Media types trying to get a handle on the Chinese market must feel like they’re beating their heads against that Great Wall.
In just the past two weeks, there have been plenty of mixed messages on China’s potential for growth: Authorities nixed a local edition of Rolling Stone mag after just one issue; Warners announced it would open some 200 studio stores in China; cultural overseers issued new regs clamping down on a Chinese version of “American Idol”; Viacom entered talks to develop a Paramount theme park in the city of Tianjin.
And, as always, there’s the good news-bad news on piracy: U.S. media execs applauded recent gains by Chinese authorities to shut factories making illegal copies of CDs and DVDs, but the country remains a hotbed of bootlegging.
Nonetheless, the Chinese government recently announced that stimulation of consumer spending should be prioritized and exports downplayed if the country is to sustain its economic boom. That’s a relief to the U.S., which last year registered a whopping $200 billion trade deficit with the People’s Republic.
It’s also an opportunity for Hollywood.
With Chinese suburbanites already seeking retail sophistication to match their broadening horizons, the government scarcely needs to tell people to spend. A walk through one of many marble and gold shopping malls, a glance at the Rolls Royce and Lamborghini dealerships or a few minutes at a bustling Starbucks should dispel any doubt that Western-branded goods are hits, or that they can earn hard cash.
But media, communications and propaganda are the last bastions of state regulation in an otherwise largely free-market economy, so Western media firms have a harder job reaching those consumers.
So how should they get in on the action?
One answer may be to act like a different kind of company: Don’t lose sleep over “landing rights” for TV channels. Stop assuming that piracy has eliminated 100% of the market. And start making like a consumer goods company.
Warner Bros., which is already building a substantial multiplex presence in China, plans to open 200 studio shops. But that’s just a toe in the water compared to Disney, which boasts 2,600 Chinese “Disney Corners.”
The Mouse also sells 2.7 million books a year in China. That’s not huge in a country of 1.3 billion people, but the margins are way better than from theatrical pics, where the revenue shared by China Film is 13.5%, or from sales to TV, where CCTV often dictates take-it-or-leave-it flat-fee terms.
But if movie and TV distribution channels are choked, how is the Chinese public so aware of these media brands?
First, it’s easy to forget just how many personal freedoms the Chinese public has acquired in the last decade. Second, Chinese online and wireless platforms have grown dramatically, bringing peer-to-peer distribution of ringtones, games and scripted content.
How else can Chinese shoppers keep in touch while sitting in the excruciating traffic jams that have come with affluence?