Winners and Losers in China TV Merger Fiasco

BEIJING --- Having announced the completion of China's merger of terrestrial and cable TV stations and the launch of new call signs in July, sources in Beijing have revealed that the State Administration of Radio, Film and Television (SARFT) has only approved the merger plans of about 20% of stations. The sources said that the majority of provincial and city stations have failed to resolve internal conflicts and are still operating as separate accounting, advertising, production, broadcast and employment units.

The failure to complete is forcing SARFT to take aggressive action to force through the mergers by a new year end deadline, including stepping up on bans on new program and channel initiatives. Meanwhile, the broadcasters that have completed their mergers are benefiting from the freedom to move ahead with the next stage of consolidation, the formation of media groups and new external partnerships.

According to some analysts, the head start now being enjoyed by Zhejiang and other early merger completers (see CMM passim) may open up a gap that the others will fail to close in future. In that case, the analysts say, SARFT will have achieved one of its objectives - regaining control through the natural death of smaller, lower level broadcasters.

The implications for foreign players are already being felt as the approved players gain permission for new WTO-flavoured initiatives. With the terrestrial and cable sectors in turmoil, it is no accident that several satellite and broadband initiatives are also announced this month or that SARFT has informally agreed to lower fees for access to China's proposed centralised satellite system.

Although China Central Television (CCTV) has yet to complete its own operational merger with radio and other state level assets announced in July (see CMM passim), it's strong central position has allowed it to move ahead with a rash of new style deals which take it into regional broadcasting as well as joint-venture production operations (see related articles).

Meanwhile, as reported in this edition of China Media Monitor, the formation of the Shanghai Media and Entertainment Group (SMEG) is now facilitating expansion of its international ambitions - a huge leap of central faith in Shanghai's ability to represent China overseas.

In Beijing, meanwhile, the Beijing Radio, Film and TV Group (BRFTG) which was formed just in time to meet the original July deadline, is preparing to re-launch its Beijing TV operation on January 1st with formal opening of new sports and youth channels (see CMM passim). BRFTG has already started investing in the publishing sector.

As reported in CMM-I over the last eighteen months, the reality of China's merger policy has rarely matched the principles. The recent internal acknowledgement that less than a fifth of China's broadcasters have delivered the changes they announced six months ago only confirms the scale of the task and the length of time before recognisable local media industry partners will emerge.

Considering that the mergers already completed were rushed through according to vague internal guidelines that fall woefully short of rigorous international standards, there can be little doubt that the saga will continue for years to come. For those stations that are unable to meet the new 2001 deadlines, death seems to be SARFT's favoured sentence.