Getting its foot in the China doorGetting its foot in China door
Author: (JIA HEPENG)
Australian media giant News Corp is in negotiations with Chinese authorities for its proposed
TV station in Hong Kong to tap the vast Chinese media market.
The news comes after AOL Time Warner was allowed to broadcast into China last week.
A report on Sina.com, a leading Chinese portal, said that News Corp is in talks with the State
Administration Radio, Film and Television (SARFT), watchdog of China's TV industry, to
establish a TV station on the Chinese mainland.
Heungshing Liu, executive vice-president of News Corp China, denied the report, saying that
a foreign-owned TV station in China would be not allowed under current policies.
"The fact is that we are talking with the SARFT on the broadcasting rights of a proposed
Hong Kong TV station into neighbouring Guangdong Province," Liu said.
Liu was in Chengdu of Southwest China's Sichuan Province last week to participate in the
Sichuan International TV Festival.
"We expect our application will soon be ratified," he said.
SARFT refused to confirm the negotiation with News Corp.
According to Liu, News Corp's proposed TV station will focus on entertainment
programmes. Its business will have no direct ties with News Corp's Hong Kong-based
offshoot Phoenix TV.
Last Monday, US media giant AOL Time Warner declared it had signed an agreement with
SARFT to broadcast an entertainment cable TV channel in Guangdong Province in exchange
for carrying China Central Television's English channel, CCTV-9, in parts of the United
States.
AOL's declaration came three days after Phoenix was given access to local cable networks in
Guangdong.
AOL and News Corp are among several major international media firms hoping to rush into
China, including Walt Disney and Viacom. Most major multinational media firms participated
in the exhibition held during the TV festival in Sichuan.
Hong Kong and Macao-based TV stations like Phoenix TV, Sun TV and Five Star TV have
also been allowed to broadcast to luxury hotels and foreign residencies on the mainland.
However, despite overseas TV stations' swarming into the country, China does not plan to
further open its tightly controlled media industry, which is not subject to changes under the
terms it promises to enter the World Trade Organization.
"The government's permission of the entry of foreign entertainment channels is nothing but
admit a fact," said Yuan Fang, director of the research department of the China International
TV Corp,
Many people on the mainland are unofficially receiving programmes from overseas satellite
TV stations despite the government's ban.
Local cable networks also privately broadcast the stations to attract more subscribers.
For example, Phoenix TV said it had 40-50 million family subscribers on the mainland before
it was officially allowed to be broadcast in Guangdong.
Yuan expects that more foreign entertainment channels will be allowed to enter China
however news contents will remain strictly controlled.
Restrictions on news content are not expected to influence News Corp's profit goals in China.
"In a TV station, news making is always a cost centre," said Liu. "The more profitable
programmes are entertainment."
In February, News Corp and other foreign investors bought stakes valued at US$325 million
in China Netcom, the leading Chinese firm in broadband construction.
Analysts said Netcom's broadband network could be used to distribute News Corp's content
in the future.
Cut-throat competition for advertising income among China's 2,000 TV stations and more
than 40 satellite TV stations seems to cast a dark shadow over the profit outlooks for any
newcomer, including News Corp.
But Liu believes that there remains a big potential in the entertainment TV market.
"Instead of challenging our domestic counterparts, we will try to tap the uncultured market in
China," he said.