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SCMP Reporter

A pioneering broadcasting group will offer 10 TV channels and will be run as an enterprise with no state funding

Southern China's first broadcasting group will soon begin operations as Guangdong weans its media outlets off state funding and prepares them for a new era of nationwide competition and, eventually, a stock-market listing.

The formation of the Southern Broadcasting Media Group (SBMG) is scheduled to be announced on Sunday.

It will encompass six channels run by Southern Television Guangdong, four terrestrial channels operated by Guangdong Television, Guangdong People's Radio Station, Guangdong Cable Network, a satellite broadcaster, and other media-related businesses including advertising and home video companies.

The group will be operated by Guangdong Administration of Radio, Film and Television  and is headed by Wang Keman.

'It will be run as an enterprise and will not receive any government subsidy,' a  spokeswoman for the administration said.

Another source said the new media group would ensure that the radio and television stations would be available on provincial and city networks throughout the province.

'In the past, all the broadcasting companies operated individually and reported to  the administration. From now on, they will no longer compete with each other but operate under the leadership of  the administration,' the source said.

SBMG would need to enhance its competitiveness through continuous restructuring and produce clear profit-and-loss records, the source said. It might also accept outside investment to finance its operations.

'This is the first step to take Guangdong media to face a nationwide market,' the source said. 'An [initial public offering] in either China or Hong Kong is a definite way to go eventually.'

The group's establishment follows a 'strength in numbers' strategy  formulated by the State Administration of Radio, Film and Television, which united the media companies so they could compete with foreign broadcasters in the Pearl River delta.

The area is the only one in China where foreign satellite broadcasters have received permission to beam their signals directly to residents' homes.

Guangdong's television advertising market was estimated to be worth three billion yuan last year, a 15 to 20 per cent increase from 2002.

However, just over half of the market is taken by Television Broadcasts and Asia Television, whose signals extend into the Pearl River delta.

The formation of SBMG will be followed by the establishment of similar groupings at the city level in Shenzhen and Guangzhou.

Now, just Beijing and Shanghai have media conglomerates operating in the same manner envisaged for Guangdong.

They are the Beijing Media Group and Shanghai Media Group.

Industry watchers expected SBMG would soon catch up with its Shanghai counterpart, which owns the city's two major broadcasters - Shanghai Television Station and Shanghai Oriental Television.

Founded in August 2001,  Shanghai Media Group has assets of more than 18 billion yuan and recorded sales of 2.27 billion yuan in 2002.

'Shanghai has only three million cable viewers while Guangdong has more than seven million,' one source said, adding Guangdong viewers were more ready to accept new programming because of their exposure to foreign content offered by international broadcasters such as Star TV.

'With such a strong audience base, the new group ... will soon have enough strength to compete with Shanghai Media Group.'



Guangdong enters a new era in radio and television