On 12 December 2016, the PRC Ministry of Culture released the Administrative Measures for Business Activities of Online Performances (the “Measures”). The Measures target providers of live performances broadcast or streamed over the Internet or a mobile network (“Streaming Services Providers”) who derive a profit from such activities through advertising, sponsorship or by charging for access. The Measures will come into effect on 1 January 2017.

Streaming Services Providers Are Now in Essence Content Gatekeepers

The new regulations require Streaming Services Providers to obtain a permit from provincial cultural affairs bureaus and display their license number in a prominent place on the website, i.e., on the homepage or landing page. Overseas Streaming Service Providers, including those from Hong Kong, Macau, and Taiwan, will have to apply for a license from the Ministry of Culture before launching a live channel.

This new provision follows a requirement issued by the Cyberspace Administration of China (“CAC”) in November 2016 requiring live Streaming Service Providers and distributors to obtain a permit for the provision of news information services over the Internet. The Measures introduce “know your performer” procedures for Streaming Services Providers in respect of all the performers in streamed shows, through ID checks, and provision of performers’ real names as many artists use pseudonyms or nicknames or aliases. Streaming Service Providers are also required to verify all data collected through follow-up interviews or through other means. Access to streaming services has been restricted and will only be available through registration. If chat room functions or other interactive services are offered on such sites, then Streaming Services Providers have the added obligation of having to report any illegal content posted by users to the relevant authority. However, there are no guidelines as yet as to what constitutes “illegal content.”

Why the Clampdown on Live and Video Streaming Through New Regulations?

In June 2016, 300 entities were found running live streaming content, some of which was of dubious quality trying to catch eyeballs with unseemly content and /or engaging in unlicensed news broadcasting according to a statement made by the CAC. Consequently, the Measures expressly prohibit six types of online content including content containing violence, cruelty, or vulgarity, and content which “infringes others’ legitimate interests.” Among the list of content expressly prohibited is online games for which a licence has not been obtained from the Ministry of Culture. This new registration requirement comes hot on the heels of the regulation of mobile apps released by the CAC in June this year which requires mobile apps providers to, among other things verify new app users’ mobile phone numbers and other identity information and have sanctions in place for users who publish content that violates applicable laws and regulations.

The rationale behind the Measures seems to be a desire to push back on the rising tide of Chinese streaming industry. In recent years, China has become a massive market for online video streaming boasting audiences in the tens of millions with the size of the market reaching RMB 15 billion (or US$ 2.17 billion) in 2015. Myriad problems, however, arise as part of this rapid expansion including unseemly content, piracy, and fraud. While some view the new regulation as an expansion of the government’s censorship over live streaming, others anticipate that the heavy registration scheme requirement might effectively deter online piracy to some extent.

This article was originally published on AllAboutIP – Mayer Brown’s blog on relevant developments in the fields of intellectual property and unfair competition law. For intellectual property-themed videos, Mayer Brown has launched a dedicated channel available here.