Apple Suspends Online Book and Movie Services in China



BEIJING—China shut down Apple Inc.’s online book and movie services in the country, suggesting an intensifying campaign to bring Web content in line with Beijing’s stringent guidelines for traditional media.

The shutdown rippled through the U.S. high-tech sector, which has long seen Apple as a China success story. The brand’s popularity in China has helped it maintain strong growth there in the past two years, even as Beijing’s buy-local push has crimped sales for many U.S. electronics makers.

“It feels like the Chinese government is flexing its muscles and reminding Apple that it’s in charge,” said Jan Dawson, chief analyst at Jackdaw Research. “Despite Apple’s success in China, it can’t count on doing business in an unfettered way.”

Apple suspended its iBooks and iTunes Movies services in China last week after meetings with the country’s video and publishing regulator, the State Administration of Press, Publication, Radio, Film and Television, two people familiar with the matter said.

The case highlights the challenges of navigating China, where laws are often vaguely worded and clarified later. In last week’s meetings with Apple, officials pointed to broad new rules issued in February that ban companies with any foreign ownership from engaging in online publishing, one of the people familiar with the talks said.

They also cited a 2008 provision that requires companies to get a license to broadcast videos on the Internet and limits license eligibility to Chinese companies, the person said. People in China’s entertainment industry have long wondered why this provision hadn’t prevented Apple from operating its movie service in China.

An Apple spokeswoman declined to say what Chinese licenses the company holds and how it hopes to restart its book and movie services. The regulator didn’t respond to a faxed request for comment.

In the short term, the impact on Apple’s business is limited. It only started offering books and movies in China in September, and charging for content there is challenging, particularly because of piracy. For now, China hasn’t banned other Apple services, such as the App Store, Apple Music or Apple Pay.

(source WSJ)