"Capital Regale" Follows by Revolution for China's Media Industry

When the "alarming warning" of Wang Ran, CEO of China eCapital Corporation, saying "the next foam will be the media" still echo, a large number of investors have started to ogle to the media industry with intense interests.

Even though some old brand media still take scrupulosity and scorn half and a half to the participation of capital, there is no doubt that China's original pattern of media industry will be terminated with more capital swarming into the industry.

It is not very easy for foreign capital to enter Chinese media industry because of its strict management. However, stronger industrial features gradually do appear.

CEO of Tom.com, the certain representative for China's rising media, recently said at the "E-Talking New Economy Forum" that in the coming several years, the value of China's advertisement market will exceed 100 billion yuan and the gross media volume will be divided into three to four portions which means the big advertisement cake will worth about 40 billion yuan. Tom.com definitely will not merely sit by and watch.

He said the rise of "transmedia" is an inevitable trend. Tom.com just gave its first strike. A tridimensional media that bridge plane printing, network and television will not only give a full play of corresponding effect to ads agents, but also provide its sources for intersecting usage: what's more important, the internet industry will be able to take root much more deeply into the traditional media through the combination of different media styles.

Chen Xiaochuan, vice chief editor of China Youth, said that about 30 to 35 percent of the expenditure can be saved if different styles of media cooperate in source production.

He also revealed that the profit rate of an average media company in China is between 20 and 25 percent although in many situations it is not possible to figure up the profits level accurately.

The attraction of China's current traditional media industry to the investors just lies in its insufficient competition because investors believe that large opportunities exist in the industry especially when the demand for media sources sharply increases with the development of wide-band network. Take Beida Jadebird as an example, following its stress on the investment in the construction of broadcasting and television network in more than ten provinces and cities so as to control the coming "era of wide-band", it determinedly developed "Jinghua Times" with People's Daily by investing a large amount of money which clearly reflects its ambition in dominating the wide-band source providing services basing on traditional media sources.

However, the strike on China's traditional media pattern by local burgeoning powers such as Tom.com and Beida Jadebird may be only uncertain if compared with the potential threat engendered by some "media empires" including AOL Time Warner, News Group, Viacom and Disney. Their intention in advancing to the Chinese market really makes Chinese media sit on thorns.

Sumner Redstone, president of Viacom, never veils his great interests in the Chinese market. He took the rising market including China and India as his strategic target for the next step. MTV Channels, the subsidiary channel of Viacom, not only co-sponsored grand musical occasion with CCTV, overlord of China's TV industry, but also introduced its program to more than 50 million Chinese audience by cooperating with 37 cable TV stations in China. Presently, Viacom is busily working to introduce its Nickelodeon Program to the country.

News Group succeeded in bringing its Phoenix TV into the inland. Obviously, it will never rest content with this. So far, News Group has had its seven channels transmitted and received in China's three-star (or above) hotels, accounting for nearly one third of the 22 foreign channels operative here. Liu Xiangcheng, vice president of Star TV, also predicted that only China's media market will be able to compete with US media in the future.

Besides, the cooperation between AOL Time Warner Inc. and Legend on FM365 Program has always been regarded as a stepping-stone for AOL to probe into China's media market; Time Warner Inc. also held "Fortune" Forum successively in Shanghai and Hong Kong and spared no pains to create atmosphere for China's economic growth. It has really given much thought to China's media industry.

Various indications have shown that although China does not give any commitment on opening its media industry for entering the WTO, its media industry will certainly be confronted with large changes with China's further integration with the economic globalization.



By PD Online Staff Du Minghua


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