Are We About to Lose Youtube Again?

Friday, January 4, 2008 15:25
Posted in category Invest in China, Red Tape

By now, everyone reading this post knows my love for Youtube. In the last 12 months, tons of new high quality China specific content has been posted, and I find it to be really useful when I want to see what is going on at large conferences and events.

Well… if the analysts are right, everyone in China may have the Youtube plug pulled on Jan 31, and unlike the outage before, it may not come back until Youtube signs on with a state owned media group.

The full details (with analysis) can be found at the NY Times and Redherring, but here are a few highlights of the regulation:

  • China will allow only state-run Web sites to broadcast video or radio through the Internet
  • Starting Jan. 31, Internet broadcasting license applicants must be government-run entities
  • Operators will be banned from offering content that promotes sex, violence, gambling or religious cults or divulges state secrets
  • It’s still unclear the effect the new regulations could have on the ownership and operation of these companies

The loss of one source of entertainment aside, this regulation in my mind could ripple out far enough that the domestic China online media industry is hurt:

  • Advertising revenue for the 100+ sites could come into question
  • This could bring about revised valuation figures
  • Revised valuation figures may result in a slowdown in investment
  • A slowdown in investment may affect China’s domestic media/ online industry

For corporations operating in China, I do not see a wide impact from an operational perspective, however, with many firms looking to reach young consumers this regulation may make it more difficult to advertise.

In the end, we will all just have to wait and see what the impact is, but I am not holding my breath

Youtube is keeping their chin up:

“China’s new regulations for online video could be a cause for concern. We believe that the Chinese government fully recognizes the enormous value of online video and will not enforce the regulations in a way that could deprive the Chinese people of its benefits.”

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