Playing to the world's biggest audience: the globalization of Chinese film and TV 9780520251342, 9780520251335, 9780520940734

Table of contents :
Frontmatter
Acknowledgments (page ix)
Introduction: Media Capital in Chinese Film and Television (page 1)
1. The Pan-Chinese Studio System and Capitalist Paternalism (page 29)
2. Independent Studios and the Golden Age of Hong Kong Cinema (page 47)
3. Hyperproduction Erodes Overseas (page 68)
4. Hollywood Takes Charge of Taiwan (page 85)
5. The Globalization of Hong Kong Television (page 109)
6. Strange Bedfellows in Cross-Strait Drama Production (page 133)
7. Market Niches and Expanding Aspirations in Taiwan (page 151)
8. Singapore: From State Paternalism to Regional Media Hub (page 176)
9. Reterritorializing Star TV in the PRC (page 192)
10. Global Satellites Pursuing Local Audiences and Panregional Efficiencies (page 211)
11. The Promise of Broadband and the Problem of Content (page 229)
12. From Movies to Multimedia: Connecting Infrastructure and Content (page 245)
Conclusion: Structural Adjustment and the Future of Chinese Media (page 269)
Industry Interviews (page 291)
Notes (page 295)
Bibliography (page 313)
Index (page 325)

Citation preview

Playing to the World's Biggest Audience

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Playing to the World’s Biggest Audience The Globalization of Chinese Film and TV — MICHAEL CURTIN

University of California Press | BERKELEY LOS ANGELES LONDON

University of California Press, one of the most distinguished university presses in the United States, enriches lives around the world by advancing scholarship in the humanities, social sciences, and natural sciences. Its activities are supported by the UC Press Foundation and by philanthropic contributions from individuals and institutions. For more information, visit www.ucpress.edu. University of California Press Berkeley and Los Angeles, California University of California Press, Ltd.

. London, England © 2007 by The Regents of the University of California Library of Congress Cataloging-in-Publication Data Curtin, Michael. Playing to the world’s biggest audience : the globalization of Chinese film and TV / Michael Curtin.

p. cm. Includes bibliographical references and index. ISBN 978-0-520-25133-5 (cloth : alk. paper)—1sBN 978-0-520-25134-2 (pbk. : alk. paper)

1. Motion pictures—China. 2. Motion picture industry—China. 3. Motion pictures—Taiwan. 4. Motion picture industry—Taiwan. 5. Television broadcasting—China. 6. Television broadcasting—Taiwan. I. Title.

PN1993.5.C4C87 2007

791.430951—dc22 2007004610 Manufactured in the United States of America

16 15 14 13 12 11 10 og 08

10 9 8 7 6 5§ 4 3 2

This book is printed on New Leaf EcoBook 50, a 100% recycled fiber of which 50% is de-inked post-consumer waste, processed chlorine-free. EcoBook 50 is acid-free and meets the minimum requirements of ANSI/ASTM D5634—01 (Permanence of Paper).

For Melissa

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Contents

Acknowledgments ix Introduction: Media Capital in Chinese Film and Television 1 1. The Pan-Chinese Studio System and

Capitalist Paternalism 29 Hong Kong Cinema 47

2. Independent Studios and the Golden Age of

3. Hyperproduction Erodes Overseas Circulation 68

| 4. Hollywood Takes Charge in Taiwan 85

5. The Globalization of Hong Kong Television 109 6. Strange Bedfellows in Cross-Strait Drama Production 133 7. Market Niches and Expanding Aspirations in Taiwan 151

Media Hub 176 Panregional Efficiencies 211 of Content 229

8. Singapore: From State Paternalism to Regional

9. Reterritorializing Star TV in the PRC 192 ~ 10. Global Satellites Pursuing Local Audiences and 11. The Promise of Broadband and the Problem 12. From Movies to Multimedia: Connecting

- Infrastructure and Content 245

Conclusion: Structural Adjustment and the :

Future of Chinese Media 269

Notes 295 Bibliography , 313 Index 325

Industry Interviews 291

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Acknowledgments

From its very inception this project was designed as an exercise in defamiliarization. That is, I hoped that shifting my attention from North America across the Pacific would encourage me to rethink my presumptions about the ways that media industries operate and the impact of globalization on them. Of course this meant that I was venturing into unfamiliar territory, and the extent to which I have succeeded depended substantially on the gen-

TV. ,

erosity of hundreds of media professionals, academics, and everyday ac- : quaintances who patiently endured my endless queries about matters large and small. A major debt of gratitude is owed first to those professionals who took time from their busy schedules to sit for formal interviews, many more than once. They are listed individually in the appendix, each of them contributing significantly to my understanding of Chinese commercial film and

During the course of my research I had the good fortune to work alongside supportive and engaging colleagues at Indiana University, the Chinese University of Hong Kong, Academia Sinica, and the University of Wisconsin—Madison. I’m grateful to all of them and to the wonderful office administrators who kept the wheels of department life spinning smoothly. Special thanks as well to Hong Kong colleagues and friends for lifting my ' spirits and offering encouragement throughout: Joseph Man Chan, Darrell Davis, Kathy Edwards, John Nguyet Erni, Steve Fore, Anthony Fung, ChinChuan Lee, Eric Kit-wai Ma, and Emilie Yueh-yu Yeh. David Bordwell and Kristin Thompson buoyed me along the way with sage advice and memorable evenings at the Spring Deer after Hong Kong film festival screenings. Likewise in Taipei, I relied on the generosity of Allen Chun, Pen-juin Chen, Lilly Yu-li Liu, Tain-dow Lee, and Wu Jin-jyi. I also wish to thank other colleagues who share my passion for the study of Chinese media and have gen-

, ix

x / Acknowledgments erously offered insights and resources at various stages of my research; these include Joe Allen, Cindy Chan, Yvonne Chang, Pei-chi Chung, Siew Keng Chua, Fan Wei, Heidi Fung, Poshek Fu, Eddie Guo, Ho Tsai-ping, Michael Keane, Steve Lewis, Liu Fei-wen, Liu Kang, Gordon Matthews, Stanley Rosen, Joseph Straubhaar, Jing Wang, Shujen Wang, Mayfair Yang, and Yingjin Zhang. Iam furthermore grateful for the warm and steadfast encouragement of — colleagues in the Media and Cultural Studies area of the Department of

Communication Arts at UW-Madison: Julie D’Acci, Mary Beltran, and Michele Hilmes, and until recently Shanti Kumar and Lisa Nakamura. Our Thursday lunches sustained me in many ways, as did evenings at The City. I also benefited greatly from collaborative adventures with Pan Zhongdang and Hemant Shah and from the departmental leadership of J. J. Murphy and Vance Kepley. At the University of Wisconsin International Institute, Gilles Bousquet and Aili Tripp have been staunch supporters, as has the office crew at Global Studies, especially the unflappable Steve Smith. Thank you all. J also wish to mention colleagues at Indiana University who encouraged

me during the initial phases of this venture and remain close friends, among them Chris Anderson, Dick Bauman, Purnima Bose, Joan Hawkins, Bob Ivie, Barb Klinger, Jim Naremore, Radhika Parameswaran, Beverly Stoelje, Sue Tuohy, and Jeff Wasserstrom. Other longtime benefactors of my _ scholarship are Lynn Spigel and Tom Streeter, special colleagues in every

way. Kudos also to the graduate and undergraduate students who challenged me along the way with spirited questions and observations. I should especially mention Lori Hitchcock, Caryn Murphy, Shawn Vancour, and Sean Tzu-hsuan Chen, who provided research assistance at various stages. At the University of California Press, Mary Francis, Mary Severance, and Robin Whitaker provided wise counsel and skillful assistance throughout the publishing process. Finally, heartfelt thanks to my family, especially Melissa, who nurtured this venture in more ways than I can enumerate and who, along with her sister, coined a working title that proved fitting for a project that lasted longer than I initially imagined: That Goddamn Book. No doubt unaware of the working title, several institutions supported my research with significant grants and fellowships, including the U.S. Ful-

bright Commission, Taiwan’s National Endowment for Culture and the Arts, the College of Arts and Sciences at Indiana University, the Hamel Faculty Fellowship Fund, the Wisconsin Alumni Research Foundation, and the

University of Wisconsin Division of International Studies. My abiding _ thanks to these organizations for critical funding, without which this project never would have succeeded. _

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Introduction Media Capital in Chinese Film and Television

At the turn of the twenty-first century, feature films such as Crouching Tiger, Kung Fu Hustle, and Hero—each of them coproduced with major Hollywood studios—marched out of Asia to capture widespread acclaim from critics, audiences, and industry executives. Taken together they seemed to point to a new phase in Hollywood's ongoing exploitation of talent, labor, and locations around the globe, simply the latest turn in a strategy that has perpetuated American media dominance in global markets for almost a century and contributed to the homogenization of popular culture under the aegis of Western institutions.! These movies seem to represent the expanding ambitions of the world’s largest movie studios as they begin to refashion Chinese narratives for a Westernized global audience. Yet behind these marquee attractions lies a more elaborate endgame as Hollywood moguls reconsider prior assumptions regarding the dynamics of transna-

tional media institutions and reassess the cultural geographies of media consumption. For increasingly they find themselves playing not only to the Westernized global audience but also to the world’s biggest audience: the Chinese audience. With more than a billion television viewers and a moviegoing public estimated at more than two hundred million, the People’s Republic of China (PRC) figures prominently in such calculations. Just as compelling, however, are the sixty million “overseas Chinese” living in such places as Taiwan, Malaysia, and Vancouver. Their aggregate numbers and relative pros-

perity make them, in the eyes of media executives, a highly desirable audience, one comparable in scale to the audience in France or Great Britain.

Taken together, Chinese audiences around the globe are growing daily in numbers, wealth, and sophistication. If the twentieth century was—as Time

| magazine founder Henry Luce put it—the American century, then the

1

2 / Introduction twenty-first surely belongs to the people that Luce grew up with, the Chinese. Although dispersed across vast stretches of Asia and around the world, this audience is now connected for the very first time via the intricate matrix of digital and satellite media. Rupert Murdoch, the most ambitious global media baron of the past twenty years, enthusiastically embraced the commercial potential of Chinese film and television when in 1994 he launched a stunning billion-dollar takeover of Star TV, Asia’s first pancontinental telecaster, founded only three years earlier by Li Ka-shing, Hong Kong’s richest tycoon. Yet if Western executives are sharpening their focus on Chinese audiences, Asian en-

trepreneurs have been equally active, expanding and refiguring their media | services to meet burgeoning demand, so that today, in addition to Star, hundreds of satellite channels target Chinese audiences in Asia, Europe, Aus-

tralia, and North America, delivering an elaborate buffet of news, music, sports, and entertainment programming. Among Star’s leading competitors is TVB, a Hong Kong-based media conglomerate built on the foundations of a transnational movie studio and now the most commercially successful television station in southern China. Its modern state-of-the-art production facilities and its far-reaching satellite and video distribution platforms position it as a significant cultural force in Europe, Australia, and North America. Equally impressive, Taiwanese and Singaporean media enterprises are extending their operations abroad in hopes of attracting new audiences and shoring up profitability in the face of escalating competition, both at home and abroad. Finally, PRC film and TV institutions, though still controlled by the state and therefore constrained by ideological and infrastructural limitations, are globalizing their strategies, if not yet their operations, regularly taking account of commercial competitors from abroad and aiming to extend their reach as conditions allow. Based on in-depth interviews with a diverse array of media executives, this book peeks behind the screen to examine the operations of commercial

| film and television companies as they position themselves to meet the bur| geoning demands of Chinese audiences.” It includes stories of Hong Kong media moguls Run Run Shaw and Raymond Chow as well as their junior counterparts, Thomas Chung and Peter Chan; of Rupert Murdoch and his enigmatic mainland partner, Liu Changle; of Sony chair Nobuyuki Idei and his Connecticut whiz-kid, William Pfeiffer. It also includes tales of legendary Asian billionaires, such as Li Ka-shing, Koo Chen-fu, and Ananda Krishnan, lured by the scent of fresh new markets, as well as stories of aspiring billionaires Chiu Fu-sheng and Richard Li, each determined to find a

Introduction / 3 seat at the table for what is becoming one of the most high-stakes media plays of the new millennium. But this volume is more than a collection of colorful accounts of personal

and corporate ambition; it is furthermore a reflection on the shifting dynamics of the film and television industries in an era of increasing global connectivity. For several centuries, the imperial powers of the West exercised sway over much of the world by virtue of their economic and military might. In time, cultural influence came to figure prominently in Western

hegemony, as the production and distribution of silver screen fantasies helped to disseminate capitalist values, consumerist attitudes, and Anglo supremacy. Likewise, Western news agencies dominated the flow of informa-

tion, setting the agenda for policy deliberations worldwide. Indeed, throughout the twentieth century, media industries were considered so strategically significant that the U.S. government consistently sought to protect and extend the interests of NBC, Disney, Paramount, and other media enterprises. All of which helps to explain why Hollywood feature films have dominated world markets for almost a century and U.S. television has prevailed since the 1950s. Besides profiting from government favoritism, U.S. media has benefited from access to a large and wealthy domestic market that serves as a springboard for their global operations. By comparison, for most of the twentieth century, the European market was splintered, and the Indian and Chinese markets suffered from government constraints and the relative poverty of their populations. Yet recent changes in trade, industry, politics, and media technologies have fueled the rapid expansion and transformation of media industries in Asia, so that Indian

and Chinese centers of film and television production have increasingly emerged as significant competitors of Hollywood in the size and enthusiasm of their audiences, if not yet in gross revenues. In particular, Chinese film and television industries have changed dramatically since the 1980s with the end of the Cold War, the rise of the World Trade Organization, the modernization policies of the PRC, the end of martial law in Taiwan, the transfer of Hong Kong to Chinese sovereignty, the high-tech liberalization of Singapore, the rise of consumer and youth cultures across the region, and the growing wealth and influence of overseas Chinese in such cities as Vancouver, London, and Kuala Lumpur. Consequently, media executives can, for the very first time, begin to contemplate the prospect of a global Chinese audience that includes more moviegoers

and more television households than the United States and Europe combined. Many experts believe this vast and increasingly wealthy Global

4 / Introduction China market will serve as a foundation for emerging media conglomerates that could shake the very foundations of Hollywood's century-long hegemony.’ Despite these changes, Hollywood today is nevertheless very much like Detroit forty years ago, a factory town that produces big, bloated vehicles with plenty of chrome. As production budgets mushroom, quality declines in large part as a result of institutional inertia and a lack of competition. Like Detroit, Hollywood has dominated for so long that many of its executives have difficulty envisioning the transformations now on the horizon. Because of this myopia, the global future is commonly imagined as a world brought together by homogeneous cultural products produced and circulated by American media, a process referred to by some as Disneyfication.* Other compelling scenarios must be considered, however. What if, for ex-

ample, Chinese feature films and television programs began to rival the substantial budgets and lavish production values of their Western counterparts? What if Chinese media were to strengthen and extend their distribution networks, becoming truly global enterprises? That is, what if the future were to take an unexpected detour on the road to Disneyland, heading instead toward a more complicated global terrain characterized by overlapping and at times intersecting cultural spheres served by diverse media enterprises based in media capitals around the world? Playing to the World's Biggest Audience explains the histories and strategies of commer-

cial enterprises that aim to become central players in the Global China market, and in so doing it provides an alternative perspective to recent debates about globalization. Transcending the presumption that Hollywood hegemony is forever, this volume joins a growing literature that is beginning to offer alternative accounts of global media.° Playing describes the challenges and opportunities that confront Chinese commercial media, and it shows, unexpectedly, that these industries are nurturing a fertile breeze of democratization that is wafting across Asia today. The winds of change are gusty and unpredictable, nevertheless, and sometimes given to dramatic reversals. After more than a decade of torrid expansion, commercial media enterprises were hit hard by the Asian financial crisis of 1997, the dotcom meltdown of 2000, and a dramatic escalation of digital piracy. By the end of the last century, Chinese media enterprises were for the very first time thoroughly globalized in out_ look but had slowed the pace of their expansion while seeking to consolidate their operations and reformulate their business plans. The focus of this book therefore is on the wave of globalization during the 1990s and early 2000s,

, Introduction / 5

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The Globalization of Hong Kong Television / 123 programming and marketing strategies. Peter Tsi, former head of program-_ ming, says that during the 1990s, Wharf shifted its focus back to upscale families, constituting less than 4o percent of local households. In Wharf's average household, “both parents work and family members spend only ninety minutes each day watching television, but when they do watch, they want more than the broadcast stations have to offer,” explains Tsi. Wharf caters to these needs by providing a range of programming, including children’s and women’s channels, documentaries, news, movies, and sports. Yet, says Tsi, most families sign up for one of two reasons. The first is access to sports programming, especially the World Cup soccer matches. Starting in

1994, Wharf bid aggressively for exclusive rights to World Cup telecasts in | Hong Kong, setting off a firestorm of criticism that the popular championship, which previously was shown on free-to-air broadcast channels, was being privatized. Government regulators refused to intervene, however, and the championship series became one of the company’s enduring promo-

tional devices, generating a dramatic uptick in subscriptions with each championship. Some of these sports fans continue their cable subscriptions, especially in public housing estates, because, says Tsi, they “are drawn to both World Cup and European league play, and they want to have access to all the games, not just one or two. The [broadcasting] stations would never play this stuff except on weekend mornings. They wouldn’t even run it late night. The soccer audience is a very strong one.” Feature films are the other

major attraction for Wharf. “The movie watchers don’t really care what you are playing,” observes Tsi. “They feel they are watching for free and don’t mind what it is, so long as it’s watchable. The ratings are very stable, except for big movies—recent titles that you spend time promoting—but most of the time it’s like they have cable TV instead of a fish tank.” Other than high profile movies and sports events, Wharf’s strategy is less an entertainment strategy than a common carrier strategy. That is, Wharf cable executives are not trying to shape audience tastes or inspire loyalty with a discerning mix of marquee attractions. Instead, they provide a diverse combination of channels for a modest amount of money, carefully weighing costs and revenues. When they invest in expensive programming, such as big-ticket movies or World Cup soccer, they base it solely on cautious market calculation rather than on inspiration. “Wharf looks at TV just like another one of its shopping arcades,” says Peter Tsi. “They want certain shops like DKNY because they want the image, but they’re not really interested in the shop itself or even what's in the shop. They’re interested in the rent.” Tsi’s assessment is shared by other TV executives, who say that Wharf was an odd choice to run the territory’s first cable service. “They

124 / _ The Globalization of Hong Kong Television have no big vision for the future of media and may not even be in the business in ten years,” comments one executive. “Of course, if they were asked by a journalist, they would act as if they had some sort of vision, but their real objective is to build up the par value in case they want to sell it. They have no attachment to the media industry per se.” In keeping with Wharf’s bias toward tangible capital assets, management slowly but surely expanded the fiber optic network until cable lines passed most businesses and homes in the territory. In the late 1990s, when broadband coverage reached critical mass and when the city became enamored of the dotcom economy, the asset value of Wharf Cable began to rise rapidly. In 1999, near the height of dotcom fever, the company rebranded itself as iCable, an interactive service connected as much to the future of the Internet as to the business of cable television. Listing itself on the NASDAQ, iCable offered 18 percent of its shares to the public, raising close to $400 million in fresh capital, most of which helped to pay down the $900 million in debt owed to the parent company, Wharf Holdings. Peter Tsi says that with that stroke, Wharf came close to realizing the first phase of its business plan—to break even. And indeed, at the time of the initial public offering, the company was returning a modest yearly operating profit, and the net asset value of i-Cable stood at close to $1 billion. Most of that value resides in the network infrastructure, says Tsi. “To them, that’s Tara: home, land, something tangible; that’s still the most important thing to them. Just take a look at Gone with the Wind and you know their mentality. Wharf is sticking very, very tightly to its network, because they believe this is the one thing that will keep them in competition.” Tsi claims this is especially important given the volatility of the digital economy. “To them, it’s good to have flashy content, it’s good to have interesting portals, but at the end of the day, network access is what will bring you reliable income and market position.” Tsi, who has since moved on to other ventures, observes that Wharf has a very conservative, very modest strategy, built around the notion that content is a mercurial business with some very big winners and lots of bright, dynamic losers. As services proliferate, management holds even more tenaciously to the notion that others can pro-

vide the content, so long as i-Cable provides the connection. “I don’t think = Wharf wants to beat anybody, actually,” says Tsi. “It’s a very, very Chinese | concept. They would be happy enough if they could stay as, let’s say, one of

the three survivors in the market. They wouldn’t say it, but I think that’s more or less the strategy. Because they believe if that other guy spends a hundred bucks to be number one, wouldn’t we be smart if we just spent thirty to be number three? They look at profitability and longevity.” The

The Globalization of Hong KongTelevision / 125 emphasis, says Tsi, is not so much on the service as it is on the investment.

“It’s sort of an asset-building strategy. If you stay in the market long enough, you’re worth something. And what they think is, the only thing that matters is to have something with tangible value. And if I put myself in their shoes, maybe this is not a bad strategy. Because connection is something that Wharf has and not everybody else has. So to ride on that is sensible. My only concern is: don’t be too cheap with your content, because you still have to do that.” According to Tsi, content is important both to attract audiences and to keep them happy when other competitors enter the market.

It was probably no surprise to Peter Woo that Li Ka-shing would reappear as one of those competitors only a year after he withdrew his cable bid. Heading up a satellite communication consortium, Li seemed to be searching for a back door into the Hong Kong television market, and satellite technology offered a promising gateway, since satellite and cable have been at turns complementary and competitive technologies throughout their histories. During the 1980s, satellite services expanded rapidly around the world, spreading signals across vast footprints. Nothing short of a comprehensive global treaty could stop these proliferating transmissions, and, as

| the cost and size of dishes decreased, seemingly nothing could stop audiences from purchasing the receiving equipment. By the end of the 1980s, viewers in Bangkok, Riyadh, and Belgrade could buy a sixty-inch dish for as little as $600. As sales exploded upward, industry executives began to promote these audiences as promising targets for advertising and pay services. Yet the debates over satellite TV continued, centering not only on technology and commerce but also on issues of national sovereignty. In Europe, Jack Lang, the French minister of culture, famously decried the encroaching influence of satellite channels by conjuring up the loathsome specter of “wall-to-wall Dallas” as the future of European television. Throughout the 1980s, such flamboyant hyperbole colored policy debates across the Continent as public broadcasters witnessed their television monopolies succumb to pressures exerted by rising costs, new technologies, and growing competition. Up until that decade, the technical constraints of terrestrial broadcasting had limited the number of available TV channels within any given

territory because of signal interference problems, creating a condition known as signal scarcity. With only a few channels available to each nation,

many governments entrusted the medium to public service institutions, _ while others carefully vetted and regulated commercial providers. Satellite channels miraculously overcame the problem of signal scarcity by employ-

126 / The Globalization of Hong Kong Television ing an underutilized part of the electronic spectrum well above the frequencies used by existing technologies. This new frontier allowed many more channels to operate without interfering with one another and therefore promised a cornucopia of programming that would make it difficult to justify artificial limits on the number of channels. Satellite technology therefore seemed to trump a fundamental rationale for public service broadcasting, but it did not ameliorate concerns about the impact of foreign media on local populations. That would have to wait until the dramatic events of 1989, when popular uprisings unfolded across the globe from Manila to Tiananmen to Gdansk. Each of these events seemed intimately tied to the spread of new communication technologies, leading ABC’s Ted Koppel to expound enthusiastically about the democratic potential of satellite TV during a U.S. network news special entitled Revolution

in a Box. Koppel, like many others at the time, contended that dramatic changes in electronic media would hasten the march of democracy, ushering in a newera in human history. Indeed, Marshall McLuhan’s “global village” now seemed within reach, as a stratospheric rhetoric of satellite TV saturated newspaper and magazine articles with breathtaking accounts of

signals transcending national boundaries, overriding restrictive government policies, and connecting villagers in remote parts of the world to the

flow of global events. |

The vaunted prospects of satellite TV also attracted the attention of investors such as Li Ka-shing, who was approached during the late 1980s by a group of entrepreneurs that had purchased Westar VI, a communication satellite launched in 1984 that wandered off course, requiring a NASA shuttle crew to retrieve and repair the wounded bird. Li was intrigued both by

the discount price of the satellite and by the prospect of expanding his telecommunications empire. In conjunction with Cable & Wireless (the British Telecom giant) and CITIC (the Chinese government’s official investment arm), Li purchased the satellite and relaunched it into high orbit over the Indian Ocean, creating a satellite footprint that stretched from the Middle East to Japan and Indonesia. Renamed AsiaSat I, it could carry both telecommunication and television signals. And even though Li was primarily interested in the former, it was his Star TV venture that would draw far more attention, for it seemed to usher in the bold prospect of pan-Asian television. Yet governments within the region, like their European counterparts, were less sanguine about the prospects of satellite TV, accustomed as they were to sovereign control over the circulation of images and ideas within their borders. Satellite television promised to change that, opening a new

The Globalization of Hong Kong Television / 127 window onto the outside world for millions of viewers. Even more dramatically, in India and China, the satellite era dawned at the very same time as the arrival of television for the masses. In 1980, fewer than a million PRC

citizens owned televisions, but by the end of the decade the figure had soared to over eighty million. India was likewise experiencing a television revolution, and transnational media companies looked to these countries as promising new markets that were also undergoing a period of trade liberalization and deregulation. In early 1990, Hutchison Whampoa launched Satellite Television Asia Region (Star), headed by Li Ka-shing’s twenty-three-year-old son, Richard Li Tzar-kai. With the company conceived as a competitor to Wharf Cable, Star staffers busied themselves preparing to file for access to the Hong Kong market after Wharf’s exclusive three-year license lapsed, but the company also entertained more expansive ambitions, proclaiming itself a pan-Asian service aimed at innovators, trendsetters, and decision makers. “People who fly first class when they travel abroad,” trumpeted one of Star’s promotions. “People familiar with global lifestyles and the latest technology.” People like, well, like Richard Li, who was groomed for leadership from a tender age, when he and his elder brother, Victor, first began attending company board meetings. Packed off to prep school in Palo Alto, California, Li later attended Stanford to study engineering for several years before departing for Toronto, where he worked a short stint with an investment bank. In January 1990, he returned to Hong Kong at the behest of his father, who put

him in charge of a venture capital portfolio at Hutchison Whampoa. It wasn’t long before Richard latched on to the exciting prospect of satellite TV, promoting the idea to his father and personally taking charge of the fledgling company. Although some expressed admiration for Richard’s leadership, others considered him an ill-mannered and abrasive boss who put impossible demands on employees. Having hired some of the best executive talent in the Asian television business, Richard reportedly bullied and berated them, apparently hoping to realize the expansive expectations that he and others were circulating to investors and news reporters regarding pan-Asian satellite TV. Noting his seemingly affected British accent, one Star executive referred to him as a “pompous little [expletive],” while another observed, “Either he’s going to be one of the great successes of twenty-first-century capitalism, or a colossal crash-and-burn failure.”? Richard’s immaturity proved to be the focus of press speculation during the early years of Star, and many wondered if his drive to succeed grew out of a desire to step out from under the shadow cast by his father. Richard dismissed this possibil-

128 / The Globalization of Hong Kong Television : ity, claiming instead that the pressure to succeed came from the marketplace, and indeed Star became one of the most flamboyant new enterprises of the 1990s and one of biggest news stories in Asia. The most immediate challenges confronting Li’s staff were cash and content. In search of programming, the company cast about for services that were seeking to establish a presence in Asia and were therefore available at a discount. BBC’s World Service Television and Prime Sports Network out of Denver, signed on to the new venture, since it allowed them to lay claim to an expanding presence in Asia. Likewise, MTV, which had pioneered one

, of the most successful satellite services in Europe during the 1980s, was looking to expand eastward. And Star itself cobbled together a Mandarinlanguage service, redubbing programs acquired from ATV in Hong Kong and movies culled from a film library it established under the name Media Assets. In all, Star’s initial operating budget was estimated at $80 million a year, besides the more than $120 million in start-up costs. As the premiere date approached, Star’s marketing staff began to peddle charter advertising subscriptions to longtime business associates of the Li

, family. For $250,000 one could purchase two years of ad time and receive preferred status in a future flotation of Star shares. Institutional ads there-

| fore prevailed initially, but ad spots for consumer goods soon took off as | well, in partas a result of Star’s market research, which claimed in 1992 that its channels were reaching eleven million homes in forty-seven countries. These figures were impossible to verify given the rudimentary quality of audience measurement then available in most Asian countries. More persuasive evidence was derived from promotional ploys that, for example, invited viewers to subscribe to a free programming schedule. In 1993, the company delivered 365,000 schedules each week via fax, almost a third of

them to China, with others spreading from Yemen to Korea. Equally compelling evidence of Star’s impact seemed to come from governments protesting the intrusion of satellite signals from afar. Indian offi-

| cials were early and passionate critics, challenging the company’s right to operate in a gray zone created by the absence of international satellite regulations. Faced with enormous social and economic development challenges, the government worried that the unbridled commercialism and sensuality of channels such as MTV Asia would undermine the public service mission of Indian television. In a different vein, the Japanese government criticized Star’s attempt to skim prime advertising revenue from its national broadcasters, and Singaporean bureaucrats complained about the ideological content of Star, banning private receiving dishes and fashioning a highly so-

The Globalization of Hong Kong Television / 129 phisticated (and highly regulated) cable system to compete for the attention of audiences. Such anxieties only fueled Star’s mystique and encouraged the sale of ad

time. And no one was stoking the fires of controversy more assiduously than Richard Li, who in his midtwenties fashioned himself as something of a visionary, making bold pronouncements about the dawn of pan-Asian advertising and the twilight of mass broadcasting. “Ultimately, niche channels could be supported by specific industries,” opined Li. “An automobile channel, for instance, could be financed by car companies. Indeed, television of the future will enlighten, entertain, and uplift us in surprising new ways. It’s an inexpressibly vital form of liberty that we are to gain: the freedom of choice.”'! Regardless of what limited enlightenment one might expect from an automobile channel sponsored by car manufacturers, Li was avidly participating in the very same stratospheric discourse that had spurred the new technology in Europe: satellite TV promised to erase spatial barriers and national frontiers, helping to bring together far-flung audiences and specific shared interests. Although available to many, satellite TV targeted the affluent consumer, who, it was suggested, deserved the basic human right to choose. Japanese regulators might fulminate and Indian authorities might fret, but the stratospheric discourse of satellite TV made it seem that little could be done to stop the growing momentum of Star and the upwardly mobile middle class that it served.

, Nevertheless, significant problems festered. For one thing, the company still lacked adequate market research to inspire advertisers to pay premium rates. Levi’s jeans might be flashed on television screens across Asia, but the size and location of audiences remained vague. Did viewers, in fact, have access to stores that carried the product? Was it truly within their means? And how did the cost of Star’s advertising compare with local forms of promo-

. tion? Perhaps even more troublesome was the competition that Star’s seemingly bright prospects were beginning to attract; by 1993 some 350 transponders were beaming signals at the Asian continent, including new services sponsored by global media conglomerates. Such pressures exacerbated concerns about Star’s modest menu of programming. Although management had assembled enough channels to draw the attention of millions, the novelty was beginning to wear off, and the future seemed likely to include direct competition from the likes of ESPN, HBO, and TVB. Star was now on the threshold of the big-time media industry, a terrain littered with the carcasses of upstart novelty acts that couldn’t sustain themselves over the long haul. Pan-Asian rhetoric aside, it needed programming strategies

1430 «=©6©/ ‘The Globalization of Hong Kong Television

that were targeted at specific time zones, cultures, languages, and competitors. That meant program costs were sure to rise, and the Li family would have to assess the depth of its commitment to the television business.

As early as 1992, there were numerous reasons for the Lis to begin searching for satellite partners or even outright buyers. Chief among them were the financial reversals suffered by Hutchison enterprises in the early 1g9gos. After Hutchison purchased the Alberta-based Husky Oil in 1986, a soft global oil market and the collapse of the Soviet economy forced Husky to write off $200 million in losses. Similarly, Hutchison’s aggressive expansion into the European cell phone business started to founder, as the $1.3 billion rollout of Hutch Telecom in the United Kingdom showed only faint signs of health, with management anticipating ongoing losses until the end of the decade. Other projects were slated to launch in Australia, Greece, and | Germany, but then Li Ka-shing suddenly reversed course, deciding to with-

| draw from all three places. As one securities analyst in Hong Kong speculated, “They are so deeply involved in the U.K. that they can’t pull out, so they have to pull out elsewhere.” For many years, Li Ka-shing had been accustomed to operating in markets in which his firm dominated and the barriers to entry for new competitors were high. The senior Li’s penchant for -

owning infrastructure—real estate, utilities, port facilities, and retail chains—shows why he was initially interested in telecommunications. Not everyone could own and control satellite, cellular phone, and fiber optic cable networks. The world of entertainment was different, however, with far more competitors, many of them more experienced than Li and some with even deeper pockets than the Hong Kong billionaire. Perhaps with this in mind, Star TV executives started shopping for partners, first opening talks with Pearson, but soon broadening their discussions to include other suitors, among them Rupert Murdoch, then the world’s most aggressive satel-

lite television operator and chair of the News Corporation media conglom- , erate.

: Up until the mid-1980s, television in Hong Kong was a governmentregulated oligopoly, dominated by Run Run Shaw’s powerful TVB,acompany that alone commanded more than half of all advertising expenditures in the territory. Earnings from this lucrative franchise began to plateau, however, when television ownership reached most households and when the audience began to fragment into smaller market segments. Government protection that at one time assured market dominance and profitability had ~ now become a constraint on accumulation, with regulators seeking to rein

, The Globalization of Hong Kong Television / 131 in TVB’s attempts to expand across media platforms. With profit growth diminishing, TVB was in need of a “spatial fix.” This might have involved the reorganization of its production facilities, but they were already highly con-

centrated and refined, so much so that programming was often criticized as. formulaic. The centripetal logic of accumulation therefore seemed fully exploited, leaving the centrifugal realm of distribution as the focus of man-

agement’s attention. Pressed to explore new areas for growth while restricted from cross-ownership in the local market, TVB began to look overseas, initially developing video rental services before expanding to cable and satellite TV, first in Taiwan and then throughout Asia and even farther afield. Commercial Hong Kong television, which had been focused on local identity, now needed to reinvent itself using new technologies to complement its local programming with niche-market fare that could be targeted at audiences around the world. This new emphasis on “personal TV” sought to take advantage of new delivery technologies and media convergence, allowing TVB to refashion itself as a transnational conglomerate rather than as a licensed local broadcaster.

Such transformations were further stimulated by government regulators who sought to encourage broadband communication technologies, which they saw as crucial to sustaining Hong Kong’s stature as a global financial center. Focusing first on television, government regulators solicited bids for an exclusive cable franchise, attracting the attention of the terri-

tory’s business elite, who had previously shunned what they saw as the crass, volatile, and ephemeral world of entertainment. Yet the prospect of building a broadband network for both television and ultimately telecommunications drew interest from two of the wealthiest and most influential capitalists in Hong Kong, both of them heavily invested in real estate and shipping but looking to migrate into the unfolding information economy of the late twentieth century. Peter Woo, who built Hong Kong’s Wharf Cable system, saw television as a Trojan horse for his company’s strategic interest in telephony, a utility that he hoped would at first provide an exclusive government franchise and

in the long run turn into a capital-intensive network with tangible asset

. value. Woo had little interest in television programming per se, seeing it largely as window dressing to attract subscribers, who could provide ongoing streams of rental revenue that could then be plowed back into capital development. Wharf’s strategy was strongly influenced by its previous experiences in real estate and shipping, and the company invested only marginally in program production, focusing instead on the network infrastruc-

132. / The Globalization of Hong Kong Television ture. The strategy proved unexpectedly successful when the dotcom boom allowed Wharf to rebrand itself as i-Cable and float shares in the red hot speculative fever of the late 1990s NASDAQ. Likewise, Li Ka-shing entered the satellite business with a common carrier strategy, hoping to control capital-intensive infrastructure that could be

used by a host of communication services, including his burgeoning telecommunications business. He was no doubt surprised that a motley panAsian television channels run by his son would engender eager enthusiasm and speculation. Despite this, as Richard scrambled to amplify Star’s first-

-. mover advantage and build its brand identity, he and his staff still encountered emerging competition from experienced media conglomerates with far greater creative resources. Unlike Woo’s cable franchise, Li’s satellite system had neither an exclusive monopoly nor a territorial infrastructure to hold competitors at bay. Lacking such advantages, the Hutchison enterprises either had to plunge into the competitive world of content production and fully embrace the logic of media capital or needed to unload the brand they built before it began to unravel. Either way, the Lis seemed acutely aware that Chinese capitalists could no longer ignore the media business, and, like Shaw, they seemed to sense that the future of the industry would be transnational rather than local, a lesson that was being learned in other markets as well.

6 Strange Bedfellows in

Cross-Strait Drama Production

Although Hong Kong was the undisputed capital of the Chinese commercial media production during the 1990s, Taiwan was still the largest single market for movies, music, and television. After the end of martial law in 1987, however, new challenges and opportunities arose in Taiwan when the government relaxed restrictions on media, spurring the emergence of dozens of fiercely competitive new television companies. Unlike the martial law era, during which three state-controlled channels monopolized the airwaves, the new media economy offered the average viewer more than a hundred cable channels, featuring a broad range of programming and political opinions, making Taiwan an increasingly open, if also unruly, media environment. In this chapter I explain the pervasive impact of media privatization and liberalization during the 1990s, focusing on the fortunes of terrestrial television services. I show how shifting forces of sociocultural variation profoundly affected the strategies and operations of these media institutions as tight government controls on media imports and local production gave way to an increasingly diverse and competitive market. Accordingly, major television services were pressed to look for new markets, new partners, and new production resources. Surprisingly, in many cases these partners turned out to be stations in the PRC that were themselves experiencing dramatic competitive pressures and audience fragmentation. In their bid to survive and prosper, the big three Taiwanese terrestrial TV services began to place greater strategic emphasis on the logic of accumulation and trajectories of creative migration, both of which encouraged them to consider transnational strategies as some _of the brightest prospects for the future of these enterprises. The early years of Taiwanese television were strongly influenced by Chiang Kai-shek, who dominated most aspects of the island society from the 1950s

133

134 / Strange Bedfellows in Cross-Strait Production to the 1970s. After World War II, many residents were hoping to be granted , independence after fifty years of Japanese colonial rule. Instead U.S. leaders prodded the United Nations to transfer governing authority to the retreating Chinese Nationalist army, allowing Chiang to install his regime in the former Japanese colonial capital of Taipei. Those who accompanied him into exile would come to constitute less than 15 percent of the island’s population, yet they controlled the army, the state apparatus, and the only political party. Local Taiwanese administrators, intellectuals, and businesspeople were shouldered aside while the government doled out jobs, subsidies, and political favors to exiles from the mainland. Clustered in the northern part

of the island around Taipei, this generation of exiles became known as waisheng ren (people born outside), yet ironically it was the Taiwanese who found themselves living as outsiders on their own island. The regime callously slaughtered its opponents, imposed martial law for more than three decades, and engaged in a thorough program of ideological indoctrination that proclaimed Chiang’s government as the only legitimate representative of all Chinese people. The regime dismissively treated Taiwan as a minor province, as little more than a temporary haven until the Nationalists could rejuvenate their military forces and mount a campaign to reclaim control of

the mainland.

Yet for all its nefarious activities, the government also realized that it needed to cultivate the island population if only to muster a new generation of soldiers. Consequently, universal education was instituted, and children began each school day singing songs glorifying President Chiang and spent

| much of their time studying the history, culture, and geography of mainland China, learning little about their own island. Mandarin became the lan' guage of instruction, governance, and big business, even though few Taiwanese could speak it fluently. Overall, the regime’s ideology was a mixture of sinophiliac nostalgia, virulent anticommunism, and Nationalist Party republicanism. Schools, newspapers, and movies were all closely monitored, and when television arrived in the 1960s, it too was fashioned as an ideological tool of the state. Broadcasting largely in Mandarin, one station was

controlled by the provincial government (Taiwan Television, TTV, established in 1963), another by the military (China Television Service, CTS, 1971), and a third by the Nationalist Party, or Kuomintang (China Television, CTV, 1971). Pressed to appear strong in the face of invasion threats from the PRC, the

government sought to modernize the economy and the military, which in turn required ideological mobilization of the local population and support

Strange Bedfellows in Cross-Strait Production / 135 from the United States. Consequently, the regime fashioned itself as the democratic alternative to communism, even if, in fact, it was thoroughly corrupt and autocratic. When American support began to waver after Richard Nixon’s trip to Beijing in 1972, reform elements within the Kuomintang (KMT) began to press for further democratization, and with Chiang’s death

in 1975 and the ascendancy of his son to the presidency, the government began to open its doors tentatively to Taiwanese participation in politics and government. This process culminated in the lifting of martial law in 1987, the emergence of an oppositional Democratic Progressive Party (DPP), and the election of native-born Lee Teng-hui as president in 1988. It also sparked a cautious movement toward media liberalization, which laid the groundwork for the cable television revolution of the 1990s when the number of stations mushroomed from three to more than one hundred licensed operators.! Wholly owned by the Kuomintang, CTV provided a lucrative source of

income and played an influential role in shaping public opinion for more than two decades, but during the 1990s, as martial law began to wither and new media outlets began to flourish, KMT leaders reluctantly decided to release their grip on the station for a number of reasons. First of all, reformers within the party believed the commercial objectives of the station would be best realized by breaking explicit ties with the KMT. Second, as competition from cable television intensified, financial planners worried that the value of the station might decline, so it would be best to float a public stock offering in the near future. Finally, some party leaders feared that, should the KMT ever lose power, the station might be seized by the opposition DPP or rendered worthless by government regulatory action. Accordingly, in 1996, the CTV board of directors hired Su Ming Cheng to prepare the company for an initial public offering (IPO) that would pave the way for a transition of ownership. A former television news professional and cabinet official, Cheng swiftly spun off nine subsidiaries and established

ten joint-venture companies in computer graphics, digital gaming, and telecommunications. With the company now known as the CTV Media Group, Cheng also engineered a change in its corporate culture, which is exemplified by her office atop the CTV complex. Conspicuously absent are any traces of the company’s connections to the ruling party: no pictures of

KMT leaders or even of Chiang Kai-shek. An ikebana-inspired floral arrangement in one corner adds a splash of color, and a Chinese calligraphy brush painting crisply contrasts with the teak wall paneling, but overall the

_ décor is modern and corporate. Cheng’s ready smile and telegenic appear- ,

136 / Strange Bedfellows in Cross-Strait Production ance in her smart black suit recall her prior career as an evening news anchor. Yet these days industry professionals are more likely to comment on

_ her managerial performance at CTV, a company often referred to as the “brightest of the terrestrials.” Cheng’s diversification strategy worked well initially, with more than half of the company’s profits now coming from

nonbroadcast revenues.

Cheng believes that TV advertising sales cannot keep up with the rapidly rising costs of program production, especially since TV ad revenues are now spread among more than eighty channels rather than the original three terrestrials. Indeed, between 1998 and 2001, ad income at CTV plummeted from $147 million to $88 million, dropping more than 40 percent.? Cheng contends that the company must diversify and globalize, repositioning itself as a multimedia content provider with a strong focus on Chinese language and culture. “We're talking about transforming Chinese culture into

, something modern that can be accepted by the whole world,” she explains. No longer a propaganda tool of the ruling party, CTV fashions products to suit diverse audiences: mass and niche, domestic and foreign. Yet the core identity of the company revolves around its distinctive association with Chinese arts and culture. “Whether fortunately or unfortunately, we were

ruled by Chiang Kai-shek,” says Cheng, “and at that time everybody thought that we were the rightful heirs to Chinese culture.” Chiang’s regime nurtured and sustained traditional arts during the era when the PRC was undergoing the Cultural Revolution and Hong Kong and Singapore were living under colonial rule. In her estimation, CTV can tap its deep con_ nections to Chinese culture to produce captivating media products in a contemporary Chinese vernacular. “A modern language is something that can be accepted worldwide,” says Cheng. It maintains distinctive cultural traces and yet at the same time is capable of addressing audiences that come from a variety of backgrounds, especially young audiences. “Last night at the movies,” she explains, “I saw the trailer for an animated mainland movie called Lotus Lantern. You can really see the difference between it and Disney’s Mulan. You look at it, and you can immediately tell: no, it’s just too Chinese. Not only too Chinese for Taiwan, but too Chinese for Hong Kong and a lot of other places. It’s just too old,” she chuckles. Interestingly, our conversation was taking place only a month before the July 2000 premiere of Crouching Tiger, Hidden Dragon, which succeeded precisely because its Taiwanese director, Ang Lee, was able to produce a film that paid homage to romantic dramas and swordplay films of the past while also producing a very contemporary, transnational blockbuster using global talent and resources. Likewise, Cheng believes that CTV

Strange Bedfellows in Cross-Strait Production / 137 should be at the center of content development for a global market, providing financing and organizing resources on a regional basis. _ Asan example, she points to Splendid China, a CTV documentary series that capitalizes on Taiwan’s growing tourist trade-with the mainland. For many citizens, especially waisheng ren and their children, trips across the strait have become increasingly popular since both the PRC and Taiwan governments began lifting travel restrictions during the 1990s. Many who venture to the mainland wish to reconnect with family and friends, whereas others are intrigued by the opportunity to visit sites they could only imagine while studying Chinese history and culture during their school years. CTV cashed in on this trend by fashioning a long-running series of travel programs and by producing a host of related products and services that include publications, videos, a Web site, and a travel service, all of them owned by CTV Media Group. “A lot of people want to travel in mainland China,”

says Cheng, “but they don’t know where and what and how. There are dozens of agencies that provide these services, but we use the name Splendid China for our program, our travel agency, and our Web site. The brand has become quite famous, and the name makes each of these products stand out in their own markets.” Such products both complement one another and multiply the profit opportunities generated by core programming. “We're __ also dubbing it into English to sell overseas to National Geographic or Discovery or other English-speaking services.” Other genres are also ripe for synergistic development, according to Cheng. A popular game show called The Matchmaker expands its appeal to young audiences via an audienceparticipation Web site, as well as several e-businesses that focus on gifts, weddings, and honeymoons.

While both travel and game show genres seem especially ripe for transnational, multimedia development, prime-time drama is perhaps the most important form of core content that the station produces. Traditionally, eight o’clock dramas have been a keystone of the evening TV schedule, forming a bridge between the nightly news and variety programs. A strong

drama series not only attracts a large audience but also helps to carry the audience through prime time. Moreover, since each drama series is usually telecast five nights a week over a period of eight or more weeks, it also serves as an important promotional vehicle for terrestrial stations. By comparison,

cable channels find it difficult to finance original dramas, so they usually purchase dramas from foreign suppliers, or they rerun series that were originally produced by their terrestrial competitors. When cable stations do venture into the realm of original prime-time series, they usually produce low-budget studio dramas, often with contemporary themes. The original

138 / Strange Bedfellows in Cross-Strait Production three terrestrial stations, therefore, distinguish themselves by mounting lavish historical dramas, but interestingly, they now have difficulty financing the programs, and so they must look for coproduction partners overseas. Moreover, they must, from the very outset of the production process, take into consideration the international distribution of each series, since Tai-

wanese ad revenues can no longer support original productions. Consequently, the competitive economics of the local market are now driving CTV toward transnational coproduction and distribution. In the spring of 2000, Su Ming Cheng was quite proud that CTV productions were playing in prime time on the leading terrestrial stations in Hong Kong and the PRC. And she was furthermore delighted that in the preceding year Huanzhu Ge Ge (Princess Huanzhu, aka Princess Pearl), an_ other CTV coproduction, scored record audiences throughout Global China, especially among young viewers, who Cheng sees as prime users of ancillary products and services. “With all of our dramas we now target young audiences, and we try to develop computer software to go with them,” enthuses Cheng. “We have a joint venture with Soft China, the biggest video game company in Taiwan, so now every one of our evening dramas is aimed at audiences who might be interested in these games.” Of the terrestrial stations, CTV has moved most aggressively to reposition itself in a changing media universe. It was able to do this because the station was “ privately” owned and operated by the ruling KMT rather than the government. When the party decided to mount an IPO, the decision was made internally by shareholders and the KMT leadership. In comparison, efforts to reform the other broadcast stations, CTS and TTV, have presented a far more complicated set of issues, because both are government-owned, and any attempt to reorganize them has to be vetted by the legislature, a process

: fraught with political conflict and maneuver. Nevertheless, all three stations feel the pressure to reform while the competitive crush in cable TV continues to drive down advertising revenues, thus stimulating the search for new ways to attract audiences. The extent to which CTV can realize its ambitions

as a transnational, multimedia enterprise with a contemporary Chinese identity is still up in the air, but the institutional dynamics provide a good example of the macropolitical and economic pressures that are driving Taiwanese broadcasters to look overseas for production and distribution opportunities. In the realm of production, creative personnel look especially to historical drama as one of the few genres that can succeed transnationally.

During the late 1990s, TTV’s Eric Yang emerged as one of the most successful young producers of television drama, scoring six hit series over the

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190 / Singapore: From State Paternalism to Media Hub phobic about where you get the talent,” he says, “the potential is tremendous, but you have to move fast because the competition is growing.”

Between the 1970s and 1990s, rigorous government planning helped to launch the “miracle” economy of Singapore when the island society first carved out a competitive niche in world markets with its low-wage factory workforce and then sustained its advantages by adapting over time through systematic investments in education, job training, and technology. Most recently the transition to a high-tech service society has encouraged Singaporean leaders to self-consciously reposition their city as an important node on the global communications grid, investing heavily in transoceanic cable and satellite technology. This further encouraged planners to spur institutional reform in the media sector, initiating the rollout of a sophisticated broadband cable service and forcing television and publishing monopolies

— to diminish their reliance on government patronage and diversify their product lines with an eye toward regional and even global distribution.

No longer a monopolist, MediaCorp undertook a series of initiatives aimed at improving the quality of its programming so as to confront new challenges in the local advertising market and to make its dramas attractive to audiences overseas. At first it sought to distribute its creative output via

syndication and through its new regional satellite network, but neither strategy proved financially viable, so it shifted focus to coproductions, hoping to find partners who might share financial and creative resources, in_ cluding opportunities for mutual learning effects. The strategy also aimed to ensure that such programs would at the very least be distributed in the production partner’s market, a significant improvement over the vagaries of international distribution.

_ Nevertheless, coproductions presented distinctive challenges of their own because of shades of variation in audience preferences regarding television programs marked by foreign cultural influences, a problem that has commonly affected all types of transnational media circulation. Scholars and industry practitioners have commonly noted that foreign programs can improve their prospects in particular markets to the extent that they seem culturally similar in the eyes of viewers. That is, Peruvian audiences are likely to prefer a Mexican telenovela as opposed to a Hollywood drama because of linguistic and cultural similarities between the two Latin American countries.* Yet, as we've observed both in Singapore and in Taiwan, cul-

tural proximity can under certain conditions have the opposite effect, inviting critical scrutiny from viewers. That is, a contemporary Singaporean TV series may spark discomfort among, for example, Taiwanese

Singapore: From State Paternalism to Media Hub = / ~~ 191 viewers, who are likely to perceive subtle linguistic and cultural differences as alienating. In contrast, Chinese historical dramas set in the distant past (temporal distance) or programs imported from distinctively alien cultures, such as Japan or Korea (spaciocultural distance), often tend to be more easily accepted, in many cases because of their abstract or exotic textual qualities. For their part, successful Chinese coproductions seem to require a deft mixing of local talent and scenery with exotic elements provided by partners or abstract tableaux on which to fashion more culturally neutral narratives. Although such mixtures offer cost efficiencies and assured distribution, they are unlikely to satisfy audience interests in emphatically local

and topical concerns. | MediaCorp therefore faces a complicated challenge. On the one hand it must coproduce programming with glossy production values that will be abstract enough to travel into overseas markets and familiar enough to be popular in the local market. On the other hand it has to sustain its commitment to emphatically local shows so as not to surrender its Singaporean identity to emerging competitors in the island market. What had once been a resolutely national monopoly has transformed its operations in response to changes in the global political economy. Forces of sociocultural variation that had at one time dominated the city’s media now have given way to an increasingly transnational market logic that forces companies not only to refigure their spheres of distribution but also to reconsider the city’s potential to sustain itself as a site of creative endeavor that might prove attractive to talent from the region as well as from the city itself. Yet, even

though capitalist pressures are reconstituting the geography of Singaporean media, forcing the local to go global, a counterexample, which we will observe in the next chapter, shows how global media have been forced to localize.

9g Reterritorializing Star TV in the PRC

Dramatic changes in Chinese media began as early as the mid-1980s with liberalization and reregulation in Hong Kong, Taiwan, and Singapore, as _ well as the People’s Republic of China. In the PRC the introduction and dif_ fusion of television technology proceeded at a frenetic pace. In 1980, only a tiny percentage of homes owned TV receivers, but by mid-decade a majority of urban households had purchased their own sets. This enthusiastic embrace of the new medium was commonly linked to Deng Xiao-ping’s “Four Modernizations,” and therefore many observers anticipated that it was only

| a matter of time before PRC media, like many other industries, would commercialize their operations.' As political and economic pressures combined with a technological shift toward satellite, cable, and VCR, they fueled the rising aspirations of citizens, who now had access to more information and imagery than would have seemed imaginable only a few years before. If Richard Li’s claims about the promise of Star TV seemed inflated and pretentious, they nevertheless were inspired by epochal changes then taking place on the ground. The promise of Asian television therefore appeared boundless, but as mentioned earlier, Richard Li became anxious about the

: fortunes of Star as early as 1993, worried that global media conglomerates with greater expertise and programming resources might expand their operations in Asia and thereby diminish the value of Star, despite its first- mover advantage. When the Li family began to probe for partners or buyers, Rupert Murdoch emerged as one of the most likely candidates, given his expressed ambition to build a global media empire and his extensive experience with satellite television in Europe. Yet News Corporation was also in talks at the time with TVB, certainly the most prominent Chinese-language media enterprise in the region. Interestingly, Pearson was talking with TVB, too, as were Sony, Disney, Turner, and Time-Warner. The maneuvering by

192 |

| Reterritorializing StarTVinthe PRC / = 193 global conglomerates seemed to be escalating daily, and speculation proliferated about which parts of the mainland China market would open first and which commercial television service would be in the best position to take advantage of this emerging opportunity. TVB appeared to hold a pivotal position, but as negotiations with News Corporation unfolded, it became clear that government ownership regulations would factor into any merger or acquisition plan. That is, a foreign investor could take up to a 15 percent interest in a Hong Kong station, but a conglomerate such as News Corporation or Pearson could not take a controlling interest without securing a waiver from the territory’s Executive

Council. This proved to be a significant obstacle for News Corporation, since Murdoch was widely perceived, both in Hong Kong and London, as a marauding investor bent on building a global empire at the expense of local media enterprises. Londoners, who were especially sensitive to this issue, irreverently referred to Murdoch as the Dirty Digger, an Australian inter_ loper who had taken over major newspapers, such as the Sun and the Times, turning the former into an overheated tabloid and the latter into a middlebrow shell of its former self. To critics of the increasing conglomeration and globalization of media, Murdoch was the most nefarious example of the

| new media barons that Ben Bagdikian dubbed the Lords of the Global Village.? Critics in Hong Kong were no less concerned, for allowing Murdoch to take control of the crown colony’s only profitable TV station seemed antithetical to regulations aimed at sustaining local voices on the airwaves. Making matters even more complicated, Beijing officials expressed misgivings about Murdoch, and with the 1997 handover looming, their opinions carried weight with many Hong Kong officials. If the colony’s Executive Council were to waive the residency stipulation, not only would it be an affront to the Beijing leadership, but it also would make it difficult for

local regulators to resist future takeover attempts mounted by mainland investors.

With these complications rising to the fore, Murdoch abruptly terminated his courtship of TVB in June 1993, much to the relief of the Li family. From the Lis’ perspective, a News Corporation—T VB alliance would have

brought together the world’s most prominent satellite TV firm with the most formidable force in Chinese commercial television, and such an alliance would surely threaten Star TV’s tenuous status as the leader of Asian satellite TV. Furthermore, the collapse of Murdoch’s negotiations with TVB meant that he would likely turn his attention to other prospective acquisition targets, and the Lis made it known that they were ready to talk. Negotiations began with News Corporation offering $425 million for a

194 / _ Reterritorializing Star TV in the PRC _ substantial stake in the Asian satcaster, but the Lis demurred, saying the offer simply wasn’t rich enough. Executives from the two companies haggled for weeks, until finally Richard Li accepted an invitation to negotiate face-to-face with Rupert Murdoch aboard his yacht, moored off the island

of Corsica in the Mediterranean. Emerging from the six-hour meeting, Murdoch announced that News Corporation would pay $525 million for a 63.6 percent stake in Star TV, leaving the remaining portion of the company and the ownership of AsiaSat in the hands of Hutchison Whampoa. The deal was a bonanza for the Li family, providing a sizable cash return on their investment and relieving them of the burden of running a multichannel television service. For their part, News Corporation executives crowed that the sale price was a bargain, and they continued to tout the merits of Star two

years later, when they bought the rest of the company for an additional $345 million, bringing the total purchase price to $870 million. Murdoch claimed that the future promise of commercial TV in Asia made Star worth more than three times what News Corporation had paid. Others, however, weren't so sure. Although Star remained Asia’s leading satellite telecaster, it still suffered

from all the problems that had beset the Lis: it needed better market research, more advertising, and more subscription revenue. And even though

News Corporation made its vast inventory of English-language content available to Star programmers, Chinese and Indian resources were still in short supply. Moreover, Murdoch soon made matters considerably more difficult when, in a London speech only a month after the 1993 acquisition of Star, he enthused that satellite television was breaking down borders and proving to be “an unambiguous threat to totalitarian regimes everywhere.”

| Without specifically mentioning China, he continued, “Satellite broadcasting makes it possible for information-hungry residents of many closed societies to by-pass state-controlled television channels.” Murdoch's hyper-

bole, which interestingly was telecast around the world by satellite, , immediately raised eyebrows in Beijing, where officials perceived it as a di-

rect challenge to party supremacy. _ | In a swift and calculated response, Chinese leaders banned private ownership of satellite dishes, prohibited newspaper advertising for foreign satellite services, and selectively showcased the prosecution of violators. Even more creatively, the government began to promote cable TV, making services available at such low cost that satellite dishes no longer seemed worth the bother. Paradoxically, Chinese leaders chose to proliferate access to gov-

ernment cable systems in order to limit signal flow, reasoning that cable would be easier to regulate than satellite signals from afar.* Taken together,

Reterritorializing StarTVinthePRC / = 195 these steps initially proved so successful that News Corporation managers realized they had a crisis on their hands, and it would take years of concerted, almost obsequious, effort for the company to regain even limited standing with the Beijing regime. This contretemps furthermore emphasized—Murdoch’s remarks notwithstanding—that infrastructure on the ground was just as important to Star TV as high-speed conduits in the sky.

That is, government relations and marketing personnel inside the PRC would prove crucial to Star’s attempts to access government cable systems and promotional opportunities in local print media. The seemingly inexorable logic of distributing high-quality Hollywood programming via satellite throughout the PRC proved to be quite vulnerable to forces of sociocultural variation marshaled by the Chinese state. Murdoch’s management team discovered it had other problems as well. Initially, Star was developed as an English-language, pan-Asian platform aimed at upscale households across the continent, but it soon became clear that the company would have to multiply the number of channels and target them more specifically along linguistic, cultural, and national lines. For it became evident to Star executives that a transnational elite audience was not large enough to sustain the costs of operation, let alone to turn a profit.

Moreover, the dispersal of elite viewers across the vast expanse of Asia proved to be a programming and marketing nightmare. Time zone differences alone made a single program service untenable, and, as it turned out, less than a third of Star’s advertising clients were interested in synchronous continental exposure. Instead, most clients preferred to buy ads that would

promote particular products in specific media markets. In order to serve these customers, Star needed to produce and acquire programming crafted to the tastes of such audiences. This realization caused a major shift in company strategy, according to John O’Loan, the chief of network operations

who oversaw Star’s transition to News Corporation control. “After we bought Star we realized that what [the Li family was] doing was wrong. It would be nice if you could get some economies of scale. It would be nice if you could squeeze another 1 percent out here and there. And like any other business, you'll look for places where you can get those economies, but not if they're going to put you out of business by losing touch with your audience.” Star’s pan-Asian strategy would have to be recalibrated in light of local preferences. Program acquisition and scheduling therefore proved to be much more complicated than anticipated. Although the Fox film and television libraries are among the most extensive in the world, Star soon found that it needed access to programs that would generate buzz among its diverse audiences.

196 / _ Reterritorializing Star TV in the PRC In some cases that meant access to a hit Hollywood show that had gone into global syndication, and in other cases it meant access to locally produced programs. Yet from the outset, TVB refused to sell to Star, because the two

companies competed in Taiwan, China, and India. Likewise, Taiwanese broadcasters were reluctant to supply programming to Star, because they too were beginning to think transnationally. Only ATV, the hapless com- __ petitor of TVB, agreed to do business with Star on a regular basis. Global media firms were only slightly more cooperative. Warner Bros., Sony, and Paramount each sold Star some programs, but they were reluctant to feed too much content to the News Corporation subsidiary, because each was laying plans for its own Asian satellite services. Moreover, com- | panies such as Warner Bros. Television worried that satellite transmission would undermine the value of programs they were selling to local broadcasters. As O’Loan explains, “If a program fetched $1,000 an hour in six markets across Asia, why put it on Star, which cuts across those markets?” If the syndicator sold the program to Star for $3,000, it would jeopardize the $6,000 the syndicator might make by selling the show in six separate mar-

kets. Star tried to argue that satellite audiences and broadcast audiences were distinct, but this failed to console local broadcasters, who countered that whenever they telecast American dramas, they too were targeting the very same niche audience as Star. Consequently, Star spent much of the 1990s patching together its programming schedule with content from Fox, BBC, ATV, and to some extent Sony. One of the most common criticisms of Star during this period was the unevenness of its telecasting schedule. Although its Western programming proved somewhat attractive, Star struggled to acquire compelling content in local languages and to deliver services that would meet the needs of non-English-speaking viewers.

At first Star’s new management thought it could cope with these chal-

lenges by splitting the service in two, creating a northern and a southern beam, which would be pan-Chinese and pan-Indian, respectively. Yet before long management discovered that these markets were further complicated by prevailing taste hierarchies within them. For example, a viewer in Fujian Province, directly across the strait from Taiwan, is likely to be interested in Taiwanese television shows (especially those broadcast in the southern Min

| dialect), but the reverse is highly unlikely: Taiwanese viewers are not apt to be interested in programs from Fujian, since most viewers in Taiwan already have access to more than eighty channels that compete ferociously for their

attention. Moreover, a Hong Kong viewer is unlikely to be interested in programs from either Fujian or Taiwan because of linguistic, social, and cultural differences, although a (Cantonese-speaking) viewer in nearby

Reterritorializing Star TV in the PRC / 197 Guangzhou might be interested in the same sorts of Mandarin programming that interest viewers in Fujian Province or even Shanghai. Cultural biases proved to be just as important. For example, residents of both Guangzhou and Hong Kong speak Cantonese, and Hong Kong TV programs are quite popular in Guangzhou, but not the reverse. The reason for this particular pattern of cultural flow is best expressed in temporal terms: Guangzhou looks to Hong Kong as its future, while Hong Kong looks inland toward its past. As Koichi Iwabuchi has observed, such valences are at work throughout Asia, and they significantly influence patterns of cultural exchange.® Given these complexities, Star decided that the only way to move

forward with its Chinese TV services was to develop two distinctive Mandarin-language platforms, one for Taiwan and one for the eastern region of mainland China, while largely ignoring such lucrative but competitive markets as Hong Kong, Singapore, and Malaysia.

By 1995, management had all but abandoned ambitions for a panChinese, let alone a pan-Asian, service, since both approaches simply lacked enough advertiser support. John O’Loan explains that transnational adver-

tising works best for companies that are trying to build a brand identity with consumers who are unfamiliar with their product. “The people who are the biggest spenders on pan-European advertising are the Japanese, who are furthest from the market, followed by the Yanks,” observes O’Loan. Establishing a brand identity is important to these companies, either because they are just beginning to develop a new distribution infrastructure or because they have a product (often a luxury product) that does not rely on mass dis-

tribution systems. Advertisers in such cases aren’t especially concerned about the competitive dynamics of particular local or national markets, since they see themselves as distinctive or even exotic brands. Likewise in Asia, says O’Loan, “we sell a lot of pan-Asian advertising, but not to Asians. We

sell it to the Americans, and we sell it to the Europeans—Volvo, for example—but we couldn’t survive on that type of advertising. The money that keeps television going is soap, toothpaste, and consumer products, which is national advertising that’s tied to a distribution network on the ground.” Yet within the borders of the People’s Republic of China, Star found that even national advertising is problematic, because, like many other parts of Asia, distribution networks are rarely national in scope. Infrastructural constraints, personnel limitations, banking idiosyncrasies, and complex social networks all militate against national product distribution. “If you have a toothpaste factory,” observes O’Loan, “you've got to have a way to get your product around the country. In China, right now, there’s no way to do it. The

obstacles are severe, because the road and rail infrastructure can’t handle

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