China

How IP protection drove Chinese fans away from Hollywood

The sentencing of China’s largest volunteer subtitle group is a warning message to fans of pirated material.

CEO of Sohu Charles Zhang and CEO of Youku Tudou Victor Koo attending a press conference of the action against copyright violations in Beijing.

Two major Chinese video platforms attended a press conference of the action against copyright violations in Beijing on Nov. 13, 2013.

Photo: WANG ZHAO / Stringer via Getty Images

For 16 years, Liang Yongping led one of the biggest Chinese fan translation groups, one that has brought countless foreign movies to the Chinese internet. His methods were legally questionable, but for a long time, the government didn’t seem to mind. When Liang was interviewed by a state-run magazine in 2011, he was called “the preacher of knowledge in the internet era.

But on Nov. 22, Liang was handed a sentence of 3.5 years in prison and a fine of over $230,000. The reason, to no one’s surprise, was copyright infringement.

Volunteer subtitling and translation work, commonly referred to as “fan subbing” in English or “字幕组” in Chinese, was one of the unique cultural phenomena in China’s early internet years. Groups of devoted members would team up to download pirated content, translate the dialogues into Chinese and distribute the results on Chinese internet platforms. Because of the country’s tight grip on cultural imports, these pirated movies and shows became the way a generation of Chinese web users learned about the outside world.

Subbing is hard. It takes hours of intensive work and often becomes unsustainable because no one is getting paid. Renren Yingshi, a subbing group created in 2003 and once one of the biggest, went the furthest when it came to trying to monetize the popularity of fan subbing. Under Liang’s leadership, it tried to sell ads, create a paid streaming service and build apps for movie fans. It even received VC funding at various points. But any monetization attempt has ultimately been unsuccessful, if not illegal.

According to local court documents in Shanghai, by the time Liang and his colleagues were arrested this February, Renren Yingshi was hosting 32,864 available movies and shows and had accumulated 6.83 million members. In about three years, the website made nearly $2 million in revenue through selling ads, memberships that come with “donation requirements” and hard drives full of bootleg movies.

As China gradually joined the world in cracking down on copyright violations, fan subbing groups either dissolved, lowered their profile or faced legal consequences like Liang and his company.

But IP protections weren’t a clear win for the Western firms that had once clamored for them. As fan subbing groups waned, and Western shows became harder to access, so did the general audience’s appetite for them.

The rise of streaming platforms

In the early 2010s, burgeoning Chinese streaming platforms tried to appeal to fans of foreign shows. Sohu, a prominent player at the time, bought exclusive rights to hits like "The Big Bang Theory" or "House of Cards" and positioned itself as a legal way to consume American content. Other platforms did the same.

This was bad news for subbing groups. One of the reasons they hadn’t faced immediate legal repercussions was because Hollywood didn’t know how to navigate the Chinese justice system. But now, that can be done by the Chinese streaming platforms who have bought the broadcasting rights. Powerful platforms like Tencent Video have successfully sued several websites for hosting pirated content.

In the past decade, China has been frequently accused by international society of rampant copyright violation, and it has become an issue the Chinese government treats seriously. Chinese streaming platforms stand to benefit from an increasing emphasis on IP protection and that stance now defines China’s entertainment industry.

But fans aren’t so happy. Rooting out pirated shows doesn’t necessarily mean they will become available on legal platforms. There are only a small number of shows and movies bought by Chinese platforms in China, and even for those, they come out much later and are often heavily censored. Viewers reported that, for each episode of "Game of Thrones," Tencent would cut out five to 10 minutes of content related to nudity or violence. And the grand finale episode of the show was never broadcast, for “technical reasons” according to Tencent. Imagine the fans’ fury at that.

What remains

Frustrated by their experience on mainstream platforms, Chinese web users have ultimately returned to places like Renren. In many ways, Renren represents the old-fashioned way of accessing pirated shows: Everything is on one portal, easily navigable with search functions. But that convenience led to Renren’s demise.

“The fact that Chinese government has tightened up its control on unauthorized subtitling related websites has sent a clear message to the public about the potential risk of producing and disseminating unauthorized subtitling work,” Ting Guo and Jonathan Evans, a U.K.-based researcher duo who studies Chinese fan subbing groups, told Protocol.

The sentencing is another reminder that to stay in regulators’ good graces, these groups have to be content with doing unpaid work to avoid catching the government’s attention. While other cultural phenomena like anime and web novels are turning into business empires, fan subbing has to stay fan subbing.

In Renren’s wake, smaller subbing groups are still working. But to find their content, fans need to know the exact social media sub-forum, secret made-up file names or passwords that can only be accessed on a separate platform.

When accessing the content gets so complicated, it’s no surprise that the audience will lose interest. Domestic streaming platforms now provide Chinese users with tons of movies and shows. Even though the majority of them are subpar, they are enough to kill time. This also coincided with the rising cultural trend to embrace domestic content as a form of patriotism.

Perhaps Hollywood could never have predicted that, by protecting their content from illegal distribution, they ultimately lost a generation of Chinese viewers.

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