CCTV carriage could scuttle China TV deal

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.

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