In the past, China's television organizations would only exchange TV programs or jointly produce films with their foreign counterparts. Although not a requirement of the country's World Trade Organization (WTO) commitments, China is opening up its television market to the outside world. According to a report from China Daily, Rupert Murdoch's News Corporation signed an agreement on December 19 with Hunan Radio, Film and Television Group to jointly finance and produce television programs in the world's fastest growing media market. It will be the first time for China and a foreign media to jointly produce TV programs. Experts commented, "China's television media is accelerating its reform."

A Dream Come True

News Corporation, led by the legendary media tycoon Rupert Murdoch, spread reports on the 16th National Congress of the Communist Party of China (CPC) to the rest of the world through its extensive TV networks in Europe and America. Murdoch sent a congratulatory letter to the Shanghai municipal government as soon as Shanghai won its bid to host the 2010 World Expo. His global media empire has given Shanghai strong media support.

During China's process of opening up the TV media industry, News Corporation has been one of the largest investors showing strong and long-term support for China's opening-up policies. In September of 2001, Murdoch's Starry Sky Satellite TV (Xing Kong Wei Shi in Chinese) -- the first foreign-funded TV channel in China, was approved in south China's Guangdong Province.

At present, News Corporation has become the first foreign company allowed to cooperate with China's TV media. This is the first time for the Chinese government to allow a foreign-funded TV organization to cooperate with a Chinese film or TV organization. Although the details of the agreement and scope of cooperation are not yet known, some insiders have suggested that the negotiation involves jointly producing TV programs and program exchanges.

News Corporation's Chinese counterpart, the Hunan Radio, Film and Television Group, with total capital of 3 billion yuan (US$362 million), was set up two years ago in Changsha, capital of central China's Hunan Province. It owns radio, film, TV, newspaper, websites as well as a film studio. The company has seven TV channels including Hunan Satellite TV, four radio channels including Hunan People's Radio Station and owns the only listed company specializing in TV media in China -- the Hunan TV&Broadcast Intermediary Co., Ltd. The company was listed in 1999 and has ambitions of becoming "China's Hollywood" producer. According to insiders the actual operational cooperation will be carried out by Hunan TV&Broadcast Intermediary Co., Ltd. and the Star Group Ltd. under Rupert Murdoch's News Corporation in Hong Kong.

TV Media to Accelerate Opening-up

During the past year, the Hunan Radio, Film and Television Group has been in contact with many foreign media companies including AOL Time Warner Inc. and News Corporation to discuss potential cooperation. In May, Hunan TV&Broadcast Intermediary Co., Ltd. formally decided to start negotiations with News Corporation. Detailed negotiations started in July.

On October 22, on China Central Television's Dialogue talk show program, the president of Star Group Ltd. Jamie Davis, the only foreigner present in the audience, asked the program's guest Xu Guangchun, vice minister of the Publicity Department of the Central Committee of the Communist Party of China and director of the State Administration of Radio, Film and Television, "With the further opening-up of China's radio, film and television industry, in what field can the Star Group Ltd. cooperate with Chinese media?"

Xu replied that cooperation between Chinese media and their foreign counterparts should adhere to four principals: Mutual understanding, mutual trust, mutual benefit and long-term cooperation. News Corporation's 20th Century Fox Film Corporation can jointly shoot films and produce TV programs with China. "In short, the door for cooperation is wide open," said Xu.

Murdoch Places Great Attention on Local Resources

The Hunan Radio, Film and Television Group, the first of its kind in China, announced in July 2001 that the Group will realize an income of 10 billion yuan (US$1.2 billion) within five to 10 years. The detailed targets are to implement 10,000 hours of self-produced TV programming, 10,000 hours of radio programming and 1,000 episodes of teleplays. By that time, the Group, centered in Changsha, Beijing, Shanghai and Shenzhen and broadcasting all over the country, will be the largest radio, film and television based south of the Yangtze River area.

In addition, the Hunan TV&Broadcast Intermediary Co., Ltd. has also taken part in investment, construction and reformation of Hunan's wired broadcast and cable TV network, which covers a population of 44.6 million viewers and has 2.14 million cable TV subscribers. The company also plans on having 10 million cable TV users around China in three to five years after further investment.

News Corporation has always wanted to introduce digital pay TV into China's cable network market. The successful experiences of Hunan in programming production and its local market resources have proved attractive to News Corporation.

It is reported that China is in negotiations with News Corporation's British Sky Broadcasting Group (BSkyB) and French media giant Vivendi Universal. The agreement may be bidirectional. That is, CCTV-9 (China Central Television's English channel) will be distributed throughout Europe, while BskyB and Vivendi Universal programs will be permitted to enter China's mainland.

Currently, in addition to Starry Sky Satellite TV's new entertainment channel being broadcasted on Guangdong's cable network, Chinese audiences can also watch programs from five of Star Media Ltd.'s channels, including the Channel V music channel, the Star sports channel, Star Cinema, ESPN and the National Geographic Channel. Star Media Ltd. broadcasts 40 entertainment and information channels to 300 million viewers in 53 countries and regions throughout Asia in eight different languages.

The 16th National Congress of CPC was delivered to European countries by more than 100 channels including BSkyB, via CCTV-9. Murdoch's long-term efforts in China are not only to launch foreign channels in the country, but also to increase the number of viewers at an average annual rate of 8 percent and reach 124 million viewers on China's mainland, Hong Kong and Taiwan through cable and satellite TV by 2004. Investment in advertising has been increasing at an average annual rate of 8 percent and is expected to reach US$760 million by 2004. Investment in China's mainland will see an average annual increase of 4.1 percent, with very broad prospects for the market.

(China.org.cn, translated by Wang Qian, December 24, 2002)