Media Industry in China

This new broadcast partnership, as well as others that have been signed since then, have come at a time of growing acceptance on the part of the Chinese authorities toward the need for greater plurality of media ownership, in particular regarding participation of overseas investors. The first concrete sign of this came last year when the State Administration of Radio, Film and Television (SARFT) loosened ownership restrictions in the film and television industries, effective from November 2004. In a move designed to encourage greater levels of money, technology and talent, foreign companies can now hold a maximum of 49 percent stake in a film or TV Joint Venture.

Prior to this announcement, domestic broadcasting had in general been out of bounds to overseas involvement. Licensed wholly foreign-owned TV channels such as Star TV, HBO and CNN were and still are restricted to a satellite reach limited to selected hotels and residential compounds. And even with the Joint Venture regulations, few in the industry are expecting a fully deregulated media at any time soon.

Of particular concern is China's commitment to digital TV. In October 2003, the central government announced that it had initiated a transition from analogue to digital broadcasts via satellite in all key urban areas by 2005. This highly ambitious move was later modified and now, according to the government's National project, the aim is to complete the technology switch over in the majority of households by the 2008 Beijing Olympics and to ensure that all Chinese households have digital capacity by 2015. At present, the digital network, led by CCTV and Shanghai Media Group (SMG) is extremely small with less than 20 channels in operation. This however is just the beginning and as the network expands, a serious lack of content is expected to be the biggest worry for channel operators. If there are to be 100 new channels - 8,400 hours of TV a year times 100 - where is it going to come from? Partnerships with foreign content providers, such as that between HBO Asia and CCTV's First Theatre, seem the likely answer.

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