SUMMARY
China has the world's largest television industry. The audience has grown from 80m in 1978 to 900m today. About 30m homes are also linked to cable stations, expected to rise to 100m by the year 2000.
There are more than 1,000 television stations, most of which are financed mainly from advertising. Total annual advertising income is nearly $2 billion and is expected to rise to $7 billion by 2005.
The government wants foreign finance and technology and some foreign programmes, but will block western cultural dominance.
The most popular programmes are not western ones but the new, outspoken, news and current affairs programmes. Sitting in the British-style City Pub in downtown Beijing, the media director of Saatchi and Saatchi (Greater China) was talking about his biggest worry-how to get Chinese women to buy Head and Shoulders. He need not worry. According to the first western consumer survey in China, Proctor and Gamble's Head and Shoulders achieved the highest brand name recognition in women's products. Of those questioned in China's nine biggest cities 80 per cent had heard of it. The 1995 Gallup China Consumers' Attitude Survey found that Johnson and Johnson came second with a 42 per cent mention and Avon third with 36 per cent. No Chinese brands were recognised by those interviewed. Saatchi and other big international advertising companies now operate in China on behalf of nearly all the world's largest consumer companies.
It is through television that these multinationals are now trying to achieve the Holy Grail of instant brand recognition in what will be the world's largest consumer market. As a result, the annual television advertising spend in China is projected to increase three-fold to nearly $7 billion by 2005, making it second only to Japan in the region. This huge advertising spend is driving the most extraordinary development in world media-the emergence of the world's largest commercial television system within the world's largest Communist party-controlled state.
The current size of China's television system is already difficult to comprehend. On Chinese New Year's Eve the state's central television network, China Central TV (CCTV), broadcasts a four hour entertainment extravaganza which gets a 90 per cent rating across the country. At some point in the evening nearly 900m Chinese watch the show. CCTV's Channel One 7pm evening news gets a 40-50 per cent share of the audience-between 400 and 500m viewers.
Everyone from Saatchi, to Rupert Murdoch and the Chinese Communist party (CCP) itself must now find ways of winning the hearts and minds of this mass audience. As one of the heads of the CCTV network said: "The audience is now the God."
This is quite a new view of the relationship between broadcasters and viewers in China. Since the foundation of the CCP in the early 1920s the media has been regarded as the mouthpiece of the Party, for the propagation of the line and the mobilisation of the masses. Even today all leading media workers are Party members and major policy decisions relating to the media come from the Party organisation. Only technological and administrative issues are dealt with through the government machinery-in the case of broadcasting this is the Ministry of Radio, Film and Television (MRFT).
The rapid development of the television network began in 1978 when Deng Xiaoping started his market modernisation drive. In 1978 there were only 3m homes with television sets; a total audience of 80m. By 1983 that had increased to 36m homes and 400m viewers. Turgid political programming has given way to more foreign films, Disney cartoons and American teledramas. In 1983 the Party decided to partially decentralise the economy and dozens of locally managed television and radio stations were set up with local funding-although all remained under the supervision of the MRFT. Within a year the number of television stations had doubled to 93. There are now nearly 1,000 "free to air" stations (40 or so provincial and big city stations and hundreds of small city and county stations).
THE COMMERCIALISATION OF TV
In the mid-1980s the pressure on public finances led to the phasing-out of state subsidies, with all media encouraged to rely on advertising. Television adapted comfortably to the new commercial imperatives. Since 1980 an increasing pool of advertising cash had been flowing in from domestic and foreign consumer manufacturers. By 1993 CCTV received $90m in advertising income. In 1995 this increased to $144m-90 per cent of the station's revenue. Beijing TV, the local station for the Beijing area, started running commercials in 1984. Its estimated income from advertising for 1995 was $72m.
All stations remain state owned, but commercialisation has begun to destabilise the once united television system by introducing competition for advertising and audiences. This has led city and provincial stations to counter-schedule against CCTV, and cable television to counter-schedule against the local free to air city stations (although the government insists on certain "must carry" rules for news programmes).
The post-Tiananmen economic expansion has led to the appearance of stations like Shanghai's Oriental TV (OTV) with more programming autonomy. OTV was launched in 1993 by the local broadcasting authority, specifically designed to be a non-subsidised competitor to the city's larger and more staid broadcaster, Shanghai TV. Thus OTV runs more commercials, entertainment programmes, and imported films. (Like other state enterprises, stations have become astonishingly entrepreneurial. For example, Beijing TV now earns much of its income from renting pagers and mobile phones, and from property development, including a 100-floor media hotel.)
The early 1990s saw the start of a new phase of commercialisation-pay cable television. The biggest operator, Beijing Cable TV, provides eight channels to 800,000 subscribers. Shanghai Cable is using the latest fibre optics to bring 12 channels to 720,000 homes. The official Chinese statistics are that some 30m homes now have cable (although Gallup found that 22 per cent of homes had watched cable or satellite television "yesterday" indicating that more than 50m homes are connected to cable or satellite dishes). It is estimated that by the year 2000 about 100m homes will be cabled, making the cable network larger than the US's-currently the world's largest.
The government takes the view that the only way China's television infrastructure can be developed is through a system of "satellites in the sky and cable on the ground." The aim is that all the homes in each city, town, county or village will be cabled and linked to a cable "headend" which will transmit the multi-channel programming it receives from satellite along with its own local fare. The cities will be the first to be cabled with advanced fibre optics, while the villages will initially be cabled with cheaper coaxial cable. With 600,000 villages in China, even this will be no mean feat.
The main constraint on the development of cable is programming.To help local stations fill their schedules (and make money for itself) CCTV is launching four new channels on satellite in April 1996. Three of the new channels (movie, sports and entertainment) will be encrypted pay channels. The cable stations wishing to downlink the CCTV service will pay CCTV between US12c and 20c per subscriber per month. The new service will also include a "free peasant and army channel" and the whole service will be broadcast from Asiasat Two-the latest and most powerful satellite in the region.
Controlling foreign broadcasters
Developing its own domestic satellite to cable network also has the benefit of locking out foreigners like Rupert Murdoch or the BBC. If, as broadcasting officials believe, all the entertainment needs of the people can be met by the domestic satellite/cable network, then Chinese viewers will have no desire to buy their own satellite dishes to view foreign services.
The banning of unlicensed satellite dishes in 1993, combined with the promotion of domestically produced entertainment television, seems to have successfully stopped foreign satellite broadcasters gaining a foothold in the domestic market, at least for now. The number of "carriage deals" which foreign broadcasters have struck with Chinese broadcasters (to allow foreign channels in via the Chinese network) is testimony to the success of this plan. Even Murdoch's Star TV, which has issued figures claiming that 30m homes in China receive its signals, has been courting the Beijing government. The inability of Star TV to get legal access to China's masses has meant it has been unable to build a subscription service or get reliable enough ratings data to sell sufficient advertising to fund Star's expansion plans. Murdoch's efforts to woo the government might now be coming to fruition, with a reported deal with CCTV allowing Star TV programming into the country via its network. The overseas service of the Australian Broadcasting Corporation has already been granted permission for its programmes to be fed directly on to the Guangdong provincial cable network. But the biggest "foreign" broadcaster to gain direct access to the Chinese market is Robert Chua's Hong Kong-based China Entertainment TV. His policy of "no sex, no violence, no news" has helped him get CETV into 28m cable homes. Foreign broadcasters are also trying to gain access to the Chinese market through co-productions and joint venture media companies. These now include one by the UK's Pearson Group in Beijing. The most productive, however, is Rupert Murdoch's four-studio production facility in Tian Jin, near Beijing. This $20m joint venture is designed to produce Star TV's Chinese sports programming and provide post- production facilities for CCTV.
All regional satellite and terrestrial broadcasters are seeking to build up their Chinese language programming for which there is already a huge demand in what is now regarded as the Greater China market of China, Taiwan, Hong Kong and Singapore. Although western programmes still have some attractions, they rarely get more than a 20 per cent rating, and there is evidence, in all these countries, of viewer preference for culturally relevant Mandarin or Cantonese language programming.
The shortage of domestic production capacity has meant that some stations have to rely on imported films and television dramas (mainly from the Chinese-speaking world). An unofficial quota restricts imports to 25-30 per cent of output, but many stations use more. All imported films have to be approved by officials of the local MRFT. However, there has been increasing concern in Beijing that local offices are permitting the import of too many "cheap and nasty" films. American teledramas are accused of depicting too much realistic violence and sex. An apocryphal tale doing the rounds in the MRFT tells of the robbery of a Shanghai taxi driver by a gang of teenage youths. When questioned by the police as to why they had so violently attacked the taxi driver the youths said they got the idea from watching an American film on local television. Responding to this, the MRFT has announced the centralisation of censorship.
The behaviour of the highly commercialised cable television stations is also causing concern. Cable stations are growing so fast that Beijing finds it difficult to keep track of them. In 1995 about one third of the 3,000 cable stations were not even licensed. This year the MRFT announced that it had fined eight local cable stations and revoked the licences of two others for broadcasting programmes that were either pornographic or had "serious political problems."
There is also now a growing awareness of the impact advertising and advertisers might have on viewers. New regulations have banned advertisements for cigarettes on television. But regulations on corporate sponsorship of programmes remain lax. The first big sponsorship deal was with Coca-Cola in 1992 and the latest is with General Electric, which is sponsoring a 130-part $46m Chinese version of Sesame Street. Last year the Japanese advertising giant Dentsu brought together Beijing TV and Toshiba in an advertising and programming deal which has helped make Toshiba the third best known corporate name in China.
Apart from concerns about cultural domination, the MRFT is also concerned to protect indigenous television production. Last year the ministry issued new regulations banning some joint ventures in programme production in line with its objective of restricting foreign involvement to finance and technology. But the line between technology and content is difficult to police. The US cable company United International Holdings and the Hong Kong-based Wharf Cable both have equity stakes in Chinese cable stations and, of course, there are Murdoch's joint venture studios in Tian Jin.
The new journalism
Party tradition has it that the media should only focus on socialism's positive attributes. However, television news now regularly provides a diet of stories about environmental problems, the effects of rising crime, consumer complaints and sometimes even government and police corruption. Chinese programmes also increasingly resort to the "vox pop"-giving viewers the chance to voice complaints and concerns directly.
The Party itself has called on broadcasters to make their programming more relevant to viewers-adopting the principle of "three proximities": that programmes should have a closer proximity to the public, actual events and day to day life. The new populist news and current affairs programmes such as CCTV's Focal Report or Beijing TV's Express News are a big hit with Chinese viewers and usually have higher ratings than drama or light entertainment. In a sense the success of populist factual programming benefits the Party, which wants (especially since Tiananmen) to be seen to listen to popular concerns. Programmes also act as a safety valve for popular frustrations and as a "watchdog" over government, although at this stage it is none too savage. A more pro-active media would also alert the government to areas of social tension-which the Party recognises are the inevitable by-product of the rapid transformation of China from state socialism to a market economy. As a senior CCTV producer put it: "We must not just be the mouthpiece of the government but also its eyes and ears."
