New Chinese Media Groups to Learn Fast

BEIJING --- The news that Hangzhou has become the first municipal broadcast system to corporatize its radio and TV assets into a new group structure (see related article) heralds the start of group building at the provincial capital city level.

As lesser cities are not currently allowed to become groups and many provinces have yet to tackle the issue (some suggest they will not form groups at all), groups like the Hangzhou Radio and TV Group (HZRTVG) will be the last line of China's state media defense against foreign competition expected after WTO entry.

As Guizhou TV's President explains in our feature interview, a number of smaller provincial players see their short term survival as coming from re-branding of their channels, outsourcing of program production and the construction of modern broadcast facilities rather than the corporate make-overs underway in more affluent eastern areas.

Although local broadcast licenses are not under threat, the proliferation of delivery mediums means that local broadcasters already face competition from conventional broadcasters in other parts of China. In the digital future, new interactive operators working out of the trial cities of Shanghai, Beijing and Shenzhen may be expected to enjoy significant content and technology advantages with which to gain shares in other markets.

Since production resources are likely to become the first target for media content investors and remain the key to success in this highly cluttered market of mediocre fare, larger state owned media groups and the major independents are expected to become involved in mergers and acquisitions in the coming months.

The establishment of media groups has also forced Chinese media administrators to deal with the question of corporate brands, hardly an issue in the state owned model, but key in the international world of media of which they are desperate to be a part.

While China Radio, Film and TV Group, Beijing Radio, Film and TV Group and the new HZRTVG may all be considered candidates for re-naming or re-branding, Shanghai has already decided on Shanghai Media and Entertainment Group with its slightly unfortunate English acronym.

With or without new names, the new groups must start acting like groups and become actively involved in the industry inside China and outside. This means co-ordinating activities in the marketplace and fighting for exposure at leading events and in leading business and trade titles. While the serious business challenges remain the same irrelevant of corporate structure, creating and maintaining public and industry image throughout the group will perhaps be the biggest new challenge that faces the would-be titans of the Chinese TV industry.