'China’s Netflix' Hits a Snag in Effort to Set up Taiwan Subsidiary

'China’s Netflix' Hits a Snag in Effort to Set up Taiwan Subsidiary
Photo Credit: Reuters

What you need to know

A dispute is brewing on whether China’s biggest video provider should be treated as a traditional broadcaster in Taiwan.

China’s largest online video platform iQiyi (愛奇藝) looks set to be blocked from setting up a subsidiary in Taiwan due to laws restricting Chinese investment in Taiwan’s media industry.

iQiyi has long been accessible in Taiwan, and a localized version of its website went online in March, providing users in Taiwan with more than 2,000 movies and TV shows, including content produced in Taiwan. The company says it wants to set up a local office to handle customer support and marketing.

However, under the Regulations Governing Permission for People from the Mainland Area to Invest In Taiwan, Chinese companies are not allowed to invest in the local broadcasting industry.

Minister of Culture Cheng Li-chiun (鄭麗君) said yesterday that the regulations should be taken into consideration when evaluating iQiyi’s application, the Chinese-language Liberty Times reported.

The Ministry of Economic Affairs’ Investment Commission is currently reviewing the application.

Minister of Economic Affairs Lee Chih-kung (李世光) said that as the Ministry of Culture is a member of the Investment Commission and the main authority regulating the broadcasting industry, its opinion would carry the most weight in the commission's final decision.

According to a China Times report, iQiyi intends to register in Taiwan as an information services company. Investment Commission executive secretary Emile Chang (張銘斌) said the site provided media services, which made the iQiyi case similar to ride-sharing service Uber, which has faced problems in its bid to be treated as an information services company.

In response, iQiyi Taiwan manager Young Ming (楊鳴) told United Daily News that the Ministry of Culture's classification of iQiyi as a media company was wrong.

“We are a new technology company, not traditional media. Our video service is an open platform, and we buy whatever programs are available for public consumption,” Young said.

Commonly referred to as over-the-top (OTT) content, Internet video platforms like iQiyi and Netflix provide audio and video streaming without operators regulating the distribution of content.

Cheng said Taiwan must protect its right to broadcast its own content, Apple Daily reported, adding that China has yet to allow Taiwanese OTT operators to offer services in China. Chen said she hoped that equal cultural exchanges between Taiwan and China could be achieved.

Kuomintang (KMT) Legislator Ko Chih-en (柯志恩) said there was no need to fear "brainwashing" by Chinese media since 25 percent of the content on iQiyi is Taiwanese, Apple Daily reported.

First Editor: Edward White
Second Editor: J. Michael Cole