Online dramas can no longer be streamed online in China without licenses
On September 4, a circular (link in Chinese) was issued by five governmental agencies, including the State Administration of Press, Publication, Radio, Film and Television (SAPPRFT), regulating TV and online dramas. Titled “A Notice Regarding Policies on Developing China’s TV Industry,” the circular comprised guidelines that further strengthen the government’s control on the production and broadcasting of dramas and shows. According to the notice, more governmental support will be poured into developing dramas espousing nationalist and socialist values. In addition, TV broadcasters and streaming websites are ordered to show dramas that portray military themes, revolution, or rural and ethnic minority life during prime time.
While online content has previously attracted less scrutiny from the government, it would seem that the period during which online shows and dramas enjoyed a considerable degree of latitude has now ended. The circular has decreed that online dramas are required to have a government-authorized license before they can be streamed online and that online dramas will now be subjected to the same standards of oversight as TV series.
The government’s latest regulations on TV and online dramas is just one of the many varied ways China’s administration has been seeking more rigorous control over internet activity in recent months. On August 25, the Cyberspace Administration of China (CAC) released new rules (in Chinese) enforcing “real-name registration” for users in online communities and on discussion forums after October 1, a rule which will further eliminate the anonymity that the internet once promised. The regulation also applies to users of “bullet screen” (弹幕 dànmù), a form of commentary that runs across videos on streaming sites like lines of bullets.
News sites like Yiqipaidianying have speculated (in Chinese) that the CAC’s latest order will have a chilling effect on streaming sites like AcFunTV and Bilibili, both of which have made their name by fostering vocal, interactive online communities. Over the past two months, AcFunTV and Bilibili have faced increasingly stringent control from the government. In July, both websites were reported (in Chinese) to have taken a large number of foreign movies and TV shows offline, a move many speculated had to do with censorship from the SAPPRFT, and on September 5, AcFunTV was fined (in Chinese) 120,000 yuan ($18,500) for posting content in violation of government regulations.
China’s relationship with Hollywood encounters complications amidst government controls on capital outflows
On August 18, the National Development and Reform Commission and the State Council officially codified restrictions on outbound investments in movie and entertainment industries in a notice (in Chinese) that marked overseas deals in film, entertainment, sports, and real estate as “restricted.” The Chinese government’s crackdown on entertainment dealmaking has been going on since late 2016 and has probably led to the scuttling of several high-profile takeovers of Hollywood studios by Chinese companies, including Wanda’s attempt to acquire Dick Clark Productions and Anhui Xinke New Materials’ bid to buy Voltage Pictures.
More recently, the Chinese acquisition of Millennium Films by Recon Group (睿康股份 ruìkāng gǔfèn), a conglomerate that currently owns Aston Villa Football Club, also seemed to face complications because of China’s increasingly tough regulatory environment. While there were media reports on August 30 that Recon’s deal to acquire a 51 percent stake in Millennium for $100 million had been abandoned, the CEO of Recon, Tony Xia, took to Twitter the next day to clarify that the acquisition was still on and made references to new government policies that restrict film investment. Because of the new regulations, Recon’s purchase of Millennium will likely occur via another private company, and not a publicly listed company, within his conglomerate.
Despite the fact that the government’s tightening control on capital outflows may have put the brakes on or created obstacles for some Chinese companies’ plans to invest in Hollywood, not every company has been deterred. On August 28, the Hollywood Reporter reported that Starlight Culture Entertainment Group (星光文化 xīngguāng wénhuà), a Chinese company that, like Wanda, has its roots in real estate, had launched a $100 million film fund and established development pacts with several of Hollywood’s blockbuster filmmakers, including F. Gary Gray (The Fate of the Furious), Roland Emmerich (Independence Day: Resurgence), and Jon M. Chu (Now You See Me 2). Starlight’s investment in partnerships with directors seems to herald a new direction (in Chinese) in the collaborative relationship between China and Hollywood: instead of state financing or acquisitions of Hollywood studios, lately, there has been a steady increase in Chinese funding of Hollywood directors or a single movie, as evidenced by Starlight’s investment in a roster of directors and the recently announced investment of Bona Film Group (博纳影业 bónàyǐngyè) in the Hugh Jackman drama The Greatest Showman.
China’s August box office hits historical high, while North America box office flatlines
For the first six months in 2017, China’s box office growth had been relatively sluggish, especially compared with the astronomical growth of previous years. This, however, would completely change after July 27, the date that Wolf Warriors 2 (战狼二 zhàn láng èr) premiered in Chinese theaters. Not only did the nationalistic action movie go on to become the No. 1 highest-grossing movie (in Chinese) in China’s box office history — and the first non-English movie (in Chinese) to enter the list of the world’s top 100 highest-grossing movies of all time — but it also singlehandedly saved China’s summer box office. Ticket revenues swelled to 7.3 billion yuan ($1.1 billion) in August, the highest monthly gross the country has ever seen, and Wolf Warriors 2 contributed 58 percent to the box office revenues of that month as well as a third of China’s summer box office this year, according to Mtime (in Chinese).
China’s box office surge comes at a time when the August box office of North America suffered one of its worst slumps since 2001 (in Chinese). And thanks to Wolf Warriors 2, China’s summer box office has increased 24 percent compared with last year, while North America’s box office is estimated to dip 15.7 percent. The strong box office figures from August has led to China’s media regulator, the SAPPRFT, to once again make bold forecasts (in Chinese) that China will become the world’s largest movie market by 2020, a prediction that has previously endured setbacks since China’s box office growth began to suffer a decline in 2016.