An initial plan for a major change to China’s media industry was submitted this week by the country’s State Council cabinet, proposing a reform to scrap China’s cable ministry, the State Administration of Press and Publication, Radio, Film and Television (SAPPRFT), which has been responsible for handling all video and communications matters since 2013, and its predecessor for a long time before that. The reshuffle is a sign of how much the industry has progressed in just five years, in a move to stiffen up the country’s internet defenses as foreign media continues to find a way into everyday life.
Restructuring China’s cabinet provides a rare insight into the usually unassailable walled garden of dealings, censorship and propaganda in the Chinese video market – with facilitation of a global content expansion a key element of the political move, according to local state news agency Xinhua.
A new state administration for radio and TV, more tightly controlled by the Communist party, will slide in to replace SAPPRFT. However, there has been no mention in local reports of what will come of SAPPRFT’s film unit, which piqued our interest as cinema multiplexes are growing rapidly in China, while chains are struggling in the US and Europe, and China has invested in US cinemas to ensure distribution for Chinese films.
For perspective, in 2013, China had just 20,000 cinema screens, but today it has well over 40,000, although with a low revenue per seat. Some 15 new cinemas are opening every day in China, while the US has been flat for five years at around 40,000 screens at 5,000 sites. Despite having overtaken the US last year in number of seats and screens, China’s box office takings are less than half that of the US, but if the 1.3 billion population develop cinema going habits, then box office takings per screen in China may be able to recover.
The idea that exporting Chinese titles abroad is of heightened interest to the government, central to the recent restructuring, suggests cinema habits in China are not growing quickly enough to support the surge in multiplex builds – whereas quite the contrary is true for mobile-first OTT video content. We can see where the government priority lies now.
However, Hong Kong newspaper the South China Morning Post reported SAPPRFT will be merged with the administration responsible for online content regulations, the Ministry of Culture, which is in turn overseen by the State Council.
Chinese TV and radio broadcasters China Central Television, China Radio International and China National Radio are also expected to merge into one mammoth broadcasting unit – likely under much more stringent government control.
All in all, China is reducing the number of ministries from 34 to 26 as part of the wider government changes, which comes after President Xi Jinping’s tenure was recently extended indefinitely.
Regarding 5G, there has been speculation China’s Ministry of Industry and Information Technology (MIIT) is preparing to allocate 700 MHz and some mmWave airwaves, for which Jefferies analysts believe the most likely solution is for SAPPRFT to take a stake in China Unicom and in return allow Unicom to use the 700 MHz spectrum.
It was perhaps surprising reports from China did not mention how the ongoing restructuring will affect the government’s 5G preparations.
State Council committee member Wang Yong said in a speech, “The State Administration of Radio and Television would perform the following duties: implement party propaganda policies and guidelines; craft radio and television management policies and oversee implementation; oversee overall planning and guiding of radio and television business and industry development; promote the reform, supervision, and review of mechanisms in the radio and television field concerning content and quality of radio, television, and internet audio and video programs; be responsible for importing, recording, and management of radio and television programs; and coordinate outward promotional work in the radio and television field.”