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Foreign firms eye China cable TV, programming
Reuters, 06.03.03, 5:26 AM ET
By Doug Young
HONG KONG, June 3 (Reuters) - With limited broadcasting rights in hand, foreign media giants are expected to push into China's programming and cable TV arenas over the next two years as they seek to expand in the world's most populous nation.
China wants to tap foreign expertise and capital to transform a media sector that lacks quality programmes and high-tech infrastructure. Foreign media firms are looking to expand into a market with enormous growth potential despite tight controls on content and strict limits on foreign ownership.
But despite potential windfalls, profits are a long-term -- and often elusive -- goal for many players, as reflected by AOL Time Warner's (nyse: AOL - news - people) recent decision to scale back two of its major Chinese media joint ventures.
Viacom Inc (nyse: VIA - news - people), which recently won rights to broadcast its MTV music channel into south China's affluent Guangdong province, joins AOL Time Warner and News Corp <NCP.AX>, which gained similar rights less than two years ago.
All three have promised some form of reciprocal assistance to China, from helping it sell one of its English language channels overseas to promoting Chinese cultural events.
"It's a kind of exchange. It's not just one way," said Charles Chau, Viacom's managing director of North Asia.
Others said to be sniffing around for opportunities in a sector that generated an estimated $12 billion in revenues in 2001, include Walt Disney Co (nyse: DIS - news - people) and Sony Corp <6758.T>, whose assets include a U.S.-based studio and music label.
OTHER ENTREES
China may be open to foreign investment to help fund a planned digital cable network expected to cost billions of dollars, said Vivek Couto, an analyst at Media Partners Asia.
Chinese leaders have said development of such a system is a top priority, with a goal of national coverage by 2015.
Chinese regulators may also be receptive to programming joint ventures -- technically illegal right now -- to help fill anticipated demand for new TV shows.
The expected liberalisation could come even faster following the handover of power to a new generation of leaders in March, said one industry insider who spoke on condition of anonymity.
He said Chinese regulators were looking for ways to make domestic media companies more competitive, including possibly bringing in limited foreign investment.
Yet the market remains fraught with obstacles, most notably a Chinese government wary of foreign-invested ventures.
Foreign investment in the broadcasting sector has been limited to Guangdong and high-end hotels elsewhere. Most companies practice various forms of self censorship to avoid raising political ire.
Reflecting the sometimes slow going many companies face, AOL and partner Legend Group Ltd <0992.HK> recently put their $200 million China Internet venture on hold. AOL is also reportedly close to selling a controling stake in its CETV Mandarin-language TV station to Hong Kong's tom.com <8001.HK>.
Outside of broadcasting, regulators may be slower to open up China's print media -- newspapers in particular -- to outsiders, said another insider.
"Most of the hardliners are from the newspaper generation," he said. "That was the means of the party really getting the message out there in the past...I think you'll see further liberalisation on the TV and radio side."
But industry watchers said they do not expect expanded broadcast rights to be granted soon beyond their current scope of Guangdong and some hotels and foreigner compounds.
Copyright 2003, Reuters News Service
Reuters, 06.03.03, 5:26 AM ET
By Doug Young
HONG KONG, June 3 (Reuters) - With limited broadcasting rights in hand, foreign media giants are expected to push into China's programming and cable TV arenas over the next two years as they seek to expand in the world's most populous nation.
China wants to tap foreign expertise and capital to transform a media sector that lacks quality programmes and high-tech infrastructure. Foreign media firms are looking to expand into a market with enormous growth potential despite tight controls on content and strict limits on foreign ownership.
But despite potential windfalls, profits are a long-term -- and often elusive -- goal for many players, as reflected by AOL Time Warner's (nyse: AOL - news - people) recent decision to scale back two of its major Chinese media joint ventures.
Viacom Inc (nyse: VIA - news - people), which recently won rights to broadcast its MTV music channel into south China's affluent Guangdong province, joins AOL Time Warner and News Corp <NCP.AX>, which gained similar rights less than two years ago.
All three have promised some form of reciprocal assistance to China, from helping it sell one of its English language channels overseas to promoting Chinese cultural events.
"It's a kind of exchange. It's not just one way," said Charles Chau, Viacom's managing director of North Asia.
Others said to be sniffing around for opportunities in a sector that generated an estimated $12 billion in revenues in 2001, include Walt Disney Co (nyse: DIS - news - people) and Sony Corp <6758.T>, whose assets include a U.S.-based studio and music label.
OTHER ENTREES
China may be open to foreign investment to help fund a planned digital cable network expected to cost billions of dollars, said Vivek Couto, an analyst at Media Partners Asia.
Chinese leaders have said development of such a system is a top priority, with a goal of national coverage by 2015.
Chinese regulators may also be receptive to programming joint ventures -- technically illegal right now -- to help fill anticipated demand for new TV shows.
The expected liberalisation could come even faster following the handover of power to a new generation of leaders in March, said one industry insider who spoke on condition of anonymity.
He said Chinese regulators were looking for ways to make domestic media companies more competitive, including possibly bringing in limited foreign investment.
Yet the market remains fraught with obstacles, most notably a Chinese government wary of foreign-invested ventures.
Foreign investment in the broadcasting sector has been limited to Guangdong and high-end hotels elsewhere. Most companies practice various forms of self censorship to avoid raising political ire.
Reflecting the sometimes slow going many companies face, AOL and partner Legend Group Ltd <0992.HK> recently put their $200 million China Internet venture on hold. AOL is also reportedly close to selling a controling stake in its CETV Mandarin-language TV station to Hong Kong's tom.com <8001.HK>.
Outside of broadcasting, regulators may be slower to open up China's print media -- newspapers in particular -- to outsiders, said another insider.
"Most of the hardliners are from the newspaper generation," he said. "That was the means of the party really getting the message out there in the past...I think you'll see further liberalisation on the TV and radio side."
But industry watchers said they do not expect expanded broadcast rights to be granted soon beyond their current scope of Guangdong and some hotels and foreigner compounds.
Copyright 2003, Reuters News Service
