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IP and Law

Baidu in the music business?

A major reason for search engine Baidu's popularity is its efficient MP3 search function, which allows Chinese music fans to easily find downloadable files of popular music. Of course most of this music is pirated, but Baidu's responsibilities is not clear, because the files are merely located, not hosted by Baidu.

The risk of a new law, or a lawsuit that goes after Baidu's MP3 search service for intellectual property infringement is sometimes cited as a danger for the search engine that is said to have the greatest number of users in China.

However, the risk also carries with it an opportunity. Reuters reports:

China's Baidu sets up online music partnership

Chinese Web search leader Baidu.com Inc. has set up a partnership with popular Chinese-language record label Rock Music Group to provide an online music streaming service.

Rock Music will license part of its music repertoire to Baidu users for free, and both companies will share revenue from Internet advertising, they said in a statement dated July 4.

If Apple could adapt faster than the record companies to the realities of the Internet and thus take the music industry by storm, why not Baidu?

China's record companies are in dire straits: they struggle to sell even sell legitimate copies of CDs, let alone MP3s. Baidu should easily be able to sign up several record companies to make their catalogues available online.

Baidu also has the connections and home grown China credentials to work out a partnership with China Mobile that would enable mobile downloads and an efficient billing system.

Baidu and the Chinese music business: it could be the start of a beautiful friendship.

Links and Sources
Business and Finance

Price controls on Lanzhou beef noodles

Noodle prices marked down to government-mandated levels.
Noodles are serious business in Lanzhou, the capital of Gansu Province. Last year, the city's noodle vendors were caught up in a price-fixing scheme that pushed the price of a bowl up 15% in just a few weeks, leading to investigations by both the media and the city's pricing department (see the New York Times story).

Now this year, as the price of goods is rising across the country, the city government has become the focus of controversy after its announcement of a ceiling on noodle prices. Here's the China News story:

Recently, after "weighing" the pros and cons of "big beef bowls," the Lanzhou Department of Price Administration announced first-ever limitations: the price of a large bowl of beef noodled at all normal-class beef noodle shops in Lanzhou may not exceed 2.5 yuan, and the difference between a small bowl and a large bowl must be 0.2 yuan. Violators will be punished.

In Lanzhou this year, the topic of beef noodles has been as hot as the noodles themselves. During the May Golden Week, the art of making beef noodles was put on the city's intangible cultural heritage protection list, and in June, the sudden rise in beef noodle prices perplexed the general public to no end.

On 16 June, the people of Lanzhou's Xigu District discovered that their beloved "big beef bowls" had jumped 0.5 yuan overnight. Small bowls of beef noodles climbed from 2.3 yuan to 2.5 yuan, while large bowls rose from 2.5 yuan to 3.0 yuan.


Shanxi slaves and the Labor Contract Law

Zhang Xubo, whose legs were severed in a Shanxi "black" brick kiln in 2002
On Friday, June 29, the National People's Congress voted to pass the Labor Contract Law. Media coverage, including articles in China Daily, The New York Times and The Washington Post, has hastened to situate the law's passage in the context of the recent "Shanxi black brick kiln incident." Meanwhile, Chinese law makers revealed that, during the Standing Committee deliberations, members demanded that the Labor Contract Law "handle" the Shanxi slave situation.

Speaking at an NPC press conference yesterday afternoon, legislator Li Yuan said that the Shanxi kiln case resulted from "dereliction of duty" by government agencies. As a consequence, language was appended to the Labor Contract Law making relevant government bodies and their staff liable if they harm workers or employing units (用人单位) by failing to carry out their duties or if the government bodies or their staff violate the law in the exercise of their powers.

Notwithstanding the media coverage connecting the Shanxi slaves with the Labor Contract Law, the new law has only the scantest relationship to Shanxi's illegal kilns. Passing a law in China takes years, and the Labor Contract Law has been under consideration since 2005. In addition, the key passages of the law — which include requirements for written labor contracts and payment of severance wages, as well as restrictions on fixed-term contracts — offer no solace to slave workers. When bosses kidnap children and force them to work without pay, while the local government looks away and squelches local press reports, a law requiring written contracts is beside the point. Moreover, as Li Yuan pointed out during the press conference, to the extent that the Labor Contract Law explicitly addresses the dereliction of duties that led to the scandal in Shanxi, it's redundant: laws prohibiting the dereliction of duty already exist.

What's significant about the passage of the Labor Contract Law is not that it addresses the Shanxi kiln problem, but that the NPC wanted to create the impression that it would. In other words, the NPC used the Labor Contract Law as an opportunity to appear responsive to public outrage and to pander to public opinion. For a legislative body that isn't popularly elected, it's behaving an awful lot like the U.S. Congress.

Still, whatever might be said about the NPC's sleight-of-hand theatrics, both domestic and foreign press coverage have been accommodating of the illusive connection between the Shanxi slaves and the Labor Contract Law. And for a foreign press that's free of government censorship, it's behaving an awful lot like Xinhua.

Links and Sources

Playboy mansion for Macao - but will anyone go?

Playboy magazine has seen its sales decimated on one end by by crass lads mags like FHM, and on the other end by easily available Internet pornography.

However, the magazine's name and it bunny logo remain widely recognized from Australia to Zambia. The group, under the leadership of Hugh Hefner's daughter Christy, is therefore putting money into its other lines of business: namely Internet, video, and the Playboy branded clothing line.

In addition, Playboy has started opening Playboy clubs again. The original chain of clubs ran from 1960 to 1988, mostly in the U.S., and were a major source of income for the Playboy empire. After opening a new Playboy Club in Las Vegas last year, the famous bunny is bound for China.

Christy Hefner recently announced plans to build a Playboy club in Macao. Variety magazine said that Playboy Enterprises and Macao Studio City had joined forces to open up a "Playboy Mansion ... described variously as a 'club' and a 'multi-faceted entertainment destination'."

It will be interesting to see if it works: in a city full of brothels, will the prospect of being served cocktails by girls dressed as bunnies have any appeal for the punters?

In unrelated news, a Danwei source close to the Wynn casino in Macao has reported the the new American-owned gambling houses are currently getting the jitters: the Mainland authorities have slowed down the processing of travel permits to Macao, which has drastically reduced the house takings of the clutch of new casinos in the city.

If you want to see what some of the new casinos look like, below is a Danwei video shot about a year ago in Macao.

UPDATE: Philip S. sent email noting that Playboy.com is currently accessible in China. It is not clear when the long-standing block on the website was removed, but the unblocking may be a temporary typical glitch.

Links and Sources
Business and Finance

How to donate money to a bank

Image from ZJOL.
As part of its revamped commentary section, Southern Weekly moved its "Letters to the Editor" page to the business section and retitled it "Taxpayer's Voices: What's Annoying Me."

This week's gripe comes from Hong Er:

Several years ago I was working for a Shanghai company in Guangzhou. My employer set up an account for me at Shanghai's Minsheng Bank. During that year, I think I did right by Mingsheng Bank - every time I made a withdrawal in Guangzhou, I had to pay "out-of-area withdrawal processing fees." I later moved and lost my card. I noted that there were not many Mingsheng Bank branches in Guangzhou, and my card didn't have much money on it anyway. Today I passed by a Minsheng Bank, so I took out my ID to check - it said I had 83 yuan left.

So how can I withdraw 83 yuan?

A Minsheng Bank teller told me with a smile: first I would have to go to Shanghai to report my card lost and then get a new card. Then I could withdraw 83 yuan. It would take seven business days to replace the card.

I've not been to Shanghai for quite some time. Doing the sums, I would need two round-trips - four tickets - to withdraw that 83 yuan, not even figuring in the time cost. Or I could send my ID to a friend in Shanghai and have him report the loss and apply for a new card, but that would at least require two express deliveries plus my pal's time standing in line, as well as the fees for replacing the card...

Think about it - if I had better things to do, then I'd just give the money to Minsheng Bank.

The girl at the bank heard this and corrected me: you can't say that! True, even if I wanted to give Minsheng Bank that 83 yuan, it wouldn't accept my contribution if I didn't follow this procedure, even though the money is lying in the Minsheng vault and is assessed small-balance maintenance fees every year.

According to Minsheng Bank regulations, only after waiting for the sum to be slowly eaten away would I'd realize my wish to give them 83 yuan.

I know, this regulation is not unique to Minsheng Bank. China's banks all seem to be like that. I remember one time when I wanted to withdraw the last 12 yuan remaining in a closed account at the Agriculture Bank. I waited in line all day, then obediently went to photocopy my ID at the copy-shop, then returned to pay the 5 yuan lost-card fee, and then waited several days until I could go to the Agriculture Bank that my account was opened at to withdraw 7 yuan. I couldn't do it - the bank I opened my account with was pretty far off, and the round trip bus fare was about 7 yuan.

We all know that China's banks are rich now. They're listing overseas, and foreigners have rushed to buy stock in them. Even so, if I'd like to give them 83 yuan, there's no way that'll happen.


Suddenly I had an idea - I hereby declare, as a Chinese citizen and a smallest-of-the-small depositor, I voluntarily donate the 83 yuan left in my Minsheng account to Minsheng Bank!


China's unfavorable copyright imbalance

GAPP just released a report on the state of China's publishing industries in 2006. The report concluded that, while China's copyright-related trade has made strides, the "unfavorable copyright trade imbalance" hasn't fundamentally reversed.

In support of this conclusion, the report cited figures showing that 12,386 copyrighted publication titles "from elsewhere" were sold in China in 2006, while China exported only 2,057 copyrighted publication titles. The report includes comments from industry experts saying that the competitive power of China's "book products" is still relatively weak. Chinese books that "walk out" into the international arena will have to "carry a heavy load over a long distance."

To anyone with passing familiarity with the quality of media published in China, the fact that China imports vastly more publications than it exports should be no surprise. Years of censorship, restrictions on market access, rampant copying and ingrained corruption have taken their toll on product quality. As a result, reporting and non-fiction writing in China tends to be simplistic (or simply propaganda) and include inaccuracies; comprehensiveness and analysis is rare. Fiction writing often lacks the drama and plot developments that characterize storytelling that captures a global audience.

The "unfavorable copyright trade imbalance" — or, put another way, the absence of international demand for Chinese publications — reflects the global market's assessment of the quality of Chinese publications. China would be well-advised to accept this lack of demand as a function of market forces, rather than crying unfairness or discrimination. Pushing Chinese publications into an unwilling market will only leave international audiences with a sour impression of Chinese media. If China thinks the copyright trade imbalance is unfavorable now, think how much worse it will be after global readers have slogged through "The Selected Works of Jiang Zemin" and sworn, "Never again."

Links and Sources
Media business

Hunan animation powerhouse and Sequoia

Billsdue blog has translated some interesting news about the animation industry in a post titled 'Caijing On Foreign Investment In China's Entertainment Industry'. Excerpt:

Among the interesting tidbits mentioned is that Sequoia China has apparently closed up to a $10M investment into Polybona (保利博纳. Variety backgrounder), one of China's largest private film distribution companies.

In addition, the article mentions that Sequoia China investee Great Dreams Cartoons (宏梦卡通) is discussing a merger with Sunchime Cartoons (三辰卡通). In fact, according to the CEO of Great Dreams, Wang Hong (王宏), there may be a merger underway of the top three animation companies (one an animation channel) in Hunan Province--Great Dreams, Sinchime and Aniworld (金鹰卡通) to create an animation powerhouse.

Sequoia China is the Chinese investment vehicle of the famous Silicon valley VC firm that was an early investor in Google and Youtube.

Read the whole thing on Billsdue (proxy link for people in China), or see the original Chinese article is on Caijing's website.

UPDATE From a press release published on CNN.com:

Linktone Ltd. , a leading provider of wireless interactive entertainment products and services to consumers in China, announced today that the Company has formed a joint venture with Greatdreams Cartoon Industry to provide animated cartoon wireless value added services to 367 million teenagers in China.

Media business

Media Tyrannosaurs

Found via Mind Meters, the Youtube video below is titled Prometeus - The Media Revolution. It's a faux documentary look back at a new media revolution, seen from the year 2050 or so. It was made by an Italian company that does consulting work in social media and other trendy stuff, and the narrator has a pleasant Italian accent.

The video includes this prediction:

The media arena is less and less populated. Only the Tyrannosaurus Rex survives. The Net includes and unifies all the content. Google buys Microsoft. Amazon buys Yahoo! and become the world universal content leaders with BBC, CNN and CCTV.

(Emphasis added)

If you liked Prometeus - The Media Revolution, you might also enjoy a video that was going round the Internet in 2004, before Youtube had even launched, called 2014 EPIC, by Google.

In a similar vein but strictly fact-based, The Machine is Us/ing Us elegantly explains the meaning of Web 2.0 means in five minutes.


SARFT pulls all commercials at two TV stations

This week's chengyu is 杀鸡儆猴 - "killing the chicken to warn the monkeys," or punishing one individual as a warning to others.

That's the general public perception of SARFT's order revoking the right of two local TV stations to broadcast commercial advertisements. The two stations, one in Ningxia and another in Gansu, had repeatedly ignored requests from the Administration to pull medical ads and misleading infomercials. Ningxia's station has replaced its commercial ads with PSAs about combating piracy and promoting family planning. Gansu's station is not broadcasting any ads at all right now.

But they're certainly not the only ones that have been violating the rules; many observers feel that SARFT is just making an example out of two insignificant stations to convince everyone else that things have gotten serious. The administration has been tightening its truth-in-advertising rules through series of regulations and clarifications issued over the past year or so. One key notice, jointly issued with SAIC last August, banned five categories of ads: weight-loss, breast enlargement, and height increase products, and all drugs and medical equipment. Some local stations replaced late-night medical ads with infomercials for watches, but for many, things did not change at all. Friday's Mirror reported that even after the ban in Ningxia and Gansu, local stations in some areas were still broadcasting prohibited commercials.

Why? It's all about money. According to the Mirror, only the top five cable channels have filled all of their advertising slots; of the remainder, 70% of ad time remains unsold. Late-night TV time sells for as little as 1000 yuan a minute or less on local TV; when a company buys up huge chunks of time with questionable infomercials, many stations figure it's worth the risk, particularly because the authorities haven't really followed through on their regulatory threats in the past.

Translated below are a number of (mostly skeptical) opinions on SARFT's action. In the China Economic Times, Zhou Chengxiong, head of the Academic Research Department at Peking University's Institute of Cultural Industry, identified four reasons why local stations risk defying SARFT in their advertising practices:

First, local TV stations must make a living. Because of continual changes in SARFT and local policies, many local TV stations and channels are finding it ever harder to survive. Reasons include: CCTV is too strong, all of its stations cover the whole country, and the national authorities consciously or unconsciously limit competition between CCTV and local stations; Many local stations have restrictions placed on their own programming and their broadcast times, so their revenue space is compressed....


Lu Jinbo: Marketing the Wang Shuo brand

Larry Lu Jinbo (路金波) is the publishing phenom behind recent best-sellers by Wang Shuo and Han Han, and is the architect of GirlneYa's YA fiction industry.

In an interview published in YWeekend last week, Lu revealed how he signed these big-name authors, and what his company does to recoup the multi-million advances it pays out. In particular, he counters rumors that the (relatively) poor sales of Wang Shuo's new fiction collection My Millennium resulted in losses for the publisher:

Simply selling books is too one-sided; as content-providers, we first find content, and then we proceed with value-added services - selling A/V and comic-strip adaptation rights, selling content to other media, or using the books to carry ads....we made hundreds of thousands of yuan, even up to one million, before his collection was even published.

Lu Jinbo is all about marketing the authors as brands, but he says he's not too concerned about content. Danwei recently posted an interview that the Mirror evening news did with another agent, Daniel Dan Fei, who talked how he markets trends.

Lu Jinbo: "Selling" Wang Shuo and Han Han

Interview by Yan Xueling / YW

When Lu Jinbo speaks, he's not as animated as his writing. To any question, he maintains the same tone and speed, and when he feels something is inappropriate, he will carefully correct it. This reporter's impression was of Lu Jinbo the careful, meticulous businessman rather than the reckless online outlaw Li Xunhuan of years past. Many years ago, when he was the online writer Li Xunhuan, he dared to openly take Yu Qiuyu to task in an article.

He says that he was never a fanatic, that he's always been rational. Although he hits out in all directions, he is very principled. In buying books, for example, he has never changed his mind because someone else has declared a price. "Writing is describing what you cannot bring about in your life. It's always the opposite of reality. Hideously ugly people write very beautiful protagonists, and lonely people write things that are bustling with activity."

YWeekend: Some in the media have said that Wang Shuo's book has not sold well, that it hasn't yet reached 100,000 copies and many booksellers are asking to return it.
Lu Jinbo: Wang Shuo's new book has been out for two months and has sold 300,000 copies. Wang Shuo's readers are mostly middle-aged intellectuals, but book-buyers are primarily at the two ends - kids at the one end, and retired workers at the other. People in the middle don't like to read.

Advertising and Marketing

Ebay's China joint venture to waste money

Don't mean to burst your bubble
Madison Boom is a blog about the Chinese advertising industry, subtitled 'The world, filled with egos". It seems to be written an industry insider and covers ad agency scuttlebutt, news about hirings, firings and campaigns.

Yesterday the blog reported news about Tom-Eachnet — the joint venture between Ebay and Tom formed after the U.S. auction giant realized that it could not crack the China market. According to Madison Boom, Tom-Eachnet 'has selected TBWA Shanghai for its new-platform launching assignment.' TBWA will create a campaign, apparently to run in September, to promote www.eachnet.com.

Asking a traditional 4A agency to do an ad campaign for a Chinese website! You can almost hear the money pouring down the drain.

It recalls Chinese blogger Gong Wenxiang's famous post titled 10 big mistakes of U.S. Internet companies in China. Below is Gong's mistake number 6, as translated by YeeYan (slightly polished):

U.S. sites get praise with no return, Chinese sites get good returns with no praise

Many US sites are well praised in China but can not make money. They all have the amazingly same marketing strategy: hire a 4A advertising company to design a set of elegant advertisement; put ads on subways and bus stations; make some web based ads for the niche market of white-collar; pay big bucks to top 3 portals to distribute the ads; spend a lot to buy Google keywords (note they don't use Baidu, since they only see Google and MSN in their eyes). Everybody likes their ads, but no one visits their websites. Even if there are a few visitors, the cost is way too high. Sometime it costs more than 1,000RMB ($130) per new user. And they still find excuses for not having traffic growth, such as the need to establish brand image etc.

Chinese competitors always pursue traffic as the first priority. They believe in the standard of getting one visitor for every penny they spend on promotion. It doesn't matter what happens next, they want to get the users to at least visit their sites. They think that high traffic numbers are the best way to promote their brand, and all that all those falsifying brand advertisements are useless...

...US sites normally have the plan to pay 10,000RMB for 100 high-end targeted users. Chinese sites, on the other hand, spend 1,000RMB to recruit 10,000 random customers. However, there are for sure 1,000 high-end users among them.

Mobile phone and wireless

Nokia embroiled in "Typo-gate"

Illegal characters (left) paired with their standard counterparts.
UPDATE: A reader has left an informative comment suggesting that the characters in question are actually part of a national standard for low-res devices.

Is it illegal to attempt to display Chinese characters on a low-resolution screen? That's one interpretation of a Hunan man's complaint about his Nokia mobile phone. Here's Law Weekly's breathless account from its 4 June issue:

Have you ever heard of a phone that has more than 30 incorrect characters? Recently, this weirdness happened to Mr. Zhang of Xiangtan, Hunan. And the phone that "produced" these typos was the famous international brand, Nokia! Mr. Zhang, who was once a Chinese teacher, believes that this infringes on consumer's interests, seriously harming the authority of Chinese characters and hurting the feelings of Chinese consumers.

Mr. Zhang wants to sue Nokia to get it to recall the "typo phone" and issue an open apology to all consumers.
"I never imagined that such a basic error would appear on a famous international brand like Nokia." When Mr. Zhang started entering Chinese characters into an SMS, this reporter saw that the three middle horizontal lines of the 真 character had changed to two, while in 置 they had become a single vertical line. The 言 on the bottom of 警 was just a dot, a line, and a square, and was missing two horizontal lines. Then the reporter used Mr. Zhang's mobile to input 攀, 搏, 青, and 遭, and found that they were all short a few limbs.

Anyone who's had to read small text on a cell-phone screen or a poorly-designed web page has certainly run across similar problems (which may actually appear in the quoted article, depending on how your browser renders things). The left-hand characters in the above image, for example, were enlarged from a web-browser set to a small font size.

Even the phone - a 1200-yuan Nokia 1600 - is not unique in its character issues. Southeast Express unearthed a second case in Fuzhou, only this time the culprit was a low-end domestic brand - a 399-yuan Hisense - whose owner couldn't correctly write the characters 碧, 喜, or 贵.

Unfortunately, this technical solution to the problem of displaying complicated characters in a limited space might be illegal. From LW:

Xiao Jun, a law professor at Hunan Normal University, said that according to the National Law on the Standard Spoken and Written Chinese Language, the standard spoken and written Chinese language used in information processing and information technology products shall be in conformity with the norms of the State [Article 15]. It it evident that Nokia has violated that law, and it should correct the mistaken characters as soon as possible. Second, according to the stipulations in the Law on Protection of Consumer Rights and Interests, Nokia's manufacturer's use of non-standard characters in its mobile phones violated the rights of consumers and is disrespectful to consumers and to the language and writing of China.

Similarly, SE found a government staffer in the Fuzhou Education Bureau who suggested that the phone manufacturers might be violating the Language Law.

More unfortunately, Nokia doesn't seem to be handling this PR crisis very skillfully. The LW investigation found a representative who explained that it was a question of resolution, but the company could not explain why the horizontal lines in 置 were replaced with a single vertical one. And in a follow-up story the next week, LW reported that Nokia refused to offer any further explanation.

Here's an op-ed that ran in The Beijing News on Monday that castigates Nokia's recalcitrance:

Media business

Murdoch's wife: censored profile to be published in China on Thursday

Coming to a newsstand near you on Thursday
The profile of Rupert Murdoch's wife Deng Wendi that was spiked by the editors of Australian newspaper Good Weekend is to be published in Chinese news magazine New Century Weekly (新世纪周刊) this Thursday.

The article has already appeared in English in Australia's The Monthly. It was also supposed to appear in the U.K.'s Guardian newspaper later this month, but was spiked for unknown reasons.

The cover of the upcoming issue is reproduced here. You can see more of the soon to be published Chinese language article on Ping Ke's blog: This Unusual Woman. You can see more of the author Eric Ellis' work at his personal website.

When Chinese magazines start publishing articles that scare off Western editors, you know the times they are a changing.

Links and Sources

Intellectual Property

Copyright protection for online content

WIPO logo.jpg
Beijing Business Today recently reported on China's accession and ratification of two U.N. Internet-related treaties, the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty.

Together, the two treaties require signatory countries to provide copyright protection for computer programs, databases, and digital audio and video files. About sixty countries, including the United States, are already signatories. Both treaties require China to make available legal enforcement mechanisms that will allow rights-holders to protect their copyrights quickly and effectively.

Speaking of China's ratification of the treaties, Long Xinmin, the director of China's International Copyright Office, said that countries world-wide are increasingly harmonizing their intellectual property laws with international standards, and that the force of international law is already too strong to resist. He pointed out that most countries are already using the framework of the TRIPs agreement (which comes under the jurisdiction of the WTO) to amend and perfect their intellectual property laws.

What's interesting about this report is that it sounds a note of unreserved acceptance of international standards.

More typically, China's stance on intellectual property enforcement includes caveats about China being a developing country or expresses concerns about wholesale adoption of foreign values and methods. For example, China has a "two track" mechanism for enforcing intellectual property that gives both courts and administrative agencies enforcement authority. This system creates inefficiency, a lack of accountability and has rendered intellectual property virtually unprotectable in China. But far from amending its two-pronged approach, China has showcased it, insisting that it yields even greater protection for intellectual property.

Perhaps China's embrace of the international standards in the WIPO Internet treaties signals a positive development. Obviously, no law — intellectual property-related or otherwise — will be of much use until China's courts can guarantee enforcement. And if China is open to international substantive legal standards, maybe international standards for legal procedures also stand a chance.

That said, don't expect too much in the way of copyright protection for online content. The Internet is where countries with advanced copyright protection and enforcement mechanisms meet their match. In acceding to the WIPO Internet treaties, what China may have done is join the rest of the world in paying lip service to the protection of copyright online.

Links and Sources

Local news programming makes inroads against CCTV

The 13th Shanghai Television Festival concludes today. The festival's Magnolia Forum (白玉兰论坛), which brings together industry professionals and academics from a number of countries, issued a Report on the Chinese TV News Program Market 2007-2008. The report, edited jointly by the Shanghai TV Festival and CCTV Softres Media (CSM), follows earlier papers on other areas of programming.

As might be expected in today's regulatory climate, the report warns news programs about stretching the bounds of taste, and looks to the most recent crop of reality talent shows for lessons.

However, the Mirror finds evidence of a major change in the television news landscape:

During the last year, news programs have become one of the leading formats for attracting advertisements. CCTV holds 3/4 of the market, but in regional markets CCTV has met with unprecedented challenges from local stations.

In 2006, news programming amounted to a total of 640,000 hours. General news made up half of programming; arts, sports, and legal news showed growth. General arts and entertainment news made up more than 10% of programming. Viewers watched an average of 22.8 minutes of news every day.
The Report says that in the future, the country's news programming will exhibit a few changing trends.

CCTV, using its advantages of position, resources, and policies, occupies a leading position. Minority cable stations use financing, technology, and innovation to compete with CCTV in certain time slots.

In regional markets, local stations have used "locally-targeted news" (民生新闻) to break out and occupy a relatively large share of the viewership. The Report predicts that in the next few years, "locally-targeted news" will become a major player and may approach or even replace the traditional broadcast position of CCTV's news.

CCTV has its own spin on this: Wang Lanzhu, general manager of CSM, said:

A program that could run for two years has too serious a problem with homogeneity, and if it is broadcast too frequently, it may be scuttled in a very short time. A classic example is the "locally-targeted news," because some cities have run too many repeats, leading to declining ratings; exhaustion occurs very quickly.

This article from the Washington Post in March is also relevant.

Links and Sources
Business and Finance

China's "gray" economy: what about the handjobs?

Busted at the hair salon
Sohu.com reports on a new study finding that urban residents in China enjoy 4.4 trillion renminbi in "gray" income. "Gray income" includes any income that is (a) illegal, (b) "the rational merit of which is called into question by generally accepted societal moral concepts," and (c) other income the source of which is unclear.

According to the study, called "The Condition of National Income Distribution and Gray Income," "gray" income goes hand-in-hand with wealth. The report identifies the following contributing factors to "gray" income: a lack of regulatory control over investment capital, poor transparency of investment capital flows, and "serious abuses and leaks." The report points out that, in recent years, investment in real estate projects with multiple layers of sub-contracts have created opportunities for "leakage." The problem, concludes Wang Xiaoyu, who headed the group that prepared the study, is not "marketization, but the institutions that foster corruption."

It's not surprising that the study found "gray" income to be a problem of China's affluent class, given its methodology. The study's authors surveyed more than 2,000 residents across China from different class backgrounds. The survey results were then compared to data collected by the National Bureau of Statistics (NBS). The difference between the per capita disposable income levels reported in the survey and those recorded by NBS was identified as "gray" income. But NBS admits that ferreting out the actual income of high-income residents is a "headache problem," and 70% of high-income residents who participated in the survey said they are unwilling to disclose their true income situation to NBS.

Maybe the income of rich Chinese includes a greater proportion of "gray" income than their poorer countrymen, or maybe the disparity is an accounting phantom that vanishes in daylight. What the light of day exposes in your correspondent's hutong is vigorous participation by the laobaixing in China's "gray" economy, from the hair salon-cum-handjob shack down the street, to the "adult health" sex shop one alley over, to the gambling establishment across from the community center. And while reporting on corruption-related "gray" income may advance an important political agenda, denying the existence of the seedier "gray" economy — the one dominated by China's poorer folk — makes no sense. After all, the true size and robustness of China's economy can never be reflected in data that fails to count the handjobs.

Links and Sources

Media business

A look at the status of magazine publishing in China

Last May China hosted the 36th FIPP World Magazine Conference in Beijing. FIPP stands for International Federation of the Periodical Press, an organization that inlcudes 255 members in 57 countries worldwide, and that represents 110,000 magazine titles with an estimated annual advertising expenditure of US$70 billion. Recently, magazine.org, the website of the Magazine Publishers of America has posted an exhaustive report on the Conference (see below for a link to the report). It is an entertaining read for those interested in the magazine publishing business in China.
Links and Sources

Wendi Deng profile author on Antiwave

The lads at Chinese podcast website Antiwave have interviewed Eric Ellis, author of the profile of Rupert Murdoch's wife, Deng Wendi.

As reported on Danwei, the publication of the profile — originally commissioned by Good Weekend — was later canceled by the editors of that newspaper. Good Weekend is part of the Fairfax Group, of which 7.5% is owned by Murdoch's News Corp.

The Antiwave interview podcast is here. Ellis's responses are dubbed over with Chinese translation. You can see a Danwei TV interview with the Antiwave team here.

Finally, a Chinese translation of Ellis' story is set to be published in New Century Weekly (新世纪周刊) on June 21.

Net Nanny Follies

Flickr.com filtered in China

Photo-sharing website Flickr.com seems to have been attacked by the Net Nanny.

Although it is still possible to load the website and even to log on and upload photos, the Nanny is using some type of filtering technology that stops uploaded images from loading.

This may be a consequence of the use of Flickr.com by participants of the anti-PX demonstrations in Xiamen last week.


Trend-spotting in online fiction

Daniel Dan, architect of bestsellers.
In mass-market fiction this year, grave-robbing stories and palace romances are still hot, while fantasy and wuxia fiction are in decline. So says Daniel Dan Fei, the editor behind popular titles like Stories from the Ming Dynasty (明朝那些事), Notes on Grave-robbing (盗墓笔记), and most recently, Palace Harem (后宫).

Stories from the Ming Dynasty found an audience in the intersection of popular history with the current enthusiasm for things Ming, while Notes on Grave-robbing and Palace Harem belong to two genres currently white-hot: tomb raider stories and palace romances.

Many of the titles that Dan has shepherded to market originated online. This is nothing new; what is notable is the controversy that several of these books have generated.

In March, the online version of Stories from the Ming Dynasty was the focus of accusations of click-fraud: the book was promoted as a "million-hits-a-month" forum post, which some online detectives decided was an inflated number (story at ESWN).

When an unfinished online novel is acquired by a publisher, the author might stop updating at the publisher's request (given how widely things are copied on the Chinese web, taking down the original is usually not an option). Readers typically do not do much more than grumble, but earlier this year, one group of fans took action - they launched a boycott of Palace Harem following the print publication of the first volume in February. In their opinion, author Liulianzi was reveling in her fame while ignoring the people who made her famous in the first place. Some fans were particularly incensed that she never gave a firm date for the release of the concluding volumes, resulting in fans compulsively refreshing her web-page and giving her clicks that she didn't deserve.

The publisher, Xiron, apologized to readers while simultaneously blaming rampant piracy for their decision to keep the story's conclusion off the Internet.

In the following interview (translated from the Mirror), Dan Fei acknowledges the positive effect that such a vocal opposition can have on sales. He also discusses the process of creating a bestseller, and offered his predictions of this year's hottest book trends.

Book designer favors newcomers

Manuscript's success or failure determined in an instant
An interview with Dan Fei by Qin Yuchun / Mirror

Mirror: What's your usual standard for choosing novels? Will you look at how they do online?
Dan Fei: I basically don't care about whether or not they are popular online, and I don't care about click numbers. I only care about my first impression. The authors are all clear about my predilections in selecting novels. In an instant I can decide whether a novel will live or die. If it has become popular in a small area, I'll perhaps pay more attention to it, for example, among white collars or students. I place emphasis on effective responses from netizens - quality responses.

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