SM Entertainment, JYP, YG to take a hit with China's new entertainment regulations

SM Entertainment, JYP, and YG are three of the major entertainment companies in South Korea and they are bound to take a hit as China’s crackdown in its entertainment sector is now in full swing.

According to The Korea Times, China’s move to impose stricter regulations in the country’s entertainment business will greatly affect the K-pop industry as it is the Korean entertainment companies’ biggest source of income. In late August, the Cyberspace Administration of China dropped a notice that said it will be implementing 10 rules to improve the fan culture in the region.

One of the points mentioned was the removal of chart rankings for entertainers as well the paid voting systems on TV shows. As soon as the announcement was made, it was revealed that Tencent’s QQ Music streaming service immediately took action and limited the number of album copies that customers could purchase to just one.

With this, it was predicted that the export and sale of K-pop albums in China will be affected by this new trend due to the new regulations. The Korean securities firms have yet to see the actual monetary losses by the third quarter of this year.

"Because album sales are based on individual purchase, it is difficult to accurately predict the impact of the restrictions until we confirm the decline in sales in the third quarter," Hi Investment & Securities’ researcher Park Da Gyeom, said.

To make matters worse, on Sept. 2, the Chinese State Administration of Radio, Film, and Television (SARFT) issued another notice called the "Directive on Increasing Oversight of Entertainment Programs and their Personnel." This effectively bans “sissy” or effeminate boy bands from appearing on talent shows on TV and internet platforms.

The Chinese government said that the new regulations in the entertainment business were added to get rid of immoral entertainers who engage in illegal activities. With these rules in place, TV networks will now cast singers and actors based on their moral conduct, political refinement, and overall social assessment.

Barron’s reported that broadcasting stations are also barred from featuring music artists with tattoos and they are now required to air more patriotic-themed content. The government is also trying to control the excessive fan culture that has pushed fans to spend millions on their idols after soliciting money from elaborate fundraising projects. In fact, as per the Straits Times, Weibo banned BTS’ Jimin’s Chinese fansite for the fans’ “irrational” birthday gifts and projects.