Opinion
New policies strengthen restrictions on Internet TV industry
By Sun Xiaofei (China Daily)
Updated: 2009-12-07 07:51
Market entry barriers
The online video broadcasting license will reinforce entry barriers to the Internet TV industry.
According to the new policy, only State-run companies or those wherein the state holds a certain stake can offer Internet video broadcasting services.
A large number of Internet TV manufactures and Internet content providers, including Sina, Sohu and Xunlei, are not State-run companies. So far, only a handful of companies, including Shanghai Media Group, CCTV and CNR, have acquired the Internet TV license.
The new policy might also contribute to increasing the operating burdens of TV manufacturers.
TV manufacturers have supplied content either through their independent content platforms or through cooperation with Internet content providers.
Skyworth's Coocaa TV network, for example, has secured content through its independent content platform. Haier and Hisense have obtained content by cooperating with websites such as Sina, Sohu and Xinleu.
Under the new policy, however, even the TV manufacturers who built their own content platforms have to purchase copyrights from external sources to maintain and update their content.
Considering that the price of Internet TVs is about 1,000 yuan to 2,000 yuan higher than the price of traditional TVs, there is a potential that consumers could turn their face away from Internet TV if it fails to provide abundant content.
The method of supervision and management pursued by SARFT is unlikely to be realized since it could hamper the development of the Internet TV industry, where lots of investments have already been made thus far.
SARFT claims that Internet video services should meet related laws and standards. SARFT tends to regard unscreened content such as foreign films, TV programs and videos as illegally distributed programs.
However, it appears to be impossible to crack down on them, considering that so much of this content already is distributed nationwide through the Internet.
The latest SARFT policy revision might prompt numerous problems and disputes in the Internet TV industry.
SARFT, which is responsible for supervision of broadcasting and TV operations, and China's Ministry of Industry and Information Technology (MIIT), which is in charge of the development of the home electronics industry, have different views about the development of the Internet TV industry in China.
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Accordingly, the direction of the Internet TV market will be determined by the tug of war between SARFT and the ministry.
The author is a researcher with Samsung Economic Research Institute (China). The views expressed here are her own.
