By Ling Zhang

The term “new era” is often used when referring to an improved or perhaps promising new period of time – for example, many Chinese will recall a popular song called Entering into New Era, describing China’s bright future. Recent developments, however, suggest that the foreseeable new era for video-on-demand websites in China may be an unwelcomed development for some. Under newly issued policies and the forthcoming PRC Law on Promotion of Film Industry (“Film Law”), it is anticipated that video-on-demand websites will encounter a number of issues and challenges that they will have no choice but to address.

On July 9, 2012, the spokesman of the State Administration of Radio Film and Television (“SARFT”) was interviewed regarding the recently issued Notice on Further Strengthening the Administration of Online Programs, Micro Films and Other Online Audiovisual Programs (“Notice”) issued by SARFT. The spokesman reasserted the need for further managing these mediums as they concern online content (including micro films, other kinds of audiovisual programs). Notably, (1) online audio and video service providers shall abide by the principle “who provides the service shall be responsible for its content”, which requires the providers to examine programs before broadcasting; (2) self-discipline association for the industry of online programs is encouraged to conduct activities to publicize self-discipline policies, censor the contents, and arrange professional trainings; and (3) government authorities shall further administer the industry’s entry and exit by business operators.

The biggest change brought by the Notice, according to the spokesman, is the power delegated to service providers (notably video-on-demand websites) to examine the contents of online programs themselves. The greater power by service providers suggests that they will also bear greater legal responsibility. Due to the fast production and easy to broadcast nature of online programs, it may for all practical purposes be considered impossible for the relevant authorities to examine or control the contents. Consequently, the burden of examination has shifted to the service providers themselves. According to the Notice, programs like micro films, web shows, web dramas, web documentaries require the examination and approval of three assessors, whereas art, entertainment, technology, finance, sports and education programs require more than two assessors. Further, such examinations and approvals are not final, as content will be subject to further higher-level examination and approval before broadcasting.

Besides the new policies, which impose more responsibility upon video-on-demand websites, the forthcoming Film Law may likely subject such websites to greater limitations. In late 2011, the draft version of Film Law was released for comment. Article 26 of this draft Film Law provides: “The competent department for radio, film and television under the State Council shall announce to the public the films that have obtained the Permit for Public Screening of Film. The enterprises that produce the films shall place the logo of Permit for Public Screening of Film in the film where the title is. Films that have not obtained the Permit for Public Screening of Film shall not be distributed, screened or participate in film festivals (exhibitions). They shall not be disseminated through the Internet, telecommunication network, radio and television network and other information network. They shall not be produced as audiovisual products. However, where the laws or administrative regulations have provided otherwise, those provisions shall prevail.”

The noted Permit for Public Screening of Film has been designated with a common nickname of “the dragon logo”, as it appears in the beginning of all films offered in Chinese movie theaters. Article 26 provides that without such logo, it will be illegal to disseminate films through the Internet, including those video-on-demand websites. Although Article 26 only regulates films, one may reasonably predict that similar regulations will be promulgated with respect to micro films and TV plays, as they are of similar nature. This means, if such Article 26 comes into force, video-on-demand websites will be required to obtain more licenses and go through more administrative procedures to get their programs broadcasted. This may be bad news for movie fans, as the increased involvement of administrative authorities may mean that many films might perhaps be denied the required logo. Moreover, it indicates what is foreseeably a new era for video-on-demand websites, as such websites will likely have to further grapple with issues such as permits, managing content, and limiting their liability.