What's the secret to getting in China's broadcast market?

New technology, not television

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HONG KONG--For foreign programmers, China’s massive TV market is tantalizing but elusive. Strict government restrictions provide scant opportunities to introduce 24-hour branded entertainment and news channels for China’s 366 million TV households, according to CSM Media Research.

But technology is providing other avenues for program providers--and advertisers--to reach Chinese consumers, namely through digital media like high-definition television, mobile phones and the internet, the hot topic at the Cable & Satellite Broadcasting Association of Asia’s annual four-day conference in Hong Kong, which began Oct. 24.

“The big topics in the industry right now are content, not just for TV but also for broadband, particularly in terms of gaming, and of course the new advertising model, embedding ads into games and other content,” said Frank Brown, partner at Generator Media Ventures in Sydney, and the former head of MTV’s operations in Asia.

“There’s a triangular opportunity with existing TV content, new digital content and Chinese partners. Really, you want to get all three to the table at the same time,” he said. “The question is, how do foreign companies fit into the landscape? We have to figure out where we fit and what are the opportunities.”

Co-produced, brand content deals are becoming a popular entry point for foreigners.

Los Angeles-based Branded Pictures, for instance, teamed up with a local production company, Golden Ocean, “to help us gain the confidence of the production arm of [China’s national state-run TV network] CCTV and help us navigate the local production community,” said the company’s executive producer, Steven Marrs in New York.

The result is “Go Fast Girl,” a 20-episode TV series shot in China that will air in the mainland in October 2007, just ahead of the Shanghai Grand Prix. The show’s “girl” is Xu Ping, who becomes a world-class Formula One racecar driver.

Red Robot Advertising is also developing content for China, specifically for brands tied into the next Olympics. Its first initiative, “True Beauty,” is a seven-episode reality TV journey to find China's top model. The show, a spinoff of Golden Star Road, one of the top entertainment programs in China, will be broadcast on CCTV-3 for seven consecutive nights during China’s “golden week” holiday in May 2007.

Both Red Robot and Branded Pictures are finalizing sponsorship negotiations.

Getting advertisers and agencies involved in productions to help shape the content “is not unusual in America. But, in China is it still a bit new, especially with CCTV,” said Tom Flanagan, Red Robot’s CEO in Denver, CO.

Ingrid Wang, who developed the concept behind the Power Rangers show, recently struck a $6 million deal with CCTV to develop another children’s show, “Zodiac Kids,” about 12 characters based on animals in the Chinese calendar. Backed by marketers like Sony Corp. and Coca-Cola Co., the program will launch in China next June.

High-definition, or digital, TV is already a reality in China. The technology has been tested in dozens of cities over the past couple years, and is expected to be in place in major cities by 2008, the all-important year when Beijing will host the Olympic Games.

“There is a lot of attention on Hangzhou right now,” said Becky Cheung, marketing director of CSM Media Research in Beijing. That city took the lead last January, when it rolled out China’s first official digital channel, featuring content like movies, TV series and documentaries.

Internet Protocol TV (IPTV) is opening up China’s airwaves as well, particularly with an eye to capturing revenue during the Olympic Games. China’s State Administration of Radio Film and Television (SARFT) has issued four licenses so far.

The first went to Shanghai Media Group (SMG), which is testing the service with China Telecom and China Netcom, the country's landline telecom companies. Others have been granted to CCTV, Southern Media Corp. (SMC) and the latest one, issued earlier this month, went to state-owned China Radio International.

SMG will promote IPTV business in major cities like Harbin and Shanghai, while SMC will roll out specialized business programming, with Guangdong as its base. CCTV and CRI will produce IPTV programs on the basis of their strong program resources for the whole country, according to SinoCast, a Chinese information service.

“IPTV is ‘the’ big opportunity, it allows for niche programming and could let foreigners into China in certain constraints,” said Monty Ghai, director of network development, Asia for BBC Worldwide in Singapore.

But new media doesn’t offer content providers and advertisers an avenue free of government involvement.

At the end of the day, “it’s about the audience experience, content has to be engaging. That’s not necessarily how CCTV approaches programming from a strategic point of view. For them, it’s more about what’s appropriate, not what’s entertaining,” said Charles Edwards, executive producer of the Media Village, a production and distribution company in Hong Kong.

“But China is hungry for new things and new ideas...so China is a good testing ground for new concepts.”

Unlike consumers in Japan, Chinese are open to good content from other parts of the world such as Japan, South Korea, the rest of Asia and western markets. Eager consumers in an enormous country have helped fuel China’s new media market in the past year, as venture capitalists from the U.S. and Europe pour money into China. Compared to the dot-com boom that went bust six years ago, said Mr. Brown, the mainland is a more stable bet.

“Japan is far ahead now in infrastructure and in some ways content but from a global perspective, China will be one of the leading markets within a short period of time,” he said.

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