Foreign Media Companies in China
TEXAS A&M UNIVERSITY德州农工大学
Case studies案例研究: Time Warner–China.com/Legend, Disney–Sohu.com,MTV–NetEase.com
Traditionally, joint venture partnerships have been an important way for local Chinese internet operators to access global media companies’ content-rich media libraries, while foreign companies gain access to the local market.传统意义上,合资企业的伙伴关系已经成为中国本地网络运营商访问全球媒体公司的内容丰富媒体库,同时外国公司得以进入当地市场的一个重要的方式。For example, Walt Disney Group International (WDGI), Viacom (MTV) and Time Warner have forged content and technology links with leading local internet companies Sohu.com, NeatEase.com and China.com. 例如,迪斯尼国际集团(WDGI),维亚康姆(MTV)和时代华纳已经与中国当地的领先互联网公司,Sohu.com,NeatEase.com和China.com.建立内容和技术上的联系。However, such
cooperative deals have experienced mixed success as global media companies negotiate China’s new commercial media environment and evolving socialistmarket economy.然而,这样的合作交易却在全球媒体公司与中国的新的商业媒体环境和不断发展的社会主义市场的谈判中经历过着成败参半的境遇。
Time Warner–China.com/Legend
Time Warner, which had pioneered foreign film distribution in China as early as the 1980s, entered the Chinese internet market by establishing a joint venture operation with the Hong Kong-based internet company China.com in2000. 时代华纳公司,早在20世纪80年代就开创了外国电影在中国发布的先例,它通过2000年建立的以香港为基地的互联网公司China.com,以建立合资公司的方式进入中国互联网市场。For Time Warner, forging a relationship with China.com was considered a good strategic fit, with the Chinese company providing pedigree political connections and a promising business future. Not only had China.com successfully debuted on the NASDAQ, it was partly owned by the Chinese government’s flagship news organization Xinhua News Agency.
On an operational level, the joint venture offered AOL (component of Time Warner) a way to expand its internet services, while potentially smoothing the political path through its partnership with Xinhua News Agency, allowing Time Warner to expand its movie and television interests (Weber, 2003). However, as the global internet market shrank and China.com suffered significant losses in 2000 and 2001, Xinhua News Agency decreased its ownership in the company.Time Warner, not satisfied with the progress of the deal with China.com, formed a US $200 million internet joint venture in 2001 with China’s No.1 personal computer company Legend (now known as Lenovo) (Li, 2005: 7). It was hoped that the combination of Legend’s hardware and Time Warner’s internet service technology (in a similar way to Microsoft’s bundling of software and hardware)would provide a competitive advantage. However, the joint venture failed because of two key reasons. First, Legend, though a leader in hardware manufacturing,had no experience in the rapidly expanding internet industry in China. The company simply could not offer Time Warner crucial localized knowledge that would help it compete successfully with domestic internet providers such as Sina.com,Sohu.com or NetEase. Second, Time Warner underestimated the regulatory risk in China (Li, 2005: 7). As with its China.com agreement, Time Warner had gambled on Legend’s political connections and anticipated concessions to loosen restrictions on foreign control of internet service and content provision. However,Chinese regulators were reluctant to further open the door to foreign companies wanting to offer and control internet content and services (see Weber, 2002).Underpinning this position was the need to protect the government’s own investment in Chinese telecommunications companies, like China Telecom. Following delays in gaining permission to expand its internet service delivery and AOL’s massive losses from the global downturn in internet stocks, Time Warner announced its withdrawal from the joint venture agreement in January 2004.
Viacom (MTV) and NetEase.com
In late 2002, Netease.com forged a cooperative deal with Viacom’s established MTV cable television operations in China. 2002年底,Netease.com与维亚康姆建立的MTV有线电视网在中国的业务签订合作协议。As MTV’s exclusive internet service partner, NetEase.com provides wireless products in the form of interactive clubs, English language study, and ‘Star Profiles’ in Multi-Media Services (MMS) and Short Messaging Service (SMS) formats. The partnership,called ‘MTV–NetEase M’, allows members to participate and interact with four popular cable television programs produced and distributed by MTV on China’s expanded cable television system (see Weber, 2003). For example, subscribers can send MMS or SMS messages to MTV requesting or dedicating songs, as well as order MTV ‘Star Profiles’, which are sent to mobile telephones either directly or via downloads from the Netease.com web portal. This strategy is designed to complement the larger focus by Viacom on establishing its children’s global television brand Nickelodeon. Sun Deli,Chief Executive Officer of NetEase.com, suggests that:
… cooperation with MTV is a milestone in the development of NetEase.com’s wireless services.… NetEase.com has millions of users, most of whom are youth.MTV is the No. 1 youth brand all over the world. This partnership with MTV will consolidate NetEase’s leading position in the internet market of China. (‘Wang Yi Lian’, 2003; trans. Lu Jia)
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Disney and Sohu.com
In 2003, Disney formed a partnership with Sohu.com, a leading Chinese internet company offering online media, communications, commerce and mobile value-added services.2003年,迪斯尼与Sohu.com形成了合作伙伴关系,搜狐网是中国提供互联网媒体、通信、电子商务及移动增值服务的最重要互联网公司之一。 In so doing, Disney was able to leverage Sohu.com’s local market knowledge and consumer reach and combine it with its own experience as a leading service provider across multiple business and technology platforms to deliver a comprehensive array of online and wireless content and services.Features of the partnership included mobile telephone content such as wallpapers,animated cards, logos and picture messages; online games and activities based on Disney’s key global brands – Mickey Mouse,Winnie the Pooh and the Lion King; and movie content from Touchstone Pictures, Miramax, Hollywood Pictures, ABC and ESPN. The partnership is designed to access the dynamic growth in internet and mobile telephone use by meeting ‘the demand for trustworthy,quality entertainment with educational values … that are fun and entertaining for kids while simultaneously promoting valuable information skills’(ChinaTechNews, 2003). Mark Handler, executive vice-president and managing director for WDGI suggests that the cooperative arrangement presents:#p#分页标题#e#
… a very strong market opportunity for WDGI with Chinese consumers becoming very sophisticated in their adoption of technology and we’re pleased to localize our portfolio of products and services for the fast growing Chinese internet and wireless audience. It is great new entertainment for Chinese users to discover.(ChinaTechNews, 2003)
Meanwhile, Sohu.com provides web development expertise for Disney to establish its Chinese website services and products (ChinaTechNews, 2003).The Chinese company provides the necessary technical support for Disney’s China operations as well as helping the entertainment company integrate its content into its own Chinese language website services. The chairman and chief executive officer of Sohu.com suggested that:
… the agreement combines Disney’s exciting products with Sohu.com’s online and wireless business lines and we are very pleased to work with Disney as they expand their presence in the Chinese Internet market. By introducing Disney’s products to Sohu’s users, we will enhance the entertainment value to our consumers in what is potentially the largest consumer market of the 21st century. (ChinaTechNews, 2003)
By establishing a formal partnership with local internet service provider,Disney managed to avoid direct contact with Chinese censorship bodies that control internet content, effectively assigning the policing of information to their local partner as part of the internet ‘Pledge on Self-Discipline for China’s Internet Industry’. On the other hand, Sohu.com enhanced its competitiveness with other major internet service providers such as NetEase.com and Sina.com,while building demand for its newly developed internet mobile services through offering high-quality foreign entertainment content from Disney’s portfolio.
Finding the strategic model for success in China寻找在中国成功的战略模式
The strategic models of MTV–NetEase and Disney–Sohu reflect three distinctive features. MTV - 网易和迪斯尼 - 搜狐的战略模式反映了三个不同特征。First, the content supplied by MTV and Disney plays a crucial role in successful cooperation with Chinese media groups’ target audiences.首先,由MTV和迪斯尼提供的内容在与中国媒体集团的目标观众的成功合作中起着至关重要的作用。 Both Disney and Viacom produce high-quality entertainment/educational products, such as cartoons, movies and music, which young Chinese internet users favour (see CNNIC, 2005a, 2005b). Second, entertainment products seldom involve politically sensitive topics relating to issues of ideology or democracy. Accordingly, both companies meet government regulations on culturally sensitive media content. Third, the companies can also provide specific content for China’s developing mobile telephone infrastructure,particularly in relation to supporting the upgraded 2.5G wireless service network and soon-to-be-launched 3G service.
On the other hand, Time Warner’s double failure not only reflects the economic difficulties of the global internet sector but deeper changes occurring in the media sector in China. While all three domestic internet companies offered political connections for the foreign media companies, Disney and Weber & Jia, Internet and self-regulation in China 781 MTV’s strategies gained three distinct advantages over Time Warner’s approach through better alignment in business modeling; technology–content coordination; and better synchronicity with control modalities. First, Disney and MTV strategically aligned their partnerships with established Mainland internet companies at a time when the volatile internet market had somewhat stabilized. This meant that, through localized partnerships, Disney and MTV benefited strategically from local market knowledge, a key factor in leveraging business success in this uncertain economic structure that continues to favour those with local knowledge (in spite of efforts to reconfigure the market through WTO reforms). In contrast, Time Warner’s primary focus on political leverage could not elicit the kind of concessions and traction it hoped to attain through its third-party partnerships because of the government’s reluctance to allow foreign companies (like Time Warner) to control information dissemination through service provision. This restriction was made explicitly clear to foreign companies when the government introduced the Pledge as a way to establish local internet service providers as the gatekeepers of information control. Second, Disney and MTV strategically matched their content to new, developing media technologies, linking their products and services with the growth areas of online (internet) and mobile gaming (telephony). On the other hand, Time Warner had little to offer in relation to content that fitted the government’s push to develop these two digital environments,with its main focus on movie and television program distribution.Third, the decision by Disney and MTV to link with local business partners,which had signed the Pledge, allowed the companies to avoid the troublesome and time-consuming task of negotiating with various censorship bodies over content. Instead, the onus was placed on the domestic service providers to address such censorship issues on a daily basis. This separation of foreign operators from the decision-making process over content allowed domestic operators to meet the guidelines of the Pledge and thus provide more flexibility and momentum to push ahead with commercialization strategies.