Chinese Media Industry to Change Forever
As a seasonal gift to our subscribers, CMM is pleased to lead with an exclusive lead story about the huge internal re-structuring of the state's media assets.
BEIJING --- According to CMM sources in Beijing, the continued problem about what to do with China's state-owned media assets (basically the whole lot) at last seems to have found some direction at the upper levels.
Unfortunately, leaks from the Propaganda Department of the CPC Central Committee and the State Council are sending cross signals to the various interested parties who have been racking their brains for the brilliant proposals on which their futures depend.
Naturally, everybody's proposals concentrate on them being the center of that bright and glorious future and all have been initiating pilot projects of varying sizes to get their foot in the door.
For example, CCTV's blueprint for the future concentrates around the station's metamorphosis from communist mouthpiece to 21st Century Global Commercial Super Station. CCTV has quite a head start in this respect, although the initial pitch can only be so bold.
CCTV President Yang Weiguang is one key player who is backing the current mini-trial of a DBS service to 10,000 mountain dwellers with donated equipment from MIH of South Africa. According to State Administration of Radio, Film and TV (SARFT) sources, an on-the-spot technology meeting held in Guizhou in September solved remaining technical problems and all the test villages could receive the signal.
This clears the way for the launch of the trial which is expected to lead with CCTV-8. This means that Encore International (which was the first US company to lobby itself into a CCTV satellite block on CCTV-8) is the lucky international player with the responsibility of introducing five generations of selected healthy mountain folk to modern entertainment.
CCTV and its partners are naturally hoping that the initial ratings will also be mountainous and prove a digital service can be profitable and should be extended to every household in the whole country.
The macro arguments are good as a CCTV controlled digital service would allow for completely ordered and centrally controlled introduction of foreign services which could be presented in support of China's entry into the WTO.
While CCTV may be confident of still existing when the final decisions on the future are taken, the situation is less clear for many others. Hence, all are scrambling to create proposals which will leave them holding the best of the state's media assets as Zhu Rongji's reforms effectively result in the sell-off of a lifetime.
Among the scenarios said to have received the ultimate approval is the creation of four monstrous media conglomerates. Such a vision was mapped out by Mr. Chen Xiaoning, Director of the SARFT Information Network Center at a "Film and TV Program Market Seminar" organized by the Center, which is authorized by SARFT.
In his address on December 1st in Beijing, he said the plans called for the launch of four new conglomerate media groups which will be comprised of independent operating companies. The four groups will be the Newspaper Group, the Publications Group, the Film and TV Group and the Cable TV Group.
Mr. Chen himself is set to take responsibility for the organization and establishment of the Cable TV Group. His group will control the national cable television network which he says will be interconnected via optical fiber to more than twenty provinces and cities' cable networks next year.
Meanwhile, other reports monitored by CMM reveal further domestic privatization among many leading media organizations. In its November 28th edition, China Culture Post quoted from an address given by SARFT Vice Director Zhao Shi at a recent seminar on "20 Years of Reform and Opening Up & Chinese Film" in Chongqing in which it was disclosed that the State Council had approved the establishment of the China Film Group.
According to the paper, the new China Film Group will be made up of seven enterprises authorized directly by SARFT, including the Beijing Film Studio and the China Film Corporation.
In a similar regional move, the Xi'an Film Studio is establishing the Xi'an Film and TV Shareholding Company with combined assets of RMB 200 million. Xi'an Film Studio will be the major shareholder with ultimate production and the distribution control.
CMM has previously reported on several similar mergers and corporatisations at regional levels, including Sichuan, Shanghai and Beijing and the latest moves at this level are clear indicators that whatever the national model turns out to be, it is unlikely to be in place before the regions have divided up their own assets among themselves.
Although CMM predicts that corruption, bribery, nepotism, naivety and other unhealthy business practices will lead to widespread duplication of efforts, wasted investments and unequal distribution of assets, the changes will eventually result in media organizations that are much closer to being possible investment plays for foreign companies.
In some cases, this is already happening and early international pacesetters could be poised to make the breakthroughs that their long courtship of China's leaders have long promised, but never quite yet delivered.
The promotion of recent coverage of Rupert Murdoch's meeting with Jiang Zemin to front page status, for example, was the result of strong support from the Information Office of the State Council and the fruits of News Corps lobbying of newspaper, publication, film and TV and cable TV circles.
But as industry observers speculate about which of the big foreign names will finally open the door in a meaningful way (some are laying odds that it will not include any of those currently being touted), CMM believes that News Corps is working on a new secret plan for China.
TO BE CONTINUED IN 1999