Chinese broadcasters sense change

飞雪寒冰

Mainland China's television industry, a bastion of information control for the country's ruling Communist party, is slowly transforming from within because of pressure for commercial success, according to the head of one of the few privately owned broadcasters operating in the market.

“The rise of the internet and the upcoming convergence between broadcasting and telecom networks in China will turn our industry upside down,” said Liu Changle, chairman and chief executive of Hong Kong-listed Phoenix Satellite Television.

Mr Liu told the Financial Times that he did not believe the Chinese government would loosen the rules banning private and foreign investment in broadcasting or cross- provincial consolidation among domestic state-owned broadcasters in the near term. But he said Beijing was tolerant to deals that went against the spirit of its own restrictions.

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“There are more and more grey areas” in broadcasting, he said. His own company is an example of those “grey areas”. Phoenix's programmes have long been the only relatively independent voice available to Chinese viewers in their own language.

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Mr Liu is the controlling shareholder in Phoenix, but other shareholders include Rupert Murdoch's News Corp and the Chinese government.

His remarks come amid signs of restructuring among the mainland's state-owned broadcasters.

Media China, a Hong Kong-listed satellite channel operator and entertainment content provider, jointly operates the Travel Channel with Hainan TV, a state-owned broadcaster. In December, they set up another venture under which the Travel Channel became the sole advertising agent for Hainan TV.

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At the same time, Hunan Satellite Television, a provincial network with high viewing figures, sealed a deal with Qinghai TV under which it will help the network overhaul its programming.

“These deals are proxies for M&A,” Mr Liu said. “They are doing it already, just under another name.”

Shanghai Media Group, which owns and operates the city's TV network, is also restructuring. It plans to spin off and list a number of subsidiaries that do not relate to the most sensitive news operations.

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One of the main problems for state-owned broadcasters is that they have to operate a multi-tiered channel system on different administrative levels with a lot of duplicated content.

Li Xiaofeng, chairman of Chongqing Satellite Television, said provincial broadcasters could become commercially viable by spinning off content production units and selling content on.