Video-streaming sites in China under scrutiny

Ms Miki Qian, 31, gets to watch American sitcoms like Two Broke Girls and Korean drama serials instead of "boring" Chinese shows on her television set, thanks to video-streaming.

"It is more interesting than watching Chinese productions whose contents tend to be heavily regulated," the Beijing-based entrepreneur in the entertainment industry told The Straits Times.

But with the authorities tightening control over operators such as Sohu and Youku, fans of video-streaming sites like Ms Qian are wondering how much longer their viewing pleasure will last.

From April next year, according to media reports citing insiders, video-streaming sites must get state approval for all foreign shows, which cannot exceed 30 per cent of their total content.

The proposed rules are reportedly issued by the State Administration of Press, Publication, Radio, Film and Television (Sarft). The media watchdog has in recent months also rolled out measures targeting the streaming sites.

In April, it ordered operators to remove four United States shows, including sitcom Big Bang Theory and law drama The Good Wife, sparking an outcry from half a million Chinese video-streaming fans.

In June, Sarft urged streaming sites to review their tie-ups with set-top box operators, as viewers are allowed to "access content that is either obscene in nature or detrimental to political stability".

Last Thursday, the Beijing News daily reported that Sarft called a meeting with several streaming site operators and ordered them to remove apps that viewers can download through TV sets to access their contents.

Sarft has not given a clear reason for tightening control over video-streaming sites though analysts cite reasons, such as protecting traditional television stations.

"I am not in favour of this clampdown on streaming sites," deputy managing editor Ding Daoshi of IT website told The Straits Times.

"We shouldn't be tearing down one wall to protect another wall, especially if the former is now a sector showing promise."

China's video-streaming sites have grown rapidly in recent years at the expense of television stations, constrained by tight control and unclear rules that result in shows that many viewers find unappealing. Online sites require a government licence to operate but are largely left to self-regulate their content.

The online-video viewer population, which now accounts for about 80 per cent of the 632 million Internet users in China, is forecast to grow to around 700 million by 2016, according to iResearch, which tracks the industry.

In contrast, TV stations are reportedly seeing declining viewership. In 2012, only 30 per cent of Beijing households watched TV, down from 70 per cent in 2009, based on official figures.

Hangzhou-based fashion designer Fang Jian, 23, finds Chinese TV shows too boring and prefers to spend over two hours daily watching Japanese, Korean and Thai drama serials online.

"It is irritating that the authorities are trying to make us watch more local productions with these new rules, even though they are of low quality," she said.

Some media reports said the proposed curbs are aimed at protecting TV stations and also at countering the US' soft power influence even as China works on building up its own.

Mr Ding does not think the move will work. "In the short run, it will help support the local film and TV industry but, in the long term, without competition from quality foreign productions, local standards will not rise," he said.

Some streaming operators see a silver lining - the curbs may cool the fierce bidding wars among streaming sites in China which paid some US$680 million (S$861 million) last year.

But analysts say the proposed "30 per cent foreign content" ruling could hit streaming sites adversely as the proportion of foreign content for some sites is said to be more than 50 per cent.

The need for all foreign content to obtain state approval could also hit their bottom line, analyst Liu Cuiping of Chinese entertainment research firm Entgroup told The Straits Times.

"The process of obtaining state approval is not clear yet. If streaming sites have to bid for content first, there is a risk that they may fail to get approval, which means financial losses."

Mr Ding warns that piracy may make a comeback in China if viewers cannot get their fill of foreign shows on streaming sites.

The warning may come true if Ms Qian's backup plan is anything to go by.

"If the streaming sites cannot provide the foreign shows I like, I'll just buy pirated DVDs."

Additional reporting by Carol Feng

This article was first published on Sep 23, 2014.
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