China’s Latest Crackdown Targets Its Entertainment Industry

China’s entertainment industry is the latest sector put on edge by increased regulatory scrutiny, in an environment already stifled by the pandemic and the country’s overall slowing economy.To get more breaking entertainment news, you can visit shine news official website.

Authorities have previously exerted control over its multibillion-dollar celebrity and entertainment sectors, from banning broadcasters from showing tattooed music artists to requiring programmers to air more patriotic-themed content.

But the recent crackdown comes as a bigger swell. In early August, the official Xinhua News Agency—largely a press-release forum for the government—published a series of articles on the unhealthy phenomenon of fan groups that use their massive online presence to drive traffic to celebrities and products they hawk.

Since then, the internet regulator has removed thousands of fan groups and hashtags from social media. Even China’s antigraft agency got into the mix, publishing a statement titled, “Bringing Under Control ‘Fan Club’ Madness.” Hours later, Twitter-like Weibo (ticker: WB) took down its tremendously influential Star Power List, a sort of Billboard chart for trending celebrities, at the behest of regulators.

Weibo said publicly some fan groups had become “irrational” and “unhealthy” and that it would devise a “new scoring mechanism to curb fan fundraising, encourage fans to chase stars rationally, and encourage stars to interact with fans through charity.”

Leading video-streaming platform iQiyi (IQ)—often dubbed the Netflix (NFLX) of China—last week announced it would cease airing its super popular idol talent shows, which often require viewers to purchase products in order to vote for their contestants of choice.

The company, owned by search giant Baidu (BIDU), said in a social media statement it needed to be “responsible as a platform, resist bad influences, and maintain a healthy and clean internet for users.”That crackdown came just after numerous A-list celebrities were named, shamed, and then essentially erased from China’s social platforms for various indiscretions. Two top Chinese actresses had their likenesses disappear from China’s internet in August following scandals. And after Canadian singer Kris Wu, a megastar in China, was recently arrested on charges of rape in Beijing, his fan groups attempted a public relations pushback and a fundraising campaign for his defense. Wu denies the charges.

One question that emerges is what this all means for the troves of traffic and money that have been channeled to products within this ecosystem. Social media advertising revenue alone in China is estimated to hit 107 billion yuan ($17 billion) this year, according to iResearch.

“Brands who are heavily invested in ambassadors whose fan clubs have been purged are likely to get less ROI from their endorsements. This will be the result of less online buzz created for idols, as much of this is often generated by fan club members,” Mark Tanner, managing director of Shanghai-based marketing research firm China Skinny, told Barron’s.

“It may also be a rude awakening that the ambassadors don’t have as widespread appeal as they thought, as this is often inflated by calculated initiatives from club members.”This week, China’s television regulator also banned “effeminate men” from appearing on programs, and reminded broadcasters to promote communist ideology. The regulator’s public statement used the Chinese term for “sissies” to describe the now-prohibited male types.

The constant government bombardment of sector after sector has left companies and investors confounded. Tech, education, housing, and entertainment are just the more visible industries that have been ordered to “rectify” various alleged misconduct.

Gaming, too, has faced sporadic restrictions, mostly to curtail “addiction” of minors to popular games. On Monday, perhaps the most draconian new rule was issued by the gaming regulator, which now restricts playing time for minors to merely one hour on Fridays and on weekends. Barron’s has previously spoken to parents who say their children spend up to eight hours a day playing videogames.