Global media titans hit China wall, go local
After years of banging their heads against China’s bureaucratic Great Wall, global media giants like News Corp are getting the message: Beijing doesn’t want them owning its airwaves.
By Agencies |
HONG KONG/NEW YORK: After years of banging their heads against China’s bureaucratic Great Wall, global media giants like News Corp are getting the message: Beijing doesn’t want them owning its airwaves. That realisation has led to a subtle shift in the way the global titans do business in a market once hyped for its 1.4 billion potential viewers, with many compelled to get into bed with local partners, toning down their once-ambitious plans.
“The major theme is, the government is focused on promoting its local media to a scale and profitability that it can withstand competition,” said Vivek Couto, an analyst at Media Partners Asia. “You can’t do business in China as a majority owner: full stop.”
The sobering new view came into focus this week with the announcement by News Corp, whose Chairman Rupert Murdoch was once one of China’s biggest cheerleaders, that it was selling control of its Chinese TV channels to a well-connected local private equity group.
Foreign media officials and industry watchers say Beijing, obsessed with information control and a desire to protect domestic media, has erected numerous hurdles to limit their presence.
The News Corp example could show that local tie-ups are the way to go, with foreign firms yielding control to Chinese partners to satisfy Beijing officials wary of foreign influence.
Time Warner too went a similar route when it sold control of CETV in 2003 to Hong Kong’s Tom Group. Many of the major media companies now also make money in China by selling programs to the likes of CCTV and Shanghai Media Group. Disney has also found a niche in merchandising, running a chain of English language schools and in plans to build a Disneyland with the Shanghai government. The less problematic India market is also attracting more attention, though most insist they are committed to China for the long haul.
“The major theme is, the government is focused on promoting its local media to a scale and profitability that it can withstand competition,” said Vivek Couto, an analyst at Media Partners Asia. “You can’t do business in China as a majority owner: full stop.”
The sobering new view came into focus this week with the announcement by News Corp, whose Chairman Rupert Murdoch was once one of China’s biggest cheerleaders, that it was selling control of its Chinese TV channels to a well-connected local private equity group.
Foreign media officials and industry watchers say Beijing, obsessed with information control and a desire to protect domestic media, has erected numerous hurdles to limit their presence.
The News Corp example could show that local tie-ups are the way to go, with foreign firms yielding control to Chinese partners to satisfy Beijing officials wary of foreign influence.
Time Warner too went a similar route when it sold control of CETV in 2003 to Hong Kong’s Tom Group. Many of the major media companies now also make money in China by selling programs to the likes of CCTV and Shanghai Media Group. Disney has also found a niche in merchandising, running a chain of English language schools and in plans to build a Disneyland with the Shanghai government. The less problematic India market is also attracting more attention, though most insist they are committed to China for the long haul.
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