Issue of new licences signals a move towards high-quality programmes although foreign companies are excluded The mainland's tightly controlled media sector has opened a bit further after the state regulator agreed to grant television production licences to eight privately owned companies. The new measures by the State Administration of Radio, Film and Television (Sarft) are a sign of the rising pressure to produce high-quality programming as the mainland introduces foreign and domestic competition to its media market. 'China has a huge programming gap,' said Jeanne-Marie Gescher, a Beijing-based media consultant with Claydon-Gescher Associates. 'The number of hours of TV production doesn't even meet one-quarter of the need. 'It's a very good example of liberalisation ... there's quite a lot of healthy dialogue going on.' The new rules follow other media reforms in recent months, including allowing distribution of more foreign cable channels. About 30 foreign channels have been approved for broadcast on the mainland, but they can be beamed by satellite to only a limited audience of foreign residence compounds and luxury hotels. The new rules were approved in June and took effect late last month. Under the guidelines, Sarft has issued television production licences to Beijing Yingshi, Beijing Jinying, Hairun Film Programming, Beijing Xinbaoyuan, Beijing Huayi Brother, Beijing Chaoyong, Suzhou Funa and Beijing Beidahuyi. Provincial and municipal administrations will, however, continue to 'supervise topics and examine and approve programming in order to safeguard the direction of propaganda and programme quality', Xinhua reported yesterday. And the regulations reiterate that foreign production companies are excluded from the mainland's television production market. Allowing private companies to enter the market may provide the industry with a much needed shot in the arm. China's television industry has been stymied both by a lack of local talent and a shortage of capital for development. With 300 million television households, the mainland has the largest viewing audience in the world. Turning huge audience numbers into profits is not easy because monthly cable television rates in most of the country are kept artificially low at between eight yuan and 10 yuan. A policy encouraging digital cable television could lead to higher rates, but expensive set-top boxes, along with the lack of new programming, had hampered growth. Shanghai Cable Network, the city's only cable TV service provider, launched a promotion on August 1 to win viewers, giving digital TV subscribers a free set-top box if they pay 888 yuan (HK$832.41) for a 24-month package. It also remains unclear how much outside programming the major state-owned broadcasters are willing to purchase. In April, CNBC Asia Pacific and Shanghai Media Group, one of the mainland's biggest media conglomerates, signed a partnership agreement under which they would initially repackage and broadcast a business news programme to households in the Shanghai area. Shanghai Media Group had signed similar agreements with other foreign media companies as well. Although regulations generally restrict these contracts to short blocks of shows, they indicate the increasing attraction of foreign programming for Chinese audiences. But, liberalisation measures have been accompanied by government moves to increase control over television media - by, for example, forming conglomerates in major cities. The point of these conglomerates, advertising and media executives said, was to ensure a single point of control at which local and Sarft regulators could veto non-approved programming. A second reason for the creation of such conglomerates is to turn each into a mini media monopoly, thus increasing their pricing power over advertisers and Sarft's control over media in general. Some analysts said these strategies - gradual freedom coupled with monopoly control - were contradictory, and reflected the push-and-pull within China's political system.