Challenges of Local Content Development for Digital Entertainment Growth in China
Andrew Wu, Managing Director, Shanghai Epic Music Entertainment & Chief China Representative, Sony BMG Music Entertainment

With this country's fast transformation from the traditional to the digital economy, it is understandable that our Government supervision over entertainment content reflects this transition and has not yet caught up with the speed of change. For content supervision, there are currently four different national ministries involved, i.e. Ministry of Culture (MOC), State Administration for Radio, Television & Film (SARFT), State Administration of Press & Publication (SPPA), and Ministry of Information Industry (MII). Each Ministry micro-manages entertainment content vertically within its domain and often contradicts the other ministries over specific entertainment content, such as song and lyrics approvals. While this has resulted in very narrow depth and width of what is legitimately available through traditional media or formats, which are under the spell of a traditional mind-set, it also gives rise to what is much more widely available for digital and new media but mostly without any legitimacy. Obviously, the status quo is grossly inefficient and, by logic, it begs for our Government control to improve "macro-management" and strategic effectiveness, to get in synch with 21st century technologies, and to let the growing force of digital and new media dictate how entertainment content in China should and could be sensibly and sensitively harnessed. Government control over entertainment content in China is a necessity, but it has to help and support a healthy development of the local content industries; ultimately, such control also has to be measured by success or failure of the local content industry.

Unfortunately, protection of intellectual property right for entertainment industry is too often associated or identified with foreign copyright owners, which is very misleading. Pop music content, for instance, is always local language-dominated everywhere in the world, such as in Korea and Japan where their respective local content companies are mighty powerful. For China's mainland at this moment, the fact that Taiwan or Hong Kong music content dominates the consumer market has more to do with poor competitiveness and weakness of the Chinese mainland's local content.

To strengthen local content industries therefore has to be the real answer, and digital and new media are promising to bring about a new spring for local content, as already evidenced by the recent phenomenon of Dao Lang, "Mice Love Rice" and "Super Girl". In that light, international music companies' presence or participation in China need not be feared and could only help; and local companies could be nurtured simultaneously. As there is plenty of local investment monies nowadays hungry for opportunities and intrinsically attracted to go into the local content industry too, it is just a matter of letting sound revenue models to be established and help make content business become commercially profitable. That is where IPR protection improvement comes to play an absolutely critical role, without which no amount of content development investment can be sustained for long and no local content industry can ever hope to be built up.

The battle for the traditional music record industry as we know it has been largely lost in China, but IPR protection in the digital world will determine if the anti-piracy war in China will be won and if China will develop one of the greatest entertainment content industries in and for the world -- as our great country rightly deserves to have.

Today, the local music content industry in China is "weak" by any measure. We all know that there are enormous local talents, but there are no sizable local companies for a substantial industry. Recognizing this, therefore, we cannot afford to take content for granted, especially not to allow the practice of "playing Robin hood" against such content developers or copyright owners who are already severely disadvantaged and under siege in China. The Chinese Government at all levels, hardware suppliers, digital platform operators and content companies must all work together to realize the prosperous future of digital entertainment in China. China's consumer marketplace is so unique, that international content industry experiences are actually insufficient to guide how our local situation could best evolve; so we need to apply our Chinese wisdom to promote IPR development. In my view for the entertainment business, the world is changing with China as much as it is changing China -- hopefully all for the better.

(October 12, 2005)

Copyright 2004 by All rights reserved.