Method to regulate fan economy with law

A page shows voting and crowdfunding data in a mobile app designed for fans. In June, the Cyberspace Administration of China launched a two-month campaign targeting rising problems related to fan circles, including online trolling, rumor-mongering, and cyberspace manhunts. Photo: XINHUA

“Fan economy” refers to the economic income-generating behavior of the relationship between fans and their followed celebrities. The celebrities are mostly stars, idols, and industry magnates. Some scholars believe that the fan economy converts the trust of a group of people directly into commercial value.

The “obsessiveness” of fans in popular culture manifests as worshipful behavior, deep emotional involvement, symbolic consumption behavior, and group psychological identity. In short, this concept covers three aspects: emotional investment, consumption behavior, and identity. Therefore, a fan group organized for an idol is called a fan circle or fandom.

In the internet age, the external and internal form of fan economics have undergone a number of fundamental changes, showing the following characteristics.

First, the number of fans is expanding. The internet provides a more convenient channel for idols to interact with their fans, and to establish fan clubs, which in turn enlarges the number of fans. Second, the forms of fan consumption are diversified, which could be by both direct and indirect consumption. Third, the sense of participation by fans is generally enhanced. As the opportunities to interact with their idols increase, the stickiness of fans is stronger and loyalty more lasting. It is particularly true for idol “trainees” whose fans can somewhat decide who can make it to the final line-up of the boy group or girl group. Finally, the industrial chain is prolonged, including idols, agents, capital firms, and platform companies.

Challenges for regulation

The profit model of the fan economy is different from that of traditional trading and endorsement. On the surface, it attracts fans by creating certain “renshe” or “public image” for idols. When consumers become fans, they attach emotional identity to idol-related merchandise. Therefore, the fan economy includes both direct and the more subtle indirect and associated profit model.

From a business perspective, the pillar of fan economics is the idol’s public image. Through a variety of branding and merchandising, the intangible image of celebrities is materialized, creating a profit model closely associated with it every step of the way.

Among the participants of the fan economy, agents, capital firms, and platforms hide behind idols and even retreat from the merchandising phase, but they stand to gain quite a lot from it. In this process, it remains debatable whether an idol’s public image, which is the core of fan economics, is more subjective or more instrumental.

Legal interpretation of ‘renshe’

First of all, renshe does not fall under the purview of personality merchandising. It is more like a kind of brand and word-of-mouth publicity, a kind of “presupposition” and “faith” attached to idols but independent of idols to a certain extent. It has a strong sense of commercialization of natural persons, so it is hard to categorize it under the right to protect the commercial value of a character.

Second, renshe is also not the right of commercialization of personal image, because it includes not only the physical image of idols, but also other elements. It is a three-dimensional and systematic “brand story” centering on idols, which goes beyond the category of commercialization of personal image rights. Finally, renshe is not a form of intellectual property rights.

The business operation of renshe in the fan economy thus challenges the existing legal framework. If idols in the fan economy are regarded as having stronger subjectivity, renshe will become an inseparable part of the idol’s personality rights. Then, is the operation of renshe suspected of acting as an agent of identity? If idols in the fan economy are regarded as objects, and renshe is regarded as a kind of “materialized” or “merchandized” natural person’s right, it raises a question about whether the business scope of the company can include such content.

In reality, idols are likely to be objects with subjectivity, and their relationship with agencies are worth exploring. Behind the scene of disguised commercialization of natural persons, there is a risk of abuse of personality rights.

In the process of attracting and cultivating fans, those who stand to gain may attract fans by honest business, or they may resort to fake advertisements and frauds. After all, the public image of idols is often packaged and polished, aiming at a certain fan market. It is common to beautify the idol, exaggerating his or her strengths while downplaying their weaknesses. However, some images are inconsistent with the truth. This kind of “fictitious public image” requires qualitative legal research.

Possible violations

First, fans spend large amounts of money supporting and voting for their idols in order to boost their popularity. Such spending should not be categorized as “gifts,” but as hidden transactions. Under the business model of the fan economy, the gifts are only special forms of transactions. Therefore, when the literal interpretation is not conclusive, the interpretation method of the sequence should be adopted. According to substantive analysis of the fan economy, fans’ spending is an incomplete contract and a de facto contract.

Second, the effectiveness of fans’ behaviors such as supporting and voting for idols as well as purchasing idol-related products is worthy of discussion. Whether fans can exercise the right of revocation in case of major misunderstanding or fraud against their spending for the idol depends on many factors, such as the type, rationality, loss of fans, and their knowledge of the idol’s public image as well as the enticement of interested parties.

In this light, it is necessary to strengthen pre-regulation as a supplement of after-the-fact regulation, meaning to conduct behavior control on agencies, check their creditability, impose administrative penalties on large-scale misleads of fans, or expand the application of advertising law in this field.

Third, agencies and idols’“fictitious public image” has accountability. Though the legal nature of the act of “fictitious public image” is not clear, it can be inferred that it is punitive by analogy. To what extent the beautification of idols’ public image is reasonable not only concerns the tolerance of fan economics, but also needs to be further explained in line with practice.

Fourth, social media platforms, agencies, public relations companies, and idols work together to create the public image of idols, so as to attract traffic, and ultimately gain profit from the fan economy. The fan economy involves many subjects, so how to identify co-operators and co-infringers needs to be considered from the perspective of “act in concert.” Both common intention and common benefit can be used as standards for identifying act in concert, but it is not appropriate to both conditions to be met at the same time. Given such a requirement, this could make the standards too high and allow violations of fans’ interests to escape the law. Therefore, what satisfies one of the conditions of common intention or common benefit should be regarded as an act in concert.

Fifth,“fictitious public image” is suspected of violating many legal principles such as the principle of good faith, the principle of fairness, and the principle of reliable protection. At the beginning of a new business model, when the supply of norms is insufficient, legal principles should be properly applied to guide the application of existing laws to make up for the loopholes in regulations.

How to regulate by law

To be specific, the regulation of the fan economy relies mainly on tort law, ranging from conditions under which emotional distress can be claimed, the scope of the subject of tort in the fan economy, standards of tort, and damage calculation standards.

In the tax law, attention should be paid to fans’ direct financial support and free “digital labor” that fans engage in for the purpose of increasing traffic and promoting the market value of idols and platforms. That is to say, the “gift economy” and “moral economy” should be considered in the tax law.

The behavior of voting for their idols in order to boost their popularity or hiring paid posters to vote or manipulate multiple social media accounts to slander or support stars by posting or deleting online comments are at risk of being improper competition, which needs inspection from competition law.

Meanwhile, fans should be regarded as consumers according to the consumer protection law. In particular, the protection of ordinary consumers, youngster fans, ordinary fans, and “super fans” should be better clarified. Fans’ privacy protection should also be highlighted to punish those who abuse and leak fans’ private information.

In the field of property law and intellectual property law, it is vital to take note of the convergence trend of personality commercialization and commodity personalization, clarify the legal nature of renshe as soon as possible, design relevant terms in intellectual property rights according to the creative attribution of emotional relationships that attract and activate fans, and clarify the legal status of idols as natural persons.

In addition, as public figures, idols have great social influence. Considering their influence on the public order and good customs of the whole society, industry supervision should be strengthened. In particular, in many cases where it is difficult for fans to hold idols and their agencies accountable in accordance with laws, administrative authorities can step in to punish those responsible through regulations.

Wang Shoujie is from the Advanced Research Institute at Southwest University of Political Science and Law.