2ic( s/&l Ao. 7My

LOCAL OR TRANSNATIONAL TELEVISION PROGRAMMING:

MEDIA GLOBALIZATION IN EAST ASIA, WITH AN

EMPHASIS ON DEVELOPMENT IN THE

PEOPLE'S REPUBLIC OF CHINA

THESIS

Presented to the Graduate Council of the

Universith of North Texas in Partial

Fulfillment of the Requirments

For the Degree of

MASTER OF SCIENCE

By

Hongyan Zha, B.S.

Denton, Texas

December, 1995 2ic( s/&l Ao. 7My

LOCAL OR TRANSNATIONAL TELEVISION PROGRAMMING:

MEDIA GLOBALIZATION IN EAST ASIA, WITH AN

EMPHASIS ON DEVELOPMENT IN THE

PEOPLE'S REPUBLIC OF CHINA

THESIS

Presented to the Graduate Council of the

Universith of North Texas in Partial

Fulfillment of the Requirments

For the Degree of

MASTER OF SCIENCE

By

Hongyan Zha, B.S.

Denton, Texas

December, 1995 Sif

Zha, Hongyan, Local or Transnational Television Programming: Media

Globalization in East Asia, with an Emphasis on Development in the People's

Republic of China. Master of Science (Radio, Television, and Film), December,

1995, 118 pp., 6 tables, bibliographies, 168 titles.

This study focuses on the relationship between Western transnational broadcasters and East Asian media. It analyzes 1) the processes through which

Western media players are localized and 2) the impact of media globalization on local broadcasters in East Asia. Recent developments in the People's Republic of

China are the primary focus in the discussion of local media.

This study is divided into five chapters. Chapter one is a literature review and general summary of research on the relationship between local and transnational media. Chapter two focuses on Asian audience preferences and the introduction of transnational broadcasting into East Asia. Chapter three discusses transnational programming and institutionalized media reform in P.R. China. Chapter four presents a case study of a provincial television station in China. Chapter five discusses the implications of transnational broadcasting in China. TABLE OF CONTENTS

Page

LIST OF TABLES iv

Chapter

I. INTRODUCTION 1

II. TRANSNATIONAL BROADCASTING IN EAST ASIA 20

Trends in the Localization of Programming The Advantages of the Transnational Regionally-based Preferences Prospects for Transnational, Regional, and Local Broadcasting

III. THE IMPACT OF TRANSNATIONAL BROADCASTING IN CHINA . . 48

Institutionalized Reform and Broadcasting

IV. A CASE STUDY OF THE JIANGXI TV INDUSTRY 87

V. GLOBALIZATION: TWO WAY TRAFFIC - IMPLICATIONS OF TRANSNATIONAL PROGRAMMING IN CHINA 101 Conclusion

BIBLIOGRAPHY 107 LIST OF TABLES

Page

1. RIPE ASIAN MARKET 20

2. LOCALIZATION OF WESTERN ROADCASTERS 29

3. BROADCAST TELEVISION EXPENDITURES (1987) 38

4. STATISTICS OF THE CHINA'S TELEVISION INDUSTRY 59

5. TV STATIONS ON SATELLITES IN THE P. R. CHINA 66

6. ADVERTISING RATES IN JXTV 92 CHAPTER I

INTRODUCTION

Over the last two decades, the internationalization of television broadcasting has become possible through the rapid development and widespread diffusion of cable and satellite technologies. Initially occurring in the European cable market in the seventies, the internationalization of television has already become a dominant tendency in the nineties.

Coincidentally, Asia has become economically the fastest-growing region in the world ~ overall growth rates in the region have consistently been double or triple those of the USA and Europe during this period. Expansion of technology, a diverse and cheap labor pool, and the encouragement of foreign investment by Asian governments have contributed to this spectacular success. Indeed, as Singapore

Prime Minister Goh Chok Tong says, "Asia's time has come," launching what might become, in a technological, economic, and political sense, the "Pacific century"

(Leger 43).

The dynamic economy of Asia undoubtedly provides an opportunity for

Western media moguls to expand their global ambitions. A number of Western media companies have rushed into the Asian market during the past five years, with

Rupert Murdoch's Australia-based News Corp. leading the stampede. At the time of this writing, most American major entertainment companies have stretched their services into Asia, including CNN, TNT, Disney, Discovery, CNBC, HBO, ESPN, and MTV. Currently, it is estimated that the total number of satellites capable of providing a signal over Asia exceeds 40 (Khushu 3), with an estimated 800 transponders available for television transmission ("An Asian Sky" 35). Furthermore, the maturing digital compression technology will enable the existing transponders to transmit more channels.

The Western media's explosion in Asia has exerted a profound influence on

Asian societies, cultures, politics and economies. It has also raised concerns related to several sensitive issues, including national sovereignty, cultural identity, social system and political structure, and the structure of the economic market. At the center of these issues are Western newcomers and Asian locals. The relationship between them becomes vitally important to the dynamics of media globalization in

Asia and has aroused much controversy in scholarly research.

Among the Asian countries, China is especially valuable for research because of its large population, dynamic economy and political structure. Having one-fifth of the population of the world, China obviously is a vast market. Since the late 1970s,

China's economic system has been gradually transformed from a planned economy into a market economy. The result of this reform is the fastest national economic growth in the world. In 1993, China was the world's eleventh largest trader, with exports and imports totaling $165 billion ("China Belongs to Me" 13). Within this setting, ownership of TV sets over the past decade has increased tenfold ("China

Becomes"). Television advertising revenue in China reached $2.2 billion in 1993, making China Asia's second largest television advertising market after Japan (Karp,

"Cast of Thousands" 48). The changing economic infrastructure over the past 15 years has undoubtedly given rise to corresponding transformations in the superstructure, including the media.

Western media players have long targeted China as a vast and enormously

"underserved" market. Although entrance into the Chinese market is perceived as

(and has been) difficult, due to the combination of political obstacles and economic problems, the transnational continue to try every possible way of getting into the

Chinese market.

The globalization of television is having a direct impact on the Chinese television audience's selection of television programs, the policymaking processes of the Chinese government, and the direction of China's media reform in the future. In response, for example, to a burgeoning market in illegal satellite dishes, the Chinese government imposed a strict regulation in late 1993 designed to inhibit the proliferation of private satellite ownership ("The Ministry of Radio"). Meanwhile,

China has also imported more and more Western programs, and Western programs are becoming more and more popular in China in recent years.

Over the years, communication scholars have discussed and debated various issues and problems relating to the internationalization of television. They have developed and employed many theories and approaches to the research, including imperialism, modernization, neo-Marxist, world system, and modes of production theories. Some have conducted quantitative research focusing on statistical analysis, while others have conducted their research using either an empirical qualitative methodology or a combination of quantitative and qualitative models.

According to Rogers, media internationalization is a kind of "diffusion," which is "the process by which an innovation is communicated through certain channels over time among the members of a social system" (34). For television, the process of diffusion, as described by R. Negrine and S. Papathanassopoulas is made up of several factors, each illustrating the way in which television is increasingly acquiring an international character. According to them, the first factor is that diffusion takes place when the same television signal becomes available simultaneously in at least three countries because of technological developments which make it easier for broadcasters to reach large audiences across frontiers. The second factor is that diffusion is a part of a much larger process whereby capital and investment funds flow easily across frontiers. The third factor is that diffusion draws together television producers, executives and regulators in the process of competition because there have been intensive negotiations about broadcasting issues among the concerned countries. The last factor is the standardization of product in order to meet the requirements of the increase of the transnational trade of television programs (1990, 1-2; 1991, 11-12). Kenneth Dyson and Peter Humphreys have used four terms to characterize the internationalization of communication in recent years with relation to its structure and interior competition - deregulation, globalization, synergy and convergence (1), while Annabelle Sreberny-Mohammadi divides globalization in the media sphere into four separable elements: the globalization of media forms, of media structures, of media flows and of media effects (118-38).

Negrine and Papathanassopoulos also discuss the role of new media technologies, coming to the conclusion that "they have altered the balance of forces between the traditional media institutions and the new media players," and that "the new media created considerable pressure to liberalize broadcasting structures" (1991,

13). They suggest that the motivations leading to the internationalization of programs are: increased cost of production, the potential exploitation of new markets, the opening up of international markets, the growth of interlocking alliances between once separate media organizations, the reality of programming across frontiers and the need to maximize revenue from programming sales (1991, 23). However, what lies behind the motivations are the benefits the media companies can gain from internationalization, which are summarized by Julian Weiss as: economies of scale and scope, the ability to shift resources of expertise from one part of the media field to a competing activity, the ability to use the specialist work forces of other societies, the ability to evade national regulation if it controls whole industries in other societies, the ability to deploy highly specialist managerial expertise in the new competitive media climate, creative synergies (58-59), and three other benefits observed by Sreberny-Mohammadi - optimal levels of promotion, ability to respond to the desires of consumers, and ability to accept greater financial risk (124).

Besides the benefits, researchers also notice some counter-tendencies to the process of internationalization. Among the observed counter-tendencies, the cultural and linguistic differences and government regulations are the most significant, because cultural and linguistic factors create obstacles to a fully developed international television system and government regulations usually control national broadcasting systems, constraining the development of transnational program flow

(Negrine and Papathanassopoulos 1991, 13).

Negrine and Papathanassopoulos see the future of the internationalization of television as a game of seesaw with counter-tendencies and the forces which are bringing about the internationalization of television at the two ends of the seesaw.

They point out that the key issue for development in the future is which force will be powerful enough to overthrow the other one (1991, 13). They predict the results of the game will be as follows:

First, it will lead to a redefinition of the relationship between local, national and international television; there will be a continuation of the present separation of programs but, at the same time, a growing collaboration between different organizations, which results from the pressure to compete internationally and to survive internationally... Second, the nature of that collaboration cannot be predetermined; although the Western axis has been very powerful, it is possible that other subcenters for pattern-building might exist anywhere so long as they are connected with transnational corporations... Third, the symbiosis between the media as politics, business and technology will persist (1991, 28-29).

Some scholars use "cultural imperialism" to explain the internationalization of television. Johan Galtung and Herbert Schiller are two of the foremost scholars holding this theory. They believe that free trade is the mechanism by which a

"powerful economy penetrates and dominates a weaker one," and the free flow of information is the "channel through which life styles and value systems can be imposed on poor and vulnerable societies" (8-9), while Chronis Polychroniou and Harry R. Targ point out that:

...the formation of the global political economy has been largely determined by the processes of capitalist expansion and this expansion is an objective socioeconomic development that is inextricably bound up with the tendencies of the capitalist mode of production toward the constant accumulation of capital and the continuous reproduction of social capital on ever-greater heights (59).

They further argue that the multinational companies headquartered in imperial states are backed by the executive bodies or agencies within the government of the imperial states which are set up to promote and protect the expansion of transnational capital (63). According to Polychroniou and Targ, the imperial state acts in three capacities: economically, coercively, and ideologically (63-64).

Some quantitative studies have been conducted which support the imperialism theory. Tapio Varis' study of trends in the global traffic of television programs shows that traffic flows one-way from the big exporting countries to the rest of the world, with the U.S. and U.K. being the dominant centers of entertainment material flow in the world for the last several decades (150).

However some other scholars disagree with the imperialism theory.

Chin-Chuan Lee argues that U.S. media companies' transnational operations are just

"advanced professional practice," not "imperialism," because only through transnational operation can U.S. media companies achieve economies of scale; different countries have different patterns of media at work, and national variations can be more important than global patterns; all countries have their own cultural and media tradition to counteract the influences of U.S. transnational cultural products, 8 and transnational media flow may have the function to enforce as well as subdue national autonomy (42-47). Richard Collins also argues that the media imperialism theory fails to recognize that transnational media flow may be an important component of diversity and quality for television program schedules. According to

Collins, most countries are active, rather than passive, recipients of information

(131). Michael Tracey suspects the imperialism advocates' estimation of the power of television and the ubiquity and popularity of programming from the United States

(164). By doing quantitative research on program flow in the world, he argues that

U.S. television is not as ubiquitous and popular as people thought; the new distribution technologies will not readily pour transnational programs over the populations of the world; the production of television products will not become concentrated in a small number of centers, but in many; the flow of international television products is not necessary to lead to the global village (163-97).

Some scholars also suggest that the current internationalization of television programs differs from media imperialism. Joseph Man Chan notes that the former does not assume an unbalanced influence of powerful Western transnational media over other countries in the world and that media influence among nations can be reciprocal. He also thinks that media internationalization does not necessarily involve cultural invasion (71-72).

The policies of the program-receiving countries are very important in determining the relationship between local and transnational media, and they are a primary research aspect for scholars. Jean-Luc Renaud proposes that quotas can be a kind of means by which program- receiving countries improve their position in negotiating with program-exporting countries in a media market which is dominated by oligopolistic circuits of television program distribution. They also can be a stimulus to encourage competition if not in the international market then at least in the domestic market (154). Negrine and Papathanassopoulos suggest that encouraging local production is an effective way to avoid being overwhelmed by imported programs brought in by the new media (1991, 22), while David Waterman argues that a public policy which "clearly benefits both domestic motion picture and television production industries is the subsidy or promotion of coproductions" (1993,

78).

But, disagreeing with Renaud, Waterman argues that quotas, as a weapon of cultural protectionism, "tend to undermine the stimulation of both the quantity of domestic programs and the viewing of them, and they constrain the development of strong commercial media infrastructures" (1993, 78). Sola Pool also points out that cultural protectionism is self-defeating because the countries which carry out protectionism lose the opportunity to learn, borrow, and adapt from other cultures; also, protectionism may cause a painful process for the people in the protectionist countries in resisting emotionally the change in value, and because cultural products must submit themselves to an open-market competition for "Any culture that can exist only with cultural protectionism policies are not worthy of protection" (1974,

92).

Almost all researchers agree that government regulation is the main tool for 10 resisting the media internationalization and that current media internationalization is spurred by the tendency toward deregulation in most countries. However, every country in the world still has regulations governing its media. Julian Weiss points out that the functions of regulation in the media world are

to police, direct, control, or otherwise demarcate the boundaries between media; to prevent concentrations of what was deemed to be excessive power; to calculate the consequences of media operations in order to counteract them; to make certain that those in control of specific media command the trust of government; to guarantee forms of economic competition sufficient to prevent the evolution of monopolies (11-17).

Tunstall argues that media deregulation does not mean to take politics out of media, but to move media out of the government bureaucracy of regulation and throw it into the "twin marketplace of commerce and politics." He insists that the giant new media field is still a political field and that having fewer rules is not the same as having no rules at all; the significance of the rules that remain is still tremendous (123).

Some scholars set up economic models of trade in media products, trying to explore the relationship between local and transnational media from an economic perspective. Steven Wildman, Stephen Siwek and David Waterman, in analyzing their economic models, argue that the trade of television programs is characterized by

"flowing from large markets to small markets," and it may be a "straightforward consequence of the economics of competition in products with significant public good components" (Wildman and Siwek 1993, 26). Furthermore, they suggest that the higher production quality of programs with large budgets from large markets will, 11 to some extent, offset the language handicap when they are imported into smaller markets; they also suggest that the programs produced in the small market will most likely be confronted with the language handicap and the disadvantage of smaller budgets when imported into the large market (Wildman and Siwek 1993, 31;

Waterman 1993, 69). Additionally, they hypothesize that "the combined GNPs associated with different languages should be viewed as rough indices of the potentials of the associated linguistic populations as markets for television programs, and that domestic producers can survive and thrive in fairly open competition with imported programs and films by acquiring adequate financial support" (Wildman and

Siwek 1993, 25; Waterman 1994, 97-98).

Richard Collins considers the internationalization of television program production as one form of the "international division of labor". His argument is based on the classical paradigm employed in trade theory which holds that "aggregate welfare is maximized if producers A and B specialize in producing what each of them produces best, and trade with each other to secure supply of the whole range of products produced between them" (126). Thus, he suggests, in economic terms it is therefore a "rational choice for broadcasters in importing countries to import at close to marginal cost foreign programming that enjoys acceptability with domestic audiences, rather than produce indigenous product" (128).

Most of the existing research on the internationalization of television has focused on European subjects; however there are more and more researchers focusing on the globalization of television programming in East Asia from the perspective of 12 both political economy and marketing modes of analysis. Most researchers have reached conclusions about this region that are similar to those about other parts of the world, agreeing that media globalization has exerted a great impact in Asia. Its most direct influence is on broadcast television, as exposure to transnational broadcasts has stimulated audience demands for more sophisticated programming and for greater variety. However, some scholars observe that the impact, up to now, has not been as great as people might expect. In examining recent changes in the broadcast television rates and television advertising expenditures in a number of

Asian nations, Georgette Wang finds that there is little evidence showing the influence of transnational programs on local programs (1993, 147).

Scholars have also conducted some research on the communication policies of

East Asian countries. Jonathan Parapak points out that the main roles of satellite communications in the development of East Asian countries are to accelerate national development, to modernize and integrate society, to improve national efficiency and productivity, to enhance equitable distribution of development, to conserve energy, to eliminate isolation of remote and rural areas, to expand market opportunities, and to attract capital flows for infrastructure development (28). Talking about traditional cultural roots in some Asian societies, Anura Goonasekera argues that

the Western liberal view of man in society is just one view among competing shades of views; in contrast to this individualistic, egalitarian and liberal tradition of the West, some societies (in East Asia) value their consensual and communitarian traditions which emphasize the importance of the community and places Man in the context of the social group to which he belongs; it emphasizes social harmony, which is built on duties and obligations of the individual to the collectivity. The notion of man as a purely rational 13

being, seeking individual happiness based on innate potential is unknown in such consensual societies (195).

He further suggests that Eastern countries should consider the social, cultural and political milieu from which they have emerged in making media policies (195).

In terms of the regulations governing the introduction and control of information technologies, he argues that the "adaptability and permeability of the technology among the general populace must be examined in terms of the readiness of the culture to understand and relate to these technologies" (197-98).

The accessibility to satellite television is considered by researchers as an indicator reflecting national media policies regarding transnational media in Asian nations. Joseph Man Chan categorizes four types of government responses to foreign programs in the Asian region: virtual suppression, regulated openness, illegal openness, and suppressive openness (115-19). Some governments in this region believe that the only way to protect the indigenous television industry and culture is to prohibit access to satellite television. However, many scholars think that it is impossible to do this. Georgette Wang argues that this policy may not be realistic because even if satellite television can be banned, preventing the spread of other new media has proven to be impossible (1993, 147). Hugh Leonard also points out that banning or restricting the use of dishes is at best a short-term policy (125).

On the one hand, Asian countries which have imposed regulations to restrict the transnational programs have difficulties in achieving their purpose; on the other hand, transnational media players also face a number of problems. Considering 14 various factors which have an influence on the access of transnational media, Joseph

Man Chan has suggested a model of accessibility to satellite television in Asia. The model is made up of national regulation, competition from terrestrial television, technological innovation, linguistic barriers, cultural gaps, and national affluence, as well as the programming policy and financing of the satellite television service itself

(119-25).

David Waterman and Everett Rogers have set up an economic model to conduct a study on the economics of television program production and trade in Far

East Asia. The results of their study are consistent with Pool's general assertion

(1977, 139-49) that audiences prefer domestic programming and will demand it to the extent that a country has the economic base to afford it, and the results also consistent with Straubhaar's cultural proximity hypothesis (39-59). They find that there is a relatively lower tendency in the national television broadcasting systems of

Far East Asian countries to depend on imported programming overall and to exchange television programs with each other, but a relatively higher tendency for imported programs to come from the United States (1988, 89-112).

A great number of researchers have studied the mass media in the People's

Republic of China in past decades. Conventional researchers held to the theory of mass propaganda which asserts that the goal of the Chinese media is solely to promote communist ideology. However, many researchers have observed great changes in China during the past 16 years. Tsan-Kuo Chang proposes that "the early assumptions that had guided mass communication research on China should therefore 15 be revised, if not replaced, to make room for the unfolding phenomena that cannot be adequately explained by the existing view of a monolithic press dominated by party ideology for propaganda and persuasion purposes" (175-77). Huang Yu categorizes the major social trends in current China as decentralization which results from the reduction of Party control, de-ideologization, stabilizing elite politics which fosters cultural pluralism, and commercialization (220-21). Yu's thinking is also supported by Junhao Hong (1993, 8-9) who adds one more trend, the open door policy, to Yu's categories.

The change in China's society also gives rise to changes in the mass media.

Yaojie Lei summarizes the dominant trends of the television industry in China as commercialization leading to diverse sources of revenue, narrowcasting to attract more specific audience, bringing in internal competition mechanisms, innovations of technology, and standardization to join with the globalization of television (87-88).

Tsan-Kuo Chang argues that the mass media in China now have a market to attract and an audience to serve (176). Paul Siu-nam Lee also suggests that "Chinese television was playing an increasingly important entertainment role in Chinese society in the decade that saw the highest economic growth in history" (32). He argues that the growth of television and the development of the economy have a mutually reinforcing relationship in China (29-33). Moreover, a researcher in mainland China, Xiaobin He, proposes that television in China is now in a transition process from the "throat" of the Party to an institute serving for public, and eventually will evolve into an enterprise which makes profit. He argues that the 16 degree of commercialization of television in China depends on the percentage of the sources of revenue (9-17).

Along with internal reform and the economic development of the whole country, China's media also is involved more and more with the globalization of television. Jiang Wang's research verifies four hypotheses related to the program flow from foreign countries into China. He finds that with the adoption of the open-door policy and the economic reform initiatives, China will have more in-flow of foreign television programs; the growth of trade with foreign industrial countries will result in more imported programs from those countries; and there will be more variety in television programming from abroad between the central station and regional stations as well as an increasing divergence in foreign programming among regional stations (38). However, at the same time, as China gets more and more foreign programs, China's media is also actively participating in the transnational operation. Joseph Man Chan suggests several steps to help the Chinese media become more international; these include the offering of free goods, regulated trade, competition, demonstration, and cooperation (72-78).

This study will focus on the relationship between the Western transnational media and East Asian locals. By analyzing the strategies and operations of Western transnational broadcasters in East Asia, the study tries to explain how Western transnational broadcasters expand their market in East Asia in an effort to establish a global market. The research will put its emphasis on the process of "localizing" of

Western media players, because it is considered a necessary means leading to 17 globalization. Meanwhile, this study will also give some inside analysis to the impact of globalization on local media and the reaction of local media. By examining the operations of local media in East Asia, this study also tries to find out locals' role in the process of media globalization in this area. Furthermore, this study will offer some prospects for the future of media globalization in East Asia, based on the analysis of the phenomena which have already happened in this area in recent years.

In order to do this specific research in East Asia, a general research of media globalization need to be done. In this general research there will be a summary of studies on media globalization in general and also a specific literature review on globalization in East Asia.

As a main "underserved" entertainment market, P.R. China will be the primary focus in the discussion of local media in the process of media globalization.

By examining the PRC's TV industry, this study will try to explain how media globalization happened in China and what its impact has been and is likely to be.

Also it will try to answer the question of how Western media globalization in China is influenced by China's internal reform.

In order to enhance this analysis on China's media reform, a case study on one of China's provincial TV stations will be conducted. As one of the thirty-two provincial stations in China, Jiangxi TV Station (JXTV) will be the focus of this case study. The reason for selecting JXTV is that Jiangxi is geographically located between China's reform frontier, the southern coastal area, and the more conservative 18 inland provinces so that its policies are considered at the middle if all provinces in

China are divided by the degree of openness and reform in their policies. In this sense, Jiangxi's situation typifies the whole country. Another reason is that Jiangxi is actively participating in satellite broadcasting, putting its programs in the arena of transnational broadcasting. Also, the author of the present study worked at Jiangxi for ten years, and therefore has a great deal of familiarity with the station's operations and personnel.

Because this study will mainly focus on the details of the operation of transnational broadcasting in East Asia and will try to explain the phenomena, subjects, and contexts relevant this subject area, the methodology used in the study will be a combination of critical analysis, historical analysis, and political economy analysis.

This study will be divided into two parts. Part one will be a general study of media globalization in Asia, focusing on the relationship between the Western transnational media and Asian locals. This part will be composed of: 1) local vs. transnational media-general research on the historical relation between local and transnational media; 2) local and transnational media, who wins?-a discussion of the

Asian audience's preferences when choosing between foreign and local programs; 3) local or transnational media-a study of the future of the relationship in Asia. Part two will focus on China. It will examine how the two engines of internal economic reform and external competition, in the environment of globalization of television, have combined to drive the transition of the Chinese media in recent years; also it 19 will examine the relationship between these two engines, and the directions these two forces might take in the future. This part will be divided into: 1) who is local?-

Western strategy vs. China's policy-a discussion of the impact of television globalization on China; 2) economy vs. politics~a general analysis of current media reform in China; 3) a case study of Jiangxi TV~a qualitative study on China's provincial television station; 4) globalization: two way traffic-a discussion of the future of media globalization in China.

The primary goal of this study is to improve our understanding of the relationship between the Western media and the local media in East Asian countries, particularly in China, in the environment of media globalization. The study might be helpful in predicting media policies of Eastern nations and the global strategies of

Western companies. Moreover, it may cast some light on theoretical research on the relationship between local and transnational media in East Asia. CHAPTER II

TRANSNATIONAL BROADCASTING IN EAST ASIA

The fast-growing market economy in recent years in East Asia makes this area an enormous potential market for Western investors. At the same time, the richness in material and the rising demand for new kinds of programming and more programming makes East Asian entertainment a promising industry. Statistics shows that currently TV penetration in East Asia's more developed economies is as high as anywhere in the world - 99% or above in Taiwan, South Korea, Singapore and

Japan, while in Hong Kong nearly 98% of households own a TV set. In 1983, the total TV advertising expenditure in Asia was $507 million, a figure that by 1993 it had increased to $4 billion ("An Asian Sky" 35). Table 1 gives the big picture of the prospects of the Asian market.

Table 1: Ripe Asian Market

—Asia has half the world's population; and will have two-thirds by the year 2000 —Only four of the world's largest cities will be non-Asian by 2000 —Thenumber of affluent Asian households (annual income of U.S. $30,000 or more) will rise by 50% by 2000, to 51 million —Asian per-capita GDP will double by 2000 —Asia has 240 million TV households, up 70% in the past five years (compared with 4.3% growth in Britain and 6.7% in the U.S.)

Source: Thompson, J. Walter. Far Eastern Economic Review 25 Feb. 1993: 52

The maturing entertainment market has a great attraction for Western 21 broadcasting players. A number of Western entertainment companies, especially those from the U.S., have rushed into East Asia for the past years, trying to get a piece of the market. The recent trend towards Western transnational TV broadcasting in East Asia can be traced back to the early 1990s, when the Hong Kong-based

Hutchinson Whampoa Company, partnered with Britain's Cable and Wireless and

China's international investment arm CITIC, acquired and launched a reconditioned

Hughes communications satellite called AsiaSat 1. Using 10 of the satellite's 24 transponders, the company broadcast the first pan-Asian TV channels as Star TV

(which stands for Satellite Television Asia Region). Almost immediately after deciding to launch Star TV, the company entered into profit-sharing agreements with

Prime (for a sports channel), MTV, BBC World Service Television (for a news channel) and ATV (for a Mandarin language entertainment channel) (Simon).

However, the real era of transnational broadcasting in East Asia was triggered by the acquisition of Star TV by the Australian-born American international media mogul Rupert Murdoch after he reached an agreement with Star's parent Hutchvision

Ltd. to buy 63.9% of Star TV for $525 million in cash and stock ("Review &

Outlook"). After the acquisition in 1993, Star TV dumped the BBC World Service, which always had troubles with some governments in the region, and terminated its contract with MTV. Instead, it launched Star Movies, a pay channel featuring predominantly Mandarin fare, and added its own music channel, Channel V.

However, Star TV was not alone in the sky. Other Western companies rushed to band together on a different satellite, Apstarl, which is owned by the 22

China-based APT Satellite Co. (Goll, "International"). Apstarl was able to give more reach to such early satellite broadcasters as HBO Asia, ESPN Asia, and CNN.

The footprint of Apstarl covers China, Japan, Korea, Taiwan and Southeast Asia.

Before being hooked up to Apstarl, HBO Asia, which made its debut in 1992 in

Singapore, was bounced off the Indonesian government's Palapa Satellite, which only covers Southeast Asia, and HBO only had customers in Thailand and Philippines.

CNN, the first major American company to enter the satellite-television race in Asia, started beaming its signal to Japan in 1982 and covered 23 countries as of 1993 in

Asia and the Pacific region. ESPN, the U.S.-based sports network, a part of the

Capital Cities / ABC TV media empire, was only available in the Philippines,

Thailand and Hong Kong at the time Apstarl was launched. In addition, a new range of media players also signed contracts with APT. Among them were TNT &

Cartoon Network (a channel likely to attract kids and Hollywood fans), Time Warner

Inc's Time Warner Entertainment, and Mclntyre's Discovery Channel. Viacom Inc.'s

MTV was also back via Apstarl with a special Mandarin channel and several hours per day of Hindi language programming after it left Star TV. Other Western companies also followed the Asian media bandwagon. Later in 1993, the world's largest cable television company, U.S.-based Telecommunications Inc., joined with

Dow Jones and regional television companies in New Zealand and Singapore to begin a pan-Asian satellite business-news channel, Asian Business Network (ABN), while the other Asian business channel ANBC also began its service in 1994, directly competing with ABN ("The Looming Business"). ANBC is operated by U.S.-based 23

CNBC, a six-year old subsidiary of NBC and known for its business coverage.

Using the Palapa B2P satellite, the Australian Broadcasting Corp. expanded its

Australian Television International Service (ATVI) into Southeast Asia in 1993. It

has also used local channels in the Guang Dong province of P.R. China to get access

into Southern China (Lewes). Marconi Global Communications also leased a

transponder on AsiaSat2 to broadcast its TV programs to Portuguese-speaking

communities in Asia (Halligan, "Expats to Get"). These are just the beginnings in

the arena of transnational broadcasting in East Asia. More and more media players,

both local and transnational, are still joining the competition at the point of this

writing.

It is capitalism that has been the engine driving much of the ongoing

transformation of Asian media (Fore). Through the expansion of capitalism in East

Asia, Western entertainment companies have taken a big step toward their ambition

to establish a global market for their software and services. Bob Ross, Turner Inc.'s

vice president of international business and network development, recently pointed

out that over the next ten years the international arena is where long-term growth has

to come from because the U.S. market is saturated (Amdur 35).

Given that profit is the bottom line goal of the Western transnational

broadcasters, TV programs become their commodity to sell to overseas audiences.

Although a cultural product can not be seen as a tangible commodity like an

automobile or a microwave oven in that a television show arrives at the point of

consumption as a series of electronic impulses, it shares with material commodities 24 the premise of attracting customers - audiences. The free flow of the transnational program is gradually increasing in East Asia in recent years, in large part because that East Asian countries have deregulated their satellite broadcast receiving policies, thus opening their sky to foreign satellite broadcasting. Although currently China,

Singapore, Malaysia, and Vietnam still ban privately-owned satellite dishes, the ability of these countries to enforce this regulation is doubtful. The situation in

China intensifies this doubt. The Chinese government reiterated the ban in 1993; however, there is evidence to show that the order will be difficult to enforce at least in some of the most developed areas (Karp, "Do It Our Way" 68; Kaye 73).

As the barriers to block transnational broadcasting disappear, transnational programs are carrying more attributes of a conventional commodity. For transnational broadcasters, scheduling those programs which match local audience preferences in order to attain high ratings is as important as putting a customer on high priority status for a shipment of nuts and bolts. In this sense, audience preference will definitely have special implications for international broadcasters and will exert a significant influence on the future of transnational programming in East

Asia.

TRENDS IN THE LOCALIZATION OF PROGRAMMING

However, audience preference is a complicated issue. It is involved with a number of factors, each contributing to the final selection of what program to watch by different demographic slices of the audience. Except for the personal attributes of individual audience members, such as age, education, or income, audience preference 25 is also related to external factors. Most significantly, it is related with the cultural tradition the audience shares, the historical experience of the nationality the audience belongs to, the political system of the society the audience lives in, and the economic basis of the community the audience relates to.

Moreover, the audience's motivation to watch TV at all is directly connected with audience preference of particular TV programs. According to uses and gratifications theory, viewers watch TV in order to gain gratification of their needs.

They seek programs which match their interests. If the program they are watching is not of a kind that will satisfy their needs, they will either turn off the TV or change to another channel. At this point, the audience's selection of TV program is a goal-directed purposive behavior (Rubin 206).

It is obvious that the qualities associated with a program, which are usually gauged by a shifting array of factors including novelty, specific popular genre, brand name association, authenticity, use of spectacle and stars, and promotional strategies are considered critically important in drawing an audience. However, if those qualities of a foreign program and those of a local program are considered to be approximately equal in a given situation, the local program should be more attractive to local audiences, because people's interests usually lie in what relates to them. In this sense, local programs have more intrinsic appeal to local audiences. As Sola

Pool put it, other things being equal, consumers would rather pick local products because local products have many advantages which imports must overcome ("The

Changing Flow" 43). Audiences look for a point of identification (usually a 26

character) in the program they are watching. Moreover, people would rather see a

program in their own idiom with the characters eating the foods they are familiar

with, wearing the clothes they wear, celebrating the events they celebrate, and

gossiping about the celebrities they follow. Compared with local products, foreign

programs have jokes that are harder to understand, conventions of plot, character,

and setting that are less likely to arouse interest, and situations that do not come

from daily life.

Cultural identity plays an important role in affecting audience preference.

According to Servaes, culture can be defined as a "social setting in which a certain

reference framework has taken concrete form or has been 'institutionalized' and

orients and structures the interaction and communication of people within this

historical context. This intrinsic bond with a society whose actions are full of value

makes all social facts cultural goods" (144). However, social facts like institutions, religions, life styles, norm systems, and social models are construed and cultivated

on the basis of certain values, preferences, or options that have developed in a

society in response to certain common needs or problems. Therefore, people's preferences are always restricted by their cultural identity. Furthermore, cultural identity, as noted by Servaes, can be interpreted as two complementary phenomena:

"on the one hand an inward sense of association or identification with a specific culture or subculture, on the other hand an outward tendency within a specific culture to share a sense of what it has in common with other cultures and of what distinguishes it from other cultures" (144). 27

In addition to cultural identity, cultural relevance or proximity is also an important factor which exerts an effect on audience preferences of TV programming.

That people will tend to enjoy local program more than foreign program is often accompanied by another factor: people are also seeking greater cultural relevance or proximity from both national and regional television programs. The closer the program is to the culture the audience attaches to, the more popular the program to the audience. Generally, other things being equal, the degree to which the program is received favorably by an audience can be determined by the degree of cultural proximity. Talking about the Latin American TV market, Straubhaar has suggested a hypothesis which divides audience preference into three levels: the first level consists of purely local products; if there are not enough local products, people are likely to select a second level preference - products with a degree of cultural proximity; third level preference involves the selection of foreign products (39-59).

Straubhaar's three level preference hypothesis is suggestive in relation to the program scheduling strategies of transnational broadcasters in East Asia. Cultural differences have been the biggest obstacles for transnational broadcasters to overcome in this area. Different cultural backgrounds between East and West produce great differences in values, norms, as well as in taste and sense of humor.

Most significantly, as noted by Goonasekera, "Western attitudes view man as a rational creature, and society as a web of inter-relationships among individuals, while, in contrast to the individualistic, egalitarian and liberal tradition of the West,

East Asian countries value their consensual and communitarian traditions which 28 emphasize social harmony, which is built on duties and obligations of the individual to the collectivity" (195). Family, as the basic component of a society, is strongly emphasized. To maintain the order of a society or a family, hieratic systems usually are strictly employed and a set of communal norms are set up. Those systems and norms sometimes are very different from those existing in Western society.

Because of the cultural distance between West and East, Western programs are definitely categorized as third level preferences for local audiences in East Asia.

It is natural that cultural differences will provoke clashes in values, attitudes, and norms between East and West. For transnational broadcasting in East Asia, as noted by Kermit Lansner, the clash between the Western and the non-Western will be central in the years ahead (89). Actually, cultural differences between the Western programs and local cultures in East Asia have already encountered problems in the past. For instance, foreign programs have drawn complains regarding a perceived excess of violence and sex in Indonesia, which has an eighty-five percent Muslim population (Cohen 53). Singapore banned Living Color's song Bi, which deals with bisexuality, on the grounds of objectional lyrical content (Pollack). Also, advertising for Sustagen, a milk-based nutritional supplement for kids, was considered as undermining filial obedience and thrift in Singapore ("Singapore, TV and Values").

Although the programming originating on the parent network may be a reasonably effective way to promote an initial splash in an East Asian market because of established international stature of some that programming, it seems likely that the long-term interests of the Western networks in East Asia will be served best 29 by upgrading the preference level of their programs for the local audience.

Localization or customization is the primary means of developing first level preferences. Many Western companies have gradually realized this rule of thumb for program internationalization in East Asia after they drew lessons from other markets.

In line with this, they follow the philosophy developed initially in a very different context to think globally, but act locally. Almost all Western transnational broadcasters in Eastern Asia compete to localize their network in the region in different ways (Table 2). As HBO President Jeffrey L. Bewkes said: "We intend to put HBO around the world, but with local partners, local programming, and local staff" (Landler 187).

Table 2

Channel TNT MTV STAR HBO ESPN DISCO DISNEY CNN NBC ABC

Local C,T C,H C,H,F C, T C,H J, C, H C language Can

Office HK SIN HK SIN HK HK HK HK HK SIN

C=Chinese(Mandrarin), T=Thai, H=Hindi, J=Japanese, F=Tagalog, Can=Cantonese, SIN=Singapore Source: various issues of The Hollywood Reporter. Variety, and Far Eastern Economic Review

Language, as a main component of culture, is playing an important role in affecting audience program selection processes, because viewers and listeners have a natural preference for works recorded in their native tongues over material produced in other languages. However, due to the fact that only five percent of the population in East Asia speaks English ("Battle for Teens" 53) and there is still a great number 30 of illiteracy in this area, dubbing Western programs into local languages becomes a priority for Western media players in the ongoing process of localization. (Subtitling is also an option, but is less viable because of continuing high levels of illiteracy in some regions.)

Table 2 indicates what main local language services are currently supplied by

Western broadcasters in East Asia: TNT dubs and subtitles its program into Chinese and Thai (Palmer, "TNT & Cartoon"); MTV is broadcasting two channels, a

Mandarin service catering for the Chinese speaking audience and an

English-language channel (Goll, "MTV Is Leaving"); Murdoch's Star TV runs

Mandarin, Hindi and Indonesian services (Karp, "Cast of Thousands"); ESPN began to provide Mandarin commentary for audience in China and Taiwan in 1993

("Entertainment Explosion" 37); and TBS signed contracts with mainland China,

Taiwan and Thailand's dubbing companies to translate their fare into local languages.

The content of programs is the key component of localization because the audience judges a network mainly by its programs. The immediate impact of the differences in cultural background between West and East is that Western and

Eastern audiences have different tastes in selecting TV programs and have different attitudes toward the values a program promotes. For example, beauty contests are politically incorrect in some circles in the West, but they are considered good family entertainment in mainland China and Taiwan (Palmer, "Chinese Channel").

Localization of content generally means that a Western transnational broadcaster 31 should either produce more local programs or avoid showing those programs which are likely to run counter to the values and tastes of Asian audiences. Generally,

Asian people prefer soft, gently melodic songs more than the abrasive, hard-driving music which is the main fare in Western pop music, and they like soccer, badminton or table tennis more than football and ice hockey. In addition, Asian audiences tend to be very program-loyal and favor long-running drama series. Based on the experience of Star TV in East Asia, Star Movie channel chief Tony Watts indicated that his service would steer clear of horror movies, war movies, or dramas about dysfunctional American families and that Star will be sticking to those genres that work in the Asian context, such as action-adventure, mythology or legends, melodrama, romance, and slapstick comedy. To that end, Star TV bought Die Hard.

Big. Commando. Hot Shots. Speed and Jurassic Park for that market (Palmer, "2

U.S. Film"). Michael Byrd, senior VP of syndication for Turner International also

has made the same distinction. He commented that Asian buyers are more interested

in action-adventure films and animation rather than older black-and-white movie

titles. Other sellers thought that action movies, family oriented shows and kids' programming were the three genres most commonly cited as natural imports

(Guider).

Producing localized programs is likely to be the dominant tendency of the

future. The developing middle classes in parts of East Asia such as Taiwan are

demanding (and getting) more regionally produced entertainment, usually in native

languages (Landler 187). Transnational broadcasters in East Asia currently are 32 entering a transition stage in which a schedule initially dominated by or devoted exclusively to Western-made programs is gradually replaced by localized programs.

For example, Star TV has set up its own version of MTV, Channel V, which runs local music videos more than 85 percent of the time (Halligan, "In Asia, It's Battle").

Many Western-originated programs are usually self-censored before airing by transnational broadcasters in order to avoid violating cultural taboos. HBO edits profanity, sex and violence out of its Asian programs from U.S. versions before they are broadcast (Karp, "Cast of Thousands" 48). MTV, seen as a typical Western cultural outlet with Western values by local audiences, self-censors its programs strictly ("It's Only Rock'n'Roll" 38). For the same reason, CNN's Asian version is less U.S.-centered, with the emphasis on coverage shifted to Asia ("Entertainment

Explosion").

The advantage of Western transnational broadcasters is their software ~ programs. The U.S., as the dominant center of entertainment in the world, possesses a great number of Hollywood-produced programs and the ability to generate a variety of large budget, high quality programs. However, software has to be supported by the hardware that delivers the program signal to individual homes. The problem at this point for transnationals is that it is currently almost impossible for them to acquire or build in-house transmission facilities. This is the typical situation all over East Asia as it is in the rest of the world. Media ownership is an extremely sensitive issue in this area because most leaders in this area see the control of broadcast airwaves as vitally important in maintaining the stability of the country. 33

No country in East Asia legally permits the foreign ownership of local media outlets.

Therefore it is necessary for Western TV programs to find a local carrier. Since the start of transnational broadcasting in East Asia, most Western companies have looked for local partners to carry their programs both in the "sky" and on the "ground". In the sky, they compete for transponders. By the end of 1994, there were nearly 30 satellites beaming TV programs to East Asia and the number of transponders available for TV transmission was up to 219 ("An Asian Sky" 50). Although there has been a great increase in transponders, the influx of transnational broadcasting in

East Asia in recent years has meant that there is still a shortage transponder space.

The explosion of the P.R.C.-built Apstar2 communications satellite in early 1994 made the problem more serious, as several Western transnationals were counting on the launch to expand their "footprints" in Asia (Goll, "Delay Is Likely"; Karp, "Crash and Burn").

On the ground, Western TV networks negotiate deals with local cable companies to hook up their channels. The most common strategy of the transnationals is to introduce channels initially as "free" services, with the goal of moving to an advertiser-supported and pay-per-view basis eventually. Along with these lines, Star TV (on the air since 1992) has added a pay channel to its service.

Because of the low market penetration of satellite dishes to date (for reasons having to do with both cost and politics), local cable companies are an important outlet for transnational broadcasters, and currently it seems that they are the most likely conduit to effectively run the pay-TV business. Hong Kong's Wharf Cable became 34 very popular with Western entertainment companies, especially after Wharf received permission from Beijing to have the cable franchise in Hong Kong in the next decade (Stoner, "China Gives OK"). CNN, ANBC, ESPN, E! and the BBC have contracts with Wharf, while Discovery and TNT Cartoon Network are negotiating deals (Stoner, "Broadcasters Choose Sides"). In Indonesia, PT Matahari Lintas

Cakrawala, a subsidiary of Indovision Group, is distributing six foreign television channels (Discovery, ESPN, HBO, CNN, TNT and Cartoon Network), and E! signed a recent deal with AN-Teve (Sumarno). MTV, as an active player in the area, has concluded deals with state broadcaster Doordarshan in India, Videoland in Taiwan, and M-Net in Korea (Halligan, "In Asia, It's Battle"), while Star TV formed a joint venture with the Manila-based Viva Group to launch a Filipino channel, Viva

Cinema (Groves, "Star TV"), and Discovery launched its programming on IBC's cable systems in Thailand (Halligan, "Asia Still Mysterious").

In addition, transnational corporations, as Miyoshi has pointed out, are faced with the task of recruiting workers thoroughly familiar with local rules and customs as well as the specific corporate policies for worldwide operation; because of these requirements, their workers usually are of various nationalities and ethnicities (741).

Western transnational broadcasters in East Asia are facing the same task Miyoshi describes. They have recruited local talent and employees who better understand local culture and audience tastes. For example, MTV uses Asian veejays to host programs ("Battle for Teens" 53). Disney recruited 37 people in Singapore just two days before the explosion of the Apstar-2 satellite on which the Disney Channel had 35 transponder space (Karp, "Crash and Burn"). In MIP Asia, a number of companies used the market to headhunt employees to staff new offices in Hong Kong, Beijing or Singapore (Groves, "Asia Still Mysterious").

As Anthony Smith has suggested many media companies acquire bases in other continents to ward off competitors and predators, and all of them are aware of the need to have a firm base in regions of strategic importance, including Asia (42).

Within the current highly competitive environment in Eastern Asia, almost all major

Western entertainment companies which are interested in this area have set up Asian headquarters, and some have even through joint venture arrangements built local studios to produce local programs. For example, ESPN and MTV are building production studio in Singapore. CNN's Asian studio opened in Hong Kong in 1994.

NBC has established a newsroom in Hong Kong ("NBC Takes"). MTV is negotiating to establish its largest independent Asian production center in Singapore

(Fost).

THE ADVANTAGES OF THE TRANSNATIONAL^

However, localization is not the only tendency at work currently. If other things are not equal, Straubhaar's three level preference hypothesis might be completely out of order, because cultural identity can be offset by other factors.

This phenomenon has occurred in East Asia in past years. Although localization is becoming the main tendency in the future of Western transnational broadcasting in

East Asia, the East Asian television and film market seems to have been delivering another signal simultaneously which shows that some Western blockbuster programs 36 still rank at the top of the TV ratings. As noted by Atkinson, foreign shows tend to attract the highest audience ratings and thus command higher advertising rates than those charged for domestic shows (31). In fact, most countries in this region use quotas to limit the showing of foreign films. Some governments establish broadcast policies designed to curb transnational programs and impose a ratio of foreign programs to local produced programs on local TV channels. For the foreseeable future, this ratio is not expected to shrink. All of this can be seen as proof that transnational programs can be powerful enough to draw local audiences and threaten local products. Substantial evidence in East Asia also cast lights on this argument.

Smuggled foreign films have contributed to a steep decline in film revenues in China in recent years (Xie, "Far Down"). One 1993 report said that only one theater in

Hefei, the capital of An Huei province of China, showed domestically-produced

films, while all others showed foreign videos (Xie, "Film Revenue Drop"). The

same situation happened in Fuzhou, the capital of Fujian province (Xiao). In

Indonesia, the number of films produced decreased 75 percent from 112 to 31 from

1990 to 1993 because of the influx of foreign films (Murdoch, "Films Want Funds").

In India the most popular TV program in 1993 was Santa Barbara (Moore). Chinese

language movies are getting deteriorating in Singapore (Choo). Also, Cantonese

movies have lost one-third of their home market since 1992 and have experienced

one-fifth drop in revenues in Southeast Asia (Halligan, "Cantonese Takes out"). In

1994, Keanu Reeves in Speed beat Jackie Chan and Chow Yun-fatt, the most

popular local film stars in Hong Kong, putting a Hollywood film at the top of the 37 boxoffice in Hong Kong for two successive years, following Jurassic Park in 1993

(the Hong Kong movie market had been dominated by local productions since the late 1970s) (Halligan, "Cantonese Takes out"). In Taiwan, the best box office performer in 1994 was True Lies, with a $ 1.04 million margin over the top local film (Wester). In Malaysia, a broadcast of Gone With the Wind drew more than three million viewers recently, achieving the highest rating ever on Malaysian television ("Malaysia B'casting").

A number of factors contribute to this phenomenon of local preference for foreign programming. However, it is the economic factor that exerts the most significant influence on this reversal of Straubhaar's preference order. According to

Wildman, the most decisive influence on program selection is the quality of program, and high budget programs can to some extent offset the language and cultural handicap (1993, 31). At this point, Hollywood has an overwhelming advantage over local products.

As table 3 suggests, the expenditures of Asian countries on broadcast television, except for Japan (which spends about half the amount of the U.S.), are far lower than the U.S.. The direct result of this gap is that all other things are no longer equal: U.S. TV programs are highly competitive with local products, especially high-profile, high-dollar blockbusters. The economy of scale of

Hollywood production is impossible for local producers to match, or even approach; even Hong Kong, the third largest entertainment center in the world, is far behind the U.S.. It is the big gap in economic investment between the West and locals that 38 gives an entry to Western programs and helps make them popular with local audiences.

Table 3: Broadcast Television Expenditures (1987):

HK TW SIGA INDO MALY THAI CHIN US JAPAN KOR

334 415 87 38 97 153 203 27066 13052 810

Figures expressed in millions of dollars

Source: Waterman, David. Journal of Communication 44.3 Liu, Pinseng. Jiangxi Broadcasting and Television 10 Feb. 1994

But, as the East Asian market matures and the locals increase their investment in TV programming in the future, local producers may be able to make better and more ambitious programs that will compete with Western programs. The competition between them is likely to become increasingly fierce in the coming years. As Landler in Business Weekly pointed out the triumph of the program

Dallas ten years ago in the world market might rarely happen in the future with the growth of local economy (187).

Another factor which contributes greatly to the popularity of foreign programs is the dual characteristics of the audience: on the one hand, people sometimes like to watch something familiar to them; on the other hand, people sometimes like to watch something totally different from their life. This dual characteristic is either a result of curiosity, which is a normal, natural human impulse, or occurs because people can gain gratification from evading reality by watching foreign programs. Western programs offer exotic scenes which often are completely different from East Asian 39 audiences' surroundings. The story in some Western programs are totally novel, which might be able to satisfy audiences' curiosity and supply a pleasurable illusion that allows them to escape from reality temporarily.

REGIONALLY-BASED PREFERENCES

The phenomenon of second level preference also exists on a substantial scale among the audiences of East Asia. The second level preference resulting from cultural proximity is the basis for the existence of a sub-center of cultural products in this area under current circumstances of cultural dominance by big countries. The desire for more cultural proximity is leading toward an expressed desire for increased regionalization in news and entertainment to express and satisfy regional cultural tastes.

East Asian countries have more historical and cultural connections among themselves than with Western countries. Cultural proximity among East Asian countries is very salient. Generally, they vary in historical experience, social system and economic development level. However, most countries in the region share some common cultural attributes which do not exist in Western countries. They also share similar historical experiences of being colonized by Western countries. Although the particulars of social systems vary among East Asian countries, common among most of them is a dominant national administrative power. As noted by Dr. Li, the kind of gentle, nonoppressive, benign authoritarian rule which is supported by

Confucianism still plays a role in guiding Asian policies (Weiss 4).

The East Asian audiences' second level preferences are arguably a kind of 40 cultural self-defense. For example, the Hong Kong film Rumble in the Bronx led the mainland Chinese boxoffice in early 1995. The Taiwanese TV program White

Snake Legend was the top-rated foreign show in Indonesia in 1994. A historical drama from Taiwan, Pao Boon Jin, ranked top in the TV ratings for foreign programs in Thailand ("Thailand at A Glance"). Malaysia's Home Video Distributors sold a 30-episode series called Dictator to Star TV speciffically to target Taiwan market (Latif 51). A Japanese TV drama Ah Xing was once the highest rated program in mainland China and Taiwan. Japanese animation films are always popular with young audiences throughout the region.

The Hong Kong entertainment industry has taken advantage of this second level preference and gradually become the sub-center of Chinese programming. This sub-center was generated because that there are a great number of ethnically Chinese people in the region. Although some are deeply rooted in the local community they immigrated to, they still hold and value Chinese cultural tradition and spread this tradition through the area. Traditional Chinese Confucian philosophy is widespread in this region and has been gradually absorbed into indigenous cultures.

Thanks to the phenomenon of cultural proximity, Chinese programs are more and more popular in East Asia. CTN, TVB, CETV, and CCTV are the key local

Chinese channels which are eager to participate in transnational broadcasting in this area. CTN, a Chinese all-news channel, launched in November 1994, is already on cable networks in the Philippines and Taiwan and will be on Hong Kong's Wharf

Cable in late 1 995. CTN is also holding talks with cable systems in Singapore and 41

Thailand ("Now, A Chinese CNN"). On December 1, 1994, media entrepreneur

Robert Chua started broadcasting a family-oriented channel called China

Entertainment Television (CETV) with a specific focus on regional Chinese

audiences (Halligan, "Asia Launch"). Chua has signed with Singapore Cable Vision,

Sky Cable in the Philippines and CMC in Taiwan. Hong Kong's TVB annually produces 6000 hours of Chinese programs and dubs two thirds of them into seven

languages for the audience in this area ("The Asian Hub"). China's CCTY is the

most ambitious Chinese channel in this sub-center.

PROSPECTS FOR THE FUTURE OF TRANSNATIONAL,

REGIONAL, AND LOCAL BROADCASTING

Program ratings determine the advertising rates of Asian networks. Local

broadcasters, regional broadcasters, and Western transnational alike seek to

maximize profits by maximizing ratings. Although a complete ratings survey is still

difficult to conduct in the whole region, many several ratings services such as Nelson

have begun to measure audiences in parts of Asia, and some unofficial statistics of

cable penetration and the number of satellite dishes already have been published on a

country by country basis. In the long run, the ratings of a network will be vitally

important to the future prospects of the network in the region. In this setting,

transnational TV companies will compete with each other and with local

entertainment companies.

Somewhat like the American gold rush of the Nineteenth Century, the frantic

first stage arrival of transnational TV broadcasting in East Asia has been completed. 42

Every media corporation with sufficient investment capital scrambled for a foothold in the area. However, the initial feeling of euphoria has given way to rationalization in the subsequent stage of development. Since Star TV began pan-Asia broadcasts in

1992, more than 10 transnational networks have started services in East Asia. Those who are not in place now may find themselves shut out of a distribution window on the ground. Increased competition is helping to rationalize the industry, and it is also widening the gap between players. Both transnational and local broadcasters have to rethink their strategies and make adjustment to suit the changing situation.

The program preferences of audiences will continue to guide the development of transnational broadcasting in the future.

It is likely that the competition for audience shares between transnational programs and local programs will intensify in the future. Although Western broadcasters will continue to rely primarily on U.S.-produced programming for the time being, localization will definitely increase in the future and will be pursued more actively. From this perspective, the main arena of competition will be in the field in which localized programs are challenged by real indigenous programs.

Under many circumstances, local media companies will be strengthened in the competition with Western companies. Transnational broadcasting actually can be a stimulus for local broadcasters. Local channels are protected by barriers of language, culture and social support. They have a unique advantage that transnational companies do not possess. According to the three level preference theory, local channels also enjoy natural advantages in relation to those regional audiences who 43 culturally or linguistically overlap local operations. However, this advantage was not pressed by local channels before the advent of transnational broadcasting because of insufficient competition in the area. Waterman's research on East Asian countries supports this argument; he finds that there was little exchange of programs among these cultural proximity countries even five years ago (1994, 99). Transnational broadcasting tends to wake up local media players and encourage them to widen their vision. They have begun to target these first two audience levels and now compete actively with Western transnational players for this demographic. Actually, evidence shows that the biggest primary competition for local broadcasters may not be Western transnational broadcasters, but ambitious, expansionist local and regional companies. For example, Hong Kong's TVB increased its investment in satellite broadcasting to compete with Star TV. As part of its ambition, it launched its own

Chinese channel in 1993 and anchors a group of international program suppliers that includes several Western corporations (Karp, "Cast of Thousands" 50). In January

1995, Thai Cable Vision Co. launched Thailand's first interactive TV station through

TelecomAsia (Florance M-64). A consortium of Malaysian companies that includes government and private TV stations is planning to start the cable-based Satellite

Network Service (SNS) by the end of 1995, when Measat-1 (Malaysia East Asia

Satellite) is launched (Vatikiotis).

There will be more and more niche channels catering to specific demographic groups and languages. The Pan-Asian programming strategy, with intensified competition, is being perceived as increasingly inefficient. In an environment of 44 minimal competition, a pan-Asian strategy can work well because of the cultural proximity factor in the region. In other words, the pan-Asian strategy at best only works as a second level preference. However, with the increase in the number of accessible transnational channels and the strengthening of local companies, audiences are becoming more selective. Their demand for programs can intensify from second level to first level preference. In addition, the preference of the audience within the same culture is not uniform, because of the differences in social class, economic situation, and education. To strengthen competitiveness, it has become necessary to target audiences narrowly. For example, Star TV, which presently operates 6 channels, plans to launch 30 additional channels in 1995. Among these are three movie channels respectively showing English, Cantonese and Filipino product, a

Filipino channel, a Hindi movie channel, and an English-language music service to complement the existing Hindi and Chinese channels (Groves, "Star TV").

The process of cultural exchange is reciprocal. As Western transnational broadcasting in East Asia becomes more localized, local media will simultaneously become more Westernized. The extensive exposure of local audiences to Western programs will to a degree influence individual and group values, attitudes, lifestyles and tastes. Many Chinese have had the experience of getting used to Coca Cola. To them, the first experience with Coke likes drinking a kind of traditional Chinese medicine. However, they gradually begin to like it. Every culture is increasingly adopting commodities and ideas from other cultures. The process of adoption, according to Pool, is selective and adaptive (1977, 142). Audiences' responses to the 45 transnational programs provide good examples of this process of selection; it is conducted by audiences actively, and is affected by pre-existing preferences.

One implication of this phenomenon is that local program producers increasingly find it necessary to adopt some elements of Western programs to respond to the changing in tastes resulting from Western cultural influences. Local media imitate the strategies used by Western networks to promote their channels and programs and schedule their programs. They also use Western methods to conduct audience research and Hollywood production techniques to make programs. An anecdotal observation suggests that while (generally speaking) Asian TV dramas have tended to be slow in rhythm, there is a tendency in recent years to mirror more closely the rapid exposition of Western programs. Hong Kong TV programs are most obvious example of this at this point, and it is no coincidence that Hong Kong is the most Westernized part of East Asia.

The demands of audiences for more and more polished programming will quicken the arrival and application of new broadcasting technologies. The niche broadcasting strategy requires more satellite transponders to transmit more channels.

Although there are nearly 30 satellites with 219 transponders available for TV transmission in the sky of East Asia currently ("An Asian Sky" 35), the number is still not enough to meet the demand of competition. To fill the void, a number of satellites are planned for launch in the next few years. However, orbiting space over

East Asia is limited, and already is a traffic jam in the sky. Because of claims of insufficient distance calibration, Apstarl aroused controversy with a Japanese satellite 46 consortium (Karp, "Out of Space" 50), while the placement of AsiaStar2 put APT

Satellite Company at odds with Taicom Satellite (Stoner, "Asian Satellite Dispute").

Any dramatic increase in the number of satellites to relieve the demand for transponder space is unrealistic. Digital compression technology, which compresses several signals into one transponder so that one transponder can transmit several channels simultaneously, should provide a solution to the problem. Some Western companies already have taken advantage of digital compression technology to launch multi-language services of the same program ("An Asian Sky"). In addition,

Ku-band satellite transmission technology will be used more than before. Compared with C-band transmission, Ku-band has the advantage of reception through small dishes, but it has a more limited footprint. In East Asia, with the exception of

China, countries are geographically small. Niche broadcasting basically targets a specific area, rather than whole regions. In this sense, technically, the very large footprint provided by C-band transmission is more effective for a pan-Asian strategy, while Ku-band is better for niche broadcasting. As niche broadcasting grows, so will

Ku-band transmission.

The current situation in East Asia is increasing the pressure for significant policy changes and media reforms that might enable local broadcasters to confront successfully with the competitive threat from the transnationals. The Local broadcaster's strength comes from operating in home territory, and hence is better able to gauge the values and tastes of local audiences. However, this strength is definitely not enough; it needs to be coupled with a determined effort to match the 47 reach, quality, arid choice offered by transnational broadcasters. The situation also requires transnational to align their strategies promptly and properly. Their advantage over locals in program quality is decreasing because of locals' increasing investment in programming, a result of the burgeoning economy in recent years in this region. Tapping this dynamic market, though, will require transnational media executives to follow a principle that has so far been honored mostly in the breach: think globally and act locally.

Audiences have little concern for who is providing a service or how it is delivered, and have no predetermined commitments to particular service providers.

They want quality and variety and are ever willing to migrate to new service providers who offer these. In this sense, locals and transnational broadcasters share an equal opportunity. CHAPTER III

THE IMPACT OF TRANSNATIONAL BROADCASTING IN CHINA

China's TV industry began on May 1, 1958, when Beijing TV started an experimental operation with a transmission area exclusively within Beijing. The station broadcast four times a week for two to three hours each day. One month after Beijing TV began broadcasting, Shanghai TV was established. Other TV stations followed soon after, and the Chinese television industry developed rapidly.

However, the Cultural Revolution, which began in 1966, interrupted the pace of development. Most TV stations ceased broadcasting during most of the decade.

After 1976, when the Cultural Revolution ended, the recovery of the television industry was rapid. By the end of the 1970s, there were 38 TV stations in China.

Almost every province and municipality had its own station, and by early the 1980s, all state and provincial TV transmission in China was in color. After 1980, China's

TV industry mushroomed, and the number of stations reached 684 in 1993 (Table 4).

Beijing TV was transformed into a national network and, in 1978 it changed its name to China Central Television, or CCTV. It is still the only national network in China and is directly controlled by The Ministry of Radio, Television, and Film

(MRTF). The current organizational framework of the Chinese TV industry was set up at the 11th Chinese Radio and TV Conference in 1984. The conference divided

Chinese TV stations into four levels: central, provincial (including municipalities 49 which are directly administered by the State Affairs Department such as Shanghai), municipal, and prefectual. Within this framework, the Chinese television industry as of 1992 consisted of one national network, 30 provincial stations, 295 city level stations and 350 prefectural stations. As the only national network, CCTV has expanded its broadcasting to four channels. Three of them supply national service, while one channel (channel 3) is targeted only at the Beijing area. Channel 1 features general-interest programs consisting mainly of news and entertainment programs and is broadcast for 16 hours a day. Channel 2 also broadcasts general- interest programs with an emphasis on economic news and in service for 14 hours a day. It also supplies three hours' English-language service after 10pm each day.

Channel 3 focuses on entertainment programs consisting mainly of variety shows and films. It broadcasts five hours a day in the evening. Channel 4 serves as an international service, mainly targeting Southeast Asia , Hong Kong, and Taiwan.

Before the arrival of satellite broadcasting, CCTV's channel 1 was the only channel with national coverage. Its signal was transmitted by microwave relay networks nationwide, which the MRTF rented from the Ministry of Telecommunication. It is a requirement for lower level stations to relay CCTV's channel 1. Although satellite uplinks are utilized now, the microwave network still functions as a back up (for both interruptions of the satellite signal and occasional problems with technical transmission quality of the satellite).

Provincial stations are the networks of each province. Every province has one provincial network, which has a province-wide coverage. The size of operation, 50 number of workers, on-air hours, production capacities, and technical facilities vary among different provincial stations. Sometimes the gap is very large. Some more economically developed provinces have a large-scale station, while some less economically developed and remote provinces only have a relatively simple station.

The function of a television station in China is somewhat different from that in the U.S.. A TV station in China not only broadcasts programs, but also functions as a production company does in the West. Usually, it produces different programs, from commercials to TV dramas. Lower level TV stations usually relay the programs of higher level stations. The MRTF requires that all stations must relay

CCTV's channel 1 (if a city has more than one station, this job usually falls on the more powerful station in the city). Most city-level and prefecture-level stations relay

CCTV's channel 2 in the daytime and broadcast their own programs in the evening on the same channel. As recently as two years ago, a great number of city and preferctural level stations just broadcast three or four nights each week, and some just broadcast one or two hours of local news and commercials each night. Actually, most local TV stations were established initially as relay stations. They usually experienced a transition period, moving from only relaying programs of higher echelon stations to an increased reliance on locally-produced programs and local scheduling preferences. In addition, most provincial and some city-level stations operate more than one channel. Beyond the relay channels, they may run a general interest channel and a special interest channel, for instance, a channel featuring business information or entertainment. Usually, the lower the station level is, the 51 lower the production capacity the station possesses and the more relay time it has.

However, in recent years, some city-level TV stations have become more stronger than some province-level stations, a direct result of local economic development.

Guangzhou TV typifies these stations. It has already surpassed most provincial stations in China.

In April 1984, China launched its first experimental telecommunication satellite, making CCTV's programs cover all of the country for the first time - including Tibet, which is not reached by the microwave network. In 1986, CCTV purchased two transponders on the fifth telecommunication satellite in order to transmit its two national channels. In 1991, CCTV also rented transponders on

AsiaSat 1 to broadcast its channel 4, directly competing with Star TV. In the same year, China successfully launched its own broadcast satellite Dong Fang Hong 1 (

East Is Red 1), and CCTV simultaneously transmitted its channel 4 via this satellite.

From that point on, China has entered an era of full-scale commitment to satellite broadcasting.

The fact that Western transnational programs can be received in China today is a result of China's economic reform policy, which began in 1978. As an important part of the policy, cultural exchange with foreign countries is encouraged by the government. Under the new "open door", China came back to the international community after its isolation from the outside world for more than ten years. Since the taping in 1979 of the Bob Hope special The Road to China, one of the first entertainment programs made in China by a foreign company, the desire for 52 programming from the West has increased in China, and foreign programs have

gradually become a staple of daily programming on Chinese television (Marlane 27).

At the same time, reform and the open door policy has injected vigor into China's

economy and greatly improved its economic situation: the P.R.C.'s GNP reached

$413 billion in 1994 ("Tuning in the Dragon"). Meanwhile, the prospect of material

rewards increased demand for a greater variety of cultural products. Discussing the

relationship between economics and culture in China, Jiang Wang has argued that

economic development is proportionate to cultural exchange (38). In line with this

argument, further growth in Chinese economy in the future will be accompanied by

the importing of more transnational programs into China.

Although there are several means by which transnational programs get into

China, direct satellite broadcasting and regulated trade are two of the most important

ones. Foreign programs appearing in China through regulated trade are more

"official" in the sense that they are usually put on the air by state-owned TV stations

or shown in government controlled cable stations, while satellite programs are

usually received by private satellite dishes, thus violating government regulations.

China, with 230 million TV sets (Karp, "Cast of Thousands" 46) and 900

million TV viewers, is the biggest entertainment market in the world. Almost all

Western transnational broadcasters in East Asia are targeting this market. In

addition, the regional Chinese language channels, mainly based in Hong Kong, also

see the audience in mainland China as a primary potential target. For example, at a

conference on satellite broadcasting held in Hunan province of China in May of 53

1994, it was pointed out that 13 foreign satellite channels could be received in the province, and more and more dishes were being installed ("China Refuses").

Presently, most transnational channels are legally accessible in hotels for foreigners, and it is estimated that well over 100,000 households in China have installed illegal dishes (Lin, "Satellite Dishes").

Transnational satellite broadcasting has already exerted significant influence on the Chinese TV industry. To a percentage of the Chinese audience, satellite TV programs are more colorful and diversified. Western music, foreign films, CNN, foreign sports and even children's cartoon shows are appealing to viewers accustomed to the historically more drab offerings of provincial and national television. In southern China's Guangdong and Hainan provinces, most people watch Hong Kong

TV programs rather than China Central Television (CCTV) (Lin, "Satellite Dishes").

Star TV released a research report in 1993, claiming that China had 4.8 million of the 11.3 million Asian households that could receive Star TV's five channels (Karp,

"Prime Time"). Guo Baoxing, director of the General Office of the Ministry of

Radio, Film and Television (MRFT), has admitted that foreign satellite TV shrinks the viewership of domestic programs (Lin, "Satellite Dishes"). Minister of MRFT

Sun Jiazhen also has acknowledged that Chinese television is having trouble competing with the influx of foreign programs (Li, "China Initiates"). The influence can be seen in the change of advertising rates of Chinese TV stations. In 1993,

CCTV and Shanghai TV raised advertising rates 30 percent for foreign advertisers who pay in hard currency, and 100 percent-plus for joint-venture advertisers, who 54 pay in RMB. However, competition from the channels on international satellites now broadcasting into China caused the State Administration of Industry and Commerce

(SAIC) to lower rates in 1994 (Atkinson 31).

The influx of uncontrolled satellite TV programs into China also exerts significant influence on the values, attitudes, life styles and traditions held by members of the Chinese audience. In addition, as Guo Baoxing has pointed out, foreign TV might affect people's ideological principles, especially the young's (Lin,

"Satellite Dishes"). Two media scholars, Godwin C. Chu and Yanan Ju, conducted a comprehensive research project on the cultural change in China in recent years.

They pointed out that "Western culture has been pouring into China in a variety of forms. But for most Chinese the major sources are television and movies....Its impact is manifested elsewhere, primarily in the work ethic, male-female relations, materialism, political attitudes and adventurism" (306). The Chinese government is tangibly worried by this phenomenon; the state desires economic interaction with the

Western world, but without an erosion of official political and social values. In the process of cultural exchange between China and foreign countries, the Chinese government fears that what Sreberny-Mohammad has called "hybridization" and

"creolization" might undermine the "authenticity" of China's official culture (128).

However, as noted by Anthony King, "when the movements of the margins are so proudly threatened by the global forces of postmodernity, they can themselves retreat into their own exclusivist and defensive enclaves" (36). The Chinese government reacted to the rapid spread of satellite dishes by approving new 55 regulations in October 1993 to halt the spread of the dishes. State Council

Proclamation No. 129 virtually bans the purchase, installation and use of the dishes by individuals. According to the regulation, owners were given six months to register their equipment with relevant television authorities; individuals found with unauthorized dishes could be fined up to RMB 5,000, and work units faced penalties of 50,000 ("The Ministry Issues Regulation").

But the efficacy of theses regulations has been questioned (Karp, "Do It Our

Way"; Kaye 73). Evidence shows that most people who own dishes still use them - they're just more discreet about it. Moreover, some CATV systems run by state- owned units continued to retransmit foreign transnational programs, mainly Star TV, to their users even after the promulgation of the regulations ("China Refuses"). The new regulations are the second crackdown on receiving foreign television within seven years. The last one, in 1987 (Dunnett 187), quickly proved ineffective.

China's policy towards foreign programs in recent years is like a coin with two sides. On the one side, the media administrative department strengthens control over uncensored foreign programs, especially those from satellite TV; on the other side, the government encourages the importation of foreign programs through

"official" conduits which are under state control. Due to this policy of regulated encouragement, more and more Western programs are put on the air through state- run TV stations. Statistics shows that foreign programs consume up to a third of TV on-air time in China (Karp, "Do It Our Way" 68). Although there is no legal quota limitation regarding the number of foreign programs stations may broadcast, such a 56 quota does exist as a de facto practice. This informal quota varies station by station, depending on the demography of the audience and the economic situation of the area served, and the programming policy adopted by the station. For instance, Shanghai

TV and Guangdong TV have a higher proportion of foreign programs, compared with other provincial stations. A typical rate of foreign programs in the country is around 25 percent of the daily schedule, which is the highest in East Asia (Atkinson

31).

Foreign programs brought into China by regulated trade between China's TV stations and foreign media companies constitute the lion's share of transnational programs in China at present because of the limitations placed by government regulation on other means. Most audiences in mainland China are exposed to foreign programs mainly through watching them on state-run TV stations. Usually, foreign programs shown on Chinese TV stations are brought in through the modes of barter, exchange programs, TV festival, and foreign program week (Hong), and the barter mode is currently dominant. CBS's barter of 400 hours of U.S. programs with

CCTV in 1985 was the pioneer of this kind of deal (Atkinson 30). Since then, more and more foreign programs have been brought into China in this mode. Although the ratio of foreign programs to local programs on Chinese TV has changed little in recent years, the total number of foreign programs on Chinese TV stations has greatly increased, a result of the increase in the number of TV stations and cable channels and the extension of on-air time of existing stations. In the past 14 years, the number of TV stations in China has jumped from 38 in 1979 to 684 in 1993 (Lei 57

86). At the same time, many stations have extended their service from evening to day time.

Foreign programs are becoming a very important part in the menu of Chinese

TV broadcasting. Several factors contribute to this importance. First, there is a demand for more variety on Chinese television screens. The basis of the open door policy is to adopt and absorb advanced foreign science and technology and outstanding examples of culture. The experience of the Chinese before the implementation of reform enabled them to realize that a 'delinkage' mode (Hamelink

217-28) which isolated them from the rest of the world simply didn't work.

Delinking during the era of the Cultural Revolution had the effect of making the economic and political situations in China deteriorate, and it broadened the gap between China and the West. Furthermore, the success of economic reform in the past decade has already consolidated the open door policy and affirmed official belief that to absorb foreign culture will benefit Chinese national culture in the long run.

And television is one of the most important vehicles by which Chinese people know the outside world. Statistics show that, in China's cities, people watch TV three hours per day on average (Wang, "TV and the Modern Family"). In this sense, showing foreign programs on TV to open people's horizons and expand their contact with foreign cultures is consistent with the open door policy. In addition, a wide variety of TV programs is necessary to meet the demand for cultural products.

Though more and more recreational activities are available during recent years, watching TV is still the main leisure pastime of the Chinese people. 58

Second, with the swing towards a market economy, advertising is gradually becoming the main source of revenue for Chinese TV stations. Evidence shows that

Chinese audience preferences dose not completely fit into Straubhaar's hypothetical order at this moment, though there is a trend in which suggests that as the quality of local products increases, so will their attractiveness in the future. China is still a battlefield in which third level preference programs can directly compete with first level preference programs. The built-in advantage of local programs over foreign programs have not been realized to the point where locally-produced fare is able to overwhelm the effects of counterfactors which block the smooth working of first level preferences. Although some social factors, especially people's curiosity about the outside world, play an more important role in making foreign programs popular, low production budgets and perceived low production quality are still the most significant counterfactors. The expenditure of the Chinese TV industry on programming in 1993 was $3,850 million, a figure far lower than that of the U.S. in

1987, which was $27,066 million (Table 3). Compared with the average budget of

$739,000 for each episode of U.S. TV drama in 1986 (Waterman 1993, 67), the

Chinese TV industry only invests an average $10,000 per episode in 1994. In this setting, foreign programs, as noted by Lisa Atkinson (31), usually tend to attract high audience ratings; therefore, they are considered more effective in attracting advertising customers. Foreign programs like Beauty and the Beast and Hotel usually occupy prime time slots (7:30-9 p.m.) on many local stations (Li, "China

Initiates"). When competition among stations and cable operators was minimal as 59 recently as five years ago, some stations charged more for the advertising slots on

"quality" foreign programs than local programs. In recent years, the competition among both satellite and terrestrial stations has increased, and the pressure to acquire more attractive foreign programs to compete for audience shares and advertising has increased as well. Foreign programs with nonpolitical content have been the most acceptable for China's TV stations, and those programs that match the taste of

Chinese audience and are marketed at a fair price will be most desirable in the future.

Table 4

Year TV Stations TV Channels Average Weekly Yearly Total On-air Hours Production Hours 1979 38 1992 586 644 11.931 148.000 1993 684 755 17.902 218.260 Increase of '93 over '92 98 111 5971 70000 Percentage of Increase 17 17 30 50

Source: (Lei 86) (Note: In China, some TV stations run more than one channel; on- air hours here do not include the time for relaying other stations' programs.)

Third, foreign programs are necessary simply to fill on-air time, as the production of local programs has not kept up with demand as on-air time of individual stations has and the number of cable channels have expanded. Basically there are three ways to fill the extended hours ~ increasing local production, program reruns, and the importation of more foreign programs. Although local production has dramatically increased in recent years, there is still a significant gap between on-air 60 hours and the pace of local production. Compared with the average of 5,000 hours of TV drama produced by China in 1991 and 1992 (Hift), China produced 36,000 hours of TV drama in 1994 (Li, "China Initiates"). Although the average daily production of TV drama was up to 100 hours in 1994, China has a total of about 700

TV stations, which means that the average daily increase in the production of TV drama per station was just one seventh of an hour. Table 4 supplies statistics that suggest how big the gap exactly is overall.

For 1993, each station had a daily average on-air time which was: 17902

684 + 7 = 3.74 hours. However, the daily average production for each station was:

218260 684 + 365 = 0.87 hour. Therefore, the difference between the daily average on-air hours and production hours for each station in 1993 was: 3.74- 0.87

= 2.87 hours, which is 77 percent of the total on-air hours. In the same way, the daily average on-air time in 1992 was 2.91 and the daily average production hours for each station was 1.02. The difference here is 1.89 hours, which is 65 percent of the total on-air hours. In other words an average of 77 percent of available time slots in 1993 and 65 percent in 1992 were devoid of new programs. It is also significant that the production gap went up in 1993 with the increase of on-air time, even though the rate of production increased 50 percent over 1992. This gap is most noticeable in the 32 provincial level stations. Compared with lower level stations, they have many more daily on-air hours, some comparable with CCTV, but continue to have limited production capacities.

In China, a rerun is a program which was shown previously either on the 61

same station or another station. The use of rerun has helped to solve the program

scarcity problem in recent years. However, with the increasing competition for high

ratings, a rerun does not work as well as new programming to draw an audience.

The program syndication system has not been widely used in China up to this point.

In the past, usually, some programs were exchanged among stations nationwide, and

each station scheduled the same programs at different times. As more provincial

level channels establish satellite and cable links in the coming years, thus increasing

audience bases significantly and at the same time creating a situation in which many

viewers will have access to more than one provincial station, rerun and the practice

of bicycling" programs are likely to become even less attractive.

Foreign programs are the most probable source in the short run to fill the gap

between local production capacities and the demand by local stations for more

programs. From this perspective, China definitely represents a huge potential market.

The prime determining factors in getting into this market seem to be program content

and program price. China has a censorship system which evaluates programs by political and cultural standards, as well as in terms of "entertainment" quotient. For

Western traders, to find a program with the right content for Chinese audience is not a major problem. In the reservoir of Western programs, there are a great number of programs which are apolitical and can be expected to appeal to Chinese audiences.

Price, however, is always a problem confronted both Chinese buyers and Western sellers. The motivation of Western sellers is to make money, but what blocks the achievement of this goal is the fact that Chinese buyers are short of hard currency. 62

At the international trade show MIP ASIA of 1994, although China sent a delegation

of 89 broadcasters from all over the country, they only bought a few foreign programs, contrary to the expectations of most Western sellers (Hift). The price of foreign programs sold to Chinese TV stations varies, depending on the quality and potential attraction of the program. There are also cases in which the price is not

high, but the program is not considered to have sufficient audience appeal. At this

point, the most attractive programs (for instance, melodramas and action-adventure

shows) usually are too high in price by Chinese standards. This may be the reason

why the barter mode has been widely used in China in the past. However, this mode

has been confronted with problems in recent years, as barter relies on advertiser. In

the past, almost all foreign programs arriving in China through the barter mode to

China came with foreign ads. In recent years, with the increase of this kind of trade,

it is getting hard to find enough foreign advertisers. Transnational broadcasting itself

is one reason for this problem, for it definitely draws some advertising away from

China. The other reason is the increasing suspicion of foreign advertisers on the

return rate of advertising in China. A survey shows that, outside China, advertisers

hope to generate $20-$30 of consumer spending for every dollar spent on advertising;

in China the yield is less than half that level and falling ("Hard Sell" 68). It is

necessary for Chinese buyers and foreign sellers to find an equation which can be

acceptable to both parties.

Transnational programs, either by direct satellite broadcasting or by trade,

have had a great influence on Chinese local TV stations. The satellite broadcasts of 63

Western media players in East Asia have created among Chinese broadcasters a sense of insecurity, stemming from the erosion of audience shares under the competition from Western transnational broadcasting. The veteran film director Jin Xie warned that "(future) competition will not be among ourselves, but with Hollywood" (Brent

37). In the absence of transnational broadcasting in the past, local channels had a monopoly on the Chinese audience. However, the influx of transnational programs on satellite channels has given the audience more selection. At the same time, well- produced Western programs raises the level of viewer demand for high quality local products.

Chinese broadcast authorities have developed and carried out a policy to encourage expanded local production, which is considered the most effective means to compete with transnational programs. In 1995, 643 TV dramas with a total of

7199 episodes are scheduled for production (Jin, "China Makes Effort"). In addition to the increase in the number of TV stations and cable networks, production companies have also mushroomed in recent years. In the whole country the number of registered production companies as of 1994 reached 200 (Atkinson 34). In addition, there exist a number of un-registered production companies, and there are other temporary groups formed to shoot single programs. The new policy of encouraging "outside" local production has completely changed the previous pattern of local production, in which TV stations were the exclusive source of locally-made programs. Within the new environment, production relies on multiple sources.

Beyond programming supplied by stations themselves, the main contributors of 64 programs are: TV production centers split from the drama departments of TV stations; TV production centers affiliated with film studios; TV production divisions of commercial video and audio companies; TV production groups in government departments, educational institutes, factories and industrial enterprises, and the Army; and independent producers. The multiple increased number of program has contributed greatly to the recent increase of local production. For example, more than 800 TV serials were produced by non-TV-station production groups in Beijing in 1994, surpassing the number produced by TV stations (Jin, "Beijing Non-TV-

Station").

While the quantity of local production has dramatically increased, local producers also have put their efforts in improving the quality of their programs.

Although the scarcity of local production is a big problem for local stations, the quality issue is always a much bigger problem. Compared with foreign programs, local products are generally considered humdrum, boring and flat. In terms of artistic quality, local products are all too often characterized by imprecise of camera framing, carelessness with lighting, and awkwardness in editing. Local producers are well aware that raising the quality is of critical importance in competing with transnational programs. Two tendencies in China's TV production in recent years will greatly enhance their competitiveness with foreign programs. The first tendency is the increasing budget for local production. The increase in budget enables producers to hire well-known performers and established technical personnel, to use state-of-the-art equipment, and to do more elaborate pre-production planing. The 65 blockbuster program Beiiineers in New York (1994) is a good example that reflects this tendency. Thanks to a loan of 1.5 million US dollars from China Bank

(Atkinson 34), producer Xiaogan Feng could employ China's film "emperor" Wen

Jiang to perform as the main character in the serial and was able to shoot the series in New York (the first time a Chinese TV drama had been shot in the U.S.). The second tendency is to bring filmmaking concepts of narrative, style, and "quality" into television program production. The involvement of personnel previously associated with the film industry into the television industry has greatly improved the quality of TV production.

The influx of transnational programs also has stimulated Chinese local producers to create a wider variety of programs, including some within genres that did not exist in China previously. Under the pressure of Western, Hong Kong and

Taiwan music video programs, for example, local Chinese producers have already begun to make their own MTV-style programs to compete with them. Although

Chinese MTV only has a very short history, it has developed rapidly. In 1994, the number of music video programs made in China reached 500 (Yu, "China's MTV").

Another example is the emergence of Chinese situation comedies in the last year.

The famous actor Da Yin has produced the first Chinese sitcom, I Love Mv Family. and this program was sold at a very good price in the Chinese program market (Li,

"Chinese Broadcasters").

Chinese media policymakers are interested in developing "software"

(programming) that can compete successfully with imported shows, but they are also 66 vitally interested in the hardware infrastructure that transmits all this new domestic programming. The flow of transnational programs into China has accelerated the efforts of the Chinese TV industry to renovate existing broadcast facilities and introduce the newest technology into its systems. To this end, the Chinese television industry has taken advantage of advanced satellite and rocket technologies. As for now, there are 21 domestic channels sanctioned by the Ministry of Radio, Television, and Film (MRTF) for satellite links, eleven of which have been aired by satellite

(He, "A Speech" 10; Table 5). The linkup of the other ten channels to satellite was delayed by the explosion of the Dong Fan Hong 3 (East Is Red 3) in 1994, but it is anticipated that other linkup will be arranged. Transition from modular technology to digital technology and from the C band of satellite broadcasting to the Ku band are the direction of broadcast technology development in China (He, "A Speech").

Table 5: TV Stations on Satellites in P.R. China

Satellite TV Station

Dong Fen Hons 1 CCTV1. CCTC2. Shichuans TV CSCTV). Tibetan TV fXZTV)

Dong Fen Hons 2 CCTV1. CCTV2. Shichuans TV (SCTV). Tibetan TV (XZTV) ChinaS at 5 CCTV1, CCTV2, CCTV3, Zhejiang TV (ZTV), Tibetan TV Shichuans TV (SCTV). Shansdons TV CSDTV). Xiniins TV Russian ST-14 CCTV4

AsuaSat 1 CCTV4. Yunnan TV CYTVl Guizhou TV fGZTV) Source: The People's Livelihood Newspaper. 15 Dec. 1994: 4.

In the meantime, The Ministry of Electronic Industry has drawn a blueprint

which emphasizes the incorporation of digital television transmitters and relay machines, digital audio broadcasting transmitters and receivers, HDTV, new 67 generation of camcorders, laser disc machines, and digital audio players ("Emphasis

Put on Cable"). Digital compression technology has already been used by CCTV on its programs for premium cable services, which include encrypted movie, entertainment, and sports channels ("CCTV to Run"). Since early 1995, CCTV has also used the Ku band to transmit its three new services: a comprehensive service for

Hong Kong, Taiwan, and foreign audiences (audiences in Asian, Pacific, and part of

Eastern Europe) a digital audio service which carries 30 channels of radio program and Chinese database programs, and a digitally-compressed multiple program service for premium cable windows (He, "A Speech" 11).

As Joseph Man Chan put it "internationalization by demonstration results when the adopter of foreign media culture extracts what is relevant by observing foreign fare or media organization, frequently as a response to competitive pressure"

("Media Internationalization" 78). Demonstration is symbiotic with stimulation in the process through which transnational programs influence local producers. Stimulated by the rapid introduction of foreign programs, local producers not only enhance their own strength by increasing investment in their own shows, improving program quality and renovating technology, but they also learn from the stylistic and marketing examples provided by foreign competitors. In this learning process,

Chinese local TV stations have imitated and reinvented those factors deemed crucial to giving transnational broadcasters a competitive edge.

In the process of learning to work within a globalizing TV industry, Chinese broadcasting, has already, consciously or unconsciously, adopted Western production 68 techniques, technology, and management system. Compared with TV dramas of ten years ago, Chinese TV dramas today tend to have more episodes, as is the norm in some Western programs. The longest TV series Romance of Three Kingdoms is up to 86 parts. The emergence and production of Chinese MTV is also suggestive here.

The China's pop music market was dominated by outsiders in the past. The emergence of China's MTV is an active self-defense action in the face of the heavy influence of U.S., Hong Kong, and Taiwanese popular music and music videos.

However, China's MTV has not yet developed a style of its own and is still somewhat marginal force in the newly-emerging pop culture in China. Although

Chinese music videos emphasize its nationality and have a sense of history, they continue at this point to draw heavily on the tradition of individualistic humanism characteristic of Western MTV. The artistic style of most video is greatly influenced by Hollywood conventions. The techniques of video directors are varied but usually derviative, some emphasizing narrative threads; some accompanying music with special effects; some trying to draw an audience by means of science fiction and horror references.

Another example of China's imitation of Western media is the shift to narrowcasting. Traditionally, China's radio and television stations were mandated as public service entities (under the control of the state bureaucracy), with a variety programs broadcast throughout the day, targeting all kinds of audiences. There was no special format for a radio station or special theme for a television station.

However, most Western channels broadcast by satellite in East Asia do not broadcast 69 general-appeal programs, but specialty programs. For instance, HBO Asia targets those who are interested in watching foreign movies; CNN is a news channel; MTV is a music channel; and ESPN is a sports channel. Western broadcasters' success caught the interest of Chinese television stations, and now narrowcasting is a fashion in China's TV industry. Stations which broadcast business and economic information are the most popular. Shanghai TV has been running the first music station in China since 1993 ("China's First MTV"), and it launched a drama station this year (Yu,

"Drama Station"). CCTV supplies movie, sports, and music channels to cable operators all over China ("CCTV to Run").

Like the transnational broadcasters in East Asia, China's media are also at a stage of transition driven by forces of external change (globalization) and of internal reform. External change can be a stimulus for internal reform, while, conversely,

China's current internal media reform will have direct effect on the access to foreign programs for Chinese audience, the strength of domestic broadcasting in competing with transnational programs, and even the standards of viewer preferences and tastes.

And internal reform will also have an influence on external change.

INSTITUTIONALIZED REFORM AND BROADCASTING

Chinese media reform is an extension of the economic reform which began in

1978. Considered a successful example by the world, Chinese economic reform can be divided into three phases. The first phase spanned from 1978 to 1984, during which time China reformed its rural system of agricultural production and management. The commune system was discarded, and state property was turned 70 over to the control of individual peasants. The success of this rural reform supplied a body of experience for subsequent urban reform. The second phase occurred between 1984 and 1992, during which China expanded the reform movement from rural to urban areas. During this period, China incrementally transformed the planned economy into a mixed model of planned and market-based economy. The third phase began in 1992 after the Fourteenth Conference of the Chinese Communist

Party, in which the CCP defined the target of economic reform as establishing a socialist market economy. This target was also put into the Constitution of the PRC.

Transforming the mechanism of national enterprises, especially large-and-middle- scale business and industries, and setting these enterprises into the market orbit are the main tasks in this phase.

It is understood here that the superstructure should correspond to the transformation of the economic infrastructure. As part of the superstructure, the media can not be permitted to lag behind the economic infrastructure for long.

Within the currently pluralistic economic environment, Chinese media must be reformed to match the goals of economic reform. As it stated in the proclamation of the Fourteenth Conference of the CCP, "after the establishing of a socialist market system, a series of system reforms and policy adjustments should be introduced in the field of economic infrastructure and superstructure". Given that the reform and open-door policy is the original locomotive for media change in China, four directions, as noted by Hong Yu, will guide China's media reform in the future: de-centralization, de-ideologizing, commercialization, and cultural pluralism ("Peace 71

Evolution" 23).

Television used to be a tool of ideology and propaganda for CCP before the reform. Its function was to serve as the throat of the Party, and television stations were fully supported by government subsidy. After the implementation of the reform policy, the Party called on a transformation from "political struggle" to "economic construction". Under this guideline, the government gradually reduced its subsidy to the TV industry and TV stations had to find ways to become self-supporting. To survive in the new environment, television now is getting more and more commercialized. The introduction of advertising sponsorship into Chinese television has played an important role in transforming the television program into a commodity. Television stations have to sell their programs and time to advertising customers to fill the financial void left by the decrease of government subsidy.

Advertising is accounting for a higher and higher ratio in the overall revenue of a station. In 1985, the income of the TV industry other than government subsidy in whole country was 255.66 million RMB ($66 million). The number reached to

32.6548 billion RMB ($466 million) in 1993, which is as much as 86 percent of the government subsidy in that year (Liu 15). In some provinces, such as the economically better developed coastal provinces, revenues generated by stations have already surpassed the government subsidy. In 1994, the advertising income of

Shanghai TV was over 0.6 billion RMB, topping all provincial level television stations in China. In addition, over one third of the provincial level stations in China surpassed 0.1 billion RMB in advertising income in that year (He, "A Speech" 11). 72

It seems very likely that advertising income will become the overwhelming revenue source of the Chinese TV industry in the future.

The provision of information services to the public has become another source of revenue for television stations in recent years. Television stations have two advantages in this field: first, they have engineering expertise and advanced equipment and technology, including a transmission network which is characterized by large coverage, high speed, and high efficiency, multi-picture, videotext, digital compression, multimedia, and sub-carrier capacity; second, as news institutions, they have an advantage in gathering information. It is predictable that more information services will be supplied by TV stations with the development of cable network in the coming years.

Moreover, there is a trend within which television stations are making an effort to transform themselves into for-profit enterprises from their previous status as non-profit government institutions. In addition to running television channels, many stations are also engaged in doing business unrelated to their field, such as auto repair, real estate, and travel agency. For example, CCTV has applied to the

National Travel Bureau for a license to set up as a subsidiary the Zhong Guang

Travel Corporation (He, "A Speech" 11). The Shanghai Radio and Television

Bureau has even entered the stock market, issuing the first cultural stock in China and establishing Eastern Bright Pearl Limited Corporation (Liang 29). In response to this broadened scope of operation, some broadcasters have even changed their name from station or bureau to corporation. For example, Shanghai Broadcasting and 73

Television Bureau has changed its name as Shanghai Broadcasting and Television

General Corporation (Chen, "A Prospect").

Another big step towards the commercialization of television has involved setting up a national program market. Market-based demands have gradually changed the previous pattern of program exchange, through which a station acquired programs from other stations under a system of exchange and free acquisition. The exchange process was transacted within two national exchange networks, one for provincial level stations (which consists of 32 provincial stations and 3 super-city level stations), and the other for city level stations (which has 177 members). As a network member, each station was committed to sending a certain number of programs to the network each year; the specific quota varied station by station.

However, this obligation, which is still officially in effect, is challenged by the pressures of commercialization. Some stations only provide low quality programs to fill the required number or do not fulfill their obligation at all. Both state-run networks are in a serious crisis now (Yu, "A Discussion" 98).

Contrary to the deteriorating state of program exchange networks is the emergence of the national program market (Li, "Chinese Broadcasters"). Based on the two networks, this market has matured in recent years. The increasing number of production groups, the accelerating production of programs made outside the quota system, and a newly emerged species of program agents have energized to the market. Every year, each network holds one or two large-scale program fairs to sell programs, but more and more programs are transacted outside of the networks as 74 well. Sichuang Television Festival and Shanghai Television Festival supply other two major opportunities for the transaction of programs, although mainly they deal with foreign shows.

There are two major exchange forms in the newly-established market among

TV stations, beyond the previous system of non-paid exchange. Cash payment is the most common form in the market now. However, there is no syndication system and no reference price to set prices in the market. At this point, the market is divided into three zones according to the economic level of the provinces. Each zone has a different price standard. Special economic zones, more developed areas and coastal provinces are categorized within the first zone. Stations in this zone, such as

Jiangshu, Shangdong, and Guangdong, are charged the highest price for programming. Inland provinces, other than remote areas, such as Yunnan, Jiangxi, and Shangxi, are sorted into the second zone, and stations in this zone are charged the second highest price. The third zone consists of remote and minority areas such as Ninxia, Qinhai, and Xizuang (Tibetan). The price in this zone is the lowest. To give some idea of the difference among them, a program sold for 60,000 RMB in the first zone may sell for 30,000 RMB in the second zone and 10,000 RMB or less in the third zone (Huang, "One Million").

Barter is the other important form of exchange in the program market. In this form, the station agrees to run commercials sold by the program producer or agent in return for the right to air the program. No money changes hands. The program producer or agent makes their money from the sale of commercials to advertisers, 75 and the station gives up a percentage of available commercial time. Although barter is one of the most conventional forms of programming transaction in the West, it is a new form in China, and it makes China's program market more dynamic. Barter has aroused controversy among the stations in China. Some stations prefer barter to cash while others do not. It differs station by station. Usually, stations which are located in less developed and less populated in population areas like barter, because it is more difficult for them to attract advertisers, and the "advertising rate" are lower than stations in more developed and populous areas. Provincial and super-city stations like cash payment more than barter. Their advertising rates usually are much higher than city level stations. Cash payment is more profitable for them if they buy a program and air the program with their own commercials. To sellers of a program, the situation is reversed. They like to sell programs to small stations for cash payments and to provincial level stations in barter exchanges (Yu, "A Discussion"

99).

The Party's retreat from many aspects of the social arena, its move to political rationalization and partial liberalization followed by economic development, have created the conditions for the growth of an autonomous public sphere which tends to expand its space through ever more differentiated and pluralistic activities. The trend of decentralization in current Chinese society, which is also reflected in the media field, encourages more competition among different institutions which used to be cooperators in the society. This competition appears in every corner and every field.

In the television domain, this competition occurs at different stratums, for example, 76 in the competition between stations, between departments within the same station, between programs, and between workers. In terms of the variety of the competition, stations compete with regard to the scheduling, value, and perceived stylistic and narrative sophistication of programs; they also compete with regard to communication technologies and station facilities; in addition, they compete for revenue, expertise, and the speed of the development of the affiliated for-profit enterprises.

What is most significant in terms of competition is the introduction of the ratings system in Chinese television industry in recent years. Television's previous role as mouthpiece of official policy meant that viewer preferences were of relatively little interest - the political content of a program was the primary concern. However, the arrival of competition for revenues in Chinese television is changing these priorities. The standard programming equation now emphasizes entertainment over political content. Current programming standards in terms of censorship regulations are that if there are no political problems according to the regulations a program will be approved for airing. This is different from the former standard, in which every program was required to convey some political connotation. In order to be more competitive, stations have found it essential to keep informed on viewers' changing tastes, enabling them to improve program quality and adjust their program menu to satisfy audience demand. Meanwhile, ratings provide important information for potential advertisers, and TV stations to set advertising rates more accurately. The competition for ratings is becoming critically important for stations now, and all 77 competition among TV stations in the future will be focused on one target - high ratings.

Although there were some pioneer audience surveys in the past in China - for example, the Beijing audience survey and Zhejiang province audience survey conducted in 1982 (Rogers, "Beijing Audience") - the results were not used in the broadcasting industry, but for academic research. To establish a ratings system,

CCTV unveiled its viewer survey network in February 1992; this is the largest audience survey base in China. The network covered the entire country, encompassed 20 local stations in 1994 and is expected to double in 1995, and sampled a total of 4000 viewers in 1994 (Xie, "China TV Viewers"). Usually the local survey stations of the network are a division of a provincial station. In addition, CCTV has another Beijing TV viewer survey network with 500 sample families. However, CCTV dose not make its national survey results available outside the state-run broadcasting industry. The results are made available to station programmers as a reference to improve their programs in the future, but they are not available to potential advertising customers. If a set of ratings is not favorable, a station is even more likely to keep the ratings confidential. That is, there are not independent statistics, and there are inherent credibility problems with a self-conducted survey.

To increase ratings creditability, the city of Shanghai set up the first independent audience survey network in China in 1993 (Yu, "Competition for TV"), which is also independent of CCTV's survey apparatus. Shanghai's experiment is 78

perhaps indicative of the future significance of ratings throughout the Chinese

television industry. There are two local stations in the city, Shanghai TV (STV) and

Eastern TV (ETV), and each conducted its own non-independent audience survey in

the past. However, disputes over the veracity of ratings numbers often arose, since

STV and ETV calculated those ratings themselves. As of 1995, there are 12

channels broadcast over the air or by cable in Shanghai, and the competition for

audience shares among the channels has intensified. To bring some order to the

situation, the Shanghai Radio and Television Bureau contracted an independent

institution, Shanghai Population Information Center, to conduct an audience survey

for all 12 TV channels and publish the ratings in local newspaper.

Publishing the ratings, of course, has encouraged competition. STV and ETV

now compete to schedule popular programs in order to get high ratings. Within the

newly competitive environment in Shanghai, the previously high ratings of CCTV's programs are declining dramatically; only CCTV's national news presently draws more than a ten percent shares, compared with forty-plus percent for some programs on STV and ETV (Yu, "Competition").

In order to meet the challenge of competition, every station has to reform its management system, streamline its program production mode, and upgrade its broadcast technology. Across the country, these changes have introduced in different ways. The mode a station adopts usually depends on the overall environment of the city in which the station is located, the scale and economic foundation of the station, and the openness of the leaders of the station. Beijing and Shanghai's Radio and 79

Television Bureaus are currently leading in management system reform. Beijing

TV's reform is based on its existing system, emphasizing refinement in human resource and financial systems ("Six Experiences"). In the new system, all employees have to sign a contract with the station, and during the period of contract, the salary and bonus incentives of an employee are related to assigned duties and accomplishments, which are to be periodically evaluated. There is a clearly stated system of rewards and demerits to encourage efficiency in program production, accuracy, and attention to the bottom line. The station also has the right to manage the money it makes. Shanghai TV has conducted a dramatic reform to lubricate its new market-oriented foundation (Liang 28). It has been gradually changing its function from government department to for-profit enterprise. To secure this transition smoothly, STV has completely dismantled its previous system, reorganizing the station and making it operate more in line with the new market-oriented environment. In the new system, each department is an independent entity, with the right to manage finances, facilities and employees. Each department relates with other departments on a cash-and-carry basis. For example, the Department of TV

Drama needs to pay to the Department of Production for editing services, while the

Department of Production needs to pay the Department of Engineering for maintaining equipment. In this way, STV moves the procedures of making cultural production into a market orbit and uses the management methods of a production enterprise to manage the station. Considering its former function as a government department, this reform is a breakthrough. Under its new name Shanghai Radio and 80

Television Corporation, the organization has set up a board of directors and a board of supervisors, while routine management work is supervised by a general editor, a general manager, a general engineer, a general accountant, and a general secretary

(Chen, "A Prospect").

Basically, there are two kinds of TV stations in the world in terms of financial resources: non-commercial and commercial. The trend in the latter direction within the Chinese television industry has had a great influence on the management philosophies of individual Chinese TV stations, as well as on the content of Chinese television programs. The former emphasis on political propaganda has increasingly lost its hegemonic position. Television programs in

China are carrying more and more of the attributes of commercialized cultural commodities, emphasizing entertainment, novelty, and sound bite news and reducing the emphasis on educational programs. In this sense, Chinese TV stations at this moment are in a transitional status; they are still partly financed by the government, but also increasingly reliant on their own revenue-generating mechanisms. Before the era of reform, the Party and the government were the "gods" of Chinese television, and ideological propaganda was the media's main function. However, a new "god" has appeared since advertising became the main source of revenue for

Chinese television stations. The new "god" has shaken the position of the old "god"

(He, "Who Is the God" 9). In most provincial stations, the ratio of advertising income to government subsidy is already more than 3 to 1, and the margin is widening. Now that television is a kind of commodity in Chinese society, its 81 overriding goal increasingly is to serve investors and consumers. Its content and format increasingly are designed to meet the needs and desires of the latter in order to maximize fiscal return to the former. Operating within this perspective, the form and content of television programs in China have been increasingly targeted to attract certain specific groups and classes of viewers. Beyond this trend lies the fact that

China is still a hierarchical society, and the economic gap between groups is widening as the processes of reform widen and deepen. Given that the Chinese television industry is funded mainly by commercials, advertisers will seek out programs that attract a higher percentage of relatively affluent viewers, and production companies will be likely to generate as much programming as possible targeted at that slice of the market. These relatively affluent classes will be those which hold the majority of social and economic power in current Chinese society.

China has more than 800 million TV viewers, and among this group, the peasant class accounts for the majority. But what determines the class-based programming trends is not the size of different audience segments perse, but the relative economic strength of each segment. It is these economically powerful classes that directly and indirectly support the development of television and in turn the television industry can be expected to more strongly reflect their values and attitudes. Basically, Chinese society can be roughly divided into two classes by occupation and work location: the urban class consisting mainly of reasonably well- off city residents, and the peasant class consisting of people living in rural areas and economically disadvantaged city residents. There are strong contrasts between these 82 groups, the peasant class accounts for 79 percent of the total population, and its total savings is only 273.7 billion RMB, while the urban class account for 21 percent of the population but has a total savings of 637.7 billion RMB ("Communique" 285).

The significantly lesser economic power of the peasant class means that they will have much less of a voice in guiding the direction of television development.

The process of reform is designed to continually incorporate new ideas into old ones, and the openness also encourages the introduction of new perspectives.

New concepts introduced in the Chinese TV industry has brought a measure of pluralism in Chinese television programming. Commercialization and competition in the industry have poured more fuel into the engine which drives this tendency. The pluralism in current Chinese television programs is reflected in the Chinese television menu. Most obviously, the adjustment cycle of the program menu is shortened. One of the characteristics of audiences is that they seek novelty. No TV program will forever be appealing to an audience, and when the content and format of a program diminish in attractiveness, it will be replaced. In the present environment, as more and more new programs are produced, most individual programs will have a shorter life cycle. In addition, as was discussed earlier, there is a wider variety of programs appearing in television menus, and more and more narrowcasting channels are being introduced.

Broadcasting reform in China will continue to move at an even faster pace in the future. At the same time, the competition from transnational broadcasters will be increasingly fierce. To meet these challenges, the changes in Chinese television will 83 be more and more dynamic. Although the changes may occur in different aspects of the industry at different rates, and vary across stations, what happened in China's television industry in the past decade still can supply us with some clues to future trends in the Chinese television industry.

First, there will be a tendency to separate television station operations from the television administrative department. Currently, television stations in China are a division of a government bureaucracy. Every television station affiliates with the

Radio and Television Bureau at different levels of government. This system is not favorable for television stations as they seek to become productive, market-oriented enterprises. The administrative department will still be a division of the government, and it will continue to enforce regulations, make policy, verify new stations, allocate frequencies and set technical standards, while TV stations will be changed into economic entities. Shanghai Radio and Television Bureau has already experimented with this system and their findings favor the reforms.

Second, there will be a great reform in the internal operations of television station. As media are controlled by the CCP, it is not likely that there will be private TV stations in the near future. However, extensive internal reform is necessary, as the existing system cannot keep pace with domestic policies of economic reform or with global trends. There is especially the sharp contradiction between the traditionally political function of media in China and newly-emerged consensus favoring commercialization in the television industry. On the one hand, the Party still needs the "throat," though its control has become significantly looser; 84 on the other hand, commercialization drives TV stations to deviate from the former

"throat" function. It is urgent for the Chinese television industry to find ways to solve this problem. It seems possible in the future that a station may run a non-profit channel and one or several for-profit channels simultaneously. The non-profit channel will be still supported by government and fulfill the "throat" function, and the for-profit channels will be put into the market orbit and be supported by the station itself.

Third, the spread and importance of satellite broadcasting and cable television will increase. Chinese-based satellite broadcasting has a dual purpose. On the one hand, it can improve domestic distribution of television programs; on the other hand, it can deliver China's programs to neighboring countries in Asia so that China can compete regionally with Western transnational. China used to exclusively depend on the microwave system to distribute both CCTV and provincial TV stations' programs over its national and provincial networks. However, there are still some areas of the country, especially those in remote or mountainous regions, which can not be covered by the microwave system. Satellite broadcasting can solve this problem. In addition, by means of satellite broadcasting China can uplink its provincial channels to satellite transponders and expand the coverage of those channels to the whole footprint of the satellite, directly putting them in nationwide

(or even worldwide) arena.

Parallel to the development in the "sky," China will also enhance its strength on the "ground" by developing cable TV. The reason for encouraging cable is 85 obvious: multiple channels, high quality, and most important, profitability. Actually, cable has already penetrated most cities in China. Statistics shows that at the end of

1993, there were more than 600 cable systems nationwide (Karp, "Do It Our Way"

68) and 25,000,000 households which had access to cable (Zhao, "A Prospect" 8).

The next step for China will be to expand cable TV into rural areas and establish a national cable network. Statistics also show that, in more developed areas such as the southeastern coast, more than 40 percent of rural towns are undertaking the construction of cable operation. It is predicted that cable penetration in China will proceed at a pace of over 5 million households per year (Zhao, "A Prospect" 9 ).

Fourth, there will be more channels in the future, especially more cable and niche channels. Niche channels have a good prospect in China because China has a suitable quantity of "land" on which to grow them. This "land" is the sheer size of the audience base; there are tremendous quantities of viewers and a range of viewer tastes which offers the potential to support these niche channels. As was discussed earlier, some stations have already introduced these kinds of channels, and continuing growth of satellite broadcasting and cable TV in China provides a foundation for more niche broadcasters in the future.

Fifth, China will strengthen its broadcasting legislation in the future. Chinese television is at a dynamic stage in which everything is changing. Some outdated regulations are no longer applicable to the new environment. Commercialization, new administrative systems, new technology, and new program markets all need new regulations to more efficiently govern, protect, and support. The legislation is 86 urgently needed in some areas. For example, there are no regulations governing the newly-established program market, which at present is influenced strongly by the agendas and whims of the most powerful station operators and producers. Another area in which regulation needs to be intensified is the protection of copyright.

Although there already is a copyright law in China, it is not enforced effectively. A more detailed law to ensure the effective enforcement of copyright law is crucial at this point.

The internal reform of Chinese media will give the Chinese television industry more opportunities to compete successfully in the arena of transnational broadcasting.

What is worth notice is China's ambitious plan to become a major player in the international television industry. On the one hand, China is taking measures to protect its domestic TV market, and on the other hand, China is enhancing its broadcast services to foreign countries. Currently, CCTV's programs are relayed by two satellites, covering more than 80 countries. The long-term blueprint is to stretch both English and Chinese services all over the world by the turn of the century (Lei

89). In line with this plan, CCTV has signed a contract with the American satellite operator PanAmSat (PAS) to lease a channel on its PAS4 satellite, scheduled for launch in the summer of 1995. When PAS4 is combined with PAS2 and PAS3, on which CCTV already has transponder space, CCTV will complete a worldwide network of coverage, creating the world's first global Mandarin-language television service (Murdoch, "China TV Rolls"). CHAPTER IV

A CASE STUDY OF THE JIANGXI TV INDUSTRY

Jiangxi province is located between the Yangtze and Pearl river deltas, two of the most progressive and developed areas in China. Historically, Jiangxi is an agricultural province weak in industrial infrastructure. Since the implementation of reform in 1978, Jiangxi has been in the middle of the clash between new ideas and old forces. On the one hand, Jiangxi has a deeply-rooted traditional conservative power; on the other hand, Jiangxi is geographically close to China's reform frontier, the southern coastal area. Because of its spacial location, the policies carried out by

Jiangxi often have mixed implications. Some of the reform policies are open-minded and lead the country, while others are far behind those implemented in coastal areas.

Jiangxi is generally considered a province somewhere in the middle if all provinces in China are classified by the degree of openness to reform.

Television and radio stations in Jinagxi are administered by the Jiangxi Radio and Television Bureau (JRTB). In its television domain, there were 79 cable operators and 27 TV stations which run over-the-air TV channels at the end of 1993

(Li, "The Speech" 4), including one provincial station, 13 city level stations and 13 county level stations. Jiangxi TV Station (JXTV) is the largest operator in the province and is the backbone of the Jiangxi television industry. Beginning in 1972 with 20 employees, JXTV now expands to more than 300 workers with 11 88

departments, including Administration, Program Production, Engineering, and

Commercial Departments. JXTV now runs two channels, Channel 7, which is the

only provincial channel (every local TV bureau must carry it), and Channel 13,

which covers Nanchang, the capital of Jiangxi, and its adjacent area of more than five million potential viewers. Before its signal is linked up to a satellite, Channel 7 moves through 82 relay stations, reaching 84 percent of the province as well as five cities and 22 counties in neighbor provinces. There are 46 million potential viewers and 9.8 million TV sets within its coverage ("JXTV Ad Rates"; "JXTV Booklet").

Located in southern China, Jiangxi is under the footprint of almost all satellites which carry Western programs and target East Asia. Before 1993's crackdown on the ownership of private satellite dishes in China, viewing foreign programs directly from satellite was not popular to most Jiangxi residents because the price of satellite dishes was still high. However, the number of viewers for satellite broadcasts was gradually increasing. In the early 1990s, when transnational broadcasting began in East Asia, this coincided with the emergence of cable broadcasting in Jinagxi. Most Jiangxi viewers learned of foreign satellite broadcasting through cable TV. Some newly-opened cable channels took advantage of the loose control of foreign programs by the government at that time and directly relayed foreign programs to attract customers and expand their penetration. Star TV was the most popular channel among the transnationals because it transmitted programs to China earlier than others and supplied a Chinese language service, and also because people had easier access to it, as Star TV shares space on the same 89

satellite which carries CCTV's programs.

The percentage of foreign programs shown on JXTV have been kept at a relatively stable ratio in the past five years. Although the percentage has varied from month to month, on an annual basis it has been maintained at around 25 percent of total broadcasting hours. However, contrast to JXTV, many newly-established cable channels used to be overwhelmingly dominated by foreign, Taiwan, and Hong

Kong's programs. Especially during the period in the early 1990s when the

competition between cable stations for customers was highest, programs from

overseas were scheduled in great numbers to attract audiences.

Foreign programs continue to be an important part of the program menu of

JXTV. Although the JRTB does not encourage an increase in the foreign program

ratio, the total number of foreign programs shown on JXTV has actually increased

from one hour to three hours daily because of the dramatic increase of service hour

on channel 7 in 1994 from six hours (6:00pm to 12:00pm) to 16 hours (8:00am to

12:00pm) per day. However the foreign programs available to JXTV right now have

not been sufficient to fill this three hour slot, and the station has used rerun programs

to fill this void. The rerun programs accounted for almost half of the time allotted

for foreign programs. Foreign programs are still in great demand in JXTV.

In addition, JXTV has negotiated deals for the distribution right of foreign

programs. JXTV dubbed and sold the Japanese TV series A Xiang to 35 provincial

and local stations in the country last year (Huang, "Taking Advantage" 4). This was

the first time that JXTV bought the rights to a foreign program and distributed it 90 nationwide by itself.

At the same time, JRTB strengthened its control of uncensored foreign programs. This control is placed on three main sources of foreign programs: satellite broadcasts, cable TV, and public channels. On the annual report of the Bureau,

General Director Ligong Li reiterated that TV stations should maintain the ratio of foreign programs at 25 percent ("TV Should Be" 12). This rate was stressed at almost every meeting and report related to foreign programs.

In response to the regulations issued by the State Council of the PRC which prohibited the ownership of private satellite dishes, the Jiangxi Provincial Propaganda

Department of the CCP issued an announcement on May 11, 1994 that required compliance with the regulation of the Council. Following the announcement,

General Director Li reiterated that, in Jiangxi, no person or work unit could install a satellite dish without permission ("The Speech" 10). On November 1, 1994, this ban was made legally effective by putting it into the Jiangxi Broadcasting and Television

Code ("Jiangxi Broadcasting").

In the meantime, in order to control programming on cable stations, JRTB stipulated that the programs shown on cable stations must be purchased through

Jiangxi Audio and Video Publishing House, where all the programs are pre-censored

(Li, "TV Should Be" 13). Later, this regulation was also put into the Jiangxi

Broadcasting and Television Code. This ruling greatly limited cable stations' program selection.

As with other TV stations nationwide, JXTV is facing external and internal 91 pressures. While external pressures relate especially to new areas of competition, the internal pressures drive the station to conduct reforms. Under these pressures, there are some conspicuous problems which JXTV must solve in order to survive in the new environment.

Competition with other channels ranks at the top of the problems. This competition comes from transnational broadcasting, programs broadcast from other provincial stations by satellite, programs from other local stations, cable channels and other media. The emergence of cable channels in the last five years has intensified the competition. As of now, there are 79 cable stations accessible to 100,000 households in the province ("Vice Governor's Speech" 6). Most cable channels carry programs from the station in other provinces which are linked up on satellite. The fever to open new channels and new services has added heat to the competition.

1993 was designated as "the year for opening stations" by JRTB (Li "The Speech").

In that year, they opened a Business Radio Station, an Information Radio Station, which broadcasts weather, traffic and other variety information, and JXTV channel

13. In addition, the major local competitor, Nanchang TV (the largest city-level station in the province), also opened its second channel. Moreover, two local cable stations opened in the year.

Advertising rates can be an indicator of the level of competition. Because of increased competition, it is more difficult for TV station to attract advertisers. JXTV had to reduce its ad rates in 1995 to draw customers. For example, in 1994, 15 second and 30 second spots were sold for 1400 RMB and 2500 RMB to domestic 92 advertiser, but in 1995, the rates were reduced to 1200 RMB and 2400 RMB (8.7

RMB=$1).

TABLE 6 ADVERTISING RATE IN JXTV (RMB)

YEAR 10" 15" 20" 30" 1' 2'

1994 1200 1400 1800 2500 4000 7000

1995 800 1200 1600 2400 3800 6000

Source: JXTV Advertising Rate Book 1994 and 1995.

JXTV's signal coverage is another problem. At this moment, there is still no independent survey of ratings for each station in Jiangxi. Broadcasters usually use potential viewership numbers to determine the station's popularity and the advertising rates. Because the number of potential viewers is the population within the coverage of a station, as the only provincial network, the ratio of coverage is extremely important for JXTV. As mentioned earlier, the signal of JXTV is transmitted by 82 relay stations in the province. However, some remote and mountainous areas are still not reached by these relay stations (The regular coverage of each relay station is about 11,000 square kilometers in plat area, and is dramatically reducd in mountainous area). At this point, the coverage of JXTV in Jiangxi is 84 percent (Tu

4), which means that 16 percent of the province still is not reached by its signal. To get into these areas is a tough task for them.

JXTV's desire and need for rapid development and the scarcity of available financing for that development have always been a contradiction for the station. The traditional financial management mode, through which the provincial government 93 allocated a budget to support the station, does not match the situation in the new era.

The basis of reform is to emphasize economic self-sufficiency. Under this guide line, the provincial government has encouraged JXTV to turn a profit to support itself and has greatly reduced the ratio of government funding. Between 1992 to

1994, the provincial government allocated 7.33 million RMB to JRTB each year, leaving an annual shortfall of more than 20 million RMB. In 1992, the expenditure of JRTB was 28.54 million RMB. This figure went up to 32.97 million RMB in

1993 (Liu 15). The difference between the government allocation and station expenditures had to be made up by JRTB itself. Although the income earned by

JRTB has increased dramatically in the past ten years, from 1984's 0.3 million RMB to 1993's 22.47 million RMB, an increase of 73 times, and the income in 1993 is

3.37 times as much as the provincial financial compensation (Liu 16), maintaining financial equilibrium is still a serious problem for the Bureau. For instance, a chronic lack of investment capital has been an obstacle for JXTV's plan to transmit its programming by satellite (Tu 5). Although in 1994 the provincial government allocated 7 million RMB specifically for this project, this figure was still short by more than 1 million RMB necessary for the construction of the Satellite Broadcasting

Center. Moreover, the budget for renting a transponder on the satellite Dong Feng

Hong 3, which is up to 13 million RMB each year, is still in limbo at this moment

(Tu 6).

Another problem is that the quality and quantity of the programs produced by

JXTV itself have not kept pace with the development of the TV industry and the 94 demands of local audiences. Since 1995, the daily on-air time of JXTV's channel 7 has been increased by 10 hours to the current level of 16 hours (Huang, "Taking

Advantage" 4). However, the average daily production capacity of JXTV in 1994 was only 100 minutes. Although the total production for the entire year in 1994 was

680.25 hours, 120 hours more than 1993 (Huang, "Taking Advantage" 4), it still greatly lags behind the increase of on-air time. The shortage of programs has seriously restricted the further development of JXTV. At the same time, to make matters worse, because of financial limitations, JXTV is unable to spend enough money on program production, especially on the production of TV drama. Overall, the quality of programs made by JXTV is relatively lower than that of other economically developed provinces.

These problems and pressures are major challenges for JXTV. In order to survive, the station must reform its management system, upgrade its broadcasting facility, improve its production mode, and adjust its marketing strategy. First, to compete with transnational broadcasting, as well as to enlarge its domestic coverage,

JXTV rented a transponder on the Dong Feng Hong 3 satellite which was scheduled for lunch in October, 1994, but failed spectacularly. Although Dong Feng Hong 3 blow up, a new satellite will be launched in the near future. JXTV has spent a huge amount of time and money in preparing for satellite broadcasting because it will be a milestone for them and the station's management feels that it will eventually bring great benefits. (The funds for renting the transponder space are still not completely available at this point, but JXTV has reserved space on Dong Fang Hong 3 and is 95 working hard to come up with the necessary capital, mainly through advertising income, provincial government allocation - which needs to complete a redundant and difficult bureaucratic process - and possibly a small amount of funding from the

MRTF.) For one thing, satellite broadcasting can completely solve the problem of provincial coverage for JXTV. At the end of 1994, there were 1333 satellite receiving stations in Jiangxi (Tu 6), not including private dishes. In addition, the

Jiangxi provincial government has required all local governments to support the installation of satellite dishes by local TV stations and CATV systems after JXTV is linked up to the satellite ("Vice Governor's Speech"). A great increase of relay stations and dishes is expected in 1995. Satellite broadcasting also directly puts

JXTV in the national and international television arena. The footprint of Dong Feng

Hong 3 was supposed to cover more than 40 countries (Gong 8). The dramatic enlargement of coverage will brings higher requirements to JXTV, which can be a stimulus to raise the quality of its programs and increase its capacity of production.

The great enlargement of coverage means more potential audience so that JXTV can raise its advertising rates dramatically. Satellite broadcasting, it is believed, will make more profits for JXTV in the long run.

Second, JXTV has made a great effort to increase local production in recent years. In 1993, the total local production was 680.25 hours and average daily production surpassed 100 minutes for the first time in the history of JXTV; the TV

Drama Department produced 24 TV dramas, one of the highest numbers in the history of the station. Meanwhile, JXTV sold more than 2,000 hours of programs to 96

domestic and foreign markets, making the "exportation" figures higher than the

station's "import" figures for the first time (Huang, "Taking Advantage" 10). This

suggests that production capacity and quality has improved greatly.

Third, as a local TV station, JXTV's policy for programming is to "stand on

Jiangxi" and make the program with "Jiangxi characteristics" (Li, "The Speech").

Within the highly competitive environment, JXTV has put the local audience as the

first priority. The strategy employed by the station is to take advantage of its local

attributes, making the station most popular among the Jiangxi audience. With the

local audience as first priority, JXTV also tries to make its programs more attractive

to audiences in other provinces and takes audiences in East Asia as potential

audiences. For instance, they have emphasized indigenous arts in their programs,

occasionally scheduling Gan Opera, a local opera, for its audience. Also, they show programs performed by local artists and invite artists who are from Jiangxi and working in other provinces to perform on JXTV. Some TV dramas made by Jiangxi are also about the events which happened in Jiangxi, for example, Jin Jiu Oin. a TV drama about the construction of the Jiangxi railroad. Moreover, what they emphasize most is local news. JXTV gives local news preference over all other programs, giving the News Department a more flexible policy in recruitment, financial support, and availability of facility. Also JXTV has endorsed a more open policy in news scheduling, programming methods, and management modes in order to encourage local news to be "shorter, new, quicker, live, and wider". In the last year, JXTV has added noon news, morning news, and headline news to its program menu. The time 97

slots for news have increased from 25 minutes to 60 minutes per day. The frequency

of news segments also increased from three to seven per day (Gong 9).

Fourth, JXTV has reformed its management and production system to fit into

the new environment. First of all, it reformed its employment policy, adopting a

contract system for newly-recruited employees (Li, "The Speech"). This represents a

break with the old system, in which employees were assigned by the state. In

addition, in an effort to encourage creativity and give full play to the production

staffs potential, JXTV also adopted a policy which permits employees to take a

second post within the station; for example, a staff member in the Department of

Production can work in the Department of Advertising after the end of the shift in

the first-post job. It reformed its payment system by connecting the payment of an

employee with his or her work. What is more significant is that JXTV introduced a

producer system in program production for the first time (Tang 27). The new system

uses with a producer, who has the exclusive authority to select program subjects, to

hire cast and production crew, to collect money and manage it, and to distribute the

programs they have made. This is a great breakthrough compared with the old

system, under which a program was selected by the leader of the station, financed

and distributed by the station, and the crew members were assigned by the station.

This system was tried in the new daily program Night 8:00 with the News

Department initially in June, 1994, without any financial support from JXTV. Two young journalists in the News Department are exclusively in charge of this program.

They selected a staff of seven from 200 candidates and sought financial support from 98 commercial advertisers. This magazine type program differs from former earlier

"hard"news programs, emphasizing local events, stories happening in real life, and

general information which regular viewers might be interested in. Compared with

most previous programs, which received a few letters and call-ins, or even no response from the audience at all, the program drew attention from the audience

immediately. In the first fifty episodes, the program received seventy-odd letters and

five hundred call-ins. Because of its popularity, Night 8:00 has attracted more

advertisers and has been profitable (Tang 29).

Fifth, JXTV improved its hardware infrastructure to create conditions

favorable for its development. At the end of 1993, construction of Jiangxi

Broadcasting and TV Center was completed and JXTV began to move into the new

building. The new center greatly enforced the station's production facilities and

broadcasting capacity with two master control centers, five studios, and twenty

editing rooms. JXTV has spent $400,000 to import production and broadcast

equipment. In addition, in 1994, the station spent 7 million RMB to set up a satellite

broadcasting center. In the process of improving its hardware, JXTV has kept an eye

on the latest technology. In 1994, JXTV bought its first digital-component TV van,

which improved its ability for live broadcasting. Upgrading to digital equipment has

become its current target in technical facility importation.

Sixth, the Jiangxi People's Congress has proclaimed its first legislation on

radio and television — the Jiangxi Radio and Television Management Code,

announced on October 24, 1994. Jiangxi, following Jilin and Guanxi, became the 99 third province in the country to adopt such legislation (Chen, "A Forum"). With the progress of reform in the Jiangxi TV industry, a law which regulates the industry is necessary for them in order to clarify legal obligations when a conflict occurs and to control the broadcast of TV programs. For instance, in early 1990s, there were two cable networks in Nanchang, one affiliated with JRTB and the other with Nanchang

Municipal Bureau. Conflicts occurred often between them in dividing cable franchise areas in the city. The conflicts even developed into violence, when each network sent people to cut the cable of the other party. However, there was at that point no law to solve this kind of dispute. The dynamic changes in the Jiangxi TV industry in recent years motivated the birth of the new Code.

Seventh, transformation of the TV industry into viable economic entity has been undertaken in Jiangxi in recent years. Although Jiangxi is relatively conservative and lags behind coastal areas in economic reform, Jiangxi has to undertake economic reform to catch up with other more developed provinces. In line with this environment in the province, increasing income is one of the priorities for

JRTB. Advertising has already become JXTV's main source of revenue. JXTV has increased on-air time and correspondingly increased its available commercial slots.

In 1994, the Advertising Department of JXTV produced 11,200 pieces of advertising, compared with 8000 in 1993 ("JXTV Yearly Report"). JRTB also opened the

Business Station and Information Station in 1993 in an effort to attract specific kinds of viewers and to increase advertising income by running these narrowcasting operations. In addition, to develop "third product," which in China means to run a 100 for-profit outside enterprise, is another important way to increase income. In this area, JRTB has established Jiangxi Radio and Television General Corporation, and an auto repair center (Liu 16). The business of the Corporation includes doing trade in broadcast products, supplying a range of broadcast-related services such as copying

TV programs and making programs for other institutes, factries, and government departments, running a commercial agency, installing cable TV, etc.. CHAPTER V

GLOBALIZATION: TWO WAY TRAFFIC - IMPLICATIONS

OF TRANSNATIONAL PROGRAMMING IN CHINA

Transnational programming in China gives us some interesting implications related to the relationship between local and transnational broadcasters. While the impact of transnational broadcasting is widespread in China, the most direct influence is cast upon its most immediate competitors: China's multiple levels of broadcast television stations. The relationship between transnational and locals is very complicated. Transnational programming can be both a curse and a benefit for local broadcasters. On the one hand, transnational programming is drawing local audiences away from local channels, directly threatening local broadcasters. On the other hand, the threat can be transformed into a "good" thing for locals under certain conditions. China's experience indicates that the local television industry is on the whole benefiting from transnational broadcasting. One benefit results from the pressure exerted by foreign broadcasters, which has become an impetus to force the local television industry to conduct reforms, thus pushing the industry forward.

Another benefit comes from the transnational' "demonstration" of good program production standards and organizational efficiency. By learning from transnational, locals improve the quality of their programs and upgrade the standards of the local television industry. 102

It is widely agreed that transnational broadcasting has had a significant impact on local television operations in East Asia. However, the transformation of the

Chinese television industry in recent years also suggests that local media reform, which was partly ignited by the arrival of transnational broadcasting, will in turn exert pressure on foreign transnational broadcasters. A strong local broadcaster will

7be much better placed to challenge the development of transnational broadcasting, because the transnationals usually work most smoothly in situations where local forces are weak. In addition, changes in national media policy affects the access of transnational broadcasters to local and regional audiences, as happened in China with the ban on private satellite dishes. Moreover, transnational are finding that they have to modify their programming strategies to accommodate the first level preferences of local audiences. This pressure will only be intensified by strengthened local broadcasters who broadcast better-quality local programs.

China's experience also shows that in the process of competition, locals are becoming more and more Westernized. Different from the transnationals' localization, which is an active measure to develop first-level preferences among the local audience, the locals' Westernization is a more reactive and passive action under most circumstances. The constant exposure to Western programs in the era of transnational broadcasting makes locals get accustomed to Western narrative and stylistic conventions and gradually take them as their own. However, this process is much slower than the speed through which the transnationals have localized.

What is worth notice is that the relationship between locals and transnationals 103

is not necessarily a zero-sum game. The popularity of foreign programs in China

and the development of the Chinese television industry verify this argument.

Relative strength among locals or transnational does not mean that the other party is

especially weak. Rather, the competition between them can bring a variety of high

quality and attractive programs to TV screens. This tendency is definitely helpful in

achieving the goals of increasing the size of audiences and increasing daily average

viewership. From this perspective, the competition between locals and transnationals

is mutualy beneficial.

The current situation in China indicates that the advantage of the first level

preference of the local audience has not been exploited efficiently by local

broadcasters in China, because the premise of Straubhaar's three level preference

theory is not at equilibrium at this moment in this country. China is still a battlefield

between Western third level preference programs and local first level programs.

However, the situation has become favorable to local broadcasters, thanks especially

to the ongoing Chinese media reform. The reform is characterized by commercialization, a greatly reduced-emphasis on ideology, decentralization, and cultural pluralism, and will make the Chinese TV industry more competitive in the future. Further reforms will determine the fate of the Chinese TV industry itself as well as the future of foreign transnational broadcasting in China.

Another implication is that the development of local media will blur the distinction between classifications of foreign and indigenous. Continuing economic development will lead to a redefinition of the relationship between local, national and 104 international television. Waterman suggests that a combined GNP of the population that shares the same language can be viewed as rough indices of the potential market for a TV program (1994, 97). Considering the recent economic growth in the region, the combined GNP of the Chinese-speaking population holds a promise for the

Chinese-language program market in the future. Actually, among mainland China,

Hong Kong and Taiwan, the distinction between foreign and indigenous already has blurred in the wake of numerous joint production and distribution arrangements. In addition, the level of second level preference for Chinese programs brings even brighter prospects for Chinese program producers. A fact that can not be overlooked is that China is one of the major shareholders of AsiaSat and Apstar, the main satellites delivering transnational programs in Asia. CCTV already has become the first global Chinese-speaking channel, and it is considering adding more languages on its foreign services. The continuing reach into overseas markets will bring

China's TV industry into a much bigger arena. In this sense, China is turning from a

"local" into a "transnational."

Conclusion

Transnational broadcasting in East Asia is dynamic in both theory and practice. Things keep changing day by day, and it is difficult to predict precisely what will happen tomorrow. The author of the present study has found it challenging to keep up with the pace of new developments. Information that is valid and useful today may be outdated tomorrow. As this conclusion is written, some recent events offer the potential for further transformations. The U.S.-based NBC 105 television network has announced that it is planning to launch a general interest service in Asia in the near future, making it a two-channel player in the region (the other is ANBC). Thai entrepreneur Sonhi Limthongkal is also planning to launch a regional media empire, including a satellite service to beam TV programs across

Southeast Asia. News Corp. has agreed to buy the remaining 36.4% of Star TV. In

China, the program market has developed at an unprecedented speed; the competition forced CCTV to purchase a 30 episode TV drama, Wu Zhetian. made by the China

TV Production Center, for 10 million RMB ($15 million). This price was previously unimaginable in the Chinese TV industry. In addition, beyond the two program exchange networks discussed in this study, a new program exchange network for the burgeoning number of cable operators in China is in the works.

This study examined the ongoing process of the globalization of television industry and television programming in East Asia, with an emphasis on P.R. China.

Theoretical research supports a model of local audience preference. In this model, audience preferences are divided into three levels: for local products, cultural proximity products, and foreign products. Transnational broadcasting in East Asia is developing to fit into this model. Western transnational are localizing their channels in an effort to upgrade the audience preference levels of their programs. Cultural proximity programs are taking advantage of second-level preferences, and are currently flourishing in the region. By focusing on the transformation of broadcasting in P.R. China, this study examined how locals react within the new competitive environment, and discussed some implications behind the phenomenon as 106 it occurred in China, and the relationship there between locals and transnational.

This study focused rather broadly on the influence of transnational broadcasting within the East Asian TV industry. It did not try to relate the influence to the matters of politics, culture, and economy within each country. The model of three-level audience preference discussed in this study only emphasizes matters related to culture. Other factors may also have an influence on audience preferences.

Obviously, the media policies of individual East Asian countries have a significant influence on the future of transnational broadcasting in the region. In addition, even though the audiences of East Asia share the same culture in very general terms , there are still marked differences among them. The variances in experiences and preferences among Mainland, Taiwan, and Hong Kong Chinese provide one example of this phenomenon. Further research on the relation between the three-level preference theory and other factors, such as economics, political systems, will contribute information in the future.

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