BEIJING — Execs and government officials were warily optimistic about the future of cable and broadband transmissions in China at a Beijing confab last week.
Delegates to the two-day Sino-Intl. Cable TV Executive Management Conference agreed that the key lies in consolidating fragmented cable services and setting standards in line with international broadcasting.
Michael Kertzman, prexy and CEO of platform software company Liberate Technologies, summed up sentiments, saying: “Whenever you introduce new technology, it comes down to standards. That was the case with DVD, and it will be the case with introducing digital technology to the cable networks here.”
Local authorities were in broad agreement. Ye Zhikang, head of the Shanghai Media and Entertainment Group (SMEG), an umbrella organization that controls film production, radio and TV in the east coast city, highlighted local initiatives for new technology. “We are the national pilot city of high-definition digital TV, and we will begin testing interactive two-way digi TV in July this year.”
Chen Xiaoning, of the State Administration of Radio, Film and Television (Sarft), said several standards were in place, including DVB-C, the cable digital format, at the transmission end. However, he admitted the vital link between the set-top box and the applications it runs was still a problem.
Yakking about Yanks
The potential for digital cable networks caused a buzz, with many interested in the American experience. Terri Richardson, VP of nCube and John Sie, chairman and CEO of Starz Encore Group, related the U.S. history of video-on-demand.
Meanwhile, despite recent attempts to centralize the industry — including the establishment of the China Broadcast Network Co. (CBN), a division of Sarft — China’s cable networks are fragmented. Michael Erickson, VP of investor relations for Liberty Media (which has a stake in Starz Encore, Discovery, AOL Time Warner and News Corp., among others) urged the Chinese to learn from the European model.
“After the initial explosion in the number of cable operators, a second and third wave of larger companies moved in and consolidated the industry,” he said. “That has to happen here, too, at some point.”
Foreign investment in the huge cable television market in China is forbidden. Officials estimate there are more than 100 million cable-connected families on the mainland generating in excess of $1billion annually.
Shanghai high on media
The presence of the Shanghai delegation — the only regional media group represented — reaffirms the power of the city’s media authorities.
SMEG is now the largest production base in the country, with an annual offering of 20 feature films, 100 TV films and 200 TV series, as well as interests in hotels and real estate. Its revenues were estimated to be around $500 million last year. Its piloting of digital cable schemes is likely to boost this profile further.
SMEG prexy Ye Zhikang would not be drawn about the Shanghai Film and Television Group (a division of SMEG) taking a controlling stake in the second distributor license for imported films, expected to come into effect by July this year.
According to sources, the Shanghai Group will be the largest shareholder in the company, which will distribute half the 20 films imported a year under new World Trade Organization regulations. The other half will be controlled by China Film Group, which used to have the monopoly.
“That is a matter for Sarft to decide, at the right time,” Ye commented.