China media industry has recorded a business growth of 11. 9% in 2005 and it has indicated a growth rate of more than 12% in 2006. In 2007, the media industry in China forecasts investment opportunities through mergers, acquisitions and reorganizations indicating as an important source of investment. Especially Beijing Olympics 2008, has been an interesting factor for companies of media industry viz. , cable operators, digital televisions and advertising agencies to generate revenues and profits in media industry.
In general, Chinese media industry revenues flow from advertising. As per 2003 statistics the population of China is 1. 4 billion having 37 national level TV stations, 363 city level TV stations, and 1,424 country level TV stations reaching 95% of China population. According to the State Administration for Radio, Film and Television (SARFT), China’s national authority for broadcasting has proposed to migrate the system of cable broadcasting from analog to digital by 2015. As per 2005 statistics there are 4 million subscribers of digital cable television in China.
Media industry in China includes music, computer games, advertising apart from radio, films and television network broadcasting. In the sector of music, Sony has been a successful brand for music all over the world whereas Sony BMG Music Entertainment, Access Co. , Ltd. , Melodeo Inc, Warner Music Group have entered into a collaboration with ACCESS China Media Solutions to provide world class solutions for delivering perfect mobile music and wireless multimedia entertainment.
The purpose of collaboration is to invest capital, invention of user-friendly mobile music products and also to identify market expertise in digital music business which is undertaken by ACCESS China Media Solutions. 1. 6 million pirated DVDs were seized containing Chinese, American, Korean and Japanese movies by the Chinese officials in the city of Guangzhou. Piracy of music has been a source of tension causing to lose billions of dollars for music industrial companies all over the world.
As per the report of In-Stat, by the year 2008, China will be the leader in music industry to legally allow downloading of music with an estimated turnover of US $ 222 million. In-State analyst Anty Zheng stated “By then, several mega online music stores will have opened; the user-base of portable music devices will have surpassed 100 million; a major crackdown on music piracy will have been in effect for several years; third-generation (3G) mobile communication system access will be rolled out; and consumers will be adequately educated about legitimate digital music.
” Further In-state indicates that there are few systematic changes that will take place in the market of music industry. ? Music labels as per (IFPI ) International Federation of Phonographic Industry. ? Network for original creation ? A modified business model for China due to lack of royalties and low ASPs. Sina. com has collaborated with five foreign companies viz. , Sony BMG, Universal, Warner, EMI and Rock Records who are the owners of 80 percent of world’s music recording market. Sina. com proposed to set up world’s biggest platform of digital music in China.
As per the records of Government, there are reportedly 460 million users of mobiles and 130 million of internet subscribers who would be requiring mobile music. By 2010 digital music market predicts to record a revenue of $14. 9 billion and further offering a larger scope for diversification of market and also to make profits. Although the progress is fair the risks of piracy has to be tightened in order to prevent losses. China’s online game industry has earned $840 million in the year 2006 and its revenues are growing by 30 per cent each year. According to IDC by 2011, China will be earning $ 3.
2 billion through online games. Online gaming has also created opportunities for telecom sector, Internet, computer, software and consumer electronics which earned $ 4. 3 billion from online gaming in the year 2006. The age group between 18-30 are the prominent customers for online games accounting to 31 million, as per IDC. The domestic market in China holds a proportionate share of 65 per cent and holds an account of 20 million in exports of online games. The Ministry for Information Industry has included online gaming in 2006-2010 plan for software and information service development .
There are three prominent successful companies in games viz. , Netease, Shanda and The9 which are compared with movie studios Dreamworks and FOX studios which produce one hit at a time. Investors are evincing interest to invest funds in Chinese game companies going by the trend of growth in revenues China is witnessing and expecting a good amount of returns on investments in game companies. For instance, Netease generates 81. 8% revenues through online games. The9 generates 98% of revenues from its single online game which was a big hit called “WoW” and most of the gamers call WoW as the best online game in the world.
Although Shanda has successful online games such as Hot-blooded Legend and Legend of Mir, these games lost the spirit of novelty and have been discontinued by online gamers. Online game sector has great scope for investment and business in China with the boom of broadband internet, besides China is another land for sourcing innovative technology in mobiles and electronics. China’s advertising industry is worth $ 3. 8 billion dollars according to Nielsen Media research and it is expected to become the second largest advertising market next to U. S after three years.
2006 first half has incurred revenues to the extent of RMB 155. 5 billion showing an increase of 18% over the previous year 2005. There is a swift growth in advertisement market which includes business/service, food and beverage, cosmetics and bath accessories and several other products. China advertising is expected to excessive benefits and revenues from 2008 Olympics, 2010 World Expo and several international advertising companies such as WPP Group, have entered into a joint venture with advertising companies viz. , Mindshare Chengdu, Grey Global, Neo@Ogilvy and Beijing Hua Yang Lian Zhong advertising co.
, having 38 branches in China. While the quality of local market advertising is moderate as companies cannot offer R&D facility, many foreign-owned companies are buying local market advertising companies with the fast expansion of advertising market in China. While on one side, State Administration of Industry and Commerce is monitoring new advertising marketing activities, on the other side, there are malpractices in advertising market having an account of 36 per cent and 10 per cent fake advertising due to the reason that there are no specific laws of advertisement on Internet.
Advertising market in China is also bringing awareness among public especially in tobacco business to ban smoking in public places, in the interest of public health and increasing health care costs in China as there are 350 million smokers costing a million loss of lives with an estimated medical bills cost of $ 5 billion per year. With the advantage of freedom of speech and right to information provided by Constitution of People’s Republic of China, mass media industry is vast and expansive in China through the medium of news agencies, newspapers, radio, television and internet.
Presently there are 2,000 newspapers, 9,000 magazines, 273 radio stations and 352 TV stations in China. An overall of nearly 95 per cent of homes are covered by digital and cable television in 30 cities as per the records of the year 2005. Prominent news agencies are Xinhua and China News Service which are Beijing based have gained recognition all over the world being accessible to Chinese living in foreign countries and also to the neighboring countries such as Hong Kong, Taiwan and other regions of Asia-Pacific.
The circulation of newspapers have exceeded 100 million available in 1,000 kinds of newspapers within the reach of citizens of China. Some of the prominent newspapers are Beijing Daily newspaper, Wenhui Xinmin Associated Newspaper and Guangzhou Daily newspaper and even the city of Shanghai presented Orient Observation Weekly taking the advantage of new trend of trans-regional cooperation in print media. China Radio International (CRI) targets audience of overseas via its broadcast in 38 foreign languages covering news, current affairs, entertainment etc.
, China National Radio is an official radio station broadcasting 300 hours of programme which reaches every local area of China. China Central Television (CCTV) is considered to be the most recognized television network with a set up of 250 television organizations in 130 countries. There are 3000 television stations in China which telecasts film festivals and television festivals regularly. Besides Shanghai has been recognized as Asia’s largest television program trading market.
With the entrance of China into WTO, a plethora of mass media opportunities were offered to China and in order to take advantage of competition and challenges, the Government of China founded The China, Radio and Film Television in 2001. Also Internet technology has enabled a combination of images, text, graphics and sound in news and information sector that can be made available through web sites and out of 10,000 news media, 2,000 agencies have gone online. This has facilitated a quick access to latest information and news to the people of China which is useful in day to day living.
Even Government of China has also opened official web sites for displaying its policies and procedures of working making the information available for common people. PR industry in China has grown in the recent years and is specialized in investment relations, crisis communication, employee relations, sports marketing and corporate citizenship. The cities of Shahghai, Beijing, Shenzhen and Guangzhou have gained recognition in PR sector. Multinational consumer brands, financial services, political activities have been some of the attractive areas in PR sector in these cities.
PR industry in China is presently looking for qualified and experienced staff who can take up challenges with confidence and perform well. Zhongshan university in China is offering qualified programs in PR in order to educate new generations for meeting the demands of PR sector which is facing a transition period in China and governments are influenced by media in China. Hoffman Agency in China has been promoting services in order to equip China to market its capabilities to overseas companies.
Hoffman China employees are skilled in marketing, branding, consulting, public relations and communications for prominent consumer industries in China. Conclusion China holds leadership in Asia in mobile market, consumer electronics, tourism and hospitality and finally a giant in media industry. In spite of huge language barrier, the entire set of Asian countries have a proportionate share of marketing in media industry for various industrial and consumer based products and for the purposes of public news and information.
China population, democratic policies and entrance of WTO have liberalized the media industry inviting foreign-owned companies into China for collaboration which is the main force for causing robust growth in media sector of China. China remains as a heart center of business for several East Asian countries such as Taiwan and Korea. Also China is successful in retaining its leadership in all respects of business in Asia. Further Chinese films, songs and electronics especially Nokia mobiles have earned world fame in providing quality and cost effective.
Media industry in China has a great success to its credit with the hard efforts it has invested whereas the piracy and malpractices continue the tussle of war causing business loss of revenues all over the world as most of the software games, music CDs, DVDs are being exported from China to the other parts of the world and stringent laws of piracy is the hour of requirement in order to continue the same state of business in media industry in China.