Media Industry in China

At this point in its development digital TV (DTV) faces several major threats to any near-term growth. The most direct threat is from Internet Protocol Television (IPTV) which promises to merge traditional television, the video rental store and the internet. Of more immediate and practical concern, however are two illegal technologies: pirated DVDs and illegal satellite reception. While defective discs and poor packaging are common, the typical cost of a pirated DVD (USD 1) makes it impossible for authentic versions to compete. Satellite TV services, while more expensive than DVDs, are also growing in popularity. Small dishes, costing as little as USD 150, can be hidden indoors and pick up far greater range of content from neighboring countries than China's official satellite broadcasters allow. If the government hopes to promote more expensive services like DTV or IPTV, it must first prove that it can reign in these illegal technologies.

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.

In August 2005, the finale of "Super Girl Voice" (Chinese version of "American Idol") from Hunan Satellite TV made Chinese television history by becoming the first hit from a provincial broadcaster and producer to draw more viewers than the biggest annual TV event of the year - the Spring Festival Eve gala, which is always broadcast by state-run channel CCTV. The show, whose main sponsor is an Inner Mongolian dairy, has drawn local media attention and is exciting producers and advertisers alike. It has caused a series of new shows from provincial TV companies to be approved from the censors in Beijing. The SARFT must, at some level, approve everything that airs on the small screen.

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