But Many Who Seek to Cash In Find Only Frustration : Chinese TV:An Alluring Picture

HONG KONG: When Western television producers contemplate China, they cast hungry looks toward the country's 210 million television sets.

Advertisers are in awe of a market that has quadrupled in the past three years, generating about $3 billion in ad revenue last year, according to a recent study by the J. Walter Thompson Agency.

Yet, as an increasingly wary group of veteran investors has discovered, extracting a profit can be difficult. Gathering last week for a television market and conference here, producers, advertisers and analysts pointed to the pitfalls facing companies trying to cash in on the Chinese TV audience.

Licensing fees for overseas programs are paltry by Western standards; reliable ratings are hard to come by; some programs scheduled for prime time run hours earlier or later, and others arebroadcast weeks after their agreed-upon air dates. Contracted TV spots appear erratically if at all, wreaking havoc with marketing campaigns.

A fewlocal stations block out commercials by international sponsors such as Procter & Gamble Co. and Johnson & Johnson, substituting their own advertisements. Suing errant stations and networks is out of the question: That would be the quickest way of ensuring your programs are frozen out of Chinese media.

A handful of producers tell tales of Chinese broadcasters who turn the tables on Western program vendors. Instead of buying programs, they demand fees for allowing Westerners the privilege of airing animated series and other productions on their stations. They say, not without justification, that their air time enables the producers to drum up a market for toys and other products related to the shows.

Finally, in China and the rest of Asia, local productions are far more popular than Western imports.

"Foreign programming is only filler," said Nicholas James, managing director of Media Asia Group, a Hong Kong-based distributor of Chinese-language films and videos. "Chinese audiences prefer programs by other Asian producers to the latest American series."

Mr. James was so disheartened by the Chinese market that his company is holding back distributing films in the country, waiting for prices to rise.

Because the price for dramatic television series hovers around $2,000 an hour in China — compared with $50,000 in France, for example — many Western producers prefer advertising-barter deals. Under these arrangements, a producer typically gives broadcasters programs at no cost, in return for commercial time that he then sells directly to advertisers.

But these barter deals frequently run awry, according to Alex Au Yeung, marketing director for Saatchi & Saatchi Advertising's Hong Kong branch. "We find our spots missing in virtually all of the provincial and city stations," he said.

Chen Guhua, deputy general manager for the China Program TV Agency, said some Western commercials had been pulled because they violated laws prohibiting depictions of violence or alcohol consumption.

In other cases, however, Chinese broadcasters were at fault, Mr. Chen acknowledged. "Sometimes we fail to follow rules accepted in the West because we don't know what they are," he said.

Still, despite the litany of complaints, there have been significant successes.

Based on a programming philosophy that advocates "no sex, no violence and no news," China Entertainment Television Broadcast Ltd.,a satellite service created by the Hong Kong entrepreneur Robert Chua, claims to reach 28 million homes in China with its 24-hour Mandarin-language channel.

Last week, the service announced it had signed on three new investors: International Family Entertainment, an Americancompany that runs the Family Channel; Lippo Group, a Hong Kong property and financial concern, and Malayan United Industries Bhd., a trading and manufacturing firm that is a part-owner of the South China Morning Post.

Children's Television Workshop, producer of the "Sesame Street" series, is co-producing the latest of its local-language adaptations with Shanghai Television.

According to David Jacobs, CTW's Asian regional vice president, the co-production had appeal because "the Chinese are much more interested in acquiring production skills and advancing their television industry than in simply acquiring ready-made foreign productions."

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