Shanghai Media Group (SMG) is in talks with cable network operators to air its documentary channel in Hong Kong, part of its plan to expand outside the Chinese mainland.

SMG, China's second-biggest media company by revenue, is negotiating with two Hong Kong pay-TV service providers - PCCW VOD Ltd's Now TV and i-CABLE Communications Ltd's Cable TV Hong Kong - to incorporate its documentary channel into their paid-channel packages, according to Ying Qiming, director-general of SMG's Dong Fang Documentary Channel.

"The two operators have shown great interest in us bringing our channel to Hong Kong. Negotiations are continuing over some financial terms," said Ying, adding that the channel could be aired in Hong Kong as early as this year.

"We are evaluating advertising and the costs involved in transmitting and content adjusting. We don't want to run at a loss in Hong Kong - the bottom line is to break even."

Dong Fang Documentary Channel's potential foray into Hong Kong would be the start of the channel's expansion strategy from the mainland. The channel will expand into other Chinese-speaking regions, such as Taiwan, Singapore and Malaysia, if it has success in Hong Kong.

"Putting our programs on more platforms will yield a better return on our self-made documentaries. That will help us to invest more in production to make our documentaries even better," Ying said.

TV viewers in Hong Kong have access to a much broader range of channels than their mainland counterparts. And Dong Fang Documentary Channel's entry into Hong Kong market will put it in direct competition with international documentary giants such as Discovery Channel and the National Geographic Channel.

Ying said his Dong Fang Documentary Channel will gain its footing in Hong Kong by focusing its programs more on the mainland.

"We will compete by differentiating our content from our competitors', adding a mainland angle to most of our programs," Ying said.

Dong Fang Documentary Channel now airs 150 minutes of self-produced programs a day in China. Ying said the channel will produce more programs and adjust its current ones to the taste of Hong Kong viewers.

Zhang Yanan, a media analyst with Zero2IPO Research, said Chinese media companies will inevitably go abroad as they seek better returns on their productions.

"Going into more internationalized markets can also help domestic media companies gain management and development experience through competition or cooperation with global media giants. That will also benefit their development in the domestic market," she said.

Dong Fang Documentary Channel's revenue reached 124 million yuan ($18.8 million) in 2010 and Ying expected the figure to reach 500 million yuan over the next five years.

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