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Thursday, 6 September, 2001, 05:19 GMT 06:19 UK
China offers Murdoch TV deal
Rupert Murdoch
The move will be seen as a triumph for Rupert Murdoch
China might allow Rupert Murdoch's News Corporation and AOL Time Warner to broadcast directly to Chinese television viewers in an unprecedented relaxation of the country's tightly-control over its media.

In exchange the companies would broadcast Chinese state-owned English-language channel, CCTV-9, in the US, a broadcasting authority spokeswoman said Wednesday.

"Americans want to come in. We of course want to go there too ... it should be mutually beneficial," the spokeswoman for the State Administration of Radio, Television and Film said.

If a deal is agreed, it would be the first time a foreign broadcast has been allowed to transmit directly into China.

The firms would be allowed to broadcast into a restricted area of Guangdong, a prosperous province next to Hong Kong, she said but added that no timetable had been set.

However, if a deal goes through analysts believe that bringing CCTV to the US would be a regulatory and political challenge.

Personal triumph

News of the Chinese talks has been interpreted as a personal triumph for Rupert Murdoch who has repeatedly tried to break into that country's television market.


It is a symbolic move...It takes a long time to get coverage on individual cable systems, and it takes a long time to turn that into advertising dollars

Andrew Collier, Bear Stearns
He has tried to repair relations with the authorities after a statement eight years ago in which he said satellite TV represents "an unambiguous threat to totalitarian regimes".

The talks are thought to be far advanced and likely to lead to the launch of a general entertainment channel by News Corporation.

"We are hopeful we can reach a positive conclusion soon and launch a new service that complements our already substantial operations in China," James Murdoch, chairman and chief executive of Hong-Kong based Star said.

Under the current complicated rules, both companies already have a presence in the market.

Some observers say that the fact that some foreign television distributors have already made inroads into the Chinese market may have encouraged the authorities there to change their approach.

"Instead of trying to block all of this stuff, they will regulate and approve a certain amount of it," the Financial Times' Beijing correspondent James Kynge told the BBC's World Business Report.

'Symbolic move'

The deal is potentially highly lucrative, given that the Chinese television advertising market is estimated to be worth about $2.4bn (1.6bn).

Already China has 90 million cable subscribers.

But analysts warn that it may be years before the two companies can reap profits from China.

Some analysts are also sceptical about the value of current negotiations, given that Guangdong represents only one part of the potential market.

Ultimately, Andrew Collier, media analyst with Bear Stearns in Hong Kong, said: "It is a symbolic move...It takes a long time to get coverage on individual cable systems, and it takes a long time to turn that into advertising dollars."

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 ON THIS STORY
James Kynge, Financial Times
"They are trying to regulate and approve it"
See also:

16 Aug 01 | Business
Murdoch's News Corp profits fall
06 Aug 01 | Business
Murdoch faces DirecTV rival
16 Jul 01 | Entertainment
Murdoch heads media power list
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