But telecom experts warn it could be too good to be true. Trials for three mobile broadcast standards are currently underway in different parts of China. Unlike 3G telephony, China doesn’t have a horse in the mobile TV standards race, nor does it have time to develop one with the Olympic deadline looming.
Sources close to one of the trials also indicated that the State Administration of Radio, Film, and Television (SARFT) refused to allow fees to be charged for the service. Carriers therefore may shy away, although a free service could create marketing opportunities if Beijing Radio decides to accept advertising.
Whichever standard is chosen, the service will compete with 3G for customers, although mobile TV allows for greater bandwidth and better picture clarity than 3G, and China has still not announced its 3G licensees nor chosen a standard. A turf war could also erupt over both regulation and revenue for mobile TV, as it falls through the cracks of SARFT’s TV domain and telecom overseer, the Ministry of Information Industry.
An even bigger question mark is consumer interest. Although China is the world's largest mobile phone market, buying an advanced handset capable of receiving mobile content could easily mean a 100 to 200 % price increase, and a likely jump in the cost for TV programming. If consumers in China's developing market are unwilling to invest in such phones, that could throw cold water on plans by Beijing Radio to offer video and audio content from the upcoming Olympic Games. Industry estimates place the current number of mobile TV-enabled handsets in Beijing, Shanghai, and Guangzhou at no more than 15,000 in each city, with an average price tag of $629 (5,000 RMB).
To keep prices down, broadcasters will almost certainly accept advertising. But so far, it's not clear who would buy airtime. “I would only recommend it to a client that is looking to reinforce or shift people’s perception of it as a techno savvy, premium entity, a first mover in an uncharted space,” said Scott Silverman, Beijing-based regional director, Asia/Pacific, for the ad agency Godfrey Q & Partners.
--by Steven Schwankert in Beijing
Ogilvy renews Chinese joint venture
SHANGHAI--At a time when most multinational ad agencies are hoping to part ways with their local joint venture partners in China, Ogilvy Group is moving the other direction.
Since January 2006, foreign firms can legally apply for the right to operate wholly-owned subsidiaries in China under that country's agreement with the World Trade Organization. Despite the option to go solo, Ogilvy renewed its partnership with Shanghai Advertising Ltd. for a second 15-year term. Established in 1962, Shanghai Advertising is part of the Shanghai World Expo (Group) Co., owned by that city's local government.
The agreement between Ogilvy and its partner was set to expire in October 2006, but has been extended until October 2021. However, Ogilvy did negotiate far more advantageous terms this time. The WPP Group agency now owns 75% of the joint venture, up from 51% previously.
One of the largest foreign networks in China, now the world's third-largest ad market after the U.S. and Japan, according to Nielsen Media Research, Ogilvy could certainly continue to grow in China without a local partner. The agency works with multinational marketers such as IBM, Motorola and BP as well as major Chinese brands like Lenovo and China Mobile.
"We don’t want to rock the boat since we’ve been profitable for the past 15 years, and they also wanted to continue our joint venture," said Shanghai-based Joseph Wang, Ogilvy's vice chairman, China. "A lot of joint ventures have had many problems but we’ve been lucky. We got our teething problems sorted out in the second year."
Ogilvy helps Shanghai Advertising train its staff, said Mr. Wang, while Shanghai Advertising's deputy manager sits in Ogilvy's Shanghai office, helping the agency field calls from potential clients, sort through legal issues with the government and "locate the right people to get things done."
Separately, Ogilvy has acquired Black Arc Advertising, a ten-year-old Chinese agency specializing in real estate-related advertising and promotions. Real estate is one of the mainland's largest marketing sectors, with property-related ad spend in China estimated at approximately $1 billion in 2005, according to Soufun, China's leading online real estate portal.
Headquartered in Shenzhen, just north of Hong Kong, Black Arc has a national network with offices in Beijing, Hangzhou, Chengdu and Chongqing and plans to open in Shanghai in 2007. The agency will be renamed Black Arc Ogilvy.
CNN now airing on Hong Kong mobile phones
HONG KONG--Turner Broadcasting has launched a 24-hour live stream of CNN International in Hong Kong for customers of PCCW’s new “now on mobile” service. Subscribers can access CNN’s breaking news via mobile phones or other handheld devices, according to Ringo Chan, Turner's Hong Kong-based VP, wireless development, Asia/Pacific.
In addition to the live CNN stream, the service will carry a four hour block of Cartoon Network's programming block that will be looped to provide a 24 hours service. Hong Kong is the second Asian market to carry CNN's service for mobile devices recently, following South Korea, where it debuted on mobile handsets last July, through a deal with Korea’s largest telecom company, SK Telecom.
Taiwanese noodle giant appoints JWT in China
SHANGHAI-- Taiwan's Uni-President Enterprises Corp. has appointed JWT's Shanghai office to handle advertising and below-the-line marketing in China for four of its instant noodle brands--Lai Yi Ton, President 100, Xiao Dang Jia and Xiao Wang Xion. The win follows a pitch against Dentsu’s Shanghai Oriental Partners, Bates Asia, Nitro and McCann Erickson. According to JWT's general manager in Shanghai, Michiel Hofstee, the agency's assignment includes brand strategy, advertising, events, promotion and packaging design.
Established in 1967, Uni-President has evolved into a food and beverage giant in the mainland, manufacturing a range of instant foods, frozen foods, dried provisions, breads, cakes, seasonings and milk powder and ice cream products. The company has publicly declared it plans to become the largest food group in Asia, excluding Japan, within five years. Earlier this week, it was selected as the exclusive instant noodle sponsor for the Beijing Olympic Games, making it the first Taiwanese enterprise to win a sponsorship position in the games. To win the coveted sponsorship position, it beat out the two largest instant noodle marketers in mainland China, Master Kong and Nissin Hualong.