LEADER: Merger signals a bumpy ride for TV

China's move to merge the sales department of city television stations next month is a clear indication that all is not well in the business. Anecdotal evidence suggests that television spend is hardly as robust as ACNielsen's adex figuresof 22 per cent for the first four months of the year would suggest. The general prognosis is that multinationals are spending far less this year. Regional economic uncertainties and the almost rabid level of competition from local players in the mainland have resulted in a general tightening of purse strings. Which may explain the surprise move to restructure sales departments of city television stations midway through the year. For too long, the official attitude towards its television business has been to treat it as a cash cow. Which it was for years, when China Central Television's (CCTV) annual auction of its prime-time slots, down to five-second ones, would generate astronomical sums for government coffers. The sums paid provided a barometer of the industry's health. But frantic bidding battles are more history than reality these days. The stark reality for CCTV is that it is in danger of seeing its audience share and revenue streams diminish as satellite and cable operators increase penetration levels. The centralisation directive will naturally bring economic efficiencies for the Government. It will also reduce competition, but possibly only in the short-term, and again this will depend on how well the directive is implemented nationwide. But it doesn't address the more crucial issue facing CCTV - that of building up audience and revenue streams - through quality programming. As it stands, provincial operators are showing less inclination to acquire CCTV programmes these days. The setting up of MindWorks, with its brief to develop high quality programming for China, is a clear reflection of the sizeable market gap which the national broadcaster has yet to fill. For CCTV, the future is clear - change or lose out.

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