China plans to spend billions of dollars over the next few years to develop media and entertainment companies to compete with global giants like News Corp and Time Warner, and says it will loosen some of its tight control of these industries as part of the process.
Guidelines issued last week by China’s State Council envisioned the creation of entertainment, news and culture companies with a market orientation and less government backing — in short, companies resembling Bloomberg, Time Warner and Viacom, analysts said.
On the way, Beijing will allow private and foreign companies to invest in everything from music, film and television to theater, dance and opera productions — though largely through state-owned companies.
One exception is likely to be news programming, which falls under the control of the Chinese Communist Party.
China has also been upgrading its state-run news media, with an eye on foreign language publications, wire services and television programs to reach readers and viewers overseas.
News Corp, Viacom and other Western media giants have for years been frustrated by their inability to produce films and television programs for Chinese consumers. Often they have operated with Chinese joint venture partners and run into delays or political barriers.
Several US companies said they were studying the new Chinese rules and declined to comment.
Among the first companies to benefit from the new government policy will be Shanghai Media Group (SMG, 上海文廣傳媒集團), one of the country’s biggest state-run news and media conglomerates.
In August, the government gave the company approval to reorganize its operations and issue stock to the public.
SMG reported close to US$1 billion in revenues and US$100 million in profits last year. It has partnerships with companies like News Corp, Viacom and CNBC, has profitable television units, including a home shopping network, an animation channel, fashion and lifestyle programming, and owns radio, newspaper, magazine and film production units.
Foreign media firms looking for greater access to China’s vast market may be disappointed, analysts said of the new guidelines.
“This is not an invitation for stakes by international media companies,” said Vivek Couto, director of Media Partners Asia, a Hong Kong-based research firm.
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