Regula'ons on Online Video and Internet TV 18/07/2014

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1 Regula'ons on Online Video and Internet TV 18/07/2014

2 Regula'ons on Internet Television (P1) On 14 August 2009, SARFT issue the No8ce on Management of providing Audiovisual Programming Over Internet- Connected Television Terminals Service. As stated in the No8ce, if any manufacture or service provider would like to provide program video/audio service to users of TV terminals through Internet TV or TV Set- up Box with Internet, they have to obtain the License for Broadcas8ng Audio- visual Programs through Internet as a Integrated Service Provider for Audio- visual Program via TV Terminals based on related regula8ons. Qualifica8ons of License for Broadcas8ng Audio- visual Programs through Internet: Radio and Television Company; (Telecommunica8on, TV Manufacturers do not have the qualifica8ons for the License) Licensed Company: Batch 1: CNTV, SMG, Zhejiang TV, Wasu Batch 2: South Media, Hunan TV, China Interna8onal Radio, China Na8onal Radio

3 Regula'ons on Internet Television (P2) In July 2011, SARFT issued the "Memorandum Regarding the Strict Prohibi8on of Providing Audiovisual Programming Over Internet- Connected Television Set- Top Boxes," which required that online video websites immediately take steps to cease ac8vi8es including the shu`ng down of internet TV content service plaaorms and an end to all related sales and promo8onal ac8vi8es. In Dec 2011, China's State Administra8on of Radio, Film and Television (SARFT) issued its "Opera8on and Management Requirements for Licensed Internet Television Operators," which requires that internet TV set- top boxes be operated only in ci8es selected for China's network convergence trials. The document requires that Internet TV plaaorm operators, such as Shanghai- based BesTV and Wasu Digital in Hangzhou, must submit to SARFT the types, model numbers and suppliers of the set- top boxes they choose to partner with in their license applica8ons, which SARFT will issue through uniform distribu8on in batch authoriza8ons, with a unique serial number for each qualified internet TV terminal product. The document also reiterates regula8ons over content broadcasts using internet TV terminal, sta8ng that, "Internet television content service plaaorms may only connect to internet television integrated plaaorms established with approval from SARFT," and "Content providers with television broadcast rights may deliver film and television VOD services through partnerships with Internet TV broadcast and control plaaorm operators" but "may not link such services to their [i.e. the content provider's] websites."

4 Regula'ons on Internet Television (P3) On 14 February 2012, a mee8ng on broadcast technology was held in Beijing. During this mee8ng, SARFT announced that it would establish a technological control plaaorm for converged media services, and that it would move forward with the integra8on of China s cable television network. SARFT has already facilitated the establishment of a joint venture broadcast control plaaorm operated by two large IPTV content control plaaorms: CNTV and Baishitong. This plaaorm will be directly supervised by SARFT, providing the State with a na8onwide control mechanism for IP television services. A similar pahern seems to be in the works for mobile telephone TV, Internet TV and other new media plaaorms. On early July 2014, News has been circula8ng since yesterday that SARFT (The State Administra8on of Radio Film and Television), the country s top media regulator is considering to step up regula8on over the industry. According to a reliable source, SARFT had held talks with related agencies on the 11th and 15 th July and revealed some of its new regulatory measures including that all video content must go through SARFT s uniform plaaorm ; content will be subject to stricter supervision and censorship; display of branding informa8on of content suppliers will be prohibited; no overseas produced content or Internet user self- made content will be allowed; all apps and hardware must be submihed to SARFT for review and approval before they reach the market. The new regula8on is expected to release within next several months.

5 Not only are these boxes now off the market, SCFBM has an alterna8ve already in place: its own set- top box. On June 26, the head of the technology department for the State Commihee on Films and Broadcast Media Wang Xiaojie unveiled its independently- developed and researched smart TV opera8ng system called TVOS 1.0. This specially- designed mul8- tasking terminal for televisions is even compa8ble with Android systems. Challenges of TV Set- up Box (P1) 26 June 2014: The State Commihee on Films and Broadcast Media (SCFBM) announced on June 23 that it is now forbidding the use of two popular internet TV set- top boxes because they violate video downloading regula8ons. The two companies that have had their products revoked from the market are the Wasu Media Company in Zhejiang Province with its Sky Devil Cat Box device, and Baishi in Shanghai with its own version of the internet TV box. Both devices are similar to the Apple TV, in that they allow users to watch content from internet streaming sites like Qiyi, Sohu, Youku as well as other licensed content. However, the SCFBM, which is the PRC state censorship body for films and television, are unhappy with the boxes because they allow the viewing of pirated content. More to the point, the content could be obscene, low- cultured, or in opposi8on to the government. The government body formerly known as SARFT said the two companies were selling preinstalled apps that were not authorized, and asked both to reform their products before they could be re- launched.

6 Challenges of TV Set- up Box (P2) 14 July 2014: SARFT issued the latest no8ce that the Internet TV Integra8on control plaaorms have to cancel the Playback func8ons directly provided in Integra8on plaaorm. This ac8on means some users of Internet TV Set- up box cannot choose video on demand, but only Live or online watching. 16 July 2014: SARFT con8nue to 8ghten controls on the TV box yesterday, informed sources told the media that SARFT license par8es had nego8ated and issued a document requiring a license to perform a number of New Deal Party, including all the shelves within a week without Overseas TV drama has issued licenses, micro film, network play, otherwise the license side will be 'responsible in the end. Previously, SARFT has issued immediately shut down the Internet on TV terminal products in viola8on of the leher from the video soqware download channels Recently, SARFT has halted look back at some of the network TV box func8on. Informed sources said that the recent appointment of SARFT, respec8vely, the central leadership of the three units as well as Guangdong, Zhejiang, Hunan, Shanghai Bureau of the four local sta8ons and on current issues management and opera8on of Internet TV and rec8fy exis8ng work promptly made a clear direc8on requirements, and subsequently issued a document. It is understood that the music featured in the video Watch website is its smart terminal, smart terminal by a super TV, music, as the box, LetvUI together cons8tute.

7 Regula'ons on Broadcas'ng Audio/Video Programs through the Internet (P1) On July 6, 2004, the SARFT promulgated the Rules for the Administra8on of Broadcas8ng of Audio/Video Programs through the Internet and Other Informa8on Networks, or the Audio/ Video Broadcas8ng Rules. The Audio/Video Broadcas8ng Rules apply to the launch, broadcas8ng, aggrega8on, transmission or download of audio/video programs via the Internet and other informa8on networks. Anyone who wishes to engage in Internet broadcas8ng ac8vi8es must first obtain an audio/video program transmission license, with a term of two years, issued by the SARFT and operate pursuant to the scope as provided in such license. Foreign invested enterprises are not allowed to engage in the above referenced business. On April 13, 2005, the State Council announced Several Decisions on Investment by Non- state- owned Companies in Culture- related Business in China. These decisions encourage and support non- state- owned companies to enter certain culture- related business in China, subject to restric8ons and prohibi8ons for investment in audio/video broadcas8ng, website news and certain other businesses by non- state- owned companies. These decisions authorize the SARFT, the Ministry of Culture and the GAPP to adopt detailed implemen8ng rules according to these decisions.

8 Regula'ons on Broadcas'ng Audio/Video Programs through the Internet (P2) On December 20, 2007, the SARFT and the MIIT jointly issued the Rules for the Administra8on of Internet Audio and Video Program Services, commonly known as Circular 56, which came into effect as of January 31, Circular 56 reiterates the requirement set forth in the Audio/Video Broadcas8ng Rules that online audio/video service providers must obtain a license from the SARFT. Furthermore, Circular 56 requires all online audio/video service providers to be either wholly state- owned or state- controlled. According to relevant official answers to press ques8ons published on the SARFT s website dated February 3, 2008, officials from the SARFT and the MIIT clarified that online audio/ video service providers that already had been opera8ng lawfully prior to the issuance of Circular 56 may re- register and con8nue to operate without becoming state- owned or controlled, provided that such providers have not engaged in any unlawful ac8vi8es. This exemp8on will not be granted to online audio/video service providers established aqer Circular 56 was issued. Such policies have been reflected in the Applica8on Procedure for Audio/Video Program Transmission License.

9 Regula'ons on Broadcas'ng Audio/Video Programs through the Internet (P3) In June 2008, the SARFT issued the No8ce on the Applica8on Procedures for Audio/Video Program Transmission Licenses. Under this no8ce, all online audio/video service providers are required to maintain a registered capital of not less than RMB10.0 million, and audio/ video service providers that offer news, movies, television, entertainment and other designated content must have a registered capital of not be less than RMB20.0 million. In March 2009, the SARFT released a No8ce on Strengthening the Administra8on of Online Audio/Video Content. This no8ce reiterated, among other things, that all movies and television shows released or published online must comply with relevant regula8ons on the administra8on of radio, film and television. In other words, these movies and television shows, whether produced in the PRC or overseas, must be pre- approved by SARFT, and the distributors of these movies and television shows must obtain an applicable permit before releasing any such movie or television show.

10 Regula'ons on Broadcas'ng Audio/Video Programs through the Internet (P4) On April 1, 2010, the SARFT issued the Internet Audio/Video Program Services Categories (Provisional), or the Provisional Categories, which classified Internet audio/video programs into four categories. Category I is only open to state- owned broadcast media companies opera8ng in the television sec8on, and the other three categories are open to privately held en88es. In 2012, SARFT and the State Internet Informa8on Office of the PRC issued a No8ce on Improving the Administra8on of Online Audio/Video Content Including Internet Drama and Micro Films. In 2013, the GAPPRFT released a Supplemental No8ce on Improving the Administra8on of Online Audio/Video Content Including Internet Drama and Micro Films. This no8ce stresses that en88es producing online audio/video content, such as Internet dramas and micro films, must obtain a permit for radio and television program produc8on and opera8on, and that online audio/video content service providers should not release any Internet dramas or micro films that were produced by any en8ty lacking such permit. For Internet dramas or micro films produced and uploaded by individual users, the online audio/video service providers transmi`ng such content will be deemed responsible as the producer. Further, under this no8ce, online audio/video service providers can only transmit content uploaded by individuals whose iden8ty has been verified and such content shall comply with the relevant content management rules. This no8ce also requires that online audio/video content, include Internet drama and micro films, be filed with the relevant authori8es before release.

11 Regula'ons on Producing Audio/Video Programs On July 19, 2004, the SARFT promulgated the Administra8ve Measures on the Produc8on and Opera8on of Radio and Television Programs, effec8ve as of August 20, These Measures provide that anyone who wishes to produce or operate radio or television programs must first obtain an opera8ng permit. Applicants for this permit must meet several criteria, including having a minimum registered capital of RMB3 million.

12 Regula'ons on Internet Culture Ac'vi'es (P1) On November 20, 2006, the Ministry of Culture issued Several Sugges8ons of the Ministry of Culture on the Development and Administra8on of the Internet Music, or the Sugges8ons, which became effec8ve on November 20, The Sugges8ons, among other things, reiterate the requirement for the Internet service provider to obtain an Internet culture business permit to carry on any business rela8ng to Internet music products. In addi8on, foreign investors are prohibited from opera8ng Internet culture businesses. However, the laws and regula8ons on Internet music products are s8ll evolving, and there have not been any provisions s8pula8ng whether or how music video will be regulated by the Sugges8ons. On August 18, 2009, the Ministry of Culture promulgated the No8ce on Strengthening and Improving the Content Review of Online Music. According to this no8ce, only Internet culture opera8ng en88es approved by the Ministry of Culture may engage in the produc8on, release, dissemina8on (including providing direct links to music products) and importa8on of online music products. The content of online music shall be reviewed by or filed with the Ministry of Culture. Internet culture opera8ng en88es should establish a strict self- monitoring system of online music content and set up a special department in charge of such monitoring.

13 Regula'ons on Internet Culture Ac'vi'es (P2) On February 17, 2011, the Ministry of Culture promulgated the Internet Culture Administra8on Tenta8ve Measures, or the Internet Culture Measures. The Internet Culture Measures require ICP operators engaging in Internet culture ac8vi8es to obtain a permit from the Ministry of Culture. The term Internet culture ac8vi8es includes, among other things, online dissemina8on of Internet cultural products (such as audio- video products, gaming products, performances of plays or programs, works of art and cartoons) and the produc8on, reproduc8on, importa8on, publica8on and broadcas8ng of Internet cultural product.

14 For More Informa'on hhp:// hhp://news.xinhuanet.com/fortune/ /25/c_ htm hhp://trad.ib8mes.com.cn/ar8cles/37598/ / htm hhp:// hhp://tech.hexun.com/ / html

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