“Purifying” Online Streaming: Symbolic or the New Normal?

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Online streaming services.  That constantly shifting wild-west of the Chinese music industry is now coming under the regulatory scanner.

This Monday, China’s Ministry of Culture issued an online circular on “improving the management of online music.” In effect, it’s a new policy that takes effect from January 1, 2016 requiring Chinese online music providers to “scrutinize the content of the music they provide before making it available to the public.”

Under the new rules, “any music deemed potentially “harmful” to China’s stability and national harmony should be removed”, or else face punitive action. This includes the “Big Three” of the Chinese Internet – Baidu, Alibaba and Tencent – who all have their streaming platforms.

china_online_criticism_2_xnyt105_23288837(picture courtesy South China Morning Post)

Harsh Reviews

Music services will have to set up internal departments to trawl their exiting catalog for potential subversive and “deviant” songs. The Ministry will occasionally update their requirements for this review, and all new songs must pass muster before being made available online.

These requirements have been kept ambiguous, allowing for a broader interpretation of “poor taste” and “vulgar content”. The circular comes a few months after the Ministry blacklisted 120 songs, most of them from young hip-hop acts, citing concerns to public morality for containing violent and/or pornographic content. That in turn follows a 2011 crackdown on 100 western pop songs, from Katy Perry and Lady Gaga to Simple Plan and Backstreet Boys.

But there appears to be more to this move than just cultural policing. The government has shown a clear interest in the last year to tighten up issues of copyright and IP enforcement, and repair markets (music chief among them) with a reputation for rampant piracy.

It’s possible that the circular is also an attempt to understand the beast.  Starting April 1, 2016, the Ministry of Culture also requires online music streaming providers to regularly start “sending in up-to-date information on all of their music.”

Intelligence gathering on the one hand, cultural policing on the other. For the Ministry of Culture, atleast, this move is a win-win.

Greatest Hits

So how will this impact the streaming industry in China? From a business standpoint, Xiami, QQ Music, Baidu Music and others will have to scramble for regulatory compliance. After the gold rush of swallowing up the biggest catalog possible, there will now likely be feverish attempts to prune said catalog.

This, of course, opens up a potential niche for smaller players (both in China and abroad) to capitalize on songs and artists that fall through the big guys’ nets, offering a specific, more tailored, better curated library. They could even take “non-streaming” forms, relying on downloads or physical purchases.   Blacklists have often made unknown acts famous, and it’s likely that ‘rejected songs’ will just move elsewhere rather than disappear online.

The long-term effects of this move are hard to gauge. 2016 could see more “purified” big streaming services co-existing with smaller outlets servicing the indie and underground crowds (for the rest of us, there’s always VPNs). Or this could merely be temporary fire-and-brimstone. More symbolic than practical to implement in the long run.

The streaming industry will be an interesting one to watch over the next few months.

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