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SARFT TV Drama Rules May Extend to Online Video

Beijing Business Today, 1/04/12

New restrictions on TV dramas recently issued by China's State Administration of Radio, Film and Television (SARFT) may extend to online video sites, which have invested heavily in licensing TV drama content, according to an industry source.

SARFT previously issued new restrictions, effective January 1, 2012, limiting certain kinds of TV dramas from being broadcast during primetime, and will cease accepting applications for these types of programs in October 2012. According to an industry insider, licensing agreements typically prohibit online video sites from broadcasting episodes until after they have aired on satellite TV in order to protect ratings, meaning that if the satellite TV stations cease broadcasting certain programs, the online video sites cannot broadcast them either. In the event that online video sites continue to broadcast TV dramas that no longer air on TV, audiences may shrink due to reduced exposure on TV, reducing ad revenue.

LeTV licensed the TV series "Hougong Zhen Huan Zhuan" ("Harem: The Zhen Huan Story") for RMB 20 mln in March 2011, but other online video sites would stop licensing the online broadcasting rights from LeTV if the series no longer aired on satellite TV. Tencent's (0700.HK) RMB 1.85 mln investment to license the TV series Gong Suozhulian could also be in jeopardy.

Of the more than 50 TV dramas in production at China's Hengdian World Studios in Zhejiang province, more than 30 historical costume dramas have stopped production due to SARFT's new restrictions requiring that 50% of any given satellite TV station's dramatic programming have modern day settings. Online video sites have also begun preparing to meet the requirements. A spokesperson for Baidu's (Nasdaq: BIDU) joint-venture online video site iQiyi said the company has begun procuring modern day TV dramas in preparation.

Editor's Note: For more information on this topic, please see "Rumor: SARFT to Ban Four TV Drama Genres in Primetime," MD 12/07/11 issue and "SARFT Increases Requirement for Modern TV Dramas," MD 12/12/11 issue.

Keywords: television content Internet investment revenue online video SARFT TV Drama broadcasting rights regulation programming


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