China Officially Limits Entertainment Programming on Satellite TV. Good Or Bad News For Youku And Tudou?

• Posted by bbishop
• on October 25th, 2011

The State Administration of Radio, Film and Television (SARFT), China’s primary regulator of television and video programming, has issued an edict (限娱令) limiting the amount of entertainment programs that can be broadcast on provincial satellite TV stations during the 7.30-10 PM prime time slot. As reported last month, talent shows will be limited, now explicitly to a total of ten per year across all satellite TV stations. Each station is also required to show at least one “morality construction” (道德建设) program. For those who read Chinese, here is a summary:

“限娱令”的核心内容是：各卫视频道在晚上7：30- 10点的黄金时间，每周娱乐节目不能超过两档，此外各台须设一档道德建设类节目。全国卫视选秀节目一年加起来总量不超过10档，类型不得重复。

CCTV, the main state broadcaster, appears to be exempt from the new rules.

The edict also limits the number of Taiwan performers who can appear in mainland TV productions.

I don’t know if these new rules are good or bad news for online video sites like Youku ($YOKU), Tudou ($TUDO), Qiyi ($BIDU) and Ku6 ($KUTV). The positive view might be that this edict will drive even more viewers away from TV and onto the Internet to find their video entertainment. The negative view could be that SARFT is not stupid, it understands how viewing habits are shifting from TV to online, has no intention of leaving such a wide online loophole, and may be preparing new regulations to govern online video content.

The trend in China appears to be towards more, not less, regulation. Investors may want to consider factoring in greater regulatory risk.

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