By Michael Keane
On the 5th December 2013 a crowd of media industry professionals and observers crammed into the Number One Ballroom of the Grand Hyatt Shanghai Hotel to listen to the new elite of China’s online content sector. Heading up the keynote list were Charles Zhang, CEO and Chairman of SOHU, Ma Dong, CCO of iQyi.com; Shan Xiaolei, Vice President of PPTV.com; Tan Jingying, Vice President of Letv.com, Tao Mingcheng, CEO of BesTV, and Tian Ming CEO of Canxing, the latter a leading television production company based in Shanghai. The event was the China National Internet Audio-Visual Industry Forum. I had managed to gain entry into this important industry event by chance.
While the names might not be so familiar outside China, perhaps the best point of comparison are digital platforms like Youtube, Hulu and Netflix that offer a range of streaming and downloaded content through the internet. In China the online content market is growing exponentially because of the massive online audience and its propensity for sharing. The dominant players manifest as online video providers and video-hosting providers. Many of those presenting in the Grand Hyatt Ballroom were on the side of pirates in the past; on this occasion they sang in unison from the copyright hymn sheet provided by the event’s sponsor.
The sponsor was the Motion Pictures Association (MPA), which for many of the audience present was a potent symbol of the creativity of Hollywood. The parent organisation, the Motion Pictures Association of America (MPAA) had waged a sustained campaign since the early 1990s to gain access to China’s media markets, culminating in agreements by the government to loosen foreign media entry rules following China’s World Trade Organisation (WTO) accession in December 2001. Despite concessions made to foreign media it remained difficult for ‘sophisticated’ foreign programming to breach China’s regulatory defences. In many cases audiences were not prepared for foreign genres; and when they were, as in the case of youth audiences, the state ensured that access to primetime broadcast channels was blocked.
In the following years the lure of the Chinese market sparked a wave of interest from professionals from the UK, Europe, and even Australasia. Directors who were once vocal critics of the regime brought projects to China, adding alternative endings for screenplays, editing problematic topics, and providing cameos for Chinese actors. In the online space, where an incredible amount of capital is invested in production, collaborations—and talk of impending mergers—now seem to be almost a daily occurrence.
In the Number One Ballroom of the Grand Hyatt Shanghai Hotel the forum started with the usual ceremony. Government VIPs informed the assembled masses of the significance of the ‘Chinese dream’, in this case the dream was to take China’s media to the world. Like most dreams, however, there was an air of unreality. The home market was where the action was, and where internationalization was taking place. Following the departure of officials from the Ballroom dreams were put to the side. Discussion turned to the domestic market, how to generate original content, how to combat piracy, how to exploit e-commerce, and how to work alongside the incumbent television system.
This event is significant for a number of reasons. First, there is a growing sense that China’s media industry is transforming, breaking out of the political containers that have constrained commercial development since the term ‘industry’ was first used in the early 1990s. The collapse of boundaries is most evident in China’s online space. Second, the idea that China’s media can go out to the world, and even compete with the ‘foreign wolves’, fits nicely with the political rhetoric about China’s international status, a feature of nightly news broadcasts on the national broadcaster, China Central Television (CCTV). With the dream of internationalization pervading the nation there is no shortage of support for ‘national champions’.
Television and global markets: new strategies
To put these developments into a global perspective it is worth considering how television content moves across national borders. The television industry has seen three different models of internationalization. The first is licensing of programs, the second model is international co‑production, and the third is adaptation of program concepts from one place to another. A fourth model is imminent.
Licensing of programming, the first model, is self-evident. A program is recorded for transmission in the home territory. The program doesn’t change when it is sold, although subtitles can be added for export to new territories. Over the past several decades program distribution has predominantly taken the form of licensing in different territories, a process assisted by regional offices and annual television markets (e.g. MIPCOM). The revenue gained from ancillary markets is significant taking into account that production costs are already covered in the home market. This model of television distribution is dominated by the major studios in Hollywood which send their expensive products into new territories, for example shows like Disney s Lost and ABC’s Desperate Housewives. Yet the downside of this model in territories like China—and other parts of Asia—is the massive loss of revenue through piracy, made even more acute by file sharing technologies.
The second model, co‑production, has attracted a great deal of attention in recent years in China. Co-productions have made headway in China because they offer a way into the market, as long as the necessary conditions are met, for instance, censorship of political ideas and incorporation of Chinese elements. Producers often talk about co-development, referring to the strategy of co-writing stories that will accommodate both parties, although in China this road is littered with failures. Co-productions are more evident in film and documentary than television; they came to prominence internationally in the mid-1990s as a result of economic and technological changes which made ‘runaway productions’ more feasible as well as providing opportunities for less powerful content nations to work together officially.
Formats are the third model. The international trade in television formats took off in the 1990s. The circulation of TV program ideas internationally has facilitated the emergence of new national sources of formats, with format concepts developed in Japan and Korea. Japan’s Iron Chef is a well-known export. In the past two years Korean formats such as Where Are We Going Dad? (baba qu na’er?) have become very popular in the PRC as have international franchises like The Voice of China, China’s Got Talent and The X Factor China. Chinese television’s acceptance of the rules of the international format trade, however, has taken time to register and as I have discussed elsewhere there have been many recriminations and accusations of foul play.
The fourth model, which industry analysts now call ‘connected viewing’, is more about distribution than production. Although content is still king, the speakers in the Grand Hyatt Ballroom are the ‘new king kongs.’ These savvy and well-connected entrepreneurs understand there is a massive market for new genres and formats of media among audiences disenchanted with the heavily restricted fare of the traditional broadcasters.
To understand what this means for the future of media in China we have to take account of how technological changes in the medium of television are impacting on viewing practices. Since its inception in 1958, Chinese television has been viewed in the family living room, allowing the government to send messages directly to a captive audience. Propaganda, by definition, relies on constant repetition and assumes a passive audience. This equation has changed with digital media. While still viewed in living rooms, television is a communication and entertainment medium delivered through set-top boxes deploying interactive applications (apps). An expanding array of opportunities exists for audiences to view content and to ‘reconnect’ with each other.
Content is accessed on small tablets as well as on large flat panel television screen and conspicuously displayed in taxis, subways and on transit platforms. ‘Smart devices’ allow audiences to be users and content generators—as the tag line of BesTV, one of China’s new breed of content providers puts it, ‘from watching TV to using TV’. Access to digital video recorders means that people can watch when it suits; these flexible viewing practices disrupt the traditional model of television production. While these changes began in international television systems, their impact is nowhere as obvious as in China. Many younger audiences are especially attracted to shorter ‘transmedia’ formats that can be viewed on ‘second screens’ and enhanced by ‘TV everywhere’ apps, which makes it easy for content to be shared interactively and instantaneously with friends.
Whereas getting access to the hearts and minds of Chinese viewers in the past was almost impossible, the existence of hundreds of community discussion forums provides a means for fans of international content to connect. Even if the content is not readily available, there are ways to access; some avenues like Bit Torrent sites and pirated DVDs are illegal but increasingly new online players are entering into content distribution deals and incubating new fast-moving formats and genres that exploit celebrity culture.
The medium of television is in a state of unprecedented flux in China. Changes translate into new opportunities for foreign content players, whether licensing, co-productions, formats or transmedia. Whereas in the past television was about making a successful show, producers are now looking to create content that is flexible, which can be distributed across different platforms and networks. Micro-content and user-generated content, sometimes innovative, often derivative, has become the new currency as the technology sector integrates with story-tellers. The digital transformation of media is transforming peoples’ lives and their cultural consumption in a way that was unimaginable even a decade ago.