BEIJING: China's demand that News Corporation and AOL Time Warner
offer reciprocal carriage for its national broadcaster in the US could
hinder advanced efforts by the two media giants to secure mainland cable
distribution deals.
Media agency analysts expect carriage of China Central TV in the US to
emerge as the biggest challenge which must be resolved before any deal
is signed. Failure to reach a compromise could scuttle delicate
negotiations underway with the State Administration of Radio, Film and
Television.
Simon Woodward, Carat China executive director of broadcast, said: "The
simple fact that Beijing is talking is a breakthrough. Whether those
talks reach an agreement is another thing altogether, but if they do
then that's another milestone."
Foreign broadcasts - such as News Corp's Star, Discovery and Channel V
channels and AOL Time Warner's HBO and Cinemax channels - are currently
restricted to luxury international hotels, selected research, news and
trade organisations and foreign residential compounds. However, a
significant number of Chinese households can access the foreign
broadcasts through illegal cable operators and dishes, especially in the
southern part of the country such as Guangdong province, which is where
China is willing to grant initial distribution rights.
It is expected that the legalisation of such broadcasts, which will
initially be restricted to cartoon and entertainment channels, will pave
the way for an advertising bonanza for the satcasters. The expected
targets are local and multinational companies in the consumer goods and
pharmaceutical sectors.
According to ACNielsen, television adspend in Guangdong totalled
US$794 million last year, up about 25 per cent in 1999 and
representing 61 per cent of the total advertising pie of US$1.3
billion in the province.
Woodward is confident of an advertising boom as "programming quality
would be ensured along with official measurement of reach and
ratings".
However, other analysts said that carriage of CCTV in the US could pose
the biggest obstacle to the successful conclusion of the talks. In the
West, CCTV is perceived as the Chinese government's propaganda
mouthpiece.
Michael Spiessbach, chairman of Media Financial Services International,
said: "Any deal like this could foment a reaction from the US news media
and very close scrutiny from Washington's Federal Communications
Commission because CCTV is part of a foreign government. "But I do think
that Beijing will be astute enough not to fill the pipe with
objectionable material."
China, fearful of programming critical of the country, has so far banned
satcasters from direct participation in the mainland. However, they
enjoy limited access to the Guangdong market - Star has a stake in
Phoenix Satellite Television, while AOL Time Warner has a holding in
China Entertainment Television (CETV), both based in Hong Kong.
