China has started implementing its latest content regulations, and big foreign companies are feeling the impact. DisneyLife, the on demand streaming service by Walt Disney and Chinese e-commerce giant Alibaba has gone offline not long after the suspension of Apple's iTunes Movies and iBooks stores in China. Both services had their services operated for less than a year in China, and became unavailable since April 2016. Apple iTunes Movies and iBooks service was launched in September 2015, while DisneyLife started its service in December 2015. Alibaba stated that DisneyLife is down for a service upgrade and it is issuing customers refunds. However, there are no official announcements from Apple, Disney or Alibaba about the unavailability and the future of these services.
An ongoing effort to regulate online content and reduce foreign influence
China state media regulator, the State Administration of Press, Publication, Radio, Film and Television (SAPPRFT) has tightened the regulations on online media over the last six months. The shutdowns should be perceived within a broader context of China’s aim to regulate the online content offered by both domestic and foreign content providers. Announced on 14th February 2016 and came into force on 10 March 2016, the Regulation for the Management of Online Publishing Services, is a new regulation that prohibits foreign companies from providing digital media (including music,films, books, magazines, etc) through a wholly foreign-owned company or a joint venture in China. However, the regulation permits foreign company to coorperate with Chinese company, subject to the approval of SAPPRFT.
The regulator has an existing regulation that online video services can’t have more than 30% of foreign content on their platforms. Recent shutdowns also show China’s ongoing efforts to curb foreign cultural influences and prevent Chinese people from accessing the foreign content. The Chinese military has recently called one of the latest Disney productions – Zootopia, an instrument of American propaganda and claimed that the filmmakers intended to spread messages about the “American Dream”, which has been deemed unacceptable to them. The recent success and popularity of Zootopia has further increased the concern of the regulator on Western culture influence. The film was reported to earn more than $230 million in China, ranked as Disney’s top grossing films in the market.
While China does not have an agenda against Apple or Disney specifically, it is sending out a message to all content providers that it is enforcing its latest regulations and any foreign companies that are not in compliance with the new rules will have to go, however big they might be. DisneyLife may be able to resume its service if Disney and Alibaba can iron out the partnership agreement in line with the new regulation. Whereas Apple may have to work with the Chinese government, such as giving into the the Chinese government’s demand for content removal, or data and technology sharing. Domestic online video services or content providers that aim or already work with foreign media for content production or acquisition are expected to face tighter scrutiny and content restrictions by media regulator.
Hopes amid tighter regulations
Both domestic and foreign media companies are well aware that their published content has to be in line with Chinese norms. However, there is a huge enforcement discrepancy between offline and online content. With the enforcement of the new regulations, this should send a clear indicator to online platform providers that what is not accepted for TV broadcasting is also not accepted on the internet. This willl lead to more rigorous self-censorship to avoid suspension.
China is still a market many internet companies are interested to tap into regardless of the tightening of online media regulations . Despite the difficulty of censorship, the new regulation offers a permit for foreign companies to enter the Chinese market with a partnership with Chinese licensed provider. This is something many foreign companies have been trying to do, but now with this explicit statement, it should provide a legal path for foreign companies to enter the Chinese market. Of course, beside this, foreign media companies will still have to have their media content approved by the Chinese regulator, to remove not only excessive violence, sex, vulgarity, superstition or other sensitive topics, but also the Western culture element within the content.