Game Called 'Mental Opium' and Suggestion to Regulate OTT Too
Shares of Bilibili, Kuaishou, and Related Stocks Plunge
[Asia Economy Reporter Kim Suhwan] After Chinese media criticized games as 'spiritual opium,' causing a plunge in related stocks, they have now called for regulations on video streaming platforms, triggering a similar crash in related shares.
According to Hong Kong's South China Morning Post (SCMP) on the 6th, the Economic Daily, the official newspaper of the Central Committee of the Chinese Communist Party, issued a commentary the previous day questioning the business model of video streaming platforms that spread vulgar content online and urged for stronger regulations.
The Economic Daily pointed out, "The video streaming market, with about 130 million accounts in operation, has become a battleground for traffic competition where operators compete to see who can be more vulgar."
It added, "If we simply criticize this as inappropriate behavior by operators and ignore the platform's improper distribution system, we are missing the core issue," emphasizing, "If platforms prefer traffic over high-quality content, they will inevitably create a number of low-quality, vulgar video streaming accounts."
As an example, the Economic Daily criticized some streaming operators who recently covered the 'Long March' of wild elephants in Yunnan Province traveling over 500 km away from their habitat by showing the elephants eating leftover food, calling it "grotesque and causing many complaints."
The commentary was also republished through the state-run People's Daily.
SCMP reported, "Although the commentary did not name specific companies, it is interpreted as a signal that regulations on companies like ByteDance, Kuaishou, and Bilibili will be strengthened, leading to a drop in Kuaishou and Bilibili's stock prices on the Hong Kong stock exchange."
The previous day, Kuaishou's stock price plummeted by 15.3%. Bilibili fell by 3.2%, marking its lowest stock price since its debut on the Hong Kong stock market on May 29.
SCMP forecasted that with Chinese authorities announcing restrictions on algorithm-based recommendation functions in online content distribution, the commentary indicates that regulations on online content will continue.
Mark Tanner of China Skinny, a marketing company in Shanghai, said, "There is no part of the tech industry that regulations will not affect," adding, "Especially the video streaming industry is more difficult to control than others, so further government intervention is possible."
Earlier in January, authorities fined Douyin, the Chinese version of TikTok operated by ByteDance, for "spreading obscene, pornographic, and vulgar information."
In this situation, Douyin and Kuaishou regularly announce the results of deleting inappropriate videos.
Last week, Kuaishou announced via its official WeChat account that it deleted about 129,000 short videos in July.
Douyin also revealed that it deleted 189,000 short videos in June.
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