e-magazine
The Hot Zone
China's newly announced air defense identification zone over the East China Sea aims to shore up national security
Current Issue
· Table of Contents
· Editor's Desk
· Previous Issues
· Subscribe to Mag
Subscribe Now >>
Expert's View
World
Nation
Business
Finance
Market Watch
Legal-Ease
North American Report
Forum
Government Documents
Expat's Eye
Health
Science/Technology
Lifestyle
Books
Movies
Backgrounders
Special
Photo Gallery
Blogs
Reader's Service
Learning with
'Beijing Review'
E-mail us
RSS Feeds
PDF Edition
Web-magazine
Reader's Letters
Make Beijing Review your homepage
Hot Links

cheap eyeglasses
Market Avenue
eBeijing

Finance
Business> Finance
UPDATED: December 18, 2006 NO.46 NOV.16, 2006
China's Media Morphosis
From new content to new media, communication is more profitable than ever in China
By SUNNIE WONG & JEREMY WANG
Share

Walking the streets of Beijing, a Westerner, glancing at the many newspapers being read by Chinese, might think that China's media is vastly underdeveloped.

In fact, the media industry has been moving forward in leaps and bounds, and those newspapers are more a reflection of China's social welfare for idle saunterers than true indication of its media.

After successive years of continuously high growth, the total pre-tax profit of the media industry has exceeded that of the tobacco industry, making it China's fourth largest business. Advertising revenue has increased in volume 20 times in 10 years, topping the 100 billion yuan mark in 2003, with average annual growth of 35 percent.

With its short history, rapidly changing landscape and China-specific regulations, the contemporary media industry here can be elusive to foreign understanding. But with a little help from this media cheat sheet, you may find investment opportunities closer than a click of your remote control (or iPod).

Chipping away at CCTV

"In the Chinese TV industry, there are only two real areas of competition: entertainment programs and soap operas," said Li Ruigang, President of Shanghai Media Group (SMG). "The latter is simple-you just have to pay for them. Self-produced entertainment programs are the true source of competition."

That means CCTV, the national television network, has much greater competitive strength than local channels, which are constrained in terms of program production by a lack of resources.

A 20-city survey carried out in the first half of this year revealed that the top 20 programs in terms of viewer ratings are all sports-related, and none are produced locally (excep for in Shanghai). The reason for this phenomenon is simple: The broadcasting rights for most top sporting events are in the hands of CCTV.

But new entertainment programs are beginning to change everything, especially for Changsha-based Hunan TV, which has become a domestic media success story.

Hunan TV was the first TV broadcaster in China fully dedicated to entertainment programs. Two reality shows, the Olympic-related I'm a Champion and role-playing Metamorphosis, were launched by Hunan TV in the second half of this year, following the Super Girls singing contest, the hottest talent show in the country over the past two years.

The success of Hunan TV's Joy Camp, a program with popular stars playing entertaining games, also inspired many TV stations to follow suit with similar productions of their own.

Liu Shabai, Vice President of Hunan TV and Broadcast Intermediary Co. Ltd. (TBI), believes that the reason Hunan TV has excelled in its market segment is because it grasps a simple but key point: Viewers watch TV for entertainment.

Hunan TV's self-positioning is in line with this fundamental philosophy.

Hunan TV has in recent years gained both in reputation and profit from its viewer-oriented and interactive concepts. According to the Blue Book of China's Culture released by the Chinese Academy of Social Sciences, over the past year, Hunan TV has pocketed at least 18 million yuan in advertising revenue and 30 million yuan from SMS-voting as a direct result of the Super Girls frenzy. In fact, the show was so trendy that one Hong Kong-listed company's stock rallied after it claimed to shoot a soap opera called Super Girl.

But Hunan TV's dominance of the entertainment niche has been shaken. The competition talent show My Hero, launched by SMG in 2006, turned out to be just as popular as Super Girls. The runner-up winner in the My Hero competition, Song Xiaobo, has a speaking and hearing disability, which sparked a nationwide wave of learning sign language and proved the clout of the new show with viewers.

Meanwhile, other shows aimed at challenging Super Girls are in the works.

Which is new media?

TBI's Liu recently attended a forum where the organizer arranged for him to sit with representatives from a selection of traditional media organizations.

Liu said he was unhappy with this arrangement and challenged the organizer, "Why did you consider me as a traditional media representative?" He argued that television business in China actually began in the 1980s and, given its short history, should not be regarded as a kind of old media.

Mobile phones, he added, are considered to be among new media due to their SMS capability but they need television as a revenue-generating platform. Digital TV, soon to be launched by TBI, is the newest format in the arena of new media.

Digital TV, in fact, has developed exceptionally quickly in recent years, thanks to significant government encouragement. Qingdao in Shandong Province, Hangzhou in Zhejiang Province and Shanghai have offered digital TV programs to local viewers. TBI began preparing digital TV programs a year ago even though the household-oriented distribution of set-top boxes, necessary accessories for digital TV, has still not begun.

Media bosses are fully aware of the promising prospects offered by digital TV.

Given the 2 million existing registered cable TV subscribers in Hunan Province, it is estimated that, of these subscribers, 20 percent will quickly transfer to digital TV. TBI is expecting to sign up 400,000 users upon the digital TV launch. Supposing that the annual revenue from a digital TV viewer in Hunan was 2,000 yuan, then TBI would receive 800 million yuan per year.

Considering this, it's no small wonder that stocks related to digital TV operators and new media continue to surge.

In addition to digital TV, mobile phone TV and IPTV are new additions to the new media family. SMG has embraced all of these forms. According to SMG President Li, mobile phone TV is a particularly hot concept. There are 20 million existing mobile phone users in Shanghai. If 10 percent of them embrace mobile phone TV, each paying 1 yuan per day, then SMG stands to receive 2 million yuan in additional revenue per day.

That's 730 million yuan extra for SMG each year.

In addition, media groups are broadening their scope. SMG, for instance, has established talent management agency subsidiaries. Such innovations are unprecedented in the Chinese TV industry.

As TBI's Liu put it, "Continual innovation will ensure a prosperous future for us all."

(Xinhua Finance)

DISCLAIMER: The information contained herein is based on sources we believe to be reliable, but is provided for informaional purposes only, and no representation is made that it is accurate or complete. This briefing should not be construed as legal, tax, investment, financial or other advice, and is not a recommendation, offer or solicitation to buy or sell any securities whatsoever.  



 
Top Story
-Protecting Ocean Rights
-Partners in Defense
-Fighting HIV+'s Stigma
-HIV: Privacy VS. Protection
-Setting the Tone
Most Popular
 
About BEIJINGREVIEW | About beijingreview.com | Rss Feeds | Contact us | Advertising | Subscribe & Service | Make Beijing Review your homepage
Copyright Beijing Review All right reserved