SARFT headquarters in Beijing

Last year China’s State Administration of Radio Film and Television (SARFT) caused a great deal of panic among the mainland’s video sharing websites by threatening to kick any operator without an online broadcasting license off the intertubes. Eventually, every video sharing website had a license granted, and the initial climate of panic tapered off and quietly died.

Yesterday, SARFT again unleashed its power, announcing a new set of regulations to further govern China’s online video sharing sector. Under the new rules, all films, TV series, cartoons and documentaries must obtain offline broadcasting licenses before being transmitted via internet media (and yes, mobile networks are included), even if the broadcaster has already licensed necessary copyrights from distributors. For the full story please refer to this helpful overview from Pacific Epoch, who we beleive scooped the story.

The new regulations instantly caused another panic amongst China’s netizens. Unlike YouTube, which relies on short video clips and user-generated content, its many Chinese clone-sites mainly live on (pirated) films and TV series. Obtaining an offline license for every single film would take more time than is left until the heat-death of the universe. Needless to say, offline licenses are based on the correct licensing of copyrights, which in many parts of the Chinese web do not outweigh the low cost/huge profit charms of piracy. If SARFT is really serious about this, then the whole business seems to be pretty much terminated.

But from my perception, we don’t have to be too serious about SARFT’s latest moves. Parallel with the new regulations, there is something called the “haven principle” in the whole Chinese internet sector (including video sharing). The principle works like this: an online broadcaster does not have any responsibility if any user-uploaded content causes trouble (such as violation of intellectual property rights). So long as the offending content is simply removed from the website, on notification, every problem is solved in a civilized and harmonious way.

This “uploaded-protested-notified-removed” principle has saved many Chinese video sharing websites from lawsuits they absolutely could not afford to defend.

From our perspective, it seems pretty obvious that in pursuit of almighty page-view, a large number of “helpful users” who upload tons of  stuff on daily basis are actually website editors in disguise, taking advantage of the haven principle to dodge ethical, legal and moral responsibilities. Personally I’ve formerly worked for a market-leading WAP site whose main business is was to “share” pirated (dumped, cracked, regged) mobile phone games totally free of charge, much like video sharing websites. An eye-catching disclaimer was placed on every download page saying “all content is uploaded by users, thus the provider has no responsibility for violation of intellectual property”. But guess what? They didn’t even have a user upload interface. All editors worked on a 8 hours/6 days schedule to collect, upload, and organize pirated games. The WAP site even established different servers and purchased different domain names for file storage to enhance the impression that all those games were located by its fictional “super advanced game search engine”. Gaming, indeed.

Sorry for spinning off topic.

Back to China’s haven principle. Under the user-upload umbrella, China’s video sharing websites do not have to pay anything for violating SARFT’s new regulations. On the other hand, SARFT has to manually monitor every single video on each website to check if there’s any illegal broadcasting activity. In a country of 243 million broadband users, this is a monstrous job. And considering the normal slow speed for takedown notices to be generated, there will be enough time for users to have their fun and for websites to gain almighty page-view between the video’s upload and a demanded removal (if it ever gets found and put on notice).  Of course, even if an offending video upload is terminated, another “helpful user” will upload the video again under a different URL.

Some observers believe that SARFT should be extra-careful in the implementation of its new regulations. Practically all YouTube clones in China are launched, nurtured and generate page-view via pirated content. An overdose of administration may easily snuff the whole business out, and we don’t beleive that China would want to deliver this unto the nascent sector (which employs thousands) given the current condition of the world economy.

Disbelieving?  If you’re feeling in an IPR-violating mood, you might enjoy the 213th episode of popular Japanese cartoon Bleach, uploaded on April 1st 2009, which does absolutely not have an offline broadcasting license. Thanks, Tudou.com, for sharing!

NB: Imagethief’s view, well worth reading, is here.

Article by Kane Gao, Illuminant’s Head of Research