Who’s paying for the public welfare on TV?

It’s been a busy year for China’s broadcast authority, the State Administration of Radio, Film and Television (SARFT), which has made it its mission to shake up the already messy world of Chinese television. The body’s latest action, formally announced yesterday, is to ban the insertion of advertising in popular television dramas.

Back in July this year, SARFT held a “discussion forum” to address the issue of “entertainment excessiveness” in Chinese television programming, giving bosses from various provincial television networks an ostensible opportunity to offer their views on new restrictions that already seemed a foregone conclusion. The entertainment programming ban, known in China by the shorthand xian yu ling (限娱令), finally came in September and took effect in October. It forced television stations to broadcast “entertainment programs” (娱乐节目) no more than three times a week during prime time (5-10pm).

The latest SARFT ban on advertising in television dramas expressly prohibits the interruption of dramas with ads, but does not prevent broadcasters from airing advertisements before and after dramas, or from placing paid-for plugs directly into the dramas themselves. There are some ambiguities here that could lead to interesting cheats or workarounds from television broadcasters, something we’ll come to later.


[ABOVE: Today's frontpage at the commercial Dongguan Times makes the latest SARFT ban the leading story. Strips of film labeled "advertising" are crossed into an X with a pair of scissors. The headline: "Ban on [ad] insertion. SARFT: Beginning next year TV dramas can’t insert ads.” The paper reports estimated losses to the TV sector by the move at 20 billion yuan, or 3.1 billion US dollars.]

But behind a swarm of questions like, “Will the rule kill off advertising revenues in the television sector?” and “Will broadcasters find a way to sneak around the rule?”, there looms a far more basic question: Why?

Why, indeed.

The ready answer seems to be that SARFT is putting its regulatory muscle where the Party’s mouth is on the broader issue of “cultural reforms.” To recap, the main theme at the recent plenary session of the Party’s 17th Central Committee was the building of a new cultural vibrancy in China through what was billed as a concerted process of cultural reform. In the Party’s formulation, this policy would bring a windfall of global “soft power” for China and give China the non-material confidence to stand strong “in the forest of nations.”

The talk of “cultural renewal” at the meeting came with a whole set of political and ideological imperatives. And superficially at least, it seems that SARFT is now muscling in on the television sector with some of these imperatives under its arm.

First of all, the “Notice” coming out of the October plenum said culture had to “uphold the main theme” and adhere to “correct guidance of public opinion,” both code for towing the Party’s political line. Further, the “Notice” stressed that “Marxism must be upheld as the guiding principle” of cultural reforms carried out “with the ideological armor of socialism with Chinese characteristics.” This would ensure cultural reforms “moved in the correct [political] direction.”

More directly relevant to this ad-related ban, however, the “Notice” defined “the building of a public culture service system” (公共文化服务体系) as one of the chief goals of cultural reforms. In yesterday’s official notice from SARFT, “actively developing cultural work in the public welfare” as prioritized at the recent sixth plenum is given as justification for the ban on advertising. The idea, basically, is that advertisements pollute the public welfare value of the television space, and removing them from television dramas is a service to the Chinese public.

Some members of the public have understood the ban in exactly this way. Internet user Yan Ni (燕妮) wrote on her weblog today:

The public opinion power of ordinary people is pretty substantial. The new SARFT regulations have surfaced, and beginning January 2012 advertisements can’t be inserted into television dramas. This gives the audience back a harmonious and efficient television environment. The hopes of ordinary people have been answered. This is a good thing, a very good thing.”

This of course is a fair initial reaction from the sofa. But there are important institutional, economic, practical and, yes, political questions that are left hanging by this SARFT action and its public service justification.

The section of October’s “Notice” that deals with “building a public culture service system” states that “public welfare cultural units” will form the “backbone” of this project, “supported by public financing.” The same section also talks about “employing government procurement, project subsidies, direct subsidies, interest subsidies, tax reduction and other policy measures” to “encourage various cultural firms to participate in public culture service.” Clearly, providing state funding for public welfare programming is one thing, and forcing public welfare programming standards on commercially operating enterprises is another.

This begs the question of the exact institutional nature of the television networks that will be impacted by the SARFT policy. Since the 1990s, media in China have been weaned off government support and encouraged to commercialize. In a competitive national market, they have been forced to fight for ad dollars, a fight for their survival. But the Party of course maintains the Party nature of all media in China, which is to say that there are no truly “independent” media even if the vast majority of Chinese media today have become financially independent.

So are these television networks “public welfare institutions”? Or are they for-profit entities? The answer is that they are neither and both, a question that Wei Yingjie (魏英杰) addressed yesterday at the Economic Observer:

. . . [T]he rationality and feasibility of the ‘advertising ban’ policy remain in question. In terms of the policy itself, SARFT can of course issue this or that regulation given that it is the department that overseas broadcast television nationwide. But the question of whether or not the policy is rational is a matter of whether or not it accommodates the industry’s own laws of development. So we have to make clear: are mainland television stations ultimately public welfare institutions or are they for-profit institutions? The answer is that mainland television stations are not purely public welfare institutions, nor are they entirely marketized institutions. Rather, they are compounds of both.

The core question, then, is this. Who is paying for the “public welfare” mandate? And for that matter, who is paying for the cultural reforms trumpeted so loudly at October’s meeting?

Wei sums it up like this: “The issue is really simple. Mainland television stations do not rely on fiscal appropriations to survive, and so they must be permitted to go and find sustenance in the marketplace.” It’s entirely unreasonable, he suggests, to expect profit-driven television stations to take a hit for “public welfare” without the government stepping up with its pocketbook — and arguably goes against the “spirit” of the Party’s October “Notice”, which indicates that public financing will support the so-called “public culture service system” that is the core justification of the SARFT action.

Here is Wei Yingjie again:

This means that while administrative departments [like SARFT] can demand that television stations at various levels have a great public welfare quality about them, the government must finance these stations, otherwise there is no reason to inhibit the television stations in carrying out commercial activities.

“Who’s paying for this?” seems a most basic question that neither SARFT nor the Party leaders who presumably back this decision have cared to think about. On page nine of the CCP’s official People’s Daily today, Zhang He (张贺) praises the SARFT action, saying that television viewers have been “held ransom” by advertisements. He concludes with staggering blindness: “I hope television stations won’t focus too much on the short-term impact of the ban on inserting advertisements and will take a longer view, putting their energies into raising their own core competitiveness, constantly creating various unique and excellent content resources.” Pray tell, Zhang, how will these television stations pay for the “unique” and “excellent” programs you imagine populating this idealistic future?

There also seems to be a serious disconnect in the SARFT action between problem assessment and policy prescription. This can be glimpsed again in Zhang He’s editorial, where he argues that while people do not object to “reasonable advertising,” “the values of some television broadcast units have gone seriously awry, and they care more about economic benefit than the public welfare.” Admitting that “some” stations might have behaved excessively, where is the rationale then for banning all ads at all stations?

Further, the inconsistent and apparently unfair application of this public welfare standard calls into question the motives at the very core. Zhang He writes in People’s Daily about advertisements on television dramas “harming the normal viewing rights of the masses.” But what about advertisements inserted into news programming in China? Isn’t that serious too?

A report on the SARFT action at China Enterprise Online today quoted Beijing Huayuan Group CEO Ren Zhiqiang (任志强) as saying: “Why aren’t they limiting the insertion of advertisements in news programming? It seems that a lot of advertisements are still being inserted into a lot of [news] programs like Diyi Shijian [on CCTV 2]. We should treat all equally without discrimination. Every one is equal under the law, you know.”

It is of course a further hypocrisy to righteously defend the right of the Chinese public to be free from advertising during television dramas when there is, too put it gingerly, an insufficient respect for the public’s right to know. Shouldn’t public welfare programming begin by safeguarding the accuracy of news and information in the public interest? This point was made in a backhand fashion by Wang Ran (王冉), the CEO of China eCapital Corporation, again at China Enterprise Online. In reference to China’s official nightly newscast, which is stacked with propaganda about top Party leaders, Wang remarked: “I hope that some day Xinwen Lianbo too will stop its 30-minute advertising insertion.” Wang was of course referring to the news program itself, one big advertisement for top Party leaders.

Beyond the issue of whether these new measures are reasonable or even at their core really about the public welfare, there is the question of whether they will have the intended effect at all. Internet users and commentators are already speculating about how television stations will get around the rules. Many people have suggested, for example, that the rules will result in a flood of product placements in television dramas themselves — arguably more insidiously damaging to the public welfare. Another countermeasure to the rules might be to divide dramas into segments, allowing stations to justify placing ads before and after and argue that they were not actually “inserted.”

Finally, what other unintended effects will these rules — which, of course, deal only with television — have in a changing information terrain, where the Internet and social media are increasingly encroaching on the television space anyhow? One answer comes from ChinaEquity International Holding Co. Ltd. CEO Wang Chaoyong (汪潮涌): “All these various bans from the State Administration of Radio, Film and Television are just marginalizing the whole television sector and actively promoting the development of the internet and mobile media.”

4 Comments to “Who’s paying for the public welfare on TV?”

  1. Andao says:

    The big question for me (as a taxpayer in China) is why I have to subsidize commercial-less TV that I don’t watch. Since government funds will be used for filling the gap the advertising left behind, I guess that means more public money diverted from worthwhile causes.

  2. ltlee says:

    @Dr Jones Jr.
    Actually, the order is quite specific:
    “确保自2012年1月1日起,播出电视剧时,每集(以四十五分钟计)中间不得再以任何形式插播广告。”
    The key word is “再.” In case, you do not watch Chinese TV drama, some local channels frequently cut up a 35 episodes drama, for example, the recent time travel drama, into a 40 episodes in order to sell more ads. Such arbitrary extensions degrade the quality of the story.

  3. Dr. Jones Jr. says:

    Sure, no one loves advertisements, but how else are you going to give incentive to cultural creativity in that medium?

    Talk about sabotaging their own goals: cultural vibrancy (in TV, at least) is looking further away than ever. Then again, maybe that’s the goal. Foreign policy objectives (i.e. becoming a source of cultural soft power) are probably of less import to the ruling class than making sure the domestic cultural sector doesn’t end up overshadowing the traditional organs of state propaganda.

  4. gregorylent says:

    who cares why, what a blessing!

    may the world follow!

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