1. China’s Creative Industries Dr. Lucy Montgomery Vice Chancellor’s Research Fellow, QUT Research Director, Knowledge Unlatched

2. Who am I? Why am I here? Vice Chancellor’s Research Fellow, QUT Research Director, Knowledge Unlatched Research: Interdisciplinary? Media and Cultural Studies. China. Intellectual Property. Innovation. Creative industries.

3. THIS PRESENTATION China’s Creative Industries (Context) China’s Creative Industries (The Book) State-Driven to Consumer Led Cultural Production The role of intellectual property Film, Music and Fashion China as a source of insight into disrupted markets and industries elsewhere?

4. Part 1: China’s Creative Industries Context

5. ‘The creative industries are those that are based on individual creativity, skill and talent. They also have the potential to create wealth and jobs through developing and exploiting intellectual property.' www.culture.gov.ukwww.culture.gov.uk

6. Advertising Architecture Arts and antique markets Crafts Design Designer fashion Film Interactive leisure software Music, television and radio, performing arts, publishing and software.

8. Developed in the UK in 1998 by a Creative Industries Taskforce, set up by the incoming Blair government Inclusion of the Arts and Culture in an economic policy agenda Attempt to bridge divides between ‘high’ and ‘low’ culture, publicly funded and commercially driven Where did the term come from?

9. Further aim: to emphasise the existing strengths of advanced economies: in 1998 CI already a major component of GDP, exports and jobs in UK, US and Western-Europe Creative Industries were growing at twice the rate of other sectors of the UK economy Where did the term come from?

10. Criticisms of Creative Industries Debate about the role of ‘culture’ Appropriation of cultural agendas for commercial gain? Concern that social and community emphasis of Media, Culture and the Arts would be lost in the race to generate profit Emphasis of Intellectual Property

11. ‘How do we begin to envision a parallel discussion of something like creative industries in a country where creative imagination and content are subjugated to active state surveillance?‘ Jing Wang, 2004 Are ‘Creative Industries’ Appropriate for China?

12. UK: 7.3% of GVA of the UK economy: Compatible in size to the financial services industry China: less than 1% of economy CI in Hong Kong: 2.5% of GDP CI in Singapore: 2.8 – 3.2% of GDP

13. High Growth Dynamic ‘Bottom up’ characteristics of creative industries growth: small and medium sized enterprises, opportunities for individual innovation ‘Clean’ Ability to absorb educated/skilled workforce Ability to help propel developing countries from low-cost production to high-value innovation? Benefits of Creative Industries

14. Difficulties for ‘Creative Industries’ in China ‘Cookie Cutter’ Approach? Can investments in ‘Creative Clusters’ ‘Creative Parks’ stimulate genuine innovation or creativity? Cultural entrepreneurship prevented by policy environment and institutional legacies? Can creative industries form without strong IP?

15. ‘In the present era culture has become a more important source of national cohesion and creativity and a factor of growing significance in the competition for overall national strength …we must stimulate the cultural creativity of the whole nation and enhance culture as part of the soft power of our country...’ Hu Jintao, 2007

16. Why might ‘Creative Industries’ be useful for China? Driver of overall economic growth High value, clean Need to develop a consumer-driven economy Import substitution Soft-power Domestic control of culture

17. Part 2: Creative Industries in China The Book

18. Began with a PhD – evolved during a post-doc at QUT John Hartley: MATE and ‘Uses of Digital Media’ China: An opportunity to interrogate copyright’s ‘negative spaces’ An examination of changing dynamics of power between state and consumers Part of a body of work attempting to understand the CIs

19. The Rise of IP…...the growth of the creative economy has meant IP laws, especially copyrights and patents, have moved centre stage of the global economy. In the 1980s, IP was a marginal factor in most economies and of little concern to most policy-makers. Twenty years later it is a central and important factor in almost all economic activity.’ (Howkins 2005, p.35)

20. The Creative Industries Challenge New technologies for copying, sharing and distributing creative products Networked creativity Read/Write Affordance Challenge to ‘copyright industry’ business models What role does intellectual property play in the growth of the ‘creative industries’?

21. CREATIVE INDUSTRIES AND CHINA New technologies and new possibilities One of the fastest social and economic transformations in history Market-based reforms Cultural transformations Changing power relationships WTO entry and formalisation of copyright law

22. THE RESEARCH Interviews conducted between 2004 and 2009 Beijing, Shanghai and Hong Kong Directors, producers, record label executives, distributors, mobile operators, musicians, fashion editors and designers, collection agencies, lawyers and judges The role of IP in cultural and creative industries

23. Film (state) Music (?) Fashion (consumer)

24. FILM 1950: Chinese Film Bureau established – responsible for pre-production censorship 1952: Film production nationalized “…cinema was no longer a matter of business or art, but rather a serious political operation subject to strict censorship from start to finish.” Zhang, 2004

25. FILM 1966-1976: Great Proletarian Cultural Revolution Film schools closed No films made between 1966 and 1972 1973 – 1976: Films reflected radical political agenda

26. FILM Until 1980s no relationship between income of a film studio and popularity of a film By 1990s economic reform agenda forcing studios to compete for audiences Competition from other forms of entertainment Early 2000s: private investment in films encouraged

27. FILM: 2009 Restricted access to commercially valuable mass distribution (cinema) Pre and post production censorship Foreign film import quotas But… ‘Pirated’ DVDs Internet, P2P, streaming, downloading Consumer creativity and distribution

28. CINEMA DISTRIBUTION A coordinated system of mass distribution Capable of converting popularity into scalable profit for commercial distribution Commercial incentives for operating within state- controlled spaces

29. MUSIC: Before the 1980s Conditions that gave rise to a recorded music industry in other markets absent Live, recorded and broadcast music were dominated by state-funded Cultural Troupes A limited repertoire of propaganda songs

30. MUSIC “Illegal sales of music in China are valued by [the] IFPI at around US$400 million, with around 90 percent of all recordings being illegal. No creative or knowledge-based industry can hope to survive in such an environment” John Kennedy, IFPI: 2006

31. DIGITAL LEAPFROG Digital outperforming physical copies Digital sales: 3.6 billion RMB in 2005 Best year of physical copies: 2.7 billion RMB Mobile the most significant source of music related revenue

32. MOBILE MUSIC Closed distribution networks Publisher managed censorship Distribution licensing Commercially focused innovators Rapid growth in commercial activity

33. ENTREPRENEURIAL CONSUMERS … to be an entrepreneur is to have entrepreneurial governmentality that makes it thinkable and practicable to relate to different aspects of the world — people, relations, institutions, the state, laws, etc. -- in terms of symbolic commodities, risks, capital, profits, costs, needs and demands (Yurchak, 2002)

34. Social Network Markets A market within which choices are determined by the choices of others.

35. FASHION Classic ‘social network market’ Consumer innovation Risk (is this hat silly, or will I start a trend?) Reward: Status, fun, identity

36. IP in Fashion Trademark, rather than copyright Copyright: Emphasizes an author’s investment in an individual creative work Trademark: Protection for investments in reputation and image of a maker Trademark helps to maintain a connection between a product and its source

38. Conclusions IP and the Creative Industries: One size unlikely to fit all No longer a case of telling China what an IP regime should look like Innovative approaches to IP and business models are just as necessary in other markets

39. Co-Evolution Co-evolution of law, technology and business models. Firms most likely to succeed in global markets are firms whose business models have evolved with weak IP. Challenges of enforcing copyright protection in distant markets.

40. Early Days of the Record Industry Expensive, specialised equipment. Copying hardware not widely available. Neighbouring rights. Technological innovation + creative innovation + developments in law = new commercial opportunities.

41. Emerging Commercial Music Models Technology for mass reproduction and consumption available before copyright law. High demand + no legitimate distribution channels = a thriving market in unauthorised products. Internet, PCs and cheap MP3 players.

42. Making Money in the Chinese Music Business Cross platform promotion – ‘Supergirl’. Merchandising, concerts, personal appearances, product endorsements. Mobile as the largest (and fastest growing) source of music related revenue. Is China’s music industry adopting strategies familiar to the fashion industry?

43. Conclusions IP and the Creative Industries: One size unlikely to fit all. No longer a case of telling China what an IP regime should look like. Innovative approaches to IP and business models are just as necessary in other markets. Evolutionary approaches to understanding IP’s role in creative innovation (stay tuned).

44. What Next? Are any of the patterns I observed in China generalisable to other markets? Design as a global industry… Publishing and scholarly communication… Less emphasis on copyright? The need for coordinating mechanisms capable of enabling global markets

45. Thank You!