Star grows dim in China, shines in India

News Corp. hits 'brick wall' after gov't's U-turn on relaxing controls

HONG KONG — Frustrated by lack of progress in mainland China, News Corp.’s Hong Kong-based satcaster Star Group is targeting other parts of Asia.

Top of the list are the hugely populated India and Indonesia, Star CEO Michelle Guthrie said last week.

Guthrie calls the Chinese government’s tightening of controls on foreign media investments “disappointing.”

She says that, in the long term, the group is still optimistic, but that it has no new investment plans for China beyond applications already made.

“We submitted a proposal to form a joint venture with a local partner under the official regulatory framework at the end of last year, but we are still waiting for government approval,” she says.

Star has put up 20% of the $350 million to $500 million starting capital for Tatas Sky, a new platform in India that launches early next year with some 100 channels.

Earlier this month Star announced it was buying a 20% stake in Indonesia’s Chakrawala Andalas Televisi, which trades as ANTV. Star will help ANTV develop new content.

Guthrie’s remarks echo those of her boss, News Corp. prexy Rupert Murdoch, and Time Warner chief Richard Parsons.

At a conference in New York last month Murdoch said that News Corp. had hit a “brick wall in China,” after the government U-turn on relaxing controls. “A year ago I would have said that there’s a lot of opening up going on. The present trend is the reverse.”

Speaking at a Hong Kong lunch last week, Parsons said Time Warner would rather invest in India than China because of the regulatory hurdles.

Star operates Chinese channels including entertainment channel Xin Kong Wei Shi, for which it produces 700 hours a year of local content, and music channel Channel V.

But it only has “landing rights” in China for areas of the southern province of Guangdong and for approved residential compounds and upscale hotels. It also has a stake in infotainment broadcaster Phoenix Satellite Holdings.

Earlier this year, some commentators suggested that China’s clampdown on foreign media investment was specifically aimed at News Corp.

The State Administration for Radio Film and Television has probed News Corp.’s wholly owned advertising sales operation in Shanghai, which provides programming content and advertising for regional channels. Chinese authorities are understood to be worried that this operation could, in effect, take control of some smaller broadcasters.

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