I was reading a very interesting article (Chinese only) yesterday that appeared in Beijing Daily about the regulation of television shows.¹ I used to do quite a bit of entertainment law work here in Beijing, so I like to keep up on regulatory trends.

The article started off with some comments made by an official with the State Administration of Radio, Film, and Television (SARFT), which is the main regulator in this industry. The SARFT guy was explaining that the government is well aware that the television industry often suffers from “over-exploitation” (????) of subject matter and that the regulators are taking steps to fix this problem when it occurs.

Right. What exactly does all that mean? First, let’s take a look at this issue of excessive use of themes. The way that the entertainment industry works over here is that if a movie, television show (or anything else) is successful, it will be copied endlessly until the concept becomes stale.

In television, you get one hit show in a given year, and then the following year, there are ten copycats trying to get in on a concept that is a “proven” commodity. It makes sense to do so as long as the market does not become saturated too quickly, and usually there are no intellectual property problems associated with using someone’s general concept (i.e. it isn’t copyright infringement).

So you get periods of time when there are 12 versions of “American Idol” running simultaneously on different stations, and eleven of them are crappy.² SARFT sees this as a regrettable “over-exploitation” of a television concept.

Second, why is this sort of thing seen as an issue for the government to handle? For background on that issue, it helps to pull back out of the entertainment industry and look at some general economic planning and industrial policy ideas. China has a thriving private sector, and a lot of economic activity here is indistinguishable from that of a strictly capitalist nation.

However, China also has a strong public sector, including a number of very powerful State-owned Enterprises (SOEs). Moreover, Beijing is still involved in economic planning, or as the West likes to call it, “picking winners and losers.” A lot of those winners happen to be SOEs, and one of the ways that the government ensures that these firms become large and efficient is by regulating the entire sector through a variety of means, including forced consolidation.

For example, there are too many steel producers in China, so the government has “encouraged” several waves of mergers and acquisitions to weed out inefficient producers and to consolidate the remaining firms, creating lean, mean enterprises that enjoy economies of scale. This general policy has been replicated across a number of industries, including mining (where the safety records of small coal mines have been a huge issue following well publicized accidents), chemicals, and cement.

Third, and coming back to television shows, if you are a government regulator, and you work in an environment where all your peers are busy assisting SOEs to consolidate and find efficiencies, what is the obvious solution to the “problem” of having 12 different versions of American Idol aired during the same season? Well, you are going to see it as inefficient, wasteful, and in need of government leadership.

And that’s pretty much why SARFT has no apologies for getting involved when they find “over-exploitation” of television concepts. One of the worries is that when there is too much homogeneity in the market, competition may turn ugly, with stations resorting to unethical tactics to differentiate themselves from one another.

Another justification is that this type of regulation promotes higher quality, diverse shows. Although audiences may enjoy a proliferation of American Idol clones, the job of television stations (and SARFT itself) is to promote quality. The assumption here is that audiences do not always know what’s good for them.

I would guess that a typical Western television programming executive would see this practice as totally bizarre.³. Why can’t the market decide how many American Idol clones are acceptable? If eleven of the twelve copycats are of poor quality, then they will get canceled and the stations will move on to the next great idea.

Sounds good, but in a country where the bureaucratic apparatus has an established track record of facilitating industrial consolidation, it’s only natural that industrial policy be applied to soap operas, cop dramas, and talent shows, right?
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1. Technically the article referred to television dramas (???), but I’m going to expand the scope of that term for this post to include game and talent shows.[↩]
2. Well, in my opinion, they all suck, but then again, I’ve yet to encounter any kind of reality or talent show that is worth watching.[↩]
3. Western folks may also be shocked to learn that this regulatory “advice” is often facilitated through informal means (e.g. with regulators sending faxes with programming guidance directly to television station/production company bosses[↩]

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