China's TV stations face merger order

<p>BEIJING: China will merge the sales operations of city television </p><p>stations at the end of this month at a time when TV adspend is said to </p><p>be declining for the first time. </p><p><BR><BR> </p><p>However, media sources believe the State Administration of Radio, Film </p><p>and Television directive is politically-motivated to cut the number of </p><p>TV stations from an estimated 2,000 nationwide to a more manageable </p><p>total of under 300. This covers the 240 cities and 31 provinces, in </p><p>addition to national broadcaster, China Central TV. </p><p><BR><BR> </p><p>The latest directive follows a decision early this year to revoke the </p><p>licences of county TV stations. Theoretically, county stations are no </p><p>longer allowed to sell ad space or produce programming. They only have </p><p>transmission rights. </p><p><BR><BR> </p><p>But media directors said county stations are still accepting </p><p>advertising, and they believe the Government will find its merger </p><p>directive just as difficult to implement. </p><p><BR><BR> </p><p>"I believe 70 per cent of the mergers will be superficial ones," said </p><p>Zenith Media Beijing general manager Derek Kwok. He said Zhejiang's </p><p>cable and terrestrial operation are still operating separately despite </p><p>their merger. "The Government knows it but it has to keep one eye closed </p><p>because of revenue considerations, and it also does not want to create a </p><p>monopoly situation," he said. </p><p><BR><BR> </p><p>The merger comes at a time when media agencies have forecast either </p><p>static growth or a decline in 2001 spend. Domestic policy and external </p><p>pressures have been cited as key factors limiting growth. </p><p><BR><BR> </p><p>Media sources believe the merger will reduce competition in the </p><p>short-term, but doubted its long-term impact. </p><p><BR><BR> </p><p>"The negotiation tactic in the medium to long-term will be to play off </p><p>one market against another," said MindShare China chief executive Chris </p><p>Walton. "Increasingly, advertisers are looking at the potential of </p><p>market A versus market B rather than TV station one versus station two." </p><p><BR><BR> </p>