China Shines in the Sun at MIPTV
CANNES --- The annual MIPTV television programming fair in Cannes, France
ended March 28 with a 300% increase in Chinese participation and the unprecedented announcement of over 600 hours of international programming acquisition by Chinese state and private media organizations.
Newly formed PRC mega-media conglomerates China Media Group (CCTV) and the Shanghai Media & Entertainment Group (SMEG) occupied the majority of the first beachside booth space in the event's 40 year history, while most of the over 100 Chinese delegates were first time buyers from provincial and city levels enchanted by the city and its best in 40 year weather.
As nearly 10,000 industry executives from over 90 countries are also now well aware (from our co-sponsorship of the official delegate bags with SMEG), CMM-I is the company that has coordinated this explosive increase. Along with Reed Midem, we are bridging the cultural and business gap between China and the rest of the world.
For that reason, this editorial must begin by repeating the good news that the full value of our role as exclusive China agents for Reed Midem's four international television events and the high degree of trust placed in CMM-I by all levels of China's media industry will be fully reflected in our independent range of strategic PRC media resources. Indeed, we expect to be in a position to announce a further international broadcast event agreement in the near future.
For subscribers to China Media Monitor, our premium intelligence resource, CMM-I's growing ability to provide professional business platforms means better information and deeper analysis based on wider relationships and more personal interaction with you, the key players on both sides of this fast evolving market.
This was reflected in the first quarterly review prior to MIPTV and will continue now as we approach a season of domestic markets with the launch of the CMM-I World TV Guide (Chinese edition) and the most comprehensively updated China Media Yearbook & Directory.
During the MIPTV market, we not only coordinated China's official activities, but also strengthened our agreements with existing trade press partners and data providers. Again, further agreements will be announced in the coming weeks and months.
While CMM-I is proud to add MIPTV to the increasing number of premium events at which it is the catalyst for professional media business exchange between China and the rest of the world, it is China's real interest (even bottled up enthusiasm) for more programming and vast quantities of it that is responsible for this explosive growth in activity at MIPTV despite the international situation.
In the past, Chinese attendance at MIPTV has generally been low key with only CCTV exhibiting and a small number of distributor agents buying. As a result, very little in the way of programming deals actually occurred openly at the event (which as participants know well is half the point). The reasons: many restrictions were in place on film and drama and copyrights levels of all genres were very simple and very low.
This year, however, was truly different. What was of most relevance to foreign program producers and sellers, was the huge increase in the number of independent program distributors looking to bundle larger volumes of long term satellite, terrestrial, cable, DVD and new media rights for the China market and willing to use established market mechanisms to achieve their aims.
According to exclusive CMM-I interviews with Chinese and international participants, the deal terms for China rights to over 600 hours were agreed during the market, the majority of these undertaken by independent programming distribution companies. Companies such as Beijing Continental Bridge Culture Ltd. and the Shenzhen TV Dubbing Center dramatically increased their acquisitions activity with the focus on longer factual series in categories ranging from history to extreme sports.
Spurred on by the competition, more established factual buyers such as Wuhan TV strengthened its grip on the leading science and technology strands with several MIPTV renewal deals. Although program producers were excited by the marked increase in the number of companies buying programming solely for the China market, foreign content rights holders quickly found that they would need to be flexible both in terms of price and rights agreements to be able to successfully sell their programming.
Some of the larger Chinese program buyers show a marked preference for initial purchase of provincial rights only with an option on China wide rights to be negotiated later. Program buyers are using this as a hedge to gauge program popularity for a cheaper price before purchasing the country-wide rights. "As I can get the program for a cheaper price for only the provincial rights, I prefer to do it this way at first as it allows me to gauge the program popularity before attempting to sell it across the country," according to Pan Yi, President of Shenzhen TV Dubbing Center (Shenzhen Dubbing), which syndicates throughout China to provincial and city levels after dubbing in house with leading independent talent.
According to one of the international companies agreeing such a deal with Shenzhen Dubbing at the market, it has been wary of selling "hard to track" provincial rights to small independents, but is willing to do so with larger players as it hopes to create relationships that will exist when the rights need to be renewed or extended into new rights categories, such as for digital services.
With provincial rights to sports programming more than four years old starting at US$100 per half-hour and documentary of the same age slightly less, successful syndication following lead broadcast in one market needs to convince only 15-20% of China's provinces and national municipalities to reach the basic level for a single national rights agreement.
Chinese program buyers at this year's MIPTV were also keen to negotiate contracts that include six-month holds on all video rights. While the public line is that this allows them to measure program popularity through ratings before committing to a price on the video rights, there is no doubt that piracy conditions also mean that the actual value of video rights is almost perfectly inverse to the broadcast ratings.
In contrast to their view on a number of other Asian markets, some small international program producers were still demanding the sale of country-wide rights in China, even as buyers interested in their often more creative output, were asking for increased flexibility not only for geographic distribution rights, but also clear differentiation of rights category (i.e. cable, satellite, terrestrial, DVD, etc.) and higher volumes and staggered payments.
For them, China will remain a difficult market, one that may be better served through more direct consolidated action through their representative organizations, such as the pan-European MEDIA and PACT in the UK.
As the mergers and consolidations that have occurred over the past few years concentrate programming buying power within single selling points, initial fears regarding the death of specialist distributors have been replaced by the realization by middlemen that they are even better placed to play a larger role in the trade process.
These players (you can find them in the MIPTV Guide or at our website) are starting to make pro-active responses, looking to secure rights to the high volumes of international content that, by definition, will be required to fuel the state-owned multi-platform local monopolies now emerging all over the country.
Some markets covered in this edition of China Media Monitor will need to unleash the floodgates by the end 2003 if they are not to start looking like many of the forward international-theme parks built in the early 1990s that now litter the roads towards China's great historic wonders.
As we move from the first major international program market of the year into a busy season of politically charged domestic PRC TV markets, China finally seems poised to make good on its long held potential as the "biggest TV market in the world", but only because it needs to.
While we must leave it to you to decide if MIPTV provides relevant indicators of trends in the international program trade, the event tells us that China and the world have just taken a symbolic leap in their understanding of each other.
The view and the direction of the new "majors" in Chinese broadcasting is best summed up by Shanghai Media Group and its President Li Ruigang, heading the largest and most comprehensive commercial exhibition and promotion campaign by a Chinese media organization at an international market.
At a press conference and at a reception (for which authentic Chinese cuisine was admitted for the first time in MIPTV's proud history of serving only French canopes) and through an impressive beach side stand and through its advertising and sponsorship of the anniversary delegate bags, Mr Li and SMEG kept repeating the message coming from China's new super metropolis for the 21st Century.
The message was simple, totally compelling and the most important breaking news story since China chose a PAL system in 1973. While journalists from a number of respected titles took the time to consider its significance for the industry, many in the Chinese delegations observed that many western participants are too busy maintaining traditional relationships to consider new markets.
China Media Monitor subscribers need only look for Shanghai at our search page to see more detail about the incredible media and entertainment market emerging in China, led by Shanghai, but for those that missed any of the opportunities to hear the English speaking Mr. Li, (at 35 years old China's youngest ever senior broadcast official), this is a brief executive summary of his presentation:
"Look at Shanghai's urban cable system, probably the biggest in the world (at 3.5 million subs). We own that. At the moment, these clients receive seven basic channels. We own them. Terrestrial viewers in Shanghai are served by four channels. We own them. Shanghai reaches the whole of China through a satellite channel that we own. We own 12 major media, entertainment and exhibition complexes in Shanghai and more than 50 cinemas. We own all the major film, drama, factual, news and animation production groups and companies. Ours is the inter-active digital network that will be available to over 2 million people in three years time and the audio-visual information and entertainment system to be installed in all public transport. Did we miss anything? Oh yes. We own the most important international television and film and TV equipment exhibitions in China at which we conduct the majority of our international business. Welcome to China, Welcome to Shanghai."
Among the agreements CMM-I announced at the market are the continuation of partnerships with all the leading international TV festivals in China and the Asian region. These include the Asia TV Awards, the Beijing TV Week, the Shanghai TV Festival, HK Filmart, the Sichuan TV Festival and the Asian TV Forum. Check the Interactive page at our website.