Olympics, Yao power China TV growth

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NEW YORK -- August 8, 2008, could shape how the world sees Chinese television for a long time to come. That's when the Summer Olympics are set to begin, which are expected to draw 4 billion viewers.

Looking past Communist censorship and recent nightly news reports from official media outlets lambasting Nobel Peace Prize winner the Dalai Lama as a terrorist, the ad industry has already recognized China's TV gravitas.

The Beijing Olympics will lead worldwide net television advertising -- up 5.8% this year to $123 billion -- defying widespread fears of an overall economic downturn. The Olympics are also expected to help push 2008 past 2007's growth of 3.5%, according to a recent report by Telecoms and Media.

Yet, while the global average for net television advertising per TV household is running at more than $100 -- and the U.S. will be highest at $380 in 2008 -- China will remain the lowest at $10.

Still, sports are leading the way into China, as seen in the NBA's revenue from broadcasting games featuring Houston Rockets center and Shanghai local hero Yao Ming. When Yao faced countryman Yi Jianlian, a rookie with the Milwaukee Bucks, in November, some billed it as "the Chinese Super Bowl." The two played again in early February, with both games drawing Chinese television audiences of 100 million-200 million.

Indeed, China is a major expansion market for the NBA. In January, a group of investors, including ESPN and Asia's richest man, Li Ka Shing, paid $253 million for an 11% stake in NBA China, which was created to handle all of the league's affairs there, including licensed retail. The new entity also hired Timothy Chen, a former CEO of Microsoft China, to head the company.

But now the injured Yao is out for the season, and a recent first attempt by Major League Baseball failed to get Dodgers-Padres exhibitions games aired on Chinese TV.

Another way onto China's small screens is through the tested gateway of Hong Kong, where William Pfeiffer, former CEO of Malaysian-owned film and television production company Celestial Pictures, has just launched a television production company targeting the Chinese-language market. Pfeiffer will establish the company with a modest investment from
Lionsgate in North America.

"Other than the Olympics, the big shifts in Chinese television this year will be the resurgence of the more traditional entertainment genre, including the variety show format and TV dramas, as regulations curtailing contest formats have taken hold," says Anke Redl, director of the Beijing-based media research consultancy China Media Monitor Intelligence. "At the same time, government policies focused on developing China's animation industry will continue to increase output as well as quality of animated stories finding their way into the market."

In February, Mickey Mouse, SpongeBob and other foreign cartoon favorites got their primetime walking papers in China when regulators at the State Administration of Radio, Film and Television forbade all foreign cartoons from airing between 5-9 p.m., expanding an earlier ban imposed in August 2006, which kept foreign cartoons off the air from 5-8 p.m. Japan's "Pokemon" was also impacted by the decision.

Authorities said that the move is designed to protect China's own cartoon industry. The initiative also increases the total amount of domestically produced programming that channels aimed at children should air from 60% to 70%.
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