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Larry Namer for Television Business International | September 30, 2010

China: a TV opportunity and a challenge

China has become the market no one can afford to ignore. Whether you are a media company, a consumer brand, or a builder of huge infrastructure projects, China represents incredible opportunities. Metan Development Group was founded almost two years ago as our way of coming to that market and learning all we can. We wanted to set up to be a media company that is 100% focused on China, whether bringing programming In, taking programming out, or using the great production economics to create new formalt for sale around the world. The lesson we learned was that China does not want to be America. They see things they want to learn from us but their goal is to not he just like us. Everything we do is Mandarin-based. Even Hello! Hollywood, which is produced In Beijing and has in field operations in Hollywood, is an original show created in Mandarin for the Chinese audience – not an existing show subtitled or dubbed. Hello! Hollywood fills a gap in the market where young affluent Chinese want to keep up with the world of entertainment – just like viewers in every other place – while having everything wrapped within Chinese context. Currently we have three other shows scheduled to go on air through production deals with Chinese companies over the next six months. But rather than detail those, I’ll give the primary opportunities and challenges in China today.

Opportunities:

1. TV: The national coverage of 35 satellite TV stations and CCTV’s dozen or so national channels provide a reach advertisers are looking for – now they just need programmes to draw in audiences. With over 30 online video portals either hosted by TV stations or dot-tom companies, the stations and portals are fighting for innovative entertainment content and formats. Due to the short history of TV programming development, local production Is having
difficulty matching these needs.
2. Advertising: Advertising expenditure grew 42% over the last 5 years in China and is still growing. China recently eclipsed the US as the largest luxury market in the world. Global brands need TV programming to match their brand Image, which adds to advertising’s force in media.
3. Government: Within the last 18 months, the government has been opening its doors to international media: more films are being brought into China. Illegal P2P sites are being shut down, and television stations are becoming more commercially viable.
4. Internet: Now with over 420 million Internet users, the online community is continually growing. Online video portals are starting to look more like content providers and with the green light on triple play, we see more access and availability to viewing through the Internet.
5. Success of original branded content: TV dramas such as Ugly Wudi and China’s Got Talent have piqued brands’ Interest in executing similar projects with proven formats and brand integration.
6. Digital media proliferation: The growth of the Internet is an opportunity to create multi-platform programming as well as a viral marketing vehicle to build an audience.

Challenges:

1. Metrics: Non-standardized media metrics create difficulty when valuing either television or online. As such negotiating advertising and sponsorship deals is less than a scientific process.
2. China’s size: It is difficult to create programmes that cross all the different regions. ethnicities and economic groups. With over 3,500 TV stations and 30 relevant online portals. building distribution relationships, is not easy.

3. Local media authorities: Relationships with local media authorities are difficult to develop. You have to understand what they want, what they think their constituents want, and what local customs are allowed.
4. Content localisation: The largest country in the world demands that creative concepts be localized and then produced in Mandarin with Chinese actors.
5. Experienced production personnel: Making television appeal to mass audiences is relatively new. With limited audience feedback, skillsets aren’t honed by constant evaluation. However. work ethic is not an issue as people are willing to work hard to participate in the new opportunities that China has developed over the past 30 years.

Larry Namer, president and CEO. Metan Development Group

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