Media firms allowed one production venture

China will limit foreign media players such as Viacom Inc. and Sony Corp. to one program-producing venture each, dousing hopes of quick and easy access to the country¡¯s US$25 billion advertising market, industry sources say.

A flurry of activity ¡ª encompassing talk by Viacom chief executive Sumner Redstone of partnering with firms in Beijing and Guangzhou ¡ª could stop with the implementation of guidelines issued in recent weeks, the sources said.

China opened its media sector to external investment late 2004, triggering a rush by top players from Viacom's Nickelodeon to Time Warner¡¯s Warner Bros. and Sony Pictures to create ventures with local partners.

News Corp. was now negotiating a deal that could involve setting up a dedicated channel reaching more than 100 million of China¡¯s 1.3 billion people, chairman Rupert Murdoch said this year.

The new regulations permited each media player to set up just one program-producing venture in China, Li Ruigang, president of China¡¯s second-largest domestic media firm Shanghai Media Group (SMG), said.

Industry executives confirmed the new regulations, which were issued just months after the appearance of an initial set of rules outlining the formation of such ventures.

China could become one of the world¡¯s biggest media markets, with print and TV advertising spending rising 25 percent last year to US$23.3 billion.

The only company to have announced more than one partnership to date has been Viacom, which a year ago said Nickelodeon was forming a joint venture with SMG to make children's programs.

Six months later, Viacom announced a second program "strategic alliance" with Beijing Television, China's third-largest media group. And it has said it might consider cooperating with Southern Media, the nation's fourth-largest.

But a Viacom spokeswoman said that the SMG venture was its only programming venture to date and that the Beijing Television deal involved no equity investment.

"The Shanghai venture will be called HaHa Nick," she said."We are producing content...to be distributed across China."

Sony said this year it planned to focus on its TV programming joint venture with Hua Long Film Digital Production C.o and would not pursue other ventures for the moment.

Warner Bros said it would focus on a movie-making joint venture with the China Film Group and Hengdian Group.

A News Corp. spokeswoman said its existing relationship with a broadcaster in Qinghai Province was purely a sales relationship and did not involve equity investment ¡ª contrary to media reports.

Source: Shenzhen Daily/Agencies