders ‘have openly made known their desire to see the success of the Western venture capital process replicated in China”. Due to the state intervention and having a strong ban on foreign companies it has open various opportunities for the local market to create several multi billion-dollar companies such as Alibaba, Tencent and Baidu. This creates a massive win for the Government of China, as they can have better restriction over these domestic companies. Some might even argue that it is a restriction of competition and freedom for the citizen, but I feel China is also trying to protect itself from foreign propaganda as we live in the era where people could abuse the power of media and control people’s opinion which could create more chaos in the society. Two economists from Peking University and Stanford University concluded this year, after an 18-month survey, that Chinese college students were indifferent about having access to uncensored, politically sensitive information. They had given nearly 1,000 students at two Beijing universities free tools to bypass censorship, but found that nearly half the students did not use them. Among those who did, almost none spent time browsing foreign news websites that were blocked. (NY TIMES)

In conclusion, although China tend to control the competition in the market. It has forced companies and websites to collaborate with one another as each has their own comparative advantage to maximize efficiency.


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