A band performs at the launch of rocktheweb.cn in Beijing last week. Photo: Cong Mu/GT
Lou Jingyu, 51, returned to China about 12 years ago to start his business in music events. Trained as a violinist, he had taught music in two universities in the US for 14 years.
Lou is hoping his new plan can have a big impact on the domestic music industry. He teamed up with Hollywood-based composer Ivan Koutikov and a Russian investor, Ilya Agapkin, to launch a pop music singing contest website called rocktheweb.cn in Beijing last week.
Millions of Internet users, especially university students, will be encouraged to upload clips of their performances to the website. The top 100, selected by online voting, will participate in a contest that will be broadcast both online and on TV, the company said during its launch. The winner will be flown to Hollywood to record a single there.
These days, the Internet not only provides a platform for entertainment companies to expand their influence, due to the fast-growing online user base. It's also a good way to circumvent increasingly strict regulations for TV entertainment programs.
Participation by the fans, such as voting for their favorite contestants, will be a major advantage for the Internet-based competition over talent shows on TV, Lou said. Voting in TV programs has been banned in China since 2007.
TV restrictions
Voting by phone and via the Internet in TV programs will continue to be banned this year, according to an announcement from the State Administration of Radio, Film and Television (SARFT) last week. Getting people to vote used to be a major source of revenue for TV stations, as well as the telecom companies they partnered with. Super Girls, arguably the most successful TV pop music contest in China, reportedly grossed 30 million yuan ($4.8 million) in 2005 just from text messaging fees.
Further content restrictions were implemented in 2009, after the media watchdog decided that TV pictures of fans getting increasingly excited over the singers in talent shows were too provocative.
"The Internet can provide alternatives for our contestants to have more communication and interaction with their fans," Lou said, adding that they would be cooperating with Sina Weibo.
In July 2011, SARFT issued a notice to limit the length, airing time and total number of variety shows on TV. Later in October, advertisements were banned from all TV news programs and TV dramas. The measures have made life harder for many TV producers, but offer an opportunity for Internet-based entertainment companies.
"Today, China's Internet market is the biggest in the world. And the entertainment market in China is the second largest after the US. China has also become more open to the Western culture since the Olympic Games in 2008. So all these elements together make the perfect combination to start our project in China," said Agapkin, co-founder of rocktheweb.cn.
"It took one year of preparation. It was very hard, because in China there are lots of obstacles that you wouldn't face in any other country," said Agapkin.
The SARFT regulations have made it difficult to start a new project, he said, but added, "We like it (because) we're making an online competition. I am sure that during this year or next year, most of the TV talent shows will move online, and I am happy that we're the first."
Internet bet
Many other companies are also betting on China's burgeoning Internet market. The number of the country's Internet users surpassed 500 million last year, roughly 40 percent of the population, according to the State Council Information Office.
Shenzhen-listed letv.com launched a beauty contest program, also targeting university students, called Crazy for School Beauty on its website last September, and recorded 130 million views in 100 days. The company also produced a program called Beauty Class, which caused much controversy because of its racy content. Its page views, however, reached 120 million in just a month.
Letv.com unveiled a more ambitious plan at a shareholder meeting in Beijing earlier this month. The company plans to promote Internet TV terminals this year to give TV audiences access to online video content, competing directly with the TV stations.
Hot Internet-based shows are becoming cash cows for entertainment firms, partly thanks to the expanding online advertising market.
The online ad market was worth 51.2 billion yuan in 2011, up 57.3 percent year-on-year, iResearch Consulting Group statistics showed. The sector has already overtaken the print media, and is on the way to catching up with the TV advertising industry, which was worth 72.4 billion yuan last year, the firm said.
The SARFT regulations are likely to encourage more advertisers to migrate to the Internet market, analysts said.
Almighty SARFT
But the companies still need to curb their enthusiasm and tread carefully. Deng Ying, a media analyst at Changjiang Securities, pointed out that, in theory, SARFT has the power to halt or cancel a program even if it is Internet-based, because the agency is in charge of censoring all kinds of video content in the country, on TV and online.
"Regulations are relatively loosely enforced online because the penetration rate of the Internet is still small compared with that of TV," Deng said.
LeTV.com is getting away with not fully complying with the regulations for now, partly because it might not be submitting all of its videos to the censors, dvbcn.com, a TV and radio industry portal website, reported.
"But the risks are high if the watchdog orders a clampdown, or if its license agreement should expire," the report said.