Murdoch tunes in to China market
The opening of News Corp's Beijing office marks the first outside challenge to Chinese state TV, writes Jasper Becker
04/01/99 South China Morning Post
2 Page 19
(c) Copyright 1999 South China Morning Post Publishers. All Rights Reserved.
By publicly ingratiating himself with Beijing, Rupert Murdoch has successfully positioned his News Corp as the first foreign media company to break into one of the world's most closely guarded sectors, the Chinese media.
In a mark of the high favour in which the Communist Party now holds Mr Murdoch, the formal opening of News Corp's office in Beijing was broadcast as one of the top domestic news stories earlier this month.
It is all in marked contrast to Mr Murdoch's position in 1993. That year he said that satellite television and telecommunications posed "an unambiguous threat to totalitarian regimes everywhere".
Then the lure of the China market became stronger, he dropped the BBC news from Star TV which he bought from Richard Li Tzar-kai, the son of Li Ka-shing. Later, he shrugged off protests after dropping the publication of Chris Patten's book East And West and stepped up his cultivation of senior party leaders.
His flagship London newspaper The Times hosted Shao Huaze, the former general put in charge of the People's Daily after 1989, on a tour of Britain after News Corp set up a joint venture with the paper. Times editor Peter Stoddard has since had to defend himself against accusations that he changed the paper's tough editorial line on China as a result.
Finally, last December President Jiang Zemin received Mr Murdoch for an audience and both sides heaped praise on each other. Mr Jiang "expressed his appreciation for the efforts made by Mr Murdoch's media empire to present China objectively and to co-operate with the Chinese press".
Mr Murdoch expressed his admiration for "China's tremendous achievements in every respect over the last two decades".
News Corp is hoping to build a media empire in China one day, and reap large profits from direct pay TV. It now has Phoenix TV, almost the only non-governmental station in China, in which News Corp has a 45 per cent stake. Run by a former PLA officer, Liu Changle, it now makes money by selling blocks of TV programming through cable TV distributors, mostly in Guangdong, and reaches 45 million households.
Livelier and better presented than Chinese state TV, it is very popular although it sticks closely to the correct political line. Its highest endorsement came last year during Zhu Rongji's first press conference as Premier, when he declared how often he watched its programmes.
News Corp is now well placed to plan a big expansion and wants to start up new TV channels - one on finance, another on travel, a third on natural history - in addition to the existing stable of five channels: two from Star TV, Channel V, Phoenix and a Chinese movie channel.
It is now trying to work out how to generate more programming material which will especially appeal to mainland audiences rather than taking material from Taiwan, Hong Kong or Singapore.
The chief executive of Star TV, Sichuan-born Gareth Chang Chengchung, is talking about producing five or six classical drama series a year inside China as well as children's programming and domestic comedies. In addition, News Corp may buy up mainland soccer teams and introduce new sports such as baseball to create audiences for exclusive coverage of popular events.
A central objective is to establish the potential technological base for satellite pay TV in China, which Mr Murdoch pioneered in Britain. This is becoming more and more possible. You can now see satellite dishes everywhere on the mainland even in the poorest of villages, despite orders in the early 1990s to halt their proliferation. Shanghai viewers can now see more than 40 channels distributed by cable operators.
To earn money from this audience requires government co-operation though, to sell decoding boxes to individuals, not just to cable distributors. News Corp has now proved this is possible.
While Disney has been unable to control the illegal distribution of pirated VCD copies of its animated movie Mulan, Mr Murdoch's Fox Home Entertainment successfully released and distributed Titanic as a VCD , after Mr Jiang publicly praised it as a great, and indeed socialist, movie.
News Corp has also been shifting into news broadcasting. Phoenix already broadcasts news with a Chinese focus. It also has better reports from Taiwan and Hong Kong than CCTV. Since last year, Star TV has had two hours of news a day including material from Fox TV news and from Britain's Sky TV which recently opened a bureau in Beijing.
While none of this challenges the official mainland view of the world, it marks the first time that a real competitor to state television has emerged in China.
Communist officials have always regarded the complete control over propaganda and information as a key pillar of party power in China. Yet one can only speculate where competition, once it starts, may lead to in the long run. News Corp executives like Mr Chang simply say that "China is changing".
Competition could become the seed for fundamental change in the long run so it is not impossible that Mr Murdoch might be staying true to his original vision about how satellite TV could undermine totalitarianism. China has long since lost the battle to stop people listening to foreign shortwave radio broadcasts and there is more and more choice in everything except ideology.
On the other hand, it may just be evidence that compliance with the wishes of the party may always remain paramount in China for anyone who wishes to make money.
Certainly, China will sooner or later be bound to open up its information sector to competition if it wants to join the World Trade Organisation, and News Corp could offer a way out. Cheap telecommunications is already making a difference.
Radio Free Asia, the US government-sponsored radio broadcaster, has been able to report strikes and protests going on in small provincial towns. News which Beijing would prefer kept secret often gets out in this way, as it did with recent protests in Hunan.
Perhaps the lessons of Mr Murdoch's access to the mainland market suggest, though, that it is not government-run broadcasters but commercial media organisations, guided by big-thinking entrepreneurs, which are leading the way. Ted Turner's CNN is also now available in hotels all over China although it generally sticks closely to government strictures on its reporting on China.
By contrast, in radio, the BBC World Service, which in the 1980s probably had the largest following of any foreign broadcaster inside China, is in danger of falling far behind. The service was hailed as a national saviour at the time of the Tiananmen protests in 1989.
The Chinese-language service is still popular but reception is often poor, at least in Beijing, and subject to frequent jamming. The Voice of America can be heard much more easily. Underfunding also means that the programmes are broadcast from London, rather than China.
Radio is in any case likely to be supplanted by satellite TV, but World Service Television has little money to expand. BBC World does not broadcast in Mandarin, Cantonese or Korean (although it does in Japanese). Its English-language satellite TV broadcasts are very hard to see in China. The authorities have even stopped diplomats in their restricted compounds from accessing the signals. The BBC World Service website has been blocked.
The party wants to punish the BBC, first for broadcasting a programme on Chairman Mao Zedong and later for repeatedly allowing reporters to enter China secretly to film embarrassing reports on unrest in Xinjiang, Tibet, prison labour, and the sale of prisoners' organs.
All resident correspondents already have to be careful not to go to sensitive areas unless they have permission and are accompanied by minders. Restrictions on broadcast media are sometimes so tough the authorities stop journalists from going on to Beijing streets to carry out interviews.
BBC executives came to China to offer assurances there would be no more unauthorised reporting. But last October, British freelance reporter Sue Lloyd Roberts again enraged the mainland authorities by reporting from Tibet without permission. London was made to look an unreliable partner.
The absence of a co-ordinated negotiating policy by the BBC and a long-term strategy to open up China for its satellite television clearly puts London at a disadvantage to Mr Murdoch.
The Australian-born entrepreneur has been thinking hard about the future of the media in China. It remains to be seen whether the BBC and other Western media giants will catch up and, if so, to what lengths they will tailor their coverage to do so.
Media empire . . . Rupert Murdoch's News Corp has become the first foreign media company to break into the mainland media market. A prime objective is to establish satellite pay TV in China.
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