CHINA MASS MEDIA EXPANSION

As most people know, all mass media, including television stations, are state-owned in China. However, with the economic reform in the broadcasting system and China entering the World Trade Organization (WTO), the television industry has expanded greatly and the television market has evolved, with an ensuing growth of competition. The players in China’s television industry have changed from a monologue of TV stations to stations that hold multiple roles and a growth of production companies and overseas television companies although the TV stations still dominate China’s television market. Private television production companies are, however, becoming increasingly active in this market.

Since the economic reform of the 1980s, television organisations have reshaped the system from government ‘institution’ (shiye) to state-owned ‘enterprise’ (qiye), changing their operations from government funded to commercially managed through advertising and program rights. The scale of the television industry has increased tenfold and more since the reform of the 1980s. By 2005 there were 302 TV stations, 1,932 Radio & TV stations (1,272 of them rural) that operate a total of 1,227 channels and broadcast 12,831,800 hours every year across the country, covering 95.81 percent of the entire population of 1.3 billion people, including 12.6 million cable users (SARFT 2006, 47). Over the course of the gradual ‘industrialization’, ‘commercialization’ and ‘corporatization’ reform, state-owned TV stations have evolved from political propaganda ‘mouthpieces’ to the multi-role of political presence and commercial force. However, the growth of TV stations still cannot keep pace with market demand.

Statistics show that the production hours of TV stations account for just 20 percent of the broadcasting hours in the whole country (SARFT 2007). The production system of the TV stations is unable to satisfy demand in the current situation and television stations have thus begun to look for support outside the system.

Within the context of the ‘socialization’ and ‘marketisation’ broadcasting policies, both private studios and the practice of outsourcing began to emerge in the market in the wake of the less restrictive policies of the 1990s. Over 1,500 private television production companies have been set up since the first private TV production company was established in China in 1994 (SARFT 2006). Since 1994 their operations have been dictated at different times by banning, acquiescence, and approval by the government. Over more than ten years of development these private companies have become a very important part of the television industry as a whole and are involved in every stage of production.

The development of private television production companies can be divided into three stages: ‘non-oxygen’ stage; ‘lack of oxygen’ stage and ‘feeding with oxygen’ stage. Before China’s economic reform in 1978 the mass media were regarded as an important tool for ideology propaganda and the media were considered a part of political bureaucracies. This meant that there was no room for private companies, just like a non-oxygen environment for living beings. As the ‘mouthpiece’, mass media were considered a sensitive field for private investment and were closely controlled by the government. Therefore, it is not surprising that there was no policy or regulation for the management of private companies in this field before 1995. Indeed, it was in 1994 that the first company in the TV production business registered with the Trade Department of the government, bringing the concept of private TV production companies to the attention of Chinese
policy makers, even although before then quite a few of these companies had already been operating ‘underground’.

The first Broadcasting Regulation on this concept was issued in 1995 and totally banned the development of private TV production companies although, in practice, it was never fully executed. With the profound reform of the market economy in China and the boom of the television industry, the number of private companies increased greatly. In particular, the regulations issued by SARFT in 1997 stated that private companies could be granted permission by some government departments.
After that some private production companies emerged from their underground status in developed areas such as Beijing, Guangzhou and Zhejiang. By 2000 the number of the private TV production companies had more than doubled: at the Beijing International Television Expo they totalled 317. In 2002 the idea of the ‘separation of production and broadcasting’ – originating from the ‘commission’ of BBC program production – was advanced and discussed by many producers and experts. The ‘separation of production and broadcasting’ reform was to change the multifunction TV station that controlled production, broadcasting and distribution to a single-function TV station that mainly produced the news and controlled the broadcasting platforms.

Important milestones for private TV production companies

Time	Events
1994.11	The first ‘TV production company’ with the ‘advertising company’ name ‘Jia Shi Advertising and Cultural Company’, set up in Beijing
1995.9	SARFT Regulation No. 16. Rule No. 5: it is forbidden to establish independent film and TV companies, temporary regulations on the organization of film and TV ownership and management, by former SARFT
1997.9.1	Rule 31 in the Radio and Television Management Regulation: Some production organizations with the approval of the Radio and TV administration departments can produce programs
2002.11	Notice: independent film and TV companies can be certified once they are approved by the relative government department, by SARFT
2003.12	Doc. 105 issued by the State Council Office, Rule No. 10: social invested cultural companies can be treated similarly to state owned cultural organizations
2004.8	SARFT Regulation No. 34, Rule No. 5: the government encourages social organizations or state-owned companies to do business in the film and TV production sector, but not companies who benefit from overseas investments
2004.11	SARFT Regulation No.44: overseas companies are allowed to invest in co-operation and hold interests in co-invested production companies but the highest shareholding they can own is 49%

Private companies would therefore have more space to manage the production and distribution business. Today, more and more private TV production companies devote time and resources in professionalizing program innovation and distribution, the weak points of China’s TV stations. In particular, in content innovation some have already branded programs in the market (See table 2).
However, the absence of regulations on media rights restricts the innovation capacity of the private television production companies that have to deal with a high degree of copying and emulation in the production market. Most producers look for new sources of inspiration and innovation by resorting to the shortcut of imitating other successful overseas or domestic programs. Some private television production companies have created original and successful programs but within a couple of months they usually have to compete with several similar programs.

Table 2 – Private television production companies

Name	HQ	Year	Famous Brand	Brief background
Jia Shi Media Company (Jiashi Chuanbo)	Beijing	1994	Social News Programs	The oldest production company in this field
Tang Dragon International Media Group (Tanglong Guoji)	Beijing	1995	‘Entertainment 365’; ‘Nike Knowledge Garden’ co production with Nickelon Channel of Viacom	Over 10 programs distributed to different level TV stations; the program platform includes TV dramas, fashion, entertainment, business reports and children’s programs
Enlight TV Production Co. Ltd (Guangxian Chuanmei www.netandtv.com	Beijing	1998	‘Entertainment Live’ was aired in over 20 cities	12 programs broadcast on over 600 TV channels; extension of content production to mobile SP, internet and other new media; merged with an SP listed company, Huayou Ltd., in Nov 2007
Joyful Culture and Entertainment Co. Ltd (Huanle Chuanmei) www.joymedia.cn	Beijing	1998	‘Happy together’ (Huanle Zongdongyuan); Cultural Report Daily (Meiri Wenhua Bobao)	Major in entertainment TV programs
Yinhan Communication Co. Ltd (Yinhan Chuanbo)	Beijing	2000	BTV ‘Life Channel’ (2004-2006)	Major in business reporting with Beijing TV station
Stellar Media Co. Ltd (Xingmei Chuanmei)	Beijing	2001	Multi-platforms including magazines and DVD, etc.	The biggest company in this field with a registered capital of RMB 320 million
Egasus & Taihe Entertainment International (Paige Taihe)	Beijing	2002	‘Global Film Report’ (Huanqiu Baodao); Program design for Neimenggu TV (Mongolia TV), since 2006	Formerly Egasus International from 1993
Bao Li &Hua Yi Media Group (Baoli Huayi)	Beijing	2003	Hainan TV ‘Travel Channel’ (2005 till now)	Formerly Hua Yi Media from 1996; the main control company state-owned Baoli Group
Guanghua Centenary Media Company (Guanghua Shiji)	Beijing	2003	‘Police Life’ co production with the film and TV production center of China’s Ministry of Public Security	Parent company Guanhua Group including the equipment and music production
Qixinran Media Organization (Qixinran Chuanbo) www.qixinran.com	Beijing	2006	‘Lucky 52’ ‘Golden Apple’ ‘Healthy Life’ etc in CCTV	Formerly Advertising Company from 1997; parent company Qi Xinran Group including film, drama production and animation

Otherwise, the main hurdle for the development of private television production companies is government policy in the state-owned system. Compared to American syndication rules, the British broadcasting deregulation and the Korean broadcasting proportion system which support the relatively small-scale independent television companies in diversifying content and stimulate the market, private TV production in China has not received enough attention from government. Private television production companies cannot protect their rights over programs commissioned or co-produced with TV stations and generally cannot question TV stations on matters of policy protection.

In China, most private TV production companies adopt three different kinds of business models: the first is to outsource programs or a part of the production including packaging, advertising, content production and management but the private companies cannot own any copyright to the programs; the second is to co-produce programs, sharing copyright which includes a part of the distribution rights but, generally speaking, TV stations prefer to make a bigger investment and seldom share the copyright with the private companies; the third business model is to independently produce programs and sell them to the TV stations but again, generally speaking, to reduce their costs, most TV stations devote only a few minutes of time to the programs in return so private TV production companies have to find the sponsorship and investment for themselves.

For obvious reasons most private television production companies in the market still depend on the limited revenues of the first business model. In the global post-broadcasting era, media formats have begun to multiply and converge with new technology development; media audiences are becoming increasingly fragmented and global media groups are moving ever closer to the domestic market. China’s TV industry will also have to transform into a much more flexible system to face these challenges. However, compared to the high-value international media market, China’s TV market remains confined to the lower level of low-cost production and imitation. It is expected that the growth of private television production companies will change this situation and will also boost diversity and high quality TV content production in China.