Satellite Channels Face Embarrassment

BEIJING --- As indicated previously in China Media Monitor, SARFT is mulling the possibility of allowing provincial operators to launch a second satellite channel other than their main channel to be made available to cable operators.

The impetus for the move comes from provincial TV pressure to fill digitally upgraded cable networks that can now carry a much larger number of channels on their basic tier than was possible before (even if they carry a number of pay-TV platforms) the networks are still relatively underutilized in terms of capacity.

This thinking has caused many provincial level operators to push for the permission to launch second channels. However, there is now an internal debate going on as to whether it makes economic sense to push for the second channels in the first place.

Given the huge investment needed to launch pay-TV services and its lackluster take-up rates, a number of officials within the broadcasting infrastructure are railing against what they see as a waste of resources, and now the notion of the provincial operators launching a second channel has begun to come under scrutiny.

Since provincial operators began launching satellite channels covering the country in 1990, a total of 51 satellite channels have become available on satellite (this includes the CCTV channels, provincial operators and CETV).

However, the vast majority of these operators lose money on their satellite operations. According to industry sources, the average cost for maintaining a channel for downlink exceeds average channel revenue of RMB150 million (US$18 million) per year.
 
It is hard to see now how this deficit can be reconciled. But, it's encouraging to see some within the regulatory structure asking that the true cost of an endeavor be looked at and maybe even a business plan or two presented before implementation.