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Wed, Dec 07, 2005 - Page 12 News List

Global media on wrong track in China: executive


For the past decade News Corp, Viacom, Time Warner and every other global media behemoth has been wrestling with how to crack the Chinese market.

The benefits are obvious -- a slice of the revenues from a population of 1.3 billion undergoing a massive sea-change in their media consumption habits. According to Anthony Tse, the director of corporate development at Hong Kong-based media conglomerate Tom Group, the total media and entertainment market is already worth US$25 billion, with a relatively under-developed television market alone worth US$7 billion.

The fragmented outdoor advertising sector is already worth US$1.6 billion, with thousands of operators. Likewise, there are still thousands of television operators. Newspapers, which are still heavily state-controlled, are worth US$3 billion and magazine sales are worth $1.5 billion. Any company that can start to bring economies of scale to these businesses, while at the same time negotiating the unpredictable world of Chinese bureaucracy, has an obvious head start.

But the real opportunity, according to Tse, is in new media. Despite frequent stories about Web censorship, Tse says that mobile phones in particular offer content providers a certain latitude that they would not get in traditional media.

Tse says that there is a growing culture of political jokes being spread virally on mobile phones. While the government would never tolerate satire on television or in print, there are signs that it is more accepting of some digital content, he says.

There are between 100 million and 110 million Internet users in China, around half of whom are hooked up to high-speed broadband. Meanwhile, the country already has 378 million mobile-phone users, city centers are lined with China Telecom shops and the content sector is growing at a bewildering rate.

Tse believes that mobile content has taken off in China, Japan and South Korea because Asian mobile operators are taking a more long-term view. While state-controlled China Telecom takes a 15 percent cut from content providers, Western mobile operators take closer to 50 percent or 60 percent, Tse said.

"They go to China and they always try to hit a home run. But in an emerging market you can't be so short-sighted. We did what we were allowed to do and then started going after the tougher markets. We have a saying internally: We did what we could, then what we would, then what we should," he said.

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