China Net TV Regulations Challenged

In an unusual move, television manufacturers are posing a public challenge to one of China's most powerful regulators, attacking its monopoly on approving content. With Internet TV, they want to bypass the State Administration of Radio, Film, and Television (SARFT) and bring new life to TV sets through a wealth of non-broadcast video applications.

In China, content is tightly regulated by the state. But the growth of the Internet and related networked devices is continually posing challenges to China's dated propaganda apparatus, which is slow to react to changes in technology and can thus become a key bottleneck.

Internet TVs are catching on quickly in China, with at least 20% of LCD TVs sold in China this year expected to have Net access. Both foreign and domestic makers are looking to build up content ecosystems to make their TVs more attractive. For instance, Samsung Electronics China plans on following a model similar to Apple's App Store, providing consumers with rich and varied applications. And Chinese TV maker Konka has similar plans to introduce an open platform where third-party developers can market their applications.

Since last year the mobile phone industry has been hot on the heels of Apple's success with the App Store. In the last 12 months, several similar centralized application purchasing platforms have launched, including Google's Android Market, Nokia's Ovi Store, RIM's Blackberry App World, and Palm's Software Store.

Now TV companies have begun to join the fray. TCL recently announced the development of the first domestic Android-OS based smart television set. With this new crop of televisions, software companies and enthusiasts are getting in on the act, hoping to transform TVs into interactive platforms for education, entertainment, chat, and other applications.

Hao Yabin, from the China Video Association, believes these new intelligent TVs with their varied software applications will transform the local TV industry's business model from hardware manufacturer to service oriented provider, helping to increase the industry's slim margins.

But SARFT is not keen on relinquishing control and has issued a management model document on integration of services and content requiring manufacturers and content providers to be licensed to provide integrated services. The first of these licences has been awarded to CCTV, the state-run national broadcaster. The China Video Association is officially challenging the regulations with the government.