CCTV carriage could scuttle China TV deal

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