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Tuesday, 23 October, 2001, 17:29 GMT 18:29 UK
AOL strikes China TV deal
The deal was signed after the Apec summit in Shanghai
The deal was signed after the Apec summit in Shanghai
Media giants AOL Time Warner have struck a deal to broadcast a TV channel to seven million homes in China with cable TV in a groundbreaking agreement.

The China Entertainment Television (CETV) channel will screen new Chinese programmes and dubbed versions of American shows in the southern province of Guangdong from January.

It is the first time a major foreign broadcaster has been allowed direct access to viewers in China, although foreign channels can already be seen in luxury hotels and by those with satellite dishes.

It is a small step commercially, but a huge step strategically

David Wolf
Media analyst
In return, AOL Time Warner will broadcast China's state-run CCTV 24-hours-a-day to New York, Los Angeles and Houston.

"It's both symbolic and significant," according to Steve Marcopoto, president of AOL's Turner Broadcasting System Asia Pacific.

The benefits from gaining the foothold in China - with a TV advertising market is worth $2.4bn per year - will come in the long term, Mr Marcopoto said.

"We have it in our plans as a strategic move. It's not something that we'd expect to be profitable in the short-term."

The agreement has been described as "a small step commercially, but a huge step strategically" by David Wolf, media specialist at Beijing-based consultancy Burson Marsteller.

AOL chairman Gerald Levin:
AOL chairman Gerald Levin: "Mutually beneficial"
"This is a sign that the Chinese government is now recognising that the media industry is in fact a business, and that it's more than just propaganda."

The Chinese TV advertising market is growing by 15-20% per year, according to one forecast.

The deal will serve as a launch-pad for future co-operation, according to Minister Xu Guang Chun, director of the State Administration of Radio, Film and Television (SARFT).

Some analysts have said that foreign channels have been watched illicitly in the region for some time.

AOL Time Warner acquired CETV in June 2000, and cable viewers will now be able to watch its mix of original Chinese shows and versions of American programmes like Miami Vice and La Femme Nikita.

The American company's chairman, Gerald Levin, said the agreement would continue the "mutually beneficial exchange of knowledge and expertise".

'Greater understanding'

"We are very pleased to have achieved this landmark agreement, which represents a significant step in the growing relationship between AOL Time Warner and the people of China," he said.

"The reciprocal nature of the agreement means that American audiences will gain a greater understanding of Chinese culture as well as an appreciation for the immense intellect, artistry and creativity of the Chinese people."

Last week, Phoenix Satellite Television - partly owned by Rupert Murdoch's News Corporation - was given state approval to begin official broadcasts in Guangdong.

In June, the Chinese government allowed AOL Time Warner to take part in a joint venture to provide internet services in the country.

See also:

11 Jun 01 | Business
AOL forges online deal in China
06 Sep 01 | Business
China offers Murdoch TV deal
17 Oct 01 | Business
Subscriptions prop up AOL results
25 Sep 01 | Business
AOL cuts targets after attack
01 Oct 01 | Business
China to invest $120bn in telecoms
09 Jan 01 | Asia-Pacific
China lets in BBC TV
23 Feb 01 | Media reports
Pirate Chinese TV defies state
22 Jun 01 | TV and Radio
Chinese reality TV attracts thousands
09 Aug 01 | Media reports
New rules for Chinese media
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