Bottom line: A flurry of new corporate crackdowns will have the biggest impact on Baidu due to its role in a scandal over false advertising claims, and indicates this year’s summer crackdown season could be hotter than usual.
China cracks down on web merchants, drug makers
Summertime in China is a season for crackdowns, and we’re getting a taste of a potentially hot summer ahead fueled by a high-profile scandal involving false advertising claims on leading search engine Baidu (Nasdaq: BIDU). Three separate crackdowns are in the headlines as we begin the new week, including 2 that look potentially tied to the Baidu scandal.
That scandal consumed China for much of last week, after a student with cancer claimed he was duped into seeking treatment at a hospital that made false claims about its ability to treat his disease. (previous post) In his long list of complaints before he died of his illness, Wang Zexi also accused Baidu of deception for putting the hospital and its inflated claims high in his search results simply because the hospital paid a rich premium for such high placement. Read Full Post…
Bottom line: Beijing’s latest online video clean-up is part of its drive to guide a bigger transition from a traditional TV to an Internet-based broadcasting landscape, with more similar moves likely over the next 1-2 years.
Beijing cracks down on cartoons
It’s been at least a month or two since Beijing’s latest crackdown on unhealthy Internet content, so it should come as no surprise that the morality police have launched yet another campaign, this time targeting cartoons. The latest dragnet has snared video superstar LeTV (Shenzhen: 300104), Baidu-backed (Nasdaq: BIDU) iQiyi and most other top industry players, who are among 29 companies being investigated in this latest web clampdown.
China’s broader Internet clean-up campaign is now actually entering its second year, and dates back to April last year when leading web portal Sina (Nasdaq: SINA) had its video license revoked for hosting pornographic content. (previous post) Since then, nearly ever major video site has been investigated and punished at one point or another, and social networking sites (SNS) like Tencent (HKEx: 700) WeChat have also embarked on clean-ups of controversial content. Read Full Post…
The year 2014 could well go down as the “Year of the Crackdown”, as evidenced by 2 more such crackdowns in the headlines as we head in autumn. The first and larger of the pair comes in the online video space, where media are reporting the broadcasting regulator is finalizing rules that would severely limit the amount of foreign content on online video sites. Meantime, a more mild crackdown is also coming in the e-commerce space, where separate reports are saying another regulator is rolling out rules that will punish companies that overstate their transaction volumes. Read Full Post…
Worrisome signs of a crackdown are growing in the online video sector, where a field of young private firms rolling out a new generation of TV-like products are facing strong resistance from traditional television stations. The latest signs of turmoil are coming from PPTV, a former industry leader that is slowly getting carved up among investors as it is forced to scrap some of its most promising new products. The former high-flyer is showing up in 2 separate headlines today, including one that has seen it shelve its TV set-top box product. The other headline has the company selling 10 percent of itself to Phoenix Publishing & Media (Shanghai: 601928), marking its third major stake sale in the last year as it slowly gets carved up among a group of diverse investors. Read Full Post…
You know that things are bad when leading online video site Youku Tudou (NYSE: YOKU) doesn’t issue a press release trumpeting its recent receipt of simultaneous broadcast rights for the highly hyped return of the US television series “24”. That’s my conclusion after having to read about this relatively big win for Youku in the news headlines rather than a company press release. In fact, Youku Tudou may deliberately want to downplay this latest triumph to avoid attracting Beijing censors who have recently started banning some popular US television series from online video sites. Read Full Post…
A series of announcements late last week from leading web portal Sina (Nasdaq: SINA) looks clearly aimed at calming nervous investors who may sense the company is at a crossroads that could mark the start of a new downturn for the stock. That’s my assessment after Sina’s unusual early release of preliminary first-quarter results, which showed the company is still quite healthy financially despite a recent government crackdown on 2 of its sites and a lukewarm stock market debut for its Weibo (Nasdaq: WB) microblogging platform. Read Full Post…
