AHRC Project 3

Rationale for the research

China is now a major global player in both intellectual property right application and enforcement activities (WIPO 2011). In 2014, China was the third member of the World Intellectual Property Organization to accept the Beijing Treaty on audio-visual performances. Though the IP enforcement mechanisms are operative, China continues to be seen as a source of pirated and counterfeit commercial goods (Shen 2014), particularly in relation to digitised products including software and audio-visual media. To address Internet copyright piracy, the National Copyright Administration of China set up a special campaign - Sword Net Action – followed by annual nationwide enforcement crackdowns.

Developments in China’s cultural industries exhibit contradictory trends. Film ticket sales increased dramatically following the introduction of on-line booking for Chinese cinemas via internet platforms, The average ticket in China costs around 40 RMB (about £4). Opening-night prices can go up to 160 RMB. Cinema box office revenue grew to over 21 billion RMB in 2013 (Entgroup 2014), and 29 billion RMB in 2014 (IPraction 2015), and are expected to surpass the US in the next three years. In contrast, on-line provision of films and videos, watched on PCs and mobiles, is still predominantly free. The latest phenomenon - media box piracy – poses a further challenge for Chinese film makers and commercial players in the cultural industry, trying to create a legitimate marketplace for bringing licensed content online (Szymanski 2015).

China today has the largest population of internet users (over 641 million) and well developed ecommerce platforms, with convenient, sophisticated payment and delivery systems. However, China lags far behind North America and European countries, where online distribution is increasing rapidly and a range of new businesses has emerged some of which - such as Netflix, iTunes, YouTube, and Spotify, are flourishing. Similar on-demand streaming services have not yet emerged in China. Recently, China’s leisure industry giant Dalian Wanda, and three Internet behemoths (Baidu, Alibaba and Tencent) appear to be engaged in a race to change the way the country’s film industry operates. After initial investments in online video companies or ticketing systems (Variety.com 2015), they have joined hands with film makers to become directly involved in the film production business. New business models are being developed, integrating film production and internet platforms and services, targeted towards expected rapid future growth in demand from the Chinese cultural market. None of these players has yet publicly and explicitly announced their strategies for overcoming the IP protection problems that beset digital cultural products. However, these businesses cannot flourish without effective means to protect their commerce.

This study will examine the recent development in the Chinese film industry of close collaborations with internet businesses. The project will also address generic questions in relation to the development of the cultural industry in China and beyond, and trends in digital copyright protection in China and its impact globally. In relation to the later, existing literature has raised questions on the effectiveness and consequences of the global harmonisation of the current IP regime, and whether stringent IP protection may reduce access to cultural content for impoverished communities in developing countries, and whether other models might enhance access. Insights into new trends in the integrated business model of film production and distribution will shed light on these profound issues. 

Other collaborators include:

• Professor Burkhard Schafer, School of Law, University of Edinburgh
• Professor  Xudong Gao, School of Economics and Management, Tsinghua University