Creative industries hold the key for Asian countries looking to unlock new sources of economic growth as the COVID-19 pandemic recedes. Movies, television, and other video content employ hundreds of thousands of people and contribute billions of dollars in revenue – $108.4 billion per year in China alone.
Asian countries are understandably keen to grab their slice of the pie. Governments know that a strong local creative industry can boost economic growth, create thousands of high-paying jobs, and protect local culture. For those that get it right, TV and film can become a major export industry, as South Korea has shown.
The challenge for governments is finding the right way to encourage strong creative industries.
Some are tempted to rely on familiar regulatory models built for the era of broadcast television. In the past, governments imposed all kinds of restrictions on broadcasters, which they hoped would boost national creative industries and local culture.
But the rapid shift to streaming makes such restrictions as outdated as analogue television. The economic and cultural winners in the streaming era will embrace the dynamism of this new technology rather than treating it as a threat to the established order.
Unfortunately, some countries are considering analogue policies for a digital world. Vietnam, for instance, is considering treating new streaming services like the old broadcasters, with censorship and enforced joint partnerships with local companies, among other restrictions.
Others, notably Australia, Malaysia, and Singapore are taking a more liberal approach, allowing streaming services to operate with relative freedom. They hope instead to boost local creative industries through investment tax breaks, improving infrastructure, and strengthening copyright protection.
Australian Communications Minister Paul Fletcher announced in October a leveling of the playing field between broadcasters and streaming services by loosening local content quotas for broadcasters. This was accompanied by an extra 50 million Australian dollars subsidy to the Australian film and television industry.
Time will tell, but there are good reasons to believe the Australian approach to streaming regulation will prove more successful than the more centralized approaches under consideration by countries such as Vietnam.
Take the example of France. In a bid to preserve its unique culture, France has since the 1980s heavily subsidized its film and TV industry while imposing strict local content quotas on broadcasters. This attempt to build up the French film industry has inadvertently lessened its appeal to its core audience: the French.
French films in the 1950s dominated local box office returns, but now claim only 35 percent of their home market. Despite strenuous efforts by French governments to boost local culture, French consumers increasingly look outside their borders for entertainment.
Restrictions on competition allow creators to succeed without working hard to appeal to their home audiences. But if broadcasters and streamers are forced to serve up low-quality content that doesn’t interest people, audiences will turn elsewhere – most often to piracy.
Southeast Asia is already among the worst regions for online piracy. Pirate services don’t support local culture. They destroy it.
When piracy flourishes, foreign creators will still find support for their work elsewhere, but local creators won’t get a start. The better approach is to help local creators get better at their craft, so that their work is popular with local consumers, as Singapore, Malaysia, and Australia recognize.
Take South Korea, which has become an unlikely cultural success story. Despite language challenges – few outside the Korean Peninsula speak the language – their TV shows, popular music, and films are enjoyed by audiences globally.
South Korea became a cultural powerhouse through sound laws and policies that bolstered the capabilities of local creators. Successive governments have kept Korean cultural products appealing to consumers through arts education, training, investing in infrastructure to produce films and TV shows, as well as tax breaks for private investment and strengthening copyright protection.
Such global success starts at home, with policies that encourage quality production. People enjoy seeing their own culture and stories reflected in their entertainment. Given the chance, consumers choose quality local culture. Ultimately, some of that quality programming will break through to the competitive global market.
The winners in both home and export markets will be countries that encourage their creative industries to create content people actually want to watch. Policymakers must help local creators develop the tools to compete, not prop them up with protectionist policies.
Outdated regulations left over from the broadcast age being mooted by Vietnam and others would entrench the dominance of foreign content while encouraging piracy to thrive. The ultimate loser would be local culture.
Mark Schultz is the Goodyear Endowed Chair in Intellectual Property Law at the University of Akron School of Law, United States.