SARS Demands Radical Strategic Re-think

BEIJING --- The SARS outbreak in China has rightly been the focus of intense international media coverage throughout the last month. It has now emerged as the biggest crisis since China opened its doors to the outside world. Naturally, it is now also the biggest obstacle to continued commercial developments in the media sector and the major issue now being faced by the whole industry.

After initially denying that the outbreak was serious, the Chinese government has been forced to come clean about the extent of the problem and completely reverse its policy, not least about media reporting. In the single moment it took President Hu Jintao to announce that honesty was the best policy, the entire state media was turned on its head.

To say the executive order that media should investigate and reveal all instances of cover-up was well received in news rooms is a major understatement. In fact, it is only the nature of the disease and the increased risk this poses to journalists in the field that has dampened professional spirits on the front line.

And yet, few have any illusions that the changes are lasting. Rather, the announcement that "telling the truth is OK", is the clearest possible proof of the lack of press freedom in China and the ability of the government to turn on media accountability as and when it suits the government. That it also happens to suit the people in this case is immaterial to media watchers.

In this respect, the reactions and subsequent actions of the state media to the SARS crisis is more reminiscent of its behavior during the crackdown on "falungong" than an indication of moves toward real press freedom. Nevertheless, most in China are grateful for the media’s new position and most in the media are proud to be allowed to contribute to the battle.  (See related article)

While frontline media workers scramble to increase original news and information output, the rest of the industry is already suffering SARS fall-out that hints at serious problems in the coming months as the cancellation of normal business exchanges and extension of production deadlines starts to affect Autumn schedules.

Among the series of drastic actions taken by the government is to cancel international and domestic trade shows and conferences along with all major public events. CMM-I has received confirmation that the Beijing TV Week and the Shanghai TV Festival have both been cancelled.

The organizers, Beijing Media & Culture Group (BMCG) and Shanghai Media & Entertainment Group (SMEG) respectively, have not decided whether the events will take place at a later date, or will be cancelled for this year altogether. (see EVENTS)

With the China Media Group organized China National Broadcast Expo (CNBE) originally scheduled to join BTVW and STVF as the third international TV event over the summer period, the SARS outbreak could not have come at a worse time for the Chinese broadcasting industry, fresh from its strong performance at MIPTV. 

Not only are these the major television events for the Chinese programming industry, they are also the occasions where the major buyers from China Media Group, Beijing Media & Culture Group and Shanghai Media & Entertainment Group sign off on deals to purchase a significant percentage of their overseas content for the year.

With BTVW and the STVF cancelled and CNBE awaiting a largely political decision to continue or cancel, what are the implications for foreign program distributors?

To answer this question, there needs to be some idea of when the SARS outbreak will come under control. At the present time, China remains the wildcard in the equation as the number of cases continues to rise and officials admit (under the new openness policy) that medical services are unable to cope with the high numbers of suspected cases.

If, however, other SARS affected areas are considered, it seems that the disease tends to peak around 2-3 months after quarantine measures are implemented. If Beijing can indeed control the outbreak during this period of highly restricted travel and drastic quarantine actions, restrictions may be lifted as early as late June or July.

Given summer breaks in most of the western world, even this relatively positive scenario would mean the next significant personal exchanges would not take place until the Autumn. At this time, Chinese broadcasters and distributors are likely to have significant pent up demand for programming accompanied by tight budget controls as advertising revenues are affected by the general business conditions.

While established distributors will be able to continue to deal with clients without the need for personal contact, for companies looking to build new China business, the loss of major events rules out the most effective entry method and demands a total re-thinking of China strategy.

For some, the services offered by leading agents will seem much more attractive, while for others China will no doubt be placed once again on the back burner. For the rest, though, this crisis provides new opportunities to forge relations with Chinese partners. As many of the country’s "fair weather" friends run for the hills, those with a long term interest are seeking all ways to strengthen relationships.

Thinking ahead, the restrictions on travel and meetings will obviously play to those companies with an established presence in China and other SARS-affected areas who can minimize international executive travel.

Companies with Chinese websites and marketing materials also enter this new period with an advantage. If the many new Chinese buyers that started looking for product at this year’s MIPTV are to continue their work from home, program distributors must make further efforts to meet them half way.

Again assuming a summer resolution of the SARS crisis, it is likely that China's attempts to regain the international initiative will begin in the Autumn. In this scenario, MIPCOM and the Sichuan TV Festival in October and the ATF in Singapore in December look like potential winners as businesses aim to rebuild bridges for 2004.

However, the above predictions are based on early resolution of a disease that, as of today, is still out of control in China's capital city. There are other, more grim, scenarios that may have to be entertained in the coming weeks and months. For the time being, though, the message from Beijing is most clearly "stay at home and watch TV".