Western media companies are mulling the implications of the Chinese government’s recent regulations regarding the online publishing sector.
While some experts indicated that the new rules are generally an extension of the already stringent state regulation of foreign print media, others in the industry acknowledged they would likely necessitate structural changes in their businesses.
Released over the weekend, the rules, which go into effect on March 10, stipulate that foreign media companies and foreign joint ventures will be banned from distributing content online in the country, including text, audio, video, games and maps, without first being approved by the government.
WWD obtained a copy of the rules published by the Communist government’s State Council, which were translated into English.
The regulations require that online publishers abide by laws that “advance Socialist culture,” reflect its values and adhere to China’s Constitution. In slightly more concrete terms, online publications may not contain content that “endangers national security” or harms its “honor;” contains “rumors,” propagates “obscenity, sex, gambling, violence or abetting crime.” This goes for content that slanders, defames or endangers the country’s morals or cultural traditions.
The government’s State Administration of Press, Publications, Radio, Film and Television is responsible for making preliminary examinations and approvals of digital content. Content that violates the laws will be deleted and fines will be applied depending on how frequently the publisher has violated the rules. (Fines range from 10,000 yuan, or about $1,530, to 50,000 yuan, or $7,700.) Excessive violations will result in the termination of a business.
Many media organizations have already figured out how to work within China’s existing rules, although others haven’t — Bloomberg, Facebook and The New York Times are all blocked in China. Those properties declined to comment on the new regulations, as did Google and Apple. The Wall Street Journal also declined to comment. It should be noted that The Journal’s Chinese language site is blocked in China.
While the regulations typically impacts news organizations covering current events in China, they also affect magazine publishers. To enter the world’s second-largest economy, some publishers license their names to Chinese companies while others work through a Chinese subsidiary that is a joint venture with a local firm, which hires and pays local employees. That Chinese company is essentially run and managed by the foreign publisher. As digital becomes a bigger business, those companies have tapped print journalists to also write for the Web. Untangling the print reporters from the digital ones to meet the new rules may be tough for a publisher and may necessitate contract tweaks.
Condé Nast International declined to comment on the impact of the new regulations, but Hearst Magazines and Time Inc. shed some light on the issue.
Duncan Edwards, president and chief executive officer of Hearst Magazines International, told WWD that his company’s team in China is exploring the implications of the new rules.
“I think it’s a little early to tell. On the surface of it, it’s fairly discouraging. We’ll have to dig into it a little bit more before seeing how it impacts us,” Edwards offered.
While he noted that the laws are mainly aimed at hard news organizations, he did acknowledge that Hearst does have a valuable property in Elle China, which he said garners 44 million unique visitors a month and is among the top three fashion and beauty Web sites in the country.
Most likely, the rules for digital content will necessitate a change in partnerships in China, which Edwards said would have an “invisible impact” on Hearst.
The ceo noted that while China is growing very quickly digitally, print is still “much bigger” there. He declined to speculate further over what a more stringent reading of the regulations might yield but underscored the fact that the digital business in China is small relative to Hearst’s overall business.
Time Inc. has licensing agreements within China, and therefore, any ban will not impact its business, a spokeswoman said. The company publishes Fortune, Sports Illustrated, Travel + Leisure and Golf Magazine in China in both print and digital forms.