Telegraph: The Video Clampdown

In the Hutong
Seeking a sore throat remedy
2041 hrs.

Richard Spencer, fresh back from holidays, writes in the Telegraph about the new rules requiring websites offering video content to obtain a license.

He quotes me, but quite apart from that, his take is spot on - anyone who expects the government to swoop in and start closing down these sites is probably missing the point. Most of these sites are self-regulating already. Tudou and its kin were screening videos for content prior to posting from the beginning, and self-regulation extends beyond the frontiers: even Yahoo! won't let me watch a video on their English site from here in the Hutong.

China Securities News are quoted as saying that the government's main concern is keeping control over professionally produced films.

If you buy that - and I don't - there is a little problem: at what point can you determine if a film on Tudou or YouTube is professionally produced, or just created by a really talented amateur?

Here's my take:

China Central Television (CCTV) and the other state broadcasters have looked around the world and are worried. They see other broadcasters losing young viewers to user generated television. The Chinese broadcasters want to avoid that fate. They had no intention of losing their franchises to Sumner Redstone and Rupert Murdoch, and they're certainly not going to roll over and let programming created by a bunch of amateurs with camcorders and mobile phones take their business away.

So they turn to regulators for help.

The policy makers, however, are not of a single mind - an issue in a system of government that depends increasingly on consensus create and enforce the law. To be sure, the broadcasters do not lack for support, but there is a growing group who are either privately tired of coddling China's weak broadcasters, who see the Internet as the more important medium for the future, or both. They aren't so quick to leap to CCTV's aid, and want to see China turn into an influential power on the Internet.

So they come up with a policy that ensures they have the tools to maintain control, and that assures broadcasters that the government is ready to protect their monopoly over commercial broadcast content.

And then they sit back and watch and see what happens.

What the new regulations do is reiterate what is already government policy, and they leave room to allow the experiment to continue uninterrupted.

Investors are going to be wary for a time - this adds a level of uncertainty into the process that won't go away, but eventually they'll get comfortable again.

This does, however, serve as a dual reminder: these sites prosper not only at the whim of the government, but under the threat of a jealous broadcast sector with strong support in the party.