SARFT and MII Blind to Workers as News Takes Hardline Stance
BEIJING --- At a news briefing earlier this month, Xu Guangchun, Minister of the State Administration of Radio, Film and TV (SARFT) confirmed reports of the biggest merger to form a new TV-radio group at state level. As the architect of the merger reforms of state media, Xu appears rarely before the media he controls and is seldom one to enter into specifics.
Without revealing details, Xu said, "the blueprint for regrouping and for integrating resources of the radio, film and TV sectors at state level has already been worked out and is now waiting for final go-ahead from the State Council." He is referring to the TV-radio broadcasting group, the largest of its kind in China, comprising China Central TV (CCTV), China National Radio (CNR) and China Radio International (CRI), which will be established this month.
As news of hurried mergers in hundreds of provinces and cities continue to flood in as the SARFT July 1 deadline passes (see related articles), Xu remarked that, "the media industry is hot in China today. Development in Chinese media industry attracts attention from both industry insiders and Chinese leaders".
Spurred on by dramatic changes in international politics, economy, culture and science and technology, Xu called for "bolder reforms in China's radio, film and TV sectors [to] reflect the demands of the growing Chinese media industry itself, the requirement from the Party, and also a positive, or even aggressive response to new, global trends in the media industry".
He went on to say that the upcoming regrouping measures will significantly change the Chinese media industry in terms of structure, scale, efficiency and competitive edge, with the birth of several Chinese media giants. Xu even hinted that the next-step reform will encourage the formation "of gigantic Chinese multimedia, of cross-media groups."
While reforms led by radio, film and TV groups in Beijing, Shanghai, Hunan, Shandong and Jiangsu radically alter the broadcast landscape, fundamental consolidation is also occurring in print media with the establishment of 16 major newspaper groups across the country.
What Xu's comments reveal is not just that SARFT is working to build defenses against international competition, but also that most of the important details are being left to the local authorities again, leading to serious questions about whether size-building mergers will bring greater strength or result in highly brittle structures that will fracture upon contact with international competition.
Although the current conditions in the broadcast sector are covered more fully in the SARFT half year reports (SARFT Half Year Radio & TV Review Summary), it was left to the Ministry of Information Industry (MII) to tackle the issue of telecoms -cable cross investment straight on in a public forum.
At the China Internet Conference (see POLICY & REGULATION), MII Vice Minister Zhang Chunjiang said that "the integration of three networks has been written into the outline of the 10th Five-Year (2001-05) Plan," and that, "… the inter-connection between … cable TV and telecommunications networks will become the focus of the reform."
More directly still, Zhang called for the government to swiftly, "approve the cross-operations of the two networks under equal conditions and the last mile will break the monopoly in telecommunications and cable TV sectors".
With most broadcasters unlikely to be in shape to handle further merger activity for several months, if not years, the next stage may well see a mad dash by cash-rich print groups to pick up the pieces of broadcast media before telecoms players enter the frame. Even then, the combined assets of mainland multi-media groups may be greater in volume, but they will all still carry the same inherent business management weaknesses that make them highly vulnerable today.
Indeed, the effect of mergers is to further remove owners from the reality of day to day management of media units, in a market where even Party micro-management cannot ensure consistent quality of work at present. With assets literally thrown around between competing government led corporate units, China's production and broadcast personnel have never been more ready to "jump into the sea" to join companies better able to partner with tomorrow's international competition.
Unless Minister Xu and his planners are very careful, the moulding of western-style media groups out of government propaganda units may, with the obvious exception of transmission operations, provide international competitors with exactly the conditions required to complete the rout of Chinese media over the next decade that many now expect and that sources say has already started.
CMM-I sources in major centers including Beijing, Shanghai and Guangdong report that News Corp is now talking hardball with China over sports copyrights even as its leader continues to meet with leading Chinese leaders, including propaganda chief Ding Guangen.,
Long favoured by News as its leading entry weapon, the sources said that News Corp operated ESS (ESPN Star Sports) is now instigating a "work to rule" policy for cable channels, leading to the removal of its services on many leading networks. The new position has also caused disruption to schedules as ESS complained about newly merged TV stations "transferring" their terrestrial rights to new niche sports channels.
As to whether the timing of the new News Corp stand is suitable and whether the value of ESS's catalogue is enough to force Chinese concessions, remains to be seen. However, News Corp has certainly taken a strong and brave stance and the question can now be asked of other international media players trading into China. When will you start enforcing contracts?