Disappointing subscription numbers force regulator to consider key changes The mainland is considering allowing providers of digital cable pay-television services to run commercials as part of efforts to help them survive disappointing subscription revenue. The possible rule change - expected to take place as soon as next year - suggests the State Administration of Radio, Film and Television (Sarft) may have been too aggressive in pushing digital cable pay-television services. The agency wants to have 30 million subscribers on the mainland by next year, but there were just 201,000 at the end of last year, according to Media Partners Asia. It had targeted one million viewers by the end of last year. According to sources close to Sarft, slow subscriber growth for the services in large cities such as Beijing and Shanghai had alarmed the agency and triggered the proposed change. A Sarft spokesman declined to comment. It is estimated that Shanghai Cable has just 10,000 subscribers. Chinese Central Television, which had planned to launch pay-television operations this month, has delayed the start after signing up fewer than 10,000 subscribers in Beijing. Subscribers typically pay about 20 yuan per month on top of the US$100 set-top box fee. Lack of compelling content has been blamed for the slow sign-up rate. 'It's a vicious cycle. Cable TV operators have no money to acquire appealing content due to poor subscriptions,' one source said. 'Because the content is not attractive, people won't pay for it. In the end, operators can only air outdated programmes and repeats.' Since digital cable trials began in 2001, Sarft has banned advertisements from pay television to attract viewers tired of commercials on free-to-air platforms. But mainland studies have found the content - not the lack of ads - was the top reason for subscribing to pay-television services. This was followed by clear reception signals available via digital cable and the customer service provided by operators. The lack of commercials ranked fourth on their list of priorities. Industry players have concluded audiences might be willing to accept commercials as long as they are not excessive and, more importantly, are accompanied by appealing content. Combining ads and pay television is not without precedent. Cable TV operators outside the mainland, including Hong Kong and Taiwan, insert ads into their programming to boost profitability. Sarft is doing its utmost to promote digital services. It is pushing co-operation between manufacturers of set-top boxes and operators, including CCTV and Shanghai Interactive Television, asking them to subsidise the high cost of the decoders and jointly launch marketing campaigns. In addition, analysts expect further rule changes to permit joint ventures between domestic and overseas broadcasters to produce pay-television content. This could benefit producers such as Television Broadcasts and Phoenix Satellite Television and News Corp-controlled Xingkong Weishi.
