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U.S. shows too popular in China

Studios fearful after programs pulled from site

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Johnny Galecki (left) and Jim Parsons in a scene from The Big Bang Theory. Chinese authorities had all seven seasons of the popular show removed from Sohu.com, leaving viewers without their comedy fix.

SONJA FLEMMING / CBS / THE ASSOCIATED PRESS FILES Enlarge Image

Johnny Galecki (left) and Jim Parsons in a scene from The Big Bang Theory. Chinese authorities had all seven seasons of the popular show removed from Sohu.com, leaving viewers without their comedy fix.

BEIJING -- Johnny Galecki recently came to Beijing to rub elbows with Chinese fans of his nerdy TV comedy, The Big Bang Theory. The 38-year-old actor signed autographs, was serenaded by a harpist and drank tea on a talk show interview streamed on Sohu.com.

The Chinese Internet portal streams the Warner Bros.-produced show, and it has become a phenomenal success. As of April, the hit show has been streamed 1.4 billion times. And Sohu's chief executive, Charles Zhang, treated Galecki like royalty on the promotional visit.

So it was a major shock to Chinese fans this weekend when all seven seasons of Big Bang suddenly vanished from Sohu. Viewers were greeted with a cryptic message: "Sorry, the episode is not available at the moment due to policy reasons."

By Monday, that had changed simply to "This page cannot be found." And that has major U.S. studios worried.

China is a crucial market for Hollywood to sell its content. The nation is the No. 1 international box office, accounting for $3.6 billion in ticket sales in 2013, the Motion Picture Association of America says.

The television market there is much smaller but growing, especially as new digital platforms emerge and are hungry for content. The MPAA's international arm said the major Hollywood television production companies received $42 million in licensing and distribution fees from China in 2012, the most recent figures available.

In addition to The Big Bang Theory, three other licensed American shows -- The Good Wife, NCIS and The Practice -- disappeared from major Chinese video portals. There has been no official explanation for the shows being pulled down.

Speculation centred on the State Administration of Press, Publication, Radio, Film and Television as having issued the takedown orders without explanation. Last month, the bureau issued a notice about the need to "reinforce" monitoring of unacceptable erotic, political or violent content in online programming, which has exploded in popularity in the last several years.

Fans and industry players alike sensed there was more to the move than just concerns about edgy themes. They point out there are many more violent and risque foreign shows, including Masters of Sex, American Horror Story and The Walking Dead, still available for streaming in China.

Spokespeople for Warner Bros., CBS and 20th Century Fox Television declined to comment.

With online viewership exploding -- drawing eyeballs and advertisers away from state-controlled traditional TV, where foreign shows are few and far between -- some believe authorities are signalling they want to turn the tide before it's too late.

"Effectively, the quotas or outright bans on foreign content (on traditional TV) created this space for the Internet guys to fill. Now, it's to the point where Big Bang Theory cast members are coming to China and being treated like royalty and the incumbents -- (state-run broadcaster) CCTV and the traditional broadcasters -- are clearly feeling the heat," said Duncan Clark, chairman of BDA China, an investment consultancy in Beijing. "This Internet streaming is eating away massively at market share."

Online video revenue in China jumped 41.9 per cent between 2012 and 2013 to $2.13 billion, according to iResearch Consulting Group, which focuses on the Chinese Internet. By the end of last year, some 460 million unique visitors were using personal computers to watch video in China, and 170 million were using mobile devices -- up about 73 per cent in just 12 months.

Portals including Sohu, Youku and Tencent have snatched up scores of foreign TV series in recent years, offering programs such as Two Broke Girls, Mad Men and Breaking Bad. Sohu has more than 75 American shows, and Youku has about 60.

In a sign of just how attractive these video portals have become, China's online shopping giant Alibaba said Monday it was paying $1.22 billion for a 16.5 per cent stake in Youku Tudou.

The Chinese government crackdown on streaming services could have major consequences for these Internet portals, said Su Jie, an online video market analyst with Analysts International.

Already, Sohu's stock traded in New York has been hammered, plunging six per cent on Monday.

"If there are more restrictions on screening such shows or delaying the shows from being live-streamed just after they air in the U.S., the Chinese video websites will lose a lot of viewers," she said.

The video websites will "be hurt financially after losing this high-end audience that has a lot of spending power."

U.S. TV producers have long been frustrated by piracy in China. So these online licensing deals have been a heartening breakthrough, offering them revenue streams that previously didn't exist.

The latest dust-up has triggered fear that fresh limits on online licensed streaming or efforts to air censored versions on traditional TV may curb those deals -- and drive viewers back to illegal downloads.

What will happen to Big Bang and the other shows that were removed is unclear. The business publication Caijing reported Monday that CCTV would seek to acquire rights to The Big Bang Theory.

CCTV already carries other shows from Warner Bros., including The Middle.

-- Los Angeles Times

Republished from the Winnipeg Free Press print edition April 29, 2014 C11

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