As Appeared in OnscreenAsia

Beijing – China’s Mei Tian Mei Yu (Mei Tian) and H& R Century TV (H&R), in conjunction with Metan Development Group (Metan), Warner Bros. International Television Production (WBITVP) and the creative team behind the TV series Gossip Girl, have come together to develop a modern new teen drama series (30x60min) set in China.

Instrumental in bringing the parties together, Metan together with WBITVP, will provide development and production consultation on the project.

Set to debut to Mandarin-speaking audiences in November this year, the series is about the lives of the students at the prestigious Shanghai International University. Each week, the main characters’ trust, love and friendship are tested, with all the behind-the-scenes tales recorded in a blog.

Production begins in June and a nationwide casting search will begin later this month. Chinese actress Yang Mi (Palace) will have a recurring role on the series.

Warner Bros. International Television Production and Metan Development Group Pact to Develop New Series In China

Beijing – In an historic deal that brings together the very best minds in television production from the East and West, China’s Mei Tian Mei Yu (Mei Tian) and H& R Century TV (H&R), in conjunction with Metan Development Group (Metan), Warner Bros. International Television Production (WBITVP) and the creative team behind the hit TV series phenomenon “Gossip Girl,” have joined together to develop a modern new teen drama series (30x60min) set in China.

Instrumental in bringing the parties together, Metan, a company founded by international TV veterans Marty Pompadur and Larry Namer, together with WBITVP will provide development and production consultation on the project, which is poised to launch a new era of the modern drama series in China.

“As one of the leading film and drama production companies in China today, we’re excited to be working with such an amazing team of international TV professionals,” said Zhong Junyan, president, H&R.“With its keen understanding of global production, Metan has joined together with Warner Bros. International Television Production, creating an extraordinary consultant team to help Mei Tain and H&R forge a new form of drama series in China.”

“Metan is pleased to be involved with this exciting collaboration, underscoring our ability to once again create positive connections between Hollywood with China,” said Metan’s president/ceo Larry Namer. “We believe that bringing together such a talented team will result in one of the biggest and best drama series ever seen in China, as the country enters this new age of TV production.”

“We are delighted to be working with Mei Tan and H&R to bring this new series to one of the most vibrant and exciting countries on the planet, China,” added Andrew Zein, Senior Vice President, Creative, Format Development and Sales, Warner Bros. International Television Production.

Set to debut to Mandarin-speaking audiences in November 2012, the series about the lives of the students of the prestigious Shanghai International University, the school of choice of the rich and powerful. One’s social status reaches a new level once admitted into the school. Each week, the main characters’ trust, love and friendship are tested, with all the behind-the-scenes tales recorded in a blog. In the beginning, they are confused and lost, however over time, they discover who they really are and eventually find the right path to pursue their dreams.

Production is set to begin in June of this year and a nationwide casting search will begin later this month. Chinese actress Yang Mi, most noted for her breakthrough role in the TV series “Palace” (2011), as well as in “The Return of the Condor Heroes” and “Chinese Paladin 3,”will have a recurring role on the series.

H&R Century TV was established on September 2006 at Hengdian, Dongyang, Zhejiang Province. The company’s TV production projects include “Roses in the War,” “Pretty Maid,” “Palace,” “Bullet Hole,” “Introduction of A Perfect Husband,” “Hidden Emotion,” “Covering-City Snow” and“King’s Woman.” H&R’s ongoing TV production projects include “Palace Season 2,” “The Cost of an Unmarried Successful Woman,” “Happiness of an Angel” and“Teen Detective.” Its ongoing Movie production projects include “Painted Skin 2,” “Running all the Way to Stardom,” “Zhu Xian” and “The Legacy of Prince — The Left Hand Print.” Current projects include the films “Mountain Shu” and “Painted Skin 2,” and for TV“ Stories of Concubines in Tang Dynasty,” “Beautiful Scenery,” “Patriotism” and “The Sovereign Descending the World.”

Mei Tian Mei Yu is a Beijing-based production company that has working partnerships with over 50 TV stations in China. The company produces the weekly entertainment news magazine “Hello! Hollywood” and the soon to debut sitcom “Return to Da Foo Tsun.”

Launched in 2009, Metan Development Group LLC (Metan) is a venture created to develop and distribute entertainment content and media specifically for international markets. The company’s founders are entertainment industry veteran Marty Pompadur, E! Entertainment Television co-founder Larry Namer, Russian advertising agency entrepreneur Oganes Sobolev and Amerilink founder Jean Zhang. www.metanmedia.com

Warner Bros. International Television Production (WBITVP) aims to establish or acquire production companies in the major television territories around the world in order to become a leading producer of local scripted and non-scripted programming. In those territories where WBITVP establishes a production base, it operates by developing and producing original programming and also producing local versions of formats owned and controlled by the group such as “The Bachelor,” “The World’s Strictest Parents” and “Who Do You Think You Are?” Where WBITVP has no local production capability it licenses Warner Bros. formats to 3rd parties.

WBITVP has already taken significant steps by acquiring a majority stake in UK production group Shed Media, one of the UK’s largest and most successful independent production companies, which operates both in the UK and the US. Most recently it has acquired a majority stake in Blaz Hoffski Holding B.V., a leading independent television producer in The Netherlands and Belgium.

China is about to get gossipy.

Warner Bros.’ international television unit is teaming up with two Chinese production companies to create a Chinese teen drama series inspired by “Gossip Girl,” which airs in the United States on the CW Network. “Gossip Girl,” about a group of wealthy back-stabbing Manhattanites, has been a cult hit for the cable channel for the last five years and launched the careers of actresses Blake Lively and Leighton Meester.

Tentatively called “China Girl,” the show will be in Mandarin and launch in November on satellite television, with “Gossip Girl” creators Josh Schwartz and Stephanie Savage consulting.

Selling reruns of American movies and television shows to Chinese media outlets is commonplace, however creating new versions of American TV series — particularly comedies and dramas — is more unusual. There is a Chinese version of “Ugly Betty,” which originated in Colombia and later became a hit on ABC here. Typically though, game shows and reality shows from the U.S. are more likely to be remade for China.

“This is a big event,” said Martin Pompadur, a partner of Metan Development Group, a consulting firm that is working with Warner Bros. on the new series. Mei Tian Mei Yu, a Chinese sister company of Metan, is one of the producers of “China Girl,” as is Chinese-based H&R Century TV.

“Gossip Girl” is a fairly racy show that doesn’t shy away from sexual content. One episode famously saw three characters share the same bed. The Chinese government often has a heavy hand when it comes to content and scripts.

The scripts for “China Girl” had to be approved in advance by the State Administration of Radio, Film, and Television before production could start.

Among the changes, according to Pompadur, is that unlike the American series that originally focused on high school kids, the characters in the Chinese version will already be in college. The initial production order is for 30 episodes.

For Warner Bros., producing a version of “Gossip Girl” for China is part of its push to boost its production output around the globe. The studio produces versions of its U.S. shows — including the popular reality series “The Bachelor” — around the globe as well as licenses the formats to its programs to other producers.

“Gossip Girl,” moving from New York to Shanghai? Well, kinda.

The creative team behind the CW’s scandalous hit is teaming with Warner Bros. International Television Production, China’s Mei Tian Mei Yu and H&R Century TV and the Metan Development Group to develop a new teen drama to air in China.

Also read: The CW Orders “Cult” Pilot From “Gossip Girl” Producers

The as-yet-untitled series does sound rather similar to its CW predecessor. The project will center on “the students of the prestigious Shanghai International University, the school of choice of the rich and powerful. One’s social status reaches a new level once admitted into the school. Each week, the main characters’ trust, love and friendship are tested, with all the behind-the-scenes tales recorded in a blog.”

Also read: ‘Gossip Girl’ Actress Leighton Meester Sues — And Is Sued By — Her Mother

Chinese actress Yang Mi, known for the TV series “Palace” and “Chinese Paladin 3,” will have a recurring role on the show.

Production is set to begin in June of this year and a nationwide casting search will begin later this month.

Careful, B: There’s a new Gossip Girl on her way to China. The creators of the popular CW drama are teaming with Chinese production companies Mei Tian and H&R Century TV along with Metan Development Group and Warner Bros International Television Production to develop a local teen drama that will focus on the lives of status-conscious students at Shanghai International University. Metan — the folks behind the popular series Hello! Hollywood – and WBITVP are consulting on the development and production, with cameras due to roll in June after a nationwide casting search. Because China’s state authority has to clear all scripts, it’s likely the local series won’t be quite as risqué as the CW version, which has a large online fanbase in China. According to the release below, the students in the new show are “confused and lost, however over time, they discover who they really are and eventually find the right path to pursue their dreams.” The 30-episode series is to debut in November. Here’s the release announcing the deal:

Beijing, March 6, 2012 — In an historic deal that brings together the very best minds in television production from the East and West, China’s Mei Tian Mei Yu (Mei Tian) and H&R Century TV (H&R), in conjunction with Metan Development Group (Metan), Warner Bros. International Television Production (WBITVP) and the creative team behind the hit TV series phenomenon “Gossip Girl,” have joined together to develop a modern new teen drama series (30x60min) set in China.

Instrumental in bringing the parties together, Metan, a company founded by international TV veterans Marty Pompadur and Larry Namer, together with WBITVP will provide development and production consultation on the project, which is poised to launch a new era of the modern drama series in China.

“As one of the leading film and drama production companies in China today, we’re excited to be working with such an amazing team of international TV professionals,” said Zhong Junyan, president, H&R. “With its keen understanding of global production, Metan has joined together with Warner Bros. International Television Production, creating an extraordinary consultant team to help Mei Tain and H&R forge a new form of drama series in China.”

“Metan is pleased to be involved with this exciting collaboration, underscoring our ability to once again create positive connections between Hollywood with China,” said Metan’s president/ceo Larry Namer. “We believe that bringing together such a talented team will result in one of the biggest and best drama series ever seen in China, as the country enters this new age of TV production.”

“We are delighted to be working with Mei Tan and H&R to bring this new series to one of the most vibrant and exciting countries on the planet, China,” added Andrew Zein, Senior Vice President, Creative, Format Development and Sales, Warner Bros. International Television Production.

Set to debut to Mandarin-speaking audiences in November 2012, the series about the lives of the students of the prestigious Shanghai International University, the school of choice of the rich and powerful. One’s social status reaches a new level once admitted into the school. Each week, the main characters’ trust, love and friendship are tested, with all the behind-the-scenes tales recorded in a blog. In the beginning, they are confused and lost, however over time, they discover who they really are and eventually find the right path to pursue their dreams.

Production is set to begin in June of this year and a nationwide casting search will begin later this month. Chinese actress Yang Mi, most noted for her breakthrough role in the TV series “Palace” (2011), as well as in “The Return of the Condor Heroes” and “Chinese Paladin 3,”will have a recurring role on the series.

Two Chinese prodcos will partner with Warner Bros and Metan Development Group to produce a new teen drama inspired by US hit series Gossip Girl.

China’s Mei Tian Mei Yu and H&R Century TV will produce the untitled 30×60’ series set in modern China, which is due to debut to Mandarin-speaking audiences in November.

The show will follow the lives of students at the prestigious Shanghai International University. And each week as the main characters find their friendships tested, all their secrets will be revealed in a behind-the-scenes blog.

The project was brought together by Los Angeles-based Metan, a company founded by US TV veterans Marty Pompadur and Larry Namer to develop content for the Chinese market.

Metan and Warner Bros International Television Production will oversee development and production alongside the creative team behind Gossip Girl, which has aired for five seasons on US network The CW. Production on the Chinese series will begin in June.

Zhong Junyan, president of H&R, said its US partners will help Mei Tain and H&R “forge a new form of drama series in China.”

The partnership extends Warner Bros’ activity in the Far East, following a pact signed earlier this month with Japan’s TV Asahi to create global entertainment formats.

NEW YORK – Chinese production firms Mei Tian Mei Yu and H&R Century TV have teamed with Metan Development Group, Warner Bros. International Television Production and the creative team behind CW hit series Gossip Girl to develop an hour-long teen drama series set in China.

The Mandarin-language 30-episode series about student life at the prestigious Shanghai International University, known to attract the rich and powerful, is expected to launch in November.

Production is set to begin in June with a nationwide casting search set to start later this month. Chinese actress Yang Mi, known for her role in TV series Palace, will have a recurring role.

WBITVP and Metan, founded by international TV veteransMarty Pompadur and Larry Namer, will consult on development and production, which the partners said they hope will “launch a new era of the modern drama series in China.”

“Each week, the main characters’ trust, love and friendship are tested, with all the behind-the-scenes tales recorded in a blog,” the partners said about the series. “In the beginning, they are confused and lost, however over time, they discover who they really are and eventually find the right path to pursue their dreams.”

The series deal is the latest push by Hollywood players into the fast-growing Chinese market.

“We are delighted to be working with Mei Tan and H&R to bring this new series to one of the most vibrant and exciting countries on the planet, China,” said Andrew Zein, senior vp, creative, format development and sales, Warner Bros. International Television Production.

Added Metan president and CEO Namer: “We believe that bringing together such a talented team will result in one of the biggest and best drama series ever seen in China, as the country enters this new age of TV production.”

Deal will adapt show for Mandarin-lingo auds

As appeared in Variety by Cynthia Littleton

Warner Bros. is looking to expand its reach in China into TV production with a deal to adapt “Gossip Girl” for Mandarin-lingo auds.

Deal is a first on the smallscreen side for the studio, which has been revving up its international TV production activity on several fronts in recent years. Pact for “Gossip Girl” adaptation was orchestrated by China’s H&R Century TV and Mei Tian Mei Yu with L.A.-based Metan Development Group and Warner Bros. Intl. Television Production, spearheaded by senior veep Andrew Zein.

“Gossip Girl” exec producers Stephanie Savage and Josh Schwartz will consult on the production.

The untitled series will revolve around a clutch of collegiates at Shanghai Intl. U. and, like “Gossip Girl,” it will incorporate the tell-all tales recorded by a blog penned by one of the key characters.

There is no TV outlet for the show yet, but the partners are targeting a November debut. Prominent Chinese actress Yang Mi is set for a recurring role.

H&R prexy Zhong Junyan called the partnership an effort to “forge a new form of drama series in China.”

Metan Development Group was founded in 2009 by industry vets including Marty Pompadur and E! co-founder Larry Namer to develop content for international markets.

Warner Bros.’ recent efforts to grow its international TV footprint include its acquisition of U.K. production powerhouse Shed Media and a partnership inked earlier this month to developed formats with Japan’s TV Asahi.

Warner Bros. International Television Production and Metan Development Group Pact to Develop New Series In China

Beijing, March 5, 2012 — In an historic deal that brings together the very best minds in television production from the East and West, China’s Mei Tian Mei Yu (Mei Tian) and H& R Century TV (H&R), in conjunction with Metan Development Group (Metan), Warner Bros. International Television Production (WBITVP) and the creative team behind the hit TV series phenomenon “Gossip Girl,” have joined together to develop a modern new teen drama series (30x60min) set in China.

Instrumental in bringing the parties together, Metan, a company founded by international TV veterans Marty Pompadur and Larry Namer, together with WBITVP will provide development and production consultation on the project, which is poised to launch a new era of the modern drama series in China.

“As one of the leading film and drama production companies in China today, we’re excited to be working with such an amazing team of international TV professionals,” said Zhong Junyan, president, H&R.“With its keen understanding of global production, Metan has joined together with Warner Bros. International Television Production, creating an extraordinary consultant team to help Mei Tain and H&R forge a new form of drama series in China.”

“Metan is pleased to be involved with this exciting collaboration, underscoring our ability to once again create positive connections between Hollywood with China,” said Metan’s president/ceo Larry Namer. “We believe that bringing together such a talented team will result in one of the biggest and best drama series ever seen in China, as the country enters this new age of TV production.”

“We are delighted to be working with Mei Tan and H&R to bring this new series to one of the most vibrant and exciting countries on the planet, China,” added Andrew Zein, Senior Vice President, Creative, Format Development and Sales, Warner Bros. International Television Production.

Set to debut to Mandarin-speaking audiences in November 2012, the series about the lives of the students of the prestigious Shanghai International University, the school of choice of the rich and powerful. One’s social status reaches a new level once admitted into the school. Each week, the main characters’ trust, love and friendship are tested, with all the behind-the-scenes tales recorded in a blog. In the beginning, they are confused and lost, however over time, they discover who they really are and eventually find the right path to pursue their dreams.

Production is set to begin in June of this year and a nationwide casting search will begin later this month. Chinese actress Yang Mi, most noted for her breakthrough role in the TV series “Palace” (2011), as well as in “The Return of the Condor Heroes” and “Chinese Paladin 3,”will have a recurring role on the series.

H&R Century TV was established on September 2006 at Hengdian, Dongyang, Zhejiang Province. The company’s TV production projects include “Roses in the War,” “Pretty Maid,” “Palace,” “Bullet Hole,” “Introduction of A Perfect Husband,” “Hidden Emotion,” “Covering-City Snow” and“King’s Woman.” H&R’s ongoing TV production projects include “Palace Season 2,” “The Cost of an Unmarried Successful Woman,” “Happiness of an Angel” and“Teen Detective.” Its ongoing Movie production projects include “Painted Skin 2,” “Running all the Way to Stardom,” “Zhu Xian” and “The Legacy of Prince — The Left Hand Print.” Current projects include the films “Mountain Shu” and “Painted Skin 2,” and for TV“ Stories of Concubines in Tang Dynasty,” “Beautiful Scenery,” “Patriotism” and “The Sovereign Descending the World.”

Mei Tian Mei Yu is a Beijing-based production company that has working partnerships with over 50 TV stations in China. The company produces the weekly entertainment news magazine “Hello! Hollywood” and the soon to debut sitcom “Return to Da Foo Tsun.”

Launched in 2009, Metan Development Group LLC (Metan) is a venture created to develop and distribute entertainment content and media specifically for international markets. The company’s founders are entertainment industry veteran Marty Pompadur, E! Entertainment Television co-founder Larry Namer, Russian advertising agency entrepreneur Oganes Sobolev and Amerilink founder Jean Zhang. www.metanmedia.com

Warner Bros. International Television Production (WBITVP) aims to establish or acquire production companies in the major television territories around the world in order to become a leading producer of local scripted and non-scripted programming. In those territories where WBITVP establishes a production base, it operates by developing and producing original programming and also producing local versions of formats owned and controlled by the group such as “The Bachelor,” “The World’s Strictest Parents” and “Who Do You Think You Are?” Where WBITVP has no local production capability it licenses Warner Bros. formats to 3^rd parties.

WBITVP has already taken significant steps by acquiring a majority stake in UK production group Shed Media, one of the UK’s largest and most successful independent production companies, which operates both in the UK and the US. Most recently it has acquired a majority stake in Blaz Hoffski Holding B.V., a leading independent television producer in The Netherlands and Belgium.

###

Media Contacts:                                    

For Warner Bros. International Television Production: Scott Rowe, scott.rowe@warnerbros.com; 818-954-5806

For Metan Development Group: Nicole Goesseringer Muj, ngoesseringer@hotmail.com; 310-804-0964

Metan Development Group continues to grow in China and the Mandarin market with new premieres, content and shows. In February, the company announced the arrival of Seductively French (SF), which will bring the glamour of French lifestyle to China during an entire month.

Seductively French’s content was produced in October, 2011 in Paris and its surroundings, showcasing the best France has to offer, its personalities and lifestyle. The programs will will feature award-winning French film composer Eric Serra, beautiful crossover songstress Emma Shapplin, celebrity chef Gilles Epie and haute couture designer Nabil Hayari.

“Historically, China has been greatly influenced by French arts, culture and traditions,” said Larry Namer, President and CEO at Metan. “We’re delighted to introduce to viewers of Hello! Hollywood weekly Seductively French segments that celebrate one’s passion for France and European culture.”

“Seductively French is a celebration of the finer things in life, and the passion and romance for fashion, art, design and cuisine shared in the European culture,” said Seductively French co-founder and host Slavica Monczka.

Click here to see Metan Media on Daily Beast.

Seductively French Segments To Debut To Mandarin-Speaking Audiences In China And Around the Globe This Month.

Los Angeles, February 13, 2012 – China is set to embrace French culture this month as Metan Development Group’s flagship program Hello! Hollywood debuts a month-long series of lifestyle segments that shine the spotlight on France and the European way of life.

Seductively French (SF), the producer of media content that is aspirational, inspiring audiences to celebrate their own “joie de vivre”, produced the segments in and around Paris in October 2011, with the aim to celebrate and explore the European lifestyle.

On February 11, the first Seductively French segments debuted on Metan’s weekly entertainment news series Hello! Hollywood, marking a unique extension of the SF brand in China. Segments will feature award-winning French film composer Eric Serra, beautiful crossover songstress Emma Shapplin, celebrity chef Gilles Epie and haute couture designer Nabil Hayari.

“Historically, China has been greatly influenced by French arts, culture and traditions,” said Larry Namer, President/CEO, Metan. “We’re delighted to introduce to viewers of Hello! Hollywood weekly Seductively Frenchsegments that celebrate one’s passion for France and European culture.”

Hello! Hollywood first premiered in September 2009 and today reaches a potential one billion viewers on 40 stations in China and six in the United States and Canada, and an estimated four million viewers each week via China’s top Internet portals, including Tencent.com. In the United States, the series airs in Los Angeles, San Diego, San Francisco, Central California, New York and New Jersey to multicultural networks LA 18 and Crossings TV. Hello! Hollywood also airs on the popular online film distribution platform and Web television network Film Annex (filmannex.com).

“Seductively French is a celebration of the finer things in life, and the passion and romance for fashion, art, design and cuisine shared in the European culture,” said Seductively French co-founder and host Slavica Monczka. “Our new segments on Hello! Hollywood place the spotlight on the personalities, places and things that make up this inspirational and unique approach to living our lives.”

About Metan Development Group
Launched in 2009, Metan Development Group LLC (Metan) is a venture created to develop and distribute entertainment content and media specifically for international markets. The company’s founders are entertainment industry veteran Martin Pompadur, E! Entertainment Television co-founder Larry Namer and Amerilink founder Jean Zhang. http://www.metanmedia.com

About Seductively French
Seductively French (SF) was created by Slavica and Jason Monczka to celebrate the allure of the French culture. SF recognizes and admires France as the birth place for haute couture, sophisticated art and architecture, and the diamond standard of gourmet cuisine. The magnetism to the French culture transcends around the world. SF invites you to explore and experience the uniqueness of France, the spirit of the French people and their passionate way of life. Under the Seductively French banner, we are creating media content and products that are aspirational, empowering our audience to capture and create their own “joie de vivre.” http://www.seductivelyfrench.com

Contact: Nicole Goesseringer - ngoesseringer@hotmail.com – 310-822-4775

Metan Development Group sigue creciendo en China y el mercado mandarín alrededor del mundo, con nuevos estrenos, contenidos y programas. En febrero la compañía anunció la llegada de la serie Seductively French (SF), que durante un mes llevará todo el glamour y el estilo de vida de Francia a China.

A través de su programa estrella Hello! Hollywood, Metapan presentará los especiales de SFdurante un mes, que llegan por primera vez a las audiencias chinas.

Los contenidos fueron producidos por Seductively French en octubre de 2011 en Paris y alrededores, mostrando lo mejor de Francia, sus personalidades y el estilo de vida europeo. Los programas incluirán, entre otras cosas, al galardonado autor cinematográfico francés Eric Serra, la hermosa cantante Emma Shapplin, el celebre chef Gilles Epie y el diseñador Nabil Hayari.

“Históricamente, China ha estado muy influenciada por las artes, la cultura y la tradición francesa”, expresó el CEO de Metan, Larry Namer. “Estamos encantados de llevarle a los televidentes de Hello! Hollywood semanalmente los segmentos de Seductively French, que celebran la pasión por Francia y la cultura europea”, agregó.

“Seductively French es una celebración de las cosas más finas de la vida, la pasión y el romance por la moda, el arte, el diseño y la cocina”, expresó por su parte Slavica Monczka, co-fundadora y anfitriona de Seductively French.

El primer segmento de SF fue estrenado con suceso el 11 de febrero y los mismos seguirán por todo el mes.

French and European culture is being celebrated in China, with the debut of month-long lifestyle segments from content producer Seductively French, airing on Metan Development Group’s Hello! Hollywood.

The Seductively French-produced segments (pictured) were filmed in and around Paris. Launching this month, segments feature award-winning French film composer Eric Serra, singer Emma Shapplin, celebrity chef Gilles Epie and haute couture designer Nabil Hayari.

The collaboration between the content producer and entertainment show Hello! Hollywood was announced last year.

“Historically, China has been greatly influenced by French arts, culture and traditions,” said Larry Namer, president/CEO, Metan Development Group. “We’re delighted to introduce to viewers of Hello! Hollywood weekly Seductively French segments that celebrate one’s passion for France and European culture.”

“Our new segments on Hello! Hollywood place the spotlight on the personalities, places and things that make up this inspirational and unique approach to living our lives,” added Seductively French co-founder and host Slavica Monczka.

“The key to Hello Hollywood’s success lies in the fact that it’s created with the Chinese viewer in mind,” said Larry Namer, President/CEO, Metan. “We’re delighted to make the series available to Mandarin-speaking audiences living outside of China via Film Annex’s online platform that reaches an impressive 1.5 million viewers daily.”

Film Annex’s President, Francesco Rulli, added, “Film Annex recently launched a Chinese version that will be easily accessible to our Mandarin-speaking viewers. We look forward to deliver such quality and engaging content as Hello! Hollywood, as well as introduce Chinese celebrities, to all of our viewers from around the globe.”

Hosted by popular TV and radio personality Andy Dong, Hello! Hollywood reports on the latest in celebrity interviews and lifestyle news, covering glamorous red carpet events, concerts and award shows and offering up special insider tours of Hollywood’s new hotspots and exclusive television and movie set visits. Hello! Hollywood has interviewed some of the world’s top names from the world of entertainment including Johnny Depp, Jackie Chan, Gwyneth Paltrow, Cameron Diaz, Bruce Willis, Sylvester Stallone, Eva Longoria, Taylor Lautner, Robert Pattinson, Kristin Stewart, David Beckham, Zac Efron, Jeremy Renner, and Seth Rogan, among many others.

Hello! Hollywood first premiered in September 2009 and today reaches a potential one billion viewers on 40 stations in China and six in the United States and Canada, and an estimated four million viewers each week via China’s top Internet portals, including Tencent.com

In a bid to extend its reach to digital and broadcast markets in mainland China, the Associated Press (AP) is collaborating with LA-based Metan Development Group who distribute entertainment programming content in Mandarin for multiple platforms.

“The collaboration marks the first time AP content will be distributed in China in a magazine show-style format,” Metan chief executive Larry Namer explained. “Together, we will deliver AP’s compelling entertainment news footage to Mandarin-speaking audiences in mainland China and around the globe.”

The company’s focus lies particularly with the young urban Chinese audience – the fastest growing consumer market in the world.

“Through this deal AP will be able to reach new markets with regionalised entertainment programming in Mandarin, specifically developed for the digital and broadcast customers within mainland China,” said Michael Dutton,  AP’s global director of entertainment product.

AP’s Entertainment Daily News is a dedicated video service that provides exclusive coverage of celebrities, fashion, awards shows, film premieres, concerts and theatre. This includes more than 300 stories per month.

Read more at WorldScreen.com

London – The Associated Press (AP) and Metan Development Group have signed a deal to provide entertainment programming content for Mandarin-speaking audiences, extending AP’s reach to digital and broadcast markets in mainland China.

Los Angeles-headquartered Metan will produce short-form and long-form AP entertainment content in Mandarin for multiple platforms, including its coverage of New York, Paris, Milan and London Fashion Weeks.

Companies at this year’s Asian Television Forum in Singapore were looking for new formats, peering at new technologies and urging closer cooperation across borders within the Asian market.

And, as is often the case in areas outside the TV biz, the subject of China dominated many discussions.

China’s sheer size makes that inevitable. For example, the world’s most watched annual television show is still the Chinese Spring Festival Gala on state broadcaster CCTV, which is shown at Lunar New Year and watched by 700 million people. Also, Internet penetration in China is high, and hundreds of millions of Chinese watch content on their mobile phones.

At the same time, Chinese media are heavily regulated and censored. This year alone the government has introduced stringent limits on reality TV skeins and other light entertainment shows.

And foreigners have always found Chinese TV a tough nut to crack (Rupert Murdoch tried for years with Star TV before switching his focus to India).

Some U.S. orgs have succeeded in getting into China, however. L.A.-based Metan Development Group has signed various deals to bring content to China, including a pact with Fusion TV to provide action sports and adventure travel content, and a deal with the Associated Press to furnish fashion TV coverage in Mandarin on China’s digital and broadcast markets.

Zhu Danhong, project manager at Shanghai Wings Media, a unit of Shanghai Media Group, said Chinese companies are keen to buy foreign product but also want to sell Chinese content to neighboring countries in Asia, such as Korea and Japan, as well as other countries with strong Chinese cultural links, which includes most nations in Southeast Asia.

“We’re trying to encourage more companies to take Chinese films, animation and TV shows to Asia, Europe and Africa,” Zhu said at the company’s ATF stand, which was heavily attended by reps from many of China’s state-owned TV companies.

“Our interests are 3D (and) formats,” said Zhu, adding that Shanghai Media Group comprises 13 local channels; one satellite channel, Dragon TV, that shows “China’s Got Talent”; and an Internet TV service. The satellite channel alone reaches between 700 million and one billion people.

Zhu said she expects more cooperation with other Asian countries, especially Singapore.

That sentiment was echoed by Mohd Naguib Razak, director general of Malaysia’s National Film Development Corp., and by Myleeta Aga, GM and creative head of content and production at BBC Worldwide in Mumbai,.

Aga, who was an exec producer on “Anthony Bourdain: No Reservations,” said that what she liked about ATF is the way it is about Asians talking to Asians. Like many Indians at the show, she was on the lookout for new formats.

“There’s no one big format that everyone is buzzing about,” she said. “Everyone is eager to see what’s next.” Discussions centered how certain formats would work in places such as Thailand, Vietnam or Singapore.

NEWS BRIEF: Associated Press and LA’s Metan Development Group have signed a deal to provide entertainment programming for Mandarin-speaking audiences.

Extending AP’s reach to digital and broadcast markets in mainland China, the deal will see Metan develop original programming using AP content for distribution via TV, online and mobile platforms in mainland China.

The LA-based production and distribution company is truly adapting its structure and projects to the Chinese market. In the words of its president, this means creating specific content for that market, respecting its rules and understanding that in China “relationships are everything.”

By Sebastián Torterola

Twitter: @storterola storterola@todotv.tv

Two and a half years ago metan development Group officially began its business in China. After a year and a half of studying the Chinese market and its opportunities, the company started building the link between Los Angeles and Beijing. “Entering any new market is complex and there is a learning curve. I would say that today we are much further along in understanding not just the rules and regulations in this market, but also the audience’s tastes and habits. We have five TV shows that are in various stages, lots of Internet and mobile content deals and even our first theatrical film,” says Larry Namer, president of the group.

The company’s successful case study is called ‘Hello! Hollywood’, an entertainment show that explores the passion Chinese audience has toward the American celebrities. Currently, the program is on 40 TV stations reaching over 600 million potential viewers in China. “We also air the show on six stations in the US. It now goes out over a big Internet portal named Tencent reaching almost 3 million people weekly online,” Namer says. Other metan projects include an in-house developed sitcom that “is now casting and starts shooting next month,”a cooking competition show and the adaptation of a US format drama series. “That is followed by a daily talk show about health and wellness. On the net, we have content ranging from webisodes to action sports clips, to live coverage of global fashion shows,” Namer adds.

loCal rules. The Chinese market is huge and rich but it demands respect when allowing foreigners into it. This means adapting your content to the local rules and regulations and submitting your ideas to the control of governmental institutions like the SARFT (the local Administration of Radio, Film and Television). “We think that a lot of Western companies have had a hard time in China because they try to take what they do in other places and force that upon the Chinese market. It doesn’t work. China is a big enough market that if you don’t want to create something specific for the market, you are in the wrong place,” Namer says.

As for the market’s regulations, the executive believes that “there are rules and regulations everywhere” in the same way that social customs and other factors vary from market to market. “I have not done business with any country where there weren’t rules. If a Western company wants to be in China they have to learn the rules and obey them. It’s no different than doing business in Brazil. You can’t go into another country and expect them to change their rules to suit you. If you don’t like them, don’t enter the market. Another mistake I see all the time is companies trying to manage their China business from afar. It doesn’t work,” he adds.

Bearing this in mind, the company has been looking for successful formats -like telenovela formats- to adapt in China but the process hasn’t been easy. “In China, greed, sex and crime are things that can’t be overly apparent in the focus of the story. So it’s hard to find Latin American formats or even US formats that will have audience appeal and stay within the boundaries of what is OK for TV in China. more and more we are looking at creating things that are made for the market rather than trying to take things made for other places and trying to force them to fit,” Namer explains.

An important step in metan’s strategy was the recent creation of metan International Talent management (mITm), a new division that is now giving its first steps. “As China becomes a bigger and bigger part of the financial equation for global media projects, the need for people who understand China becomes more relevant. For example, writers who understand the Chinese audience will become more valuable. We want to be on the front end of that wave,” the executive assures.

It is often said that the general rule of thumb when working in Asia is that even though building relationships is no quick task they do tend to last a very long time once formed. how true is this? “That’s absolutely true. more than anywhere else, relationships are everything here,” Namer concludes.

New York – Film Annex, an online film distribution platform and web television network, has signed a deal to promote and distribute content produced by Metan Development Group, a media company delivering Western programming content to China.

Film Annex will be the online distributor of Metan’s flagship series Hello! Hollywood, a Chinese entertainment news programme, which brings viewers around the world the latest Hollywood celebrity and life…

By Michael Pickard

US media company Metan Development Group has appointed an online distributor to take its Hollywood magazine series around the world.

Film Annex has added Hello! Hollywood, Metan’s Mandarin-language series about celebrities filmed for Chinese viewers, to its web TV portal and has also launched a Chinese version of its website to encourage new visitors.

Los Angeles-based Metan was founded in 2009 by entertainment veteran Martin Pompadur, E! Entertainment Television co-founder Larry Namer and Amerilink founder Jean Zhang, with the aim of bringing Western content to China. Hollywood is aired on 40 networks in China, as well as nine in the US and Canada.

Celebrity Interview: Larry Namer has exemplified excellence in Cable programming for 4 decades.   He started as a cable splicer and rose to become the President and co-founder of his own Cable network, E! Entertainment Television.  Launching the careers of Greg Kinnear and Julie Moran on E! And now Eric Zuley on ‘Hello! Hollywood’.

Aside from his penchant to adding exclamation points to his projects, Mr. Namer has regularly damned market research and went on pure instinct while creating highly successful programming in foreign markets.  His first foray into foreign markets was Russia.  Knowing that the citizens of Russia were destitute and looking for some pure escapism after the fall of the U.S.S.R.   He found just what they were looking for in ‘Santa Barbara’, the popular American Soap Opera.  The Russian people loved it and it became a must watch show and Russia’s first American programming since the fall of the Soviet Union.

Richard:  “You started out in lower levels of the cable industry in its infancy and worked your way up to Vice President, then President.

Larry Namer: “I started as a cable splicer, underground in Manhattan.  I was the Director of Corporate Development for Time Warner Cable before I went to Valley Cable as the Vice President and general manager of that cable system in Los Angeles that covers the Fernando Valley.  Then started E!, I was indeed the President.

Richard:  “Do you foresee yourself going further in it from a splicer, or did you realize while you were in it, that you could handle it?”

Larry Namer: Well when I started from kind of a humble beginning, so I never quite where it would end up.  I always kind of felt that I would work my way up, where I was.  But no not at that time, the thought that one day I would start a TV network that would be around the world, never occurred to me.

Richard:  “How did you decide to go into Russia?”

Larry Namer: “I was still at E! and a friend of mine who was a lawyer had some clients that were doing some merchant banking while it was still The Soviet Union and he asked me if I would go with his client and look at a deal that was being proposed to them and tell them if I thought it was a legitimate deal.  I thought it would be cool to go visit the Soviet Union”

His latest endeavor is the Metan Development Group which has a complete focus on China.   He has a deep love for the Chinese people and their culture.  He has long held a fascination with celebrities, celebrity news and culture and has begun the show ‘Hello! Hollywood’ to help bring Western Celebrity news to the Far East.

Richard: “When came time for you push into the china, where did it come from?  Was that instinctive thing or a series of connection that you felt you wanted to take care of?

Larry Namer:  “It was instinctive thing, Five years ago I was actually invited by a government agency to come there and help work with young Chinese television executives, helping them with the transformation that was happening there.  Moving more towards commercial television…teaching and recognized the opportunity and fell in love with china and Beijing which is my favorite in the world.  Clearly this was a place for an independent entrepreneur like me.

Once the show was on the air, Larry took to the internet via a website and message boards to help fine tune their programming. He notably avoided market analysis from Beijing; the city Metan group is headquartered in.  When asked about this, he said “…it is kind of like having a TV project but realizing that you may not get New York and LA on day one.  Does our project have enough viability to sustain long enough to get into New York and LA? The same time of thing with Beijing. We are not getting into Beijing on first day and first show so let’s come up with projects that can be launched in other places around the country and eventually make its way to Beijing and which is what we did”.  My analysis says that the occupants of a large city are the migrants from the smaller cities.  Focusing on the smaller markets and their cultural, sociological, and political ideology’s, would create programming attractive to the melting pot culture of Beijing.

There were special considerations when dealing with presenting Western Celebrity culture to China.  The needed a more detailed presentation with more back stories.  I asked Mr. Namer about the reason for these special considerations and he said “The Chinese people have not grown up with the same things that we have grown up with so they need context and backstory.”   The Chinese philosophy and sociality is based on thousands of years of existence. Most Chinese rituals go back further than America’s founding.  A culture so steeped in history is bound to want to know more than the just what happened in the past week.

Richard: “What brought your attention to Eric Zuley?”

Larry Namer: “Well, obviously I have an interest in pop culture, Hollywood, movie stars and all those things that made me come up with my idea for E!. I saw Eric (Zuley) around town, hustling his butt off, doing a lot of the things that we did to get E! Off the ground in the early days.  I am a consummate entrepreneur myself.  I realized he was in an area we like, and he is a hardworking guy and he is busting his butt and is giving back and doing all the good things so we figured we would be supportive as we could be.

Richard:  What is Eric’s EZ way movement to you?

Larry Namer: “it is Eric’s way of building his modern day network of Hollywood content and Hollywood people.  He is taking advantage of all the media platforms available.  It is a multi-platform approach to marketing all things Hollywood”

Richard: “Your gut feeling about Eric’s appeal in China is one thing but what were the actual reasons he tested so well in the Chinese market?”

Larry Namer: “Eric has a very genuine way about him, First he is out there and everything going on (in Hollywood) he has hand in… he represents Young Hollywood and young pop culture.  I felt that Chinese culture could relate to him and his way of telling stories.”

Richard: Have you learned Mandarin yet?

Larry Namer: “I am in the middle of learning it… it’s not easy”

Richard: “Are you pressing Eric Zuley to learn it?

Larry Namer:  “If he wants to be a big deal in China…He will have to.”

Eric Zuley’s segment on “Hello! Hollywood” will be available on 270 million broadcast TVs with potential of 600 million people. It will be broadcast in six cities on the North American continent: New York, Los Angeles, San Francisco and Vancouver, Canada.  The Metan Development Group has partnered with Chinese internet portal, TenCent, which has 200 million registered users.

Thank you Mr. Namer for your time and consideration.  Richard Shouse

China, get ready for your own Serena van der Woodsen.

The much-rumored Chinese remake of “Gossip Girl” is officially on its way. In an interview last week on the web show “Thoughtful China,” Larry Namer, head of Metan Development Group, the Beijing-Hollywood company behind the show, shared a few details about the upcoming series, talking about the sponsors it might attract and how the current U.S. show is so appealing to Chinese youth.

Mr. Namer is no newbie when it comes to Hollywood, or China, for that matter. He was one of the founders of the E! Entertainment network, and Metan already produces “Hello! Hollywood,” a Mandarin-language roundup of entertainment and Hollywood news broadcast in China.

“Gossip Girl” is popular in China even though it isn’t aired on any TV network in the country. Instead, viewers have been catching the show through illegal downloads and streaming video sites like Tudou, usually with subtitles that have been added by the show’s Chinese fans. The show’s U.S. producers estimate that its viewing audience in China is even greater than in the U.S., where it has a devoted but small fanbase on the CW and is ranked 229th among all primetime shows, according to ratings tracker TV by the Numbers.

Blake Lively, the pouty blonde who is the star of the show, has become a star in her own right in the Middle Kingdom, appearing on the cover of Elle China in March.

The first news about an official Chinese remake emerged in July 2010 when show creator Josh Schwartz said his team was pitched the idea. Mr. Schwartz said he approved of the idea in theory but wondered aloud if the show’s focus on high society and its sexual innuendo would get past state censors. In the past, TV shows that shed a light on the moneyed classes — or even those who aspire to it — haven’t been looked upon favorably by Chinese authorities.

Already, Mr. Namer’s series will have competition from another “Gossip Girl” wannabe. In a January news conference, a series called “Runaway Sweetheart” unveiled a young cast clad in designer school uniforms, claiming it would be China’s answer to the U.S. series.

A few months later, a “Runaway Sweetheart” novel, featuring a photo of the same cast, appeared in bookstores. In its first chapter, readers are introduced to a character named Dan Han Fei — a likely reference to “Gossip Girl” protagonist Dan Humphries. Despite the hype, the show has yet to air.

Mr. Namer said that “Runaway Sweetheart” has no connection to his company’s remake but declined to specify his version’s cast, premiere date or other details. “Check back in a month,” he wrote in an email.

Whichever riff on “Gossip Girl” makes its way onto Chinese TVs first, its success is not guaranteed. Chinese remakes of U.S. shows don’t have a great track record — a version of “Ugly Betty” drew criticism for its not-ugly-enough casting, and an attempt at “High School Musical” flopped at the box office.

There are a couple of potential problems here. One, not all U.S. show remakes are hits; for every Ugly Betty to Ugly Wudi success, there is a High School Musical becomes Musical Youth failure. Also, the original CW program is already a big illegal download hit in China, which suggests the country’s youth may not have much need for a Mandarin language retread:

“There are different cultural values,” said Mark Heap, China CEO for ad agency PHD. A local version of Gossip Girl would need to be toned down to get past local censors, “so it would probably lose its edge a bit.”

The Ad Age piece includes a parallel “Thoughtful China” episode for which Namer was interviewed. Well worth watching if you’re interested in this topic.

To read the full article, click here.

By: Normandy Madden Bio Published: October 13, 2011

The American TV series “Gossip Girl” is a hit in China, to the point that Blake Lively and Ed Westwick, the show’s leading actors, are household names there. Would a Chinese remake of the series set in Shanghai be just as popular?

Metan Development Group is betting it will. The Los Angeles-based multimedia company, founded by Hollywood veterans including E! Entertainment co-founder Larry Namer, already produces programming for Chinese viewers like “Hello! Hollywood,” a Mandarin-language celebrity and entertainment news show. Among its new projects, Metan is quietly putting together a local version of “Gossip Girl” scheduled to debut next summer.

“In China, you have this everything-is-possible kind of life, so people are looking for things that are aspirational, how rich people live, what they do, what they have. ‘Gossip Girl’ has a lot of that, but it gets back to human emotions, it’s love and riches and fighting. Essentially, it’s an adult soap opera,” said Mr. Namer on this week’s episode of “Thoughtful China,” an online marketing affairs talk show produced in Shanghai.

Advertisers in China, especially those selling luxury goods, including Coach, are buzzing about sponsorship opportunities. Mr. Namer declined to share details about ad rates, but he did say the show offers “real opportunities [for advertisers in] integration, not just the TV platform but across the internet and mobile, customized for the needs of the client.”

The basis of the “Gossip Girl” show is tweeting and video blogs, Mr. Namer said, so an integrated marketing strategy “lends itself perfectly.”

Advertisers’ eagerness to attach their brands to the show partly stems from the strong and sometimes surprising popularity of American TV shows like “Heroes” and “Prison Break” in China. Those shows, and their stars, have become pop culture legends in China, prompting a close look from advertisers eager to engage with the young urban Chinese attracted to foreign programming. “Prison Break” star Wentworth Miller, for instance, has appeared in commercials for Ford Motor Co. in China.

Ironically, none of these western shows airs in China legally. Viewers download programming through torrent files to home computers and watch illegal uploads on Chinese online video-sharing sites like Youku and Tudou, often with Chinese subtitles put in place within hours of the show first airing in the U.S.

Chinese can also buy pirated discs in illicit DVD shops that have sprung up all over China. Ever wanted the complete box set of “Gilligan’s Island” or “I Love Lucy”? Neither series is tough to find if you know where to look in China, but it’s the more current series that have cult status, especially among young and affluent Chinese–or those hoping to be affluent–that intrigue advertisers.

Even so, remakes of foreign shows can be risky for brands in China, because Western content must balance two forces that are often at odds–the political agendas of China’s TV regulators and the tastes of local viewers–along with the lack of high-quality production values compared to Western markets.

“There are different cultural values,” said Mark Heap, PHD‘s CEO China. A local version of “Gossip Girl” would need to be toned down to get past local censors, “so it would probably lose its edge a bit.”

Also, localized versions of Western shows have received mixed reviews among viewers. “Musical Youth,” a Chinese version of Disney’s “High School Musical” flopped last year, for example. A Chinese remake of the telenovela “Ugly Betty,” called “Ugly Wud,i” received decent ratings for four seasons starting in 2008, but it faced a backlash for its heavy-handed use of branding for sponsors like Unilever and Bausch & Lomb as well as for casting a leading actress considered too pretty for the part.

Collaborating with purely local content doesn’t solve these problems, however, said Olaf Lassalle, global managing director of Newcast, the branded content arm of ZenithOptimedia, who is currently based in Shanghai. For advertisers in China, “we have to find new content. Our clients are looking for high-quality content, [but] right now, as far as I can see, China doesn’t offer high-quality formats.”

The lack of good programming on TV, largely due to political controls on what state-run broadcasters can air, drives marketers to digital media to reach young Chinese, especially for consumer goods marketers looking at China’s lower tiers, said Silvia Goh, managing director-China of LiquidThread, Starcom MediaVest Group’s branded entertainment business unit.”There’s huge potential to develop online. I don’t see high-quality online reality shows yet [and] this [represents] huge potential,” Ms. Goh said.

Despite the challenges, advertisers and content providers are likely to keep looking for formats, production facilities and business models to succeed in China, based purely on the size and scale of the Chinese market.

While making entertainment for broadcast in China is “a huge operational challenge, the prize is worth it,” said P.T. Black, Thoughtful China’s senior creative director in Shanghai. “A popular broadcast here can reach half a billion viewers…sometimes more.”

The popularity of “Gossip Girls” and other hit shows in China like “Prison Break” and “Heroes” demonstrates the power and reach of the internet in the mainland, because none of them aired on local TV stations. Chinese download videos through torrent files or watch them on local video-sharing websites like Tudou and Youku, where they are uploaded illegally by fans. New episodes of hot shows often appear within hours–sometimes with Chinese subtitles–within hours after they air in the U.S.

So why are American shows like “Gossip Girl,” “Heroes” and “Prison Break” so popular in China? Does localization really matter? Can CCTV and provincial channels compete foreign fare that’s easily in reach of savvy web users?

These questions are addressed in this week’s episode of “Thoughtful China,” by speakers such as Larry Namer, president & CEO of Metan Development Group, which is developing a Chinese version of “Gossip Girl.”

Brand owners, meanwhile, face different challenges working with entertainment properties in China. Gaining little through Chinese fascination with imported U.S. shows, they are looking for branded content deals involving local programming, either original series or films or adaptations of western hits such as “Gossip Girl.”

“The real opportunities [for advertisers] are integration, not just the TV platform but across the internet and mobile, customized for the needs of the client,” Mr. Namer said on “Thoughtful China,” an online marketing affairs talk show produced in Shanghai. The basis of “Gossip Girl” is tweeting and video blogs, “it lends itself perfectly.”

Even so, media agencies say localized versions of foreign shows can be risky for brands, because western content must balance two forces that are often at odds–the political agendas of China’s TV regulators and the tastes of local viewers — along the lack of high-quality production values compared to western markets.

“There are different cultural values,” said Mark Heap, PHD’s CEO China. A local version of “Gossip Girl” would need to be toned down to get past local censors, “so it would probably lose its edge a bit.”

“We have to find new content. Our clients are looking for high-quality content, [but] right now, as far as I can see, China doesn’t offer high-quality formats,” Olaf Lassalle, global managing director of Newcast, the branded content arm of ZenithOptimedia.

Marketers are also focused increasingly on digital media rather than TV to reach young Chinese.

Consumer goods marketers are looking at China’s lower tiers and how to engage with consumers there, said Silvia Goh, managing director, China of LiquidThread, Starcom MediaVest Group’s branded entertainment business unit. Right now, TV is key there, but “there’s huge potential to develop online. I don’t see high-quality online reality shows yet, this [represents] huge potential.”

Despite the challenges, advertisers and programmers are likely to keep looking for content formats, production values and business models to succeed in China, said P.T. Black, Thoughtful China’s senior creative director in Shanghai. While making entertainment for broadcast in China is “a huge operational challenge, the prize is worth it. A popular broadcast here can reach half a billion viewers–sometimes more.”

6 October 2011

BEVERLY HILLS, CA, Oct 05 (MARKET WIRE) –
SuperBox, Inc. (PINKSHEETS: SBOX), a leading social interactive entertainment company that creatively develops and distributes original content across various media platforms, today announced the appointment of E! Entertainment Television Co-founder and Metan Development Group President/CEO Larry Namer to its Advisory Board.

“We’re incredibly excited to have an entertainment industry legend like Larry Namer join our Advisory Board,” said SuperBox, Inc. Founder & CEO Russell Stuart. “Larry brings a wealth of experience across all avenues of media and international business and will be invaluable to SuperBox as we take our company to the next level and beyond.”

“I’m pleased to be a part of such a fresh and exciting company as SuperBox,” added Namer. “I look forward to working with Russell and his team to build this company into an international success story.”

An entertainment industry veteran with over 40 years professional experience in cable television, live events and new media, Larry Namer is the co-founder of E! Entertainment Television, a company now valued at over $3.5 billion US, and the creator of several successful companies in the United States and overseas.

Among those companies are Comspan Communications that pioneered Western forms of entertainment in the former Soviet Union, including the syndication of the popular soap opera Santa Barbara, which ran for 10 years in the region, and Steeplechase Media that served as the primary consultant to Microsoft’s MiTV for developing interactive TV applications. In recent years, Namer has become recognized as one of the world’s leading experts on new technology and how it is fundamentally altering the business of international media and entertainment. Among the companies that have enlisted his expertise are Microsoft, Paul Allen’s Digeo, World Digital Media Group (a joint venture of Radio Shack), EchoStar and Sirius Radio network. Additionally, he serves as Senior Advisor, Strategic Development to eurocinema On Demand, the only 24/7 on demand foreign film channel now available in 36 million homes via cable and satellite in North America.

An accomplished entrepreneur, Namer is a founding partner of Metan Development Group (Metan), a venture created to develop entertainment and media specifically for the Chinese marketplace.

Metan’s most notable project to date is Hello! Hollywood, a weekly entertainment news series tailored to Mandarin-speaking audiences, offering up the latest in celebrity and lifestyle news, and covering the most glamorous red carpet events and award shows. Launched in summer 2009, the series now reaches half a billion viewers over 40 TV stations in China and nine channels in the US, as well as over one million online users weekly.

In February, 2011 Metan teamed up with Tencent, owner of China’s largest Internet service portal QQ.com, to create special entertainment news coverage direct from Hollywood surrounding The 83rd Annual Academy Awards. This first ever viewing event of its kind was watched by an impressive audience of 11 million Mandarin-speaking viewers in China.

About Metan Development Group LLC

Launched in 2009, Metan Development Group LLC is a venture created to develop and distribute entertainment content and media specifically for international markets. The company’s founders are entertainment industry veteran Martin Pompadur, E! Entertainment Television co-founder Larry Namer and Amerilink founder Jean Zhang. www.metanmedia.com

About SuperBox, Inc.

SuperBox, Inc. is a leading social interactive entertainment company that creatively develops and distributes original games, software and entertainment across various media including personal computers, mobile devices, motion pictures, television, music, digital media and live events. The company is based in Beverly Hills, CA with development offices in Vancouver, Canada.

SuperBox, Inc. is publicly traded over-the-counter under the ticker symbol SBOX.

To learn more please visit www.superbox-inc.com

Forward-Looking Statement:

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “ACT”). In particular, when used in the preceding discussion, the words “plan,” “confident that,” “believe,” “expect,” “intend to” and similar conditional expressions are intended to identify forward-looking statements within the meaning of the ACT and are subject to risks and uncertainties, and actual results could differ materially from those expressed in any forward-looking statements. Such risks and uncertainties include, but are not limited to, market conditions, competitive factors, the ability to successfully complete additional financings and other risks.

Media Contact:
SuperBox, Inc.
Russell Stuart
CEO
Tel: 310-860-7451
Email: ir@superbox-inc.com

Metan Development Group
Nicole Goesseringer Muj
Tel: 310-804-0964
Email: kulturapr@hotmail.com

BEVERLY HILLS, CA, Oct 05 (MARKET WIRE) –
SuperBox, Inc. (PINKSHEETS: SBOX), a leading social interactive entertainment company that creatively develops and distributes original content across various media platforms, today announced the appointment of E! Entertainment Television Co-founder and Metan Development Group President/CEO Larry Namer to its Advisory Board.

“We’re incredibly excited to have an entertainment industry legend like Larry Namer join our Advisory Board,” said SuperBox, Inc. Founder & CEO Russell Stuart. “Larry brings a wealth of experience across all avenues of media and international business and will be invaluable to SuperBox as we take our company to the next level and beyond.”

“I’m pleased to be a part of such a fresh and exciting company as SuperBox,” added Namer. “I look forward to working with Russell and his team to build this company into an international success story.”

An entertainment industry veteran with over 40 years professional experience in cable television, live events and new media, Larry Namer is the co-founder of E! Entertainment Television, a company now valued at over $3.5 billion US, and the creator of several successful companies in the United States and overseas.

Among those companies are Comspan Communications that pioneered Western forms of entertainment in the former Soviet Union, including the syndication of the popular soap opera Santa Barbara, which ran for 10 years in the region, and Steeplechase Media that served as the primary consultant to Microsoft’s MiTV for developing interactive TV applications. In recent years, Namer has become recognized as one of the world’s leading experts on new technology and how it is fundamentally altering the business of international media and entertainment. Among the companies that have enlisted his expertise are Microsoft, Paul Allen’s Digeo, World Digital Media Group (a joint venture of Radio Shack), EchoStar and Sirius Radio network. Additionally, he serves as Senior Advisor, Strategic Development to eurocinema On Demand, the only 24/7 on demand foreign film channel now available in 36 million homes via cable and satellite in North America.

An accomplished entrepreneur, Namer is a founding partner of Metan Development Group (Metan), a venture created to develop entertainment and media specifically for the Chinese marketplace.

Metan’s most notable project to date is Hello! Hollywood, a weekly entertainment news series tailored to Mandarin-speaking audiences, offering up the latest in celebrity and lifestyle news, and covering the most glamorous red carpet events and award shows. Launched in summer 2009, the series now reaches half a billion viewers over 40 TV stations in China and nine channels in the US, as well as over one million online users weekly.

In February, 2011 Metan teamed up with Tencent, owner of China’s largest Internet service portal QQ.com, to create special entertainment news coverage direct from Hollywood surrounding The 83rd Annual Academy Awards. This first ever viewing event of its kind was watched by an impressive audience of 11 million Mandarin-speaking viewers in China.

About Metan Development Group LLC

Launched in 2009, Metan Development Group LLC is a venture created to develop and distribute entertainment content and media specifically for international markets. The company’s founders are entertainment industry veteran Martin Pompadur, E! Entertainment Television co-founder Larry Namer and Amerilink founder Jean Zhang. www.metanmedia.com

About SuperBox, Inc.

SuperBox, Inc. is a leading social interactive entertainment company that creatively develops and distributes original games, software and entertainment across various media including personal computers, mobile devices, motion pictures, television, music, digital media and live events. The company is based in Beverly Hills, CA with development offices in Vancouver, Canada.

SuperBox, Inc. is publicly traded over-the-counter under the ticker symbol SBOX.

To learn more please visit www.superbox-inc.com

Forward-Looking Statement:

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “ACT”). In particular, when used in the preceding discussion, the words “plan,” “confident that,” “believe,” “expect,” “intend to” and similar conditional expressions are intended to identify forward-looking statements within the meaning of the ACT and are subject to risks and uncertainties, and actual results could differ materially from those expressed in any forward-looking statements. Such risks and uncertainties include, but are not limited to, market conditions, competitive factors, the ability to successfully complete additional financings and other risks.

Media Contact:
SuperBox, Inc.
Russell Stuart
CEO
Tel: 310-860-7451
Email: ir@superbox-inc.com

Metan Development Group
Nicole Goesseringer Muj
Tel: 310-804-0964
Email: kulturapr@hotmail.com

To read the full article, click here.

George Winslow (Broadcasting & Cable) — Multichannel News, 9/15/2011 2:26:00 PM

Eurocinema On Demand, the largest on-demand provider of European films in the U.S., eurocinema On Demand, will work with Seductively French to produce a series of lifestyle segments that focus on European lifestyles.

The early segments will go into production in October and in December will be available as free content on eurocinema On Demand, which reaches about 36 million US and Canadian television homes.

“We’re delighted to partner with Seductively French to develop engaging lifestyle segments that complement the eurocinema brand,” said eurocinema founder and CEO Sebastien Perioche.  “We’re pleased to make available to our viewers and all fans of foreign film, free on demand content that will appeal to their curiosity, appreciation and love for the European way of life.”

The material will also be available in China on Metan Development Group’s Hello! Hollywood, an entertainment news program targeting Mandarin-speaking viewers that reaches about half a billion viewers over 40 TV stations in China and nine channels in the U.S.

Miami – eurocinema On Demand has partnered with Seductively French to produce a series of lifestyle segments focusing on the European lifestyle.

In Asia, these segments will air in China on Metan Development Group’s Hello! Hollywood, an entertainment news programme targeted at Mandarin-speaking audiences. The programme reaches half a billion viewers via over 40 TV stations in China, as well as over one million online users weekly.

Seductively French will produce the segments in and around Paris in early October. Segments will feature interviews with the top names in French film, music and arts; spotlights on the latest design and fashion talent; and highlights on luxury brands, among others.

To read the full article, click here.

By George Winslow — Broadcasting & Cable, 9/15/2011 1:36:32 PM

The largest on-demand provider of European films in the U.S., eurocinema On Demand, has announced that it will work with Seductively French to produce a series of lifestyle segments that focus on European lifestyles.

The early segments will go into production in October and in December will be available as free content on eurocinema On Demand, which reaches about 36 million US and Canadian television homes.

“We’re delighted to partner with Seductively French to develop engaging lifestyle segments that complement the eurocinema brand,” said eurocinema founder and CEO Sebastien Perioche.  “We’re pleased to make available to our viewers and all fans of foreign film, free on demand content that will appeal to their curiosity, appreciation and love for the European way of life.”

The material will also be available in China on Metan Development Group’s Hello! Hollywood, an entertainment news program targeting Mandarin-speaking viewers that reaches about half a billion viewers over 40 TV stations in China and nine channels in the U.S. 

This week in the Water Cooler blog, “VideoAge” takes stock of film festivals in Toronto and Venice. To find out more, and hear what Opus’ Ken DuBow had to say, link to: http://videoageinternational.com/blog5/
 
 
METAN, HARPER’S BAZAAR TEAM UP
Metan Development Group is now the exclusive overseas media partner of Harper’s Bazaar, China’s Ninth Annual Charity Night “Charity for Hope” Gala, which will be held Wednesday, September 14 at the Park Hyatt in Beijing. Metan will cover red carpet arrivals, celebrity interviews, and more. Coverage of the gala will air on Metan’s flagship series “Hello! Hollywood,” which is available on more than 50 networks in China, China’s online platforms, and on LA18 and Crossing TV in the U.S. Further details can be found at www.metanmedia.com

By the Immigrant Magazine, Sept. 9, 2011

E! Co-founder and President/CEO Metan Development Group Larry Namer will be honored on September 10, 2011 at the 4th Annual Investment Seminar & Global Independence Day, to be held in Beverly Hills at the legendary Beverly Hilton Hotel.

The fourth annual event will host dignitaries and business leaders from more than 196 countries, including the Honorable Antonio Villaraigosa, Mayor, City of Los Angeles.

Part of the event is a Global Awards Ceremony honoring noted individuals for their outstanding contributions to international business, philanthropy and entertainment. Larry Namer will receive the “Aaron Spelling Award” for his pioneering work in the areas of television, domestically and globally.

“I’m delighted to be honored with such a prestigious award that bears the name of the most influential producer and creative mind in television history,” said Namer.

An accomplished entrepreneur with over 40 years professional experience, Mr. Namer is the co-founder of E! Entertainment Television, a company now valued at over $3.5 billion USD, and the creator of several successful companies in the United States and overseas.

Among those companies are Comspan Communications that pioneered Western forms of entertainment in the former Soviet Union, including the syndication of the popular soap opera Santa Barbara, which ran for 10 years in the region, and Steeplechase Media that served as the primary consultant to Microsoft’s MiTV for developing interactive TV applications. In recent years, Mr. Namer has become recognized as one of the world’s leading experts on new technology and how it is fundamentally altering the business of international media and entertainment. Among the companies that have enlisted his expertise are Microsoft, Paul Allen’s Digeo, World Digital Media Group (a joint venture of Radio Shack), EchoStar and Sirius Radio network.

Mr. Namer’s latest venture, Metan Development Group (Metan) was created to develop and distribute entertainment content and media specifically for Chinese speaking audiences in China and abroad. Namer’s partners on this venture are entertainment industry veteran Martin Pompadur and Amerilink founder Jean Zhang.

Metan’s most notable projects include Hello! Hollywood!, a weekly entertainment news series tailored to Chinese audiences, offering up the latest in celebrity and lifestyle news, and covering the most glamorous red carpet events and award shows. Since its launch in summer 2009, the series is now available on over 40 television stations in China and nine in North America, reaching more over half a billion potential TV viewers. The series is also featured on China’s top Internet portals where over one million people watch online weekly.

Additionally, he serves as Senior Advisor, Strategic Development to Eurocinema On Demand, the only 24/7 on demand foreign film channel now available in 36 million homes via cable and satellite in North America.

About Metan Development Group- Launched in 2009, Metan Development Group LLC (Metan) is a venture created to develop and distribute entertainment content and media specifically for international markets. The company’s founders are entertainment industry veteran Martin Pompadur, E! Entertainment Television co-founder Larry Namer and Amerilink founder Jean Zhang. www.metanmedia.com

To read the full article, click here.

By Slavica Monczka  |  Posted: Aug. 29th, 2011

To read the full article, click here.

The I Sing Beijing program brings Western performers to China to learn to sing works in Mandarin.

By Dan Levin, Special to the Los Angeles Times August 14, 2011

Any production or distribution company in Latin America that manages to get its content into China usually makes headlines. And there is a reason for that: China is nothing but the largest market in the world and any local audience looks meager when compared to the potential hundreds of millions of viewers that the Asian country has to offer.

Yet none of this is new for Larry Namer. The executive is the president of Metan Development Group, a company that works as a bridge between Beijin and Los Angeles and focuses on “bringing things into China and taking things from China,” he said.

A MATTER OF ADAPTING
“In China we create shows for all broadcast platforms, from national to regional, including terrestrial and satellite,” Namer told ttv. Metan is particularly focused on purchasing formats that are suitable to be rewritten and reproduced for the Chinese market, “even after all the changes that we need to make in order to adapt the content to the country’s culture and regulations,” he said.

When asked what type of content works the best for China, Namer shows he knows the market well. “Romantic comedy is very big right now because it can be translated and understood by a Chinese audience,” he said. And what about telenovelas, then? Even though many have been adapted, the truth is that telenovelas are not always the best genre. “It gets a little tricky. A lot of the culture and customs in China are different so you can’t really have much sex, you can’t really have much violence,” the executive said. “We have looked at a bunch but we haven’t found any that we think are exactly adaptable or where the company that owns the rights was willing to make the changes that would be necessary to make it culturally acceptable.”

And that is why not everything that is popular in the Western world can work across the Pacific ocean. “We don’t think, for example, that new crime dramas can work there but there are actually older crime dramas done in the 80s that didn’t really have the same level of violence,” Namer said. “They were actually kind of sweeter and more innocent; crimes were mostly solved by thinking rather than fighting. Those kinds of formats could work in China.”

A HYPER-CONNECTED AUDIENCE
“The future for multi-platform in China is greater than anywhere else,” Namer said in regard to new technologies and their potential for TV. According to the executive, there are now over 425 million people in China who watch videos from broadband, which poses a more than interesting setting for the famous 360 approaches. “When we look at stuff, we look at its multi-platform capabilities, so it has to be online and mobile capable,” he concluded.

WordScreen| Jul 15, 2011

Metan Celebrates Hello! Hollywood’s 100th Episode

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Media Research Asia | Jun 28, 2011

Metan Launches Talent Management Unit In China

Beijing — Metan Development Group (Metan) today announced the launch of a new division to its rapidly expanding business in China – Metan International Talent Management (MITM), the announcement was made today by Larry Namer, President/CEO Metan.

“The China market is growing at a rapid pace in all areas, including modern culture and entertainment,” said Namer. “Entertainment content in China definitely has far reaching global appeal. Metan has recognized this, and developing a division dedicated to bringing Chinese talent to the forefront of Western media is a natural step in our expansion in the region.”

Former William Morris senior executive and Metan’s executive vice president Neil Strum will oversee the new venture that will represent projects and secure product endorsement deals with actors, writers and musicians in China and worldwide. MITM will also work with Western talent specifically in the Chinese market.

International author and journalist Annie Wang is the first signed to the new division that will represent Ms. Wang’s interests and projects across all media globally. MITM will be signing clients in all areas of entertainment, including film, TV, literary, music and sports.

“The launch of our new talent management division is a natural evolution for Metan. We’re delighted to sign an author of such a high caliber as Annie Wang,” said Strum. “We look forward to working with Annie as we expand her exposure in all global markets as a speaker, writer, and women’s rights activist.”

“I’ve been very impressed by the inroads Metan has made in all areas of the entertainment industry in China since they first entered the region in 2009,” added Wang. “Metan is a great partner for me, and I am pleased to work their talented team as they represent my projects on a global scale.”

Metan first launched in 2009 with a vision to bring Western media content tailored to Chinese audiences. Since then, the company has been very successful with its flagship series Hello! Hollywood, a weekly entertainment news series now available in over 50 stations reaching 600 million viewers. Recent deals include an exclusive distribution deal with Fusion TV where the companies will develop and distribute Fusion TV-branded online, mobile, IPTV, and television channels in China. Metan also has inked deals with such major global brands as Coach, Ford and Philips.

Hailed by The Los Angeles times as a striking new literary voice, Annie Wang is an editor, public speaker, and author who specializes women’s issue.  She has written ten books in Chinese and two novels in English.  Her English language debut, Lili (in June of 2001 by Pantheon Books ) was published internationally to critical acclaim.

A multi-layered novel filled with emotional, psychological and societal turmoil, Lili tells the story of a “bad girl’s” maturation and adventure in the Post-Mao Era leading up the Student Movement in 1989. Her second English novel, The People’s Republic of Desire (Harper Collins 2006) offers up a hilarious satire and insightful portrait of China’s MTV generation, urban women, and cross-cultural relationships. It has been described as a cross between Sex and the City and Joy Luck Club.

Based on her popular weekly column in the South China Morning Post and her Chinese bestseller Unbearable Shallowness, People’s Republic of Desire was serialized on NPR’s Pacific Times for six months and was reprinted in Chinese by North America’s most popular Chinese newspaper World Journal. A CNN crew also followed Annie around in Shanghai to search for the modern women in her writing.

After graduating from the University of California at Berkeley in 1996, she worked for high-tech companies in Silicon Valley, and then served in the Washington Post‘s Beijing bureau and the U.S. State Department.  In 2004, she returned to China and has been running such fashion magazines as In Style and Tatler. Today, she resides in Shanghai and Beijing.

Launched in 2009, Metan Development Group LLC (Metan) is a venture created to develop and distribute entertainment content and media specifically for international markets. The company’s founders are entertainment industry veteran Martin Pompadur, E! Entertainment Television co-founder Larry Namer, Russian advertising agency entrepreneur Oganes Sobolev and Amerilink founder Jean Zhang. www.metanmedia.com

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C21 Media | Jun 29, 2011

Metan’s got talent in China

US media company Metan Development Group is expanding in China with the launch of a new talent agency.

Metan International Talent Management (MITM) will bring the stars of Chinese television and other areas of entertainment, including film and music, to Western audiences and tailor Western talent to the Chinese market.

Author and journalist Annie Wang is the first client to be signed up by MITM, which is led by Metan’s exec VP Neil Strum.

The Los Angeles-based group was established in 2009 to develop and distribute entertainment worldwide, specifically taking Western content to Chinese audiences. Its flagship series Hello! Hollywood now airs on more than 50 stations in China, reaching 600 million viewers.

Larry Namer, Metan president/CEO, said: “Bringing Chinese talent to the forefront of Western media is a natural step in our expansion in the region.”

Last month, Metan teamed up with Fusion TV to take action and adventure sports programmes to China.

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On Screen Asia | May 12, 2011

Metan and Fusion TV to bring action and adventure to China

Los Angeles – Metan Development Group (Metan) and Fusion TV, Inc. (Fusion) have teamed up to bring action sports and adventure travel content to China, according to an announcement made by Neil Strum, executive vice president of Metan and Larry Schwartz, president of Fusion.

Together, Fusion and Metan have structured an exclusive relationship for the China market, where the companies will develop and distribute Fusion TV-branded online, mobile, IPTV, and television channels in China. The deal will also extend to Hong Kong, Macau, Indonesia and Taiwan. Metan will serve as the exclusive sales agent for Fusion’s content library, and Fusion will be the exclusive content provider and co-production partner for Metan in the category of action sports and adventure travel. Fusion has one of the largest and most diverse holdings in the action sports and adventure travel space, with programming across 30 different sport genres. Metan is already in the market structuring distribution for the relationship across multiple platforms manned with Fusion’s 750 hours of long-form television programming and over 3,000 short-form elements.

“In recent years, we’ve seen a growing interest in male-skewed and sports and adventure-related content in Asia, and our partnership with Fusion comes at a perfect time,” said Strum. “We look forward to establishing the Fusion brand in the region, providing a unique content experience, and engaging the China market with their high-quality action sports and adventure travel product.”

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Variety | May 12, 2011

Metan teams with Fusion TV

Action sports coverage for Asia on menu

BEIJING — L.A.-based Metan Development Group has signed with Fusion TV to bring action sports and adventure travel content to China.

Action sports have been exploding in China; the world’s largest skatepark, the $12 million Woodward Beijing, opened in 2005. Snowboarding, freestyle skiing and river surfing are also growing.

Under the terms of the deal, Fusion and Metan will develop and distribute Fusion TV-branded online, mobile, IPTV and TV channels in China. The deal extends to Hong Kong, Macau, Indonesia and Taiwan.

The announcement came in a joint statement by Metan exec veep Neil Strum and Fusion prexy Larry Schwartz.

Metan will be the exclusive sales agent for Fusion’s content library, and Fusion will be the exclusive content provider and co-production partner for Metan for action sports and adventure travel.

Fusion has a large and diverse holding in the action sports and adventure travel space, with programming across 30 different sport genres.

Metan is already in the market structuring distribution for the relationship across multiple platforms manned with Fusion’s 750 hours of longform television programming and more than 3,000 shortform elements.

“In recent years, we’ve seen a growing interest in male-skewed and sports and adventure-related content in Asia,” Strum said.

Fusion has been making action sports and adventure travel programming for 17 years and has relationships with domestic networks such as ESPN/ESPN2, CBS, NBC, ABC, Versus, Spike TV, USA, MTV/MTV2, Fuel TV, Speed TV, Starz and Fox Sports.

Metan was set up in 2009 by industry veteran Martin Pompadur, E! Entertainment Television co-founder Larry Namer and Amerilink founder Jean Zhang.

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Los Angeles, May 11, 2011 — Metan Development Group (Metan) and Fusion TV, Inc. (Fusion) have teamed up to bring action sports and adventure travel content to China, the announcement was made today by Neil Strum, Executive Vice President, Metan and Larry Schwartz, President, Fusion.

Together, Fusion and Metan have structured an exclusive relationship for the China market, where the companies will develop and distribute Fusion TV-branded online, mobile, IPTV, and television channels in China. The deal will also extend to Hong Kong, Macau, Indonesia and Taiwan.  Metan will serve as the exclusive sales agent for Fusion’s content library, and  Fusion will be the exclusive content provider and co-production partner for Metan in the category of action sports and adventure travel.  Fusion has one of the largest and most diverse holdings in the action sports and adventure travel space, with programming across 30 different sport genres.  Metan is already in the market structuring distribution for the relationship across multiple platforms manned with Fusion’s 750 hours of long-form television programming and over 3,000 short-form elements.

“In recent years, we’ve seen a growing interest in male-skewed and sports and adventure-related content  in Asia, and our partnership with Fusion comes at a perfect time,” said Strum. “We look forward to establishing the Fusion brand in the region, providing a unique content experience, and engaging the China market with their high-quality action sports and adventure travel product.”

“Metan comes to the table as a respected source in the China market with established relationships and track record for success.  Fusion is excited by the opportunity of working together with their team in both distribution and co-production opportunities in China,” added Schwartz.

The action sports and adventure travel genre has experienced notable growth in China over the past decade. Action Sports is exploding in China with the world’s largest skatepark, Woodward Beijing, opening in 2005 for the cost of $12,000,000.  While snowboarding is new to the region, it is growing rapidly in China, with the number of registered resorts rising from nine to more than 200.  Chinese athletes also showed well at the 2010 Winter Olympics in Canada in Freestyle Skiing.  Action sports event “X Games” first launched in Shanghai in 2001, and in 2009 the city of Hangzhau hosted the first “river surfing” annual event. Top professional surfers flock to the Qiantang River in Hangzhou to surf the world’s largest tidal bore, known as the “Silver Dragon”.

Fusion TV, Inc. (Fusion), is a digital media company with 17 years experience in the Action Sports and Adventure Travel space, producing and distributing HiDef video programming content.   With an industry reputation as a top producer of Hi-Definition programming and long-standing working relationships with domestic networks such as ESPN/ESPN2, CBS, NBC, ABC, Versus, Spike TV, USA Network, MTV/MTV2, FUEL TV, Speed TV, Starz and Fox Sports Network, Fusion’s ability to help define the category and mold the unique viewer experience is why Fusion’s programming has aired in over 150 countries globally.  Fusion TV is the world of Action Sports and Adventure Travel.  www.fusiontv.com

Launched in 2009, Metan Development Group LLC (Metan) is a venture created to develop and distribute entertainment content and media specifically for international markets. The company’s founders are entertainment industry veteran Martin Pompadur, E! Entertainment Television co-founder Larry Namer, Russian advertising agency entrepreneur Oganes Sobolev and Amerilink founder Jean Zhang. www.metanmedia.com

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Worldscreen News | May 11, 2011

Metan Aligns with Fusion TV to Deliver Content in China

LOS ANGELES: Metan Development Group and Fusion TV have entered into an exclusive partnership to bring action sports and adventure travel content to China.

The companies will develop and distribute Fusion TV-branded online, mobile, IPTV and TV channels in China. The deal extends to Hong Kong, Macau, Indonesia and Taiwan. Metan serves as the exclusive sales agent for Fusion’s library, while Fusion is the exclusive content provider and co-production partner for Metan in the categories of action sports and adventure travel.

“In recent years, we’ve seen a growing interest in male-skewed and sports and adventure-related content  in Asia, and our partnership with Fusion comes at a perfect time,” said Neil Strum, the executive VP of Metan. “We look forward to establishing the Fusion brand in the region, providing a unique content experience, and engaging the China market with their high-quality action sports and adventure travel product.”

“Metan comes to the table as a respected source in the China market with established relationships and track record for success,” added Larry Schwartz, the president of Fusion. “Fusion is excited by the opportunity of working together with their team in both distribution and co-production opportunities in China.”

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C21 Media | May 11, 2011

Metan seeks Asian Fusion

LA-based Metan Development Group has teamed up with US prodco Fusion TV to bring action sports and adventure travel programmes to China.

As part of the exclusive agreement, the companies will develop and distribute Fusion TV-branded online, mobile, IPTV and television channels in the region, including in Hong Kong, Macau, Indonesia and Taiwan.

Metan will be the sales agent for Portland, Oregon-based Fusion’s content, which includes 750 hours of longform programming and more than 3,000 shorts.

Neil Strum, executive VP of Metan, said the deal would satisfy “a growing interest in male-skewed and sports and adventure-related content in Asia.”

Michael Pickard
11 May 2011
© C21 Media 2011

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TV Asia | May 11, 2011

One name synonymous with television is Larry Namer. He began his career in 1971 at Time Inc Manhattan Cable and went on to become VP of Los Angeles Valley Cable Television, the United States’ first 61 channel two-way cable system. He is co-founder of the global hit E! Entertainment Television and was one of the first to bring Western forms of TV entertainment to the former Soviet Union. More recently Larry has fixed his sights on Asia and is a founding partner of Metan Development Group, which specializes in content for the Chinese market. He talks exclusively to Marc Checkley about how to make successful TV behind the Great Wall.

TVAPlus: Metan has been in China for about two years and you’ve worked on a number of General Entertainment shows. What challenges do you face developing these ideas for China’s massive audience?

There are certainly a lot of cultural differences that have to be dealt with and also just plain experience in international markets. For example when we first started Hello Hollywood showbiz news programme we quickly learned that what the Chinese audience wants to know about Hollywood is very different from what an American audience wants. In the U.S, TMZ has become the benchmark for this kind of programming. In China they are much less interested in this ‘let’s dig up some dirt and ruin someone’s life’ kind of approach. They want to understand more about how people live, their family life, being a celebrity. Having come out of the early days of E! where the network was really about celebrating the entertainment industry, HH works much better for me personally.

Then there is the simple thing of realizing that the China market didn’t grow up with American media and that you have to provide context. When we were first testing concepts for HH we did a short piece on the King Kong ride at Universal Studios. If we did it in the U.S it would have been a one minute piece but because we pace slower in China we did it as two minutes. The folks we tested it on said “Interesting ride, but who is King Kong?” So we went back and added another two minutes on who King Kong is and his place in Western cinema history. The response was “Ok, now we understand who King Kong is but tell us, what Universal Studios is?” So now it came to six minutes after we added that. Adding context and back story is very important.

TVAPlus: You came up with an interesting relationship with China’s pirate community for Hello Hollywood. How did this come about and what were the benefits of such an agreement?

When we launched the show we were fully aware of the problem of piracy in China. Our concern was not so much DVD’s but rather online piracy. Rather than just leave everything to chance we decided to be proactive and call all the pirate portals in China and offer them a deal.

HH is on TV Saturday at 10pm and repeated Sunday at noon. The deal was we would give them a legal license for free but we would upload the show to them only on Monday, after its ‘TV window’. They would have to take our show as is, with our ads intact but then they could sell in front or in back. Thirteen of the top portals agreed to this deal. We now get about half a million downloads a week.

Since we started HH over a year ago, there has been a very noticeable crackdown on online piracy and a big effort to legally license content. For us charging for the license will be a 2012 agenda item. For now it’s a nice bonus to our advertisers.

TVAPlus: What other type of programme s do you see working in China or are lacking in the current TV landscape?

There are lots of areas that are opening up in China TV and film. Right now we think there is a good potential for home/renovation related shows. People are buying homes and apartments now. The numbers are astronomical in terms of how many people are entering into home ownership. So there is a market for this genre, that go from simple decorating to gardening to do-it yourself projects. There has never been a need for this before but now there is.

We also see a big area for growth in the creation of new shows that are made specifically for the China audience. China was copying foreign shows, then they were buying formats, the next step is in creating properties that are uniquely Chinese. There are things about growing up and living in China that are not part of other cultures. I wrote and am now working on an original China-based sitcom, so we’ll see how that goes.

TVAPlus: What is your view on the current climate of China’s television and how the industry has changed there, accessibility – is there a TV market? (I ask this as it’s still quite hard to get local based channels to speak about this)?

In the two years since Metan was formed the market has definitely become more sophisticated in terms of technical and creative. We have always found the climate is good here, basically because of the way we approached the market. Metan has no interests outside of making things work in terms of bringing projects into China and also creating things in China that can be taken to the rest of the world. We don’t believe in taking what we may do in the U.S or Australia and trying to replicate it in China. It doesn’t work. I have likened the experience in China to going to visit my 84-year-old mother in Florida. When I visit she tells me that dinner is at 5.30pm. When I say that I don’t eat until 8pm she reminds me that I am a guest in her house and that they are the rules. It’s the same as when I worked in Russia and now China. We are guests and there are rules.

We haven’t found anything so onerous that we couldn’t abide by. I think for a lot of Western media folks it’s been more of a problem of their egos than the climate being harsh. There are lots of opportunities to do things. Hello Hollywood is syndicated (barter) to 54 TV stations. That’s a pretty new model.

The online world has also grown to more than 450 million users, getting the attention of brands and their dollars.

TVAPlus: You have a specific team of TV professionals working in your U.S office, what were your reasons for putting such a team together?

Our LA team is quite unique. The vast majority are folks that have been born and raised in mainland China and have finished one degree there and at least one other outside of China. Many of them want to learn Western media practices and then return to China. For us this is great since we have a strong pool of people who understand the audience in China and guide all of the creative development activities. More importantly we are training this talent pool to work in China. We have already had one person go back. They not only are great assets themselves but also help the Beijing team grow and adapt by being coaches and teachers.

FISHBOWL LA | April 8, 2011

E! Co-Founder Now Helping China Say Hello! Hollywood

The Mandarin language program Hello! Hollywood can be seen on Channel 18 in LA. But where it really has traction is China.

The entertainment news magazine is a production of Metan Development Group, a company run by E! Entertainment co-founder Larry Namer. Via exclusive interview with Digital Entertainment Examiner Liz H. Kelly, Namer shared some impressive 2010 Oscar week numbers for the show:

Metan partnered with Tencent, China’s largest Internet provider, and used three services to engage an audience online. “We had 3.2 million unique viewers during the Oscars, and a total of 10.2 million users during the week of the show,” Namer explained.

Namer told Kelly that China’s aforementioned three-pronged equivalent to Twitter, QQ.com, helped deliver another 90 million page views to Tencent. Metan has several other Chinese market shows in development, including a sitcom called Return to Dai Fun Cun (Village of Good Fortune).

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Examiner.com | April 7, 2011

Exclusive Interview with E! and China Digital Entertainment Pioneer Larry Namer

From Los Angeles to Beijing, Larry Namer, CEO/President of Metan Development Group is known as a digital entertainment pioneer who is leading Hollywood into China. When I interviewed Larry, this week, he explained, “It’s the largest growing box office in the world.” Metan’s Hello! Hollywood (China’s version of E!, and Larry founded E! Entertainment Television) has interviewed some of the world’s top stars including Zac Efron, Jennifer Love Hewitt, Steven Spielberg, Sylvester Stallone, and John Woo, just to name a few. To get an insider’s view, Larry shared insights on the digital entertainment culture in China, how Metan’s Hello! Hollywood broke all the social media records during the 2011 Oscars, an April TV pilot for Everyday Lohas (Life of Health and Sustainability), a new modern sitcom Return to Dai Fun Cun (Village of Good Fortune) in development and entertainment trends in China.

On Monday, The Hollywood Reporter predicted that the Chinese box office revenues will overtake the US in 10 years. With Avatar being number 1 in China for movie revenues, and a population of 1.3 billion (compared to 310 million in the US), everyone needs to think about how to market online and offline to China. Last year, Chinese box office revenue was up nearly 65% to $1.5 billion. Here’s why China’s digital entertainment space is growing so fast, and exclusive insights from Larry Namer.

1. China’s Social Media Culture – With 425 million using broadband already in China, Larry explained, “It gives you a much wider palet to paint.” Because of the numbers, there is much more advertising attention and dollars invested in social media marketing in China. Metan’s success is based on developing an overall story that gets delivered across multiple platforms (TV, internet, social media, mobile and games) with one voice and message. Larry added, “The product placement is so obvious in the US, but you can do different types of plots to make it more natural in a show.” In China, they also watch movies online, and there is no need to create 5-7 minute segments online. People under 30 do the bulk of their entertainment viewing on computers, and Larry explained that the mindset is “Watch what you want when you want online.”

2. Hello! Hollywood’s Oscar Social Media Success Story – Hello! Hollywood is the Mandarin version of E!, and is the largest entertainment show in China reaching 270 million homes (Channel 18 in Los Angeles.) For the 2011 Oscars, Metan developed a first-time behind-the-scenes view for their Chinese audience through TV, internet, and mobile. Hello! Hollywood had a backstage reporter discussing the Red Carpet fashion, food and stars on QQ Messenger (the Chinese version of Twitter), along with celebrities (Eric Zuley, YangYang Cheng from Hello! Hollywood) micro-blogging. The Governor’s Ball coverage also featured a celebrity interview with Wolfgang Puck. Metan partnered with Tencent (China’s largest internet provider, QQ.com) and used 3 services to engage an audience online. Larry explained, “We had 3.2 million unique viewers during the Oscars, and a total of 10.2 million users during the week of the show.” The 3 QQ Instant Messenger services included QQ Video (http://bb.news.qq.com/), QQ Micro-blog (t.qq.com) and QQ Entertainment News Channel (ent.qq.com). The Tencent.cn Oscar page also received 90 million views for their videos and social media network. Wow, wow and wow!
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3. Metan’s Future Health and Family TV Shows – Metan Development Group is in the process of developing two additional TV shows focused on health and family. Everyday Lohas (Life of Health and Sustainability) will be piloted on April 24th, and the show will be out this October. As Larry explained, “It’s about eastern and western medicine focused on the mind, body and spirit. It’s Dr Oz meets Oprah meets Dr Phil.” With China facing new health issues with western food chains such as McDonalds and Pizza Hut, this show has mass appeal. Social Media and mobile will be a huge part of the show, and Metan is already building mobile segments with quick daily health segments. Because family is a huge part of the Chinese culture, and especially taking care of elders, Return to Dai Fun Cun (Village of Good Fortune) is another Metan TV Project. This modern sitcom is slated for February 2012, and will highlight a guy who leaves Beijing to take care of his mother. The main character stays connected with friends in the city through the Internet and mobile.

When I asked Larry about the current trends in China, he shared, “It’s cyclical. Currently, there is a romantic comedy wave with about 30 Sex and the City type movies.” Larry added, “Young, independent women is a big theme for The People’s Republic of China.” Annie Wang is one of the role models for women in China. As a result of this trend, I definitely need to think about how to market my Great Life Great Love relationship advice brand to China (someone from China bought my ebook, How to Attract Great Love, and now it makes more sense.)

Many thanks to Larry Namer for sharing these digital entertainment insights to help us better understand China’s digital entertainment. For more updates on Metan Development Group, visit http://metanmedia.com

© Liz H Kelly, National Digital Entertainment Reporter, Sunrise Road Media, http://sunriseroadmedia.com

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METAN BRINGS OSCARS TO CHINA

Metan Development Group/Mei Tian Mei Yu (Metan) partnered with Tencent, the owner of China’s largest Internet service portal, QQ.com, to deliver special news coverage of the 83rd Annual Academy Awards. The coverage was adapted for Mandarin-speaking audiences, and approximately 3.2 million Mandarin-speaking audience members in China watched the event. Metan’s “Hello! Hollywood” production team created special content related to the award ceremony for multiple platforms, including TV, Internet and mobile. To learn more, visit www.metanmedia.com.

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Media Research Asia | March 4, 2011

Tencent Oscars Webcast Attracts 3.2 Mil. Views

Los Angeles — Metan Development Group/Mei Tian Mei Yu (Metan) teamed up with Tencent, owner of China’s largest Internet service portal QQ.com, to create special entertainment news coverage direct from Hollywood surrounding The 83rd Annual Academy Awards, tailored specifically to Mandarin-speaking audiences, the announcement was made today by Larry Namer, President/CEO, Metan.

This first ever viewing event, watched by an impressive audience of 3.2 million Mandarin-speaking viewers in China, marks a collaboration between Metan and Tencent’s three services under the QQ.com and QQ (QQ IM) umbrellas, including QQ Video (http://bb.news.qq.com/), QQ Micro-blog (t.qq.com) and QQ Entertainment News Channel (ent.qq.com).

Metan’s Hello! Hollywood production team, led by award-winning Executive Producer/Director Rick Portin created event-related content for multiple platforms spanning Internet, TV and mobile.  Breaking new ground in China, Metan’s production group reunited  members of the original Oscar live red carpet team who first covered arrivals for Movietime (now E! Entertainment Television).

“The Academy Awards are without question the most watched global entertainment event each year,” said Namer. “We’re pleased to have partnered with Tencent this year to deliver to movie fans in China an enhanced experience that expanded beyond the traditional Oscar telecast. 2011 marks the first year that audiences in China were given a new look into the awards direct from Hollywood.”

“Tencent is delighted to have connected millions of viewers in China with events surrounding the world’s most prestigious and glamorous awards show for the first time ever,” said Lau Seng Yee, President, Online Media, Tencent. “Our delivery capability coupled with Metan’s unprecedented access to Hollywood provided our viewing audience a unique experience that not long ago would have been unimaginable.”

Seeking to build its presence in China, luxury brand Coach signed up as the official sponsor of Metan’s coverage and was featured in Tencent’s online streaming surrounding the awards.

Coverage commenced on February 27, 2011 at 4 PM PST and continued until 9 PM PST. Hosted by Hello! Hollywood anchors Sean Liao and Lingxiao Xiao, coverage featured footage from the press interview room by YangYang Cheng, who also blogged throughout the event. Several guest commentators were also on hand in studio offering their up-to-the-minute fashion critique as the stars make their way down the red carpet.

Additionally, Metan  incorporated  into its coverage specialized segments surrounding the annual celebration, including a Governor’s Ball preview featuring an interview with celebrity chef Wolfgang Puck, highlights from past Oscar events (awards acceptance speeches by A-listers Javier Bardem, Kathryn Bigelow, Sandra Bullock, Penelope Cruz, Sean Penn, Kate Winslet, the late Heath Ledger, plus others), Red Carpet Fashion Flops (Celine Dion, Cher, Bjork), Making of the Oscar Statuette, Oscar Fashion Preview and Memorable Oscar Moments (Katharine Hepburn and Barbra Streisand’s tie, Ben Affleck and Matt Damon’s speech, David Niven and the infamous streaker incident.)

Coverage was enhanced with celebrity “micro-blogging,” creating a parallel and in-depth viewing experience for audiences.  Tencent made it possible for popular Western celebrities to share their blog comments with users in China for the first time ever.

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Asia Media Journal | February 27, 2011

Michael Signorelli Joins Metan Development Group

Beijing — Metan Development Group/Mei Tian Mei Yu (Metan) has tapped marketing veteran Michael Signorelli as Vice President, Sales & Marketing, the announcement was made today by Neil Strum, Executive Vice President, Metan.
Boasting nearly 15 years on the ground marketing and business development experience in mainland China, Mr. Signorelli joins Metan from the National Basketball Association (NBA), where he served as Senior Director of Global Marketing Partnerships at NBA China.

“We’re delighted to have Mike join Metan’s Beijing-based team,” said Strum. “His keen understanding and sensitivity to Eastern and Western cultures, coupled with his extensive experience working in China make him the perfect fit as we continue to expand our presence in the region.”

While at the NBA, Mr Signorelli’s responsibilities included building NBA China’s strategic direction across media, events, retail and marketing sponsorships.  Under his direction, the division conceived, developed and executed new revenue generating platforms including launching the first NBA Legends events in China and securing sponsorship for the Harlem Globetrotters’ China tour.

Prior to the NBA, Mr Signorelli held executive level positions in the private equity and consulting industries from 2000-2009, including Managing Director of Origo Partners and Business Development Director for Super 8 Hotels China, where he built a local team growing the number of franchises from three to over 130 in less than two years.  He also worked as Director of Global Accounts for Fourth Shift Corp., a Minneapolis-based software company. He was instrumental in establishing the company’s operations in Australia and New Zealand and successfully managed a sales team spread across ten countries in Asia. Prior to his work in China, Mr. Signorelli worked for Chase Manhattan Bank in New York.

He received an MBA from the University of Southern California, attended graduate school at the Hong Kong University of Science and Technology and studied Mandarin at the Beijing Language and Culture University.

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Video Age | February 26, 2011

METAN TAPS NBA CHINA EXEC

Metan Development Group/Mei Tian Mei Yu (Metan) appointed former National Basketball Association (NBA) China executive Michael Signorelli vice president of Sales and Marketing. Prior to accepting this position, Signorelli served as senior director of Global Marketing Partnerships at NBA China. Signorelli received his MBA from the University of Southern California and studied Mandarin at the Beijing Language and Culture University. For further information, visit www.metanmedia.com.

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C21 Media | February 25, 2011

Metan hires sales VP

NEWS BRIEF: LA-based Metan Development Group has tapped the US National Basketball Association’s (NBA) marketing director for China to be its new VP of sales and marketing.

Prior to the NBA, Michael Signorelli was MD of Origo Partners and worked at Super 8 Hotels China. Metan’s sales arm in China is called Mei Tian Mei Yu.

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C21 Media | February 7, 2011

Metan finds Chinese partner for health show

NEWS BRIEF: LA-based Metan Development Group has joined forces with a Chinese media and health company on a new health and wellness show.

Everyday LOHAS (Lifestyles of Health and Sustainability) is a 45-minute live studio show about health and wellbeing for the Chinese audience. Metan and EchinaMD, a firm that owns TV, online and mobile assets, will coproduce a pilot, with the former handling distribution. It launches in the summer.

7 Feb 2011
© C21 Media 2011

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Hollywood Today | January 26, 2011

NATPE Day 2

Larry Namer, entertainment and media entrepreneur, has always been a forward thinker. Mr. Namer was kind enough to take a moment with Hollywood Today at NATPE 2011 on Monday evening and chat.

His road to success began as a cable splicer right out of college and after 10 years with Time Inc’s Manhattan Cable, “I was in charge of developing new uses of cable (beyond just entertainment) and was using the Manhattan Cable TV system to move data around the city directly competing with the phone company.” It was about this time that he an Alan Mruva had the idea for Movietime (which I worked for at the time), which we know today as E! Entertainment TV.

In 1984 Namer and Mruvka talked about the idea of a network that would be like MTV for movies, wrote a business plan but couldn’t get anyone to listen explained Namer, “and everyone told us we can’t do that, but we didn’t listen. Then off to the Soviet Union and started a media company while it was still under Communist rule. Then it was interactive TV and Internet in the mid 90s. So I guess it’s always been about identifying what’s next and pioneering the way.” Of coarse, after 3 ½ years they finally found a backer, and the company grew very quickly. He said “I’m motivated by challenges and going where no one has been successful before.”

At present, Larry Namer is the President and CEO of Metan Development Group which was established to bring programming to China. He explained what Metan is all about: “Creating content for Chinese audiences, both in China and for international Chinese speaking markets. Everything we do is multi-platform and quite honestly, I’m finding it easier to do creative storytelling across platforms abroad. The huge base of Internet and mobile users make extensions from TV to these platforms more economically justifiable. Even “made for the Web” content seems to attract more agency interest. We are creating original shows for the market and also buying up international formats that we are rewriting, recasting, and reshooting as local shows.

“Metan is also working with several organizations in China to create programming that can be seen in other markets, particularly the US.  We are also exploring the film industry, in the areas of content and film scoring. Details on this to be unveiled soon.”

We could only imagine what ‘a day in the life of an entertainment media mogul’ must be and he kindly indulged HT saying, “My day starts around 6am when I make calls to our key folks in China before they go to sleep (its 10PM then). Then 45 minutes on the treadmill while I watch the news. Breakfast and email follow and I’ll get to the Los Angeles office between 930 and 10am. A good part of my day is spent working with the LA business development team on structures for our latest China deals and also with the program folks trying to get our productions for China organized. Out of the office around 4PM and usually working from the house via email. I’m on the phone again with China at 5:30pm (9:30am there). Dinner is usually with friends or one of my older kids. Then it’s home and finishing up emails. I usually fall asleep watching TV around 12:30am. The current favorites are Modern Family, Big Bang Theory, and reruns of Arrested Development.

“When I’m in Beijing, it’s usually coffee at 9am with one of the local team, and then a few hours in the office for meetings. Lunch and afternoon are usually meetings out of the office which tend to go straight through dinner. Now that I have my Slingbox all set up, I’m watching the things I miss from US television on my iPad. Somewhere in between I’ll get the calls back in to LA.”

And if that’s not enough to keep him busy, fans and friends can follow the man on Twitter and Facebook!

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Channel 21 | January 24, 2011

Red carpet to Asia

The cult of celebrity has reached fever pitch in Asian programming, and stateside distributors are reaping the rewards. Jesse Whittock investigates how global brand names are moving into the region’s TV markets.

“There are two philosophies about China and its Western counterparts such as the United States,” claims Larry Namer, CEO of US distributor Metan Development Group. “One is that the Chinese market will eventually lead and pioneer the media market for the rest of the world. I am a firm believer in the latter.”

To support his argument, Namer points to the rapidly expanding middle-class in China, and its desire to see more, watch more, play more and, above all, consume more.

His Los Angeles-headquartered company functions primarily by adapting and distributing US-infused entertainment content like flagship show Hello! Hollywood to Chinese broadcasters and content aggregators. However, this model has cultural implications.

“China does not wish to be America,” Namer continues. “With Metan, we were able to develop programs and concepts specific to the chinese market and culture. Even Hello! Hollywood, which is produced in Beijing and has its field operations in Hollywood, is an original show created in Mandarin for the Chinese audience — it’s not an existing show subtitled or dubbed over.”

Namer cites the advent of the internet take-up as the point when brands began to pervade the Chinese lifestyle, which brought about the broadcasters’ need for celebrity content. “Also, if you look at the history of US entertainment and character-driven content in China, the commonality is in the advent of the internet. It opened the Chinese audience with a new media platform not only for content but as a form of communication as well.”

But the appetite for celebrity lifestyle shows, which were partly popularized by Namer’s former employer, E! Entertainment Television, is widespread beyond China. “In Asia, we’ve noticed the rise of local celebrities and local production, and that’s become very important in the market,” notes Jene Elzie, VP of international sales and strategic planning at Comcast International Media Group (CIMG), which distributes E! Entertainment content such as personality-driven reality shows Mel B: It’s a Scary World and Kimora: Life in the Fab Lane.

Moreover, Asian celebrities are often seen as local demi-gods, and US companies are reacting to the local demand, says Elzie. “Local celebrities from Korea, for example, are becoming very popular in other parts of Asia, and for us that’s a very positive thing because we still have the A-list stars for that kind of programming.”

Elzie says that since Mipcom, she has seen a “general return to the spirit of buying” in Asia, and expects big things of new CIMG shows such as What’s Eating You? and Bridalplasty, and now, wants more local versions of E! News to follow its Malaysian feed.

Bollywood represents another area CIMG will seek to exploit, Elzie adds. “The Indian market is very interesting for us because there’s the natural Hollywood/Bollywood association.”

Away from celebrities, other stateside companies are using brands and iconic characters to put their stamp on the Asian market.

Family entertainment firm Classic Media, owner of US brands such as Mr. Magoo, Lassie and Underdog, is one of them. Having entered into a $60 million co-production partnership with Singapore’s August Media Holdings, the company wants to establish itself in Asia before selling the shows back to Europe and the US.

The key is to understand Asia’s growing importance as a test bed for the global market, says Classic’s executive VP of sales and co-productions, Doug Schwalbe.”As these Asian markets grow and mature in terms of consumption, you need to have someone there with local sensibilities. What we’re doing with August is about making content for the global market rather than for the US, or the UK and Europe.”

Twenty years ago, Asian markets were “basically nothing, but today, they’re growing in importance daily. It’s massive — a market of literally billions of people,” he adds.

However, Natalie Yuen, Echo Bridge Entertainment’s VP of international sales for Asia Pacific, warns that while US content is still popular in Asia, firms should refrain from overestimating its market value. “US programming still has a place in the Asian buyer’s shopping list, but as much as US programming can still rate well from broadcasters, home-grown programming, like in any other market, will always rule — as show by the new Asian-branded channels launching in the region, like UTV and Celestial Movies.”

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The Miami Herald | January 24, 2011

Let’s make a deal: 5,000 TV producers gather in Miami Beach

Practically everything you’ve ever seen on television plus much more that you haven’t is on sale at the three-day National Association of Television Program Executives convention that kicks off Monday.

It won’t be the most colossal sale made this week at the Fontainebleau. But it surely tells you everything you need to know about this week’s convention of the National Association of Television Program Executives, where 5,000 members of the boob-tube-ousie are gathering to wheel and deal TV shows.

“I’m not going to tell you the name of the country,” says Stephen J. Davis, president of Hasbro Studios, which makes family and children’s shows such as The Transformers. “But my head of sales came bursting into my office. `This is great! They want to buy everything we have! And they want to pay $55 an episode!’

“And we’re going to do it, even though what they’re paying us won’t cover the cost of shipping the shows. Because you want to get a toehold in that market.”

From $55-a-show blue-plate specials to staggering intercontinental deals worth hundreds of millions of dollars, practically everything you’ve ever seen on television plus much more that you haven’t is on sale at the three-day NATPE convention that kicks off Monday.

Though NATPE also includes educational sessions, professional seminars and just-plain-stargazing interludes with people such as Regis Philbin and Sabado Gigante‘s Don Francisco, the convention has less to do with art than with the art of the deal. NATPE is the television industry’s most bustling international marketplace. Producers, network executives and TV-station bosses from all over the world will be schmoozing and selling shows. And as with that Hasbro deal that Davis hopes to seal here, no market is too small.

“We have meetings each half hour, all over the hotel,” says Marta Sacasa, vice president of a Nicaraguan station, who expects to take a dozen or so shows home with her to the smallest TV market in Central America. “We have meetings at breakfast, meetings at lunch, meetings at dinner, meetings over drinks. And then there are the random meetings in corridors, which might be the most important of them all.”

NATPE began in 1964 as a meeting of mostly U.S. TV executives, looking for game and talk shows to fill holes in their schedules not covered by network programming. But a growing worldwide TV market in which shows and formats crisscross borders at the drop of a checkbook has given it an increasingly global orientation. That’s one of the reasons NATPE moved to South Florida this year from its longtime home in Las Vegas.

“NATPE is reinventing itself,” says Raul Mateu of Miami Beach’s Fluent Media Group. It used to be that people went there to, say, close a deal for Wheel of Fortune for stations in Iowa. That business is now all done at a big corporate level. It’s the international market that’s open and exciting, and the whole reason to put NATPE in Miami is to attract people from other parts of the world.

Mateu is a bit of a poster boy for the growing internationalism of NATPE. In the briefcase he’ll lug around the Fontainebleau are shows from Chile, Colombia, Argentina, Romania, France and South Korea.

“If I sell just one of them to a network, that show instantly becomes a multimillion-dollar business,” he says.

Producers at NATPE sell not only finished shows, dubbed or subtitled to make them accessible to new audiences, but also show concepts that can be adapted by a local producer.

Format sales have a long history in television — the 1970s hit sitcoms All in the Family and Sanford and Son were U.S. remakes of British shows — but the new popularity of game programs and reality shows has made those formats into hot properties. “In a lot of these markets, local dramas are often too expensive to afford,” says David Lyle, president of Fox Look, which peddles shows from Fox’s broadcasting and studio companies. “So a cheaper, unscripted show, with a proven track record, has serious interest for them.”

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WorldScreen.com | January 15, 2011

Hello! Hollywood Gets Expanded Format

BEIJING: Metan Development Group’s Hello! Hollywood, a Mandarin-language magazine program, has expanded its weekly format from a half-hour to 45 minutes.

The 45-minute version was unveiled this month. The program first launched in China in 2009 on 10 stations and is now available on more than 50 in the country, in 250 million-plus homes as well as Mandarin-focused outlets in North America.

“Hello! Hollywood has proven so popular with Chinese audiences that the affiliate stations requested a longer format for 2011 and beyond,” said Larry Namer, the president and CEO of Metan. “The series definitely has made a mark in China, and we’re delighted to expand the show, satiating the audience’s demand for entertainment news and content.”

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Todo TV | January 13, 2011

Metan’s Hello! Hollywood Expands from 30 to 45 Minutes

Metan’s show about Hollywood produced in Mandarin for Chinese audiences will be 45 minutes long from this year. This change responds to the demand posted by TV stations and audiences. 

Hello! Hollywood, the number one show about Hollywood in Mandarin language has expanded its weekly magazine format show from 30 to 45 minutes. Produced by Metan Development Group (Metan), a 45-minute version of the series was aired for the first time this month.

“The program has proven so popular with Chinese viewers that the affiliate stations requested Metan a longer format for 2011 and beyong,” said Larry Namer, Metane’s president and CEO. “The series definetly has made a mark in China, we’re delighted to expand the show, satisfying the audience’s demand for entertainment news and content.”

Hello! Hollywood is now available in over 250 million homes in China, as well as Mandarin focused TV outlets in North America.

The show first launched on September 4, 2009 on 10 stations in China. Today, is now available on over 50 stations, in addition to 13 major Chinese online platforms with 150,000 weekly views that reach about 390 million Chinese netizens. The series also airs for Chinese audiences on multicultural channels around the world.

The half-hour version of Hello! Hollywood will continue to be available on stations and networks that they prefer the original version.

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RealScreen | January 12, 2011

Metan’s magazine format show expands to 45 minutes

Mandarin-language Hello! Hollywood, the weekly entertainment magazine show from Metan Development Group, has expanded from 30 minutes to a longer 45-minute format. President/CEO Larry Namer says in a statement that affiliate stations - Hello! Hollywood airs on 50 stations in China – requested a longer format because of its popularity. The original half-hour version will continue to be available.

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www.c21media.net | November 12, 2010

Korean net Splashes out

LA-based celeb news prodco Splash News has closed a broadcast deal with a Korean network for its Hollywood gossip programme SNTV: Splash News TV.

TCast Channels network FashionN has acquired the half-hour weekly show, which aggregates news on Hollywood’s A-List that will be packaged with hosts and segments for the local Korean market. Splash CEO Gary Morgan said the deal gave his company “a secure foothold to penetrate additional markets.”

Asian networks have become increasingly attractive for US celebrity and entertainment content providers in recent years, with E! Entertainment distributor Comcast International Media Group and Metan Development Group among those heavily targeting the region.

Today’s news follows the announcement of Ultimate Hollywood Countdown, Splash’s first coproduction with fellow LA company Shankly Productions, a paparazzi/lists format first revealed by C21 at Mipcom.

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]]> http://metandevelopmentgroup.com/korean-net-splashes-out/feed/ 0 http://metandevelopmentgroup.com/larry-namer-la-experiencia-de-un-emprendedor-en-foro-de-china/ http://metandevelopmentgroup.com/larry-namer-la-experiencia-de-un-emprendedor-en-foro-de-china/#comments Wed, 27 Oct 2010 19:53:24 +0000 admin http://metandevelopmentgroup.com/?p=1639 To read the full article, click here.

Todo TV News | October 27, 2010

Larry Namer: La experiencia de un emprendedor en foro de China

El discurso de Larry Namer, titulado El Emprendedor Accidental, estuvo enfocado en su transición del mundo corporativo como un pionero en la televisión de cable trabajando para Time Inc. and Valley Cable, el primer canal con dos sistemas en EE UU, pasando por sus años emprendedores a partir de finales de los años ochenta hasta el día de hoy. Estas actividades incluyen haber co-fundado E! Entertainment Television. Namer fue el primero en introducir el entretenimiento occidental a la ex-Unión Soviética, promoviendo la TV interactiva como consultor para Microsoft (MiTV), y lanzando el primer canal VOD de películas, Eurocinema, todo esto antes de su reciente incursión en el negocio de los medios de comunicación en China.

“Mi trabajo en la industria del entretenimiento en China por los pasados dos años ha sido emocionante, desafiante y muy gratificante”, afirmó  Namer. “Me honra que me hayan pedido compartir mi visión y experiencias con los invitados y asistentes del Megaforo de China, mientras el espíritu emprendedor entre el empresariado chino comienza a desarrollarse y crecer”, agregó.

Más de 400 empresas de alto crecimiento, 148 prominentes compañías inversoras, 1000 asistentes registrados y 60 oradores de primer nivel se dieron cita en el primer acontecimiento anual de la industria celebrado en China.

Luego de E!, Namer creó y lanzó varias compañías exitosas en los EE UU y otros países, incluyendo Steeplechase Media, Comspan Communications, Comspan Russia, y más recientemente Metan Development Group en China.

Paralelamente, Namer ha jugado un rol importante en el lanzamiento de varias cadenas de televisión en el mundo y se ha desempeñado como consultor para MiTV, de Microsoft. En estos años, ha sido reconocido como uno de los principales expertos en nuevas tecnologías y el efecto del negocio de los medios de comunicación y el entretenimiento a nivel mundial.

Comenzó su carrera como instalador en 1971 en Time Incorporated Manhattan Cable, llegando a ser el Director de Desarrollo Corporativo y desde allí, continuó y estableció varios negocios con éxito. Es reconocido como un pionero en el uso de cable para la comunicación de datos. Su visión y dirección condujeron a VCTV a ser nominado a los Premios Emmy y Cable ACE, así como el reconocimiento de la revista Forbes, como el modelo nacional para la programación de la televisión de cable local. En 1989, le concedieron el prestigioso Premio de Presidente de la Asociación Nacional de Televisión por cable.

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Larry Namer for Television Business International | September 30, 2010

China: a TV opportunity and a challenge

China has become the market no one can afford to ignore. Whether you are a media company, a consumer brand, or a builder of huge infrastructure projects, China represents incredible opportunities. Metan Development Group was founded almost two years ago as our way of coming to that market and learning all we can. We wanted to set up to be a media company that is 100% focused on China, whether bringing programming In, taking programming out, or using the great production economics to create new formalt for sale around the world. The lesson we learned was that China does not want to be America. They see things they want to learn from us but their goal is to not he just like us. Everything we do is Mandarin-based. Even Hello! Hollywood, which is produced In Beijing and has in field operations in Hollywood, is an original show created in Mandarin for the Chinese audience – not an existing show subtitled or dubbed. Hello! Hollywood fills a gap in the market where young affluent Chinese want to keep up with the world of entertainment – just like viewers in every other place – while having everything wrapped within Chinese context. Currently we have three other shows scheduled to go on air through production deals with Chinese companies over the next six months. But rather than detail those, I’ll give the primary opportunities and challenges in China today.

Opportunities:

1. TV: The national coverage of 35 satellite TV stations and CCTV’s dozen or so national channels provide a reach advertisers are looking for – now they just need programmes to draw in audiences. With over 30 online video portals either hosted by TV stations or dot-tom companies, the stations and portals are fighting for innovative entertainment content and formats. Due to the short history of TV programming development, local production Is having
difficulty matching these needs.
2. Advertising: Advertising expenditure grew 42% over the last 5 years in China and is still growing. China recently eclipsed the US as the largest luxury market in the world. Global brands need TV programming to match their brand Image, which adds to advertising’s force in media.
3. Government: Within the last 18 months, the government has been opening its doors to international media: more films are being brought into China. Illegal P2P sites are being shut down, and television stations are becoming more commercially viable.
4. Internet: Now with over 420 million Internet users, the online community is continually growing. Online video portals are starting to look more like content providers and with the green light on triple play, we see more access and availability to viewing through the Internet.
5. Success of original branded content: TV dramas such as Ugly Wudi and China’s Got Talent have piqued brands’ Interest in executing similar projects with proven formats and brand integration.
6. Digital media proliferation: The growth of the Internet is an opportunity to create multi-platform programming as well as a viral marketing vehicle to build an audience.

Challenges:

1. Metrics: Non-standardized media metrics create difficulty when valuing either television or online. As such negotiating advertising and sponsorship deals is less than a scientific process.
2. China’s size: It is difficult to create programmes that cross all the different regions. ethnicities and economic groups. With over 3,500 TV stations and 30 relevant online portals. building distribution relationships, is not easy.

3. Local media authorities: Relationships with local media authorities are difficult to develop. You have to understand what they want, what they think their constituents want, and what local customs are allowed.
4. Content localisation: The largest country in the world demands that creative concepts be localized and then produced in Mandarin with Chinese actors.
5. Experienced production personnel: Making television appeal to mass audiences is relatively new. With limited audience feedback, skillsets aren’t honed by constant evaluation. However. work ethic is not an issue as people are willing to work hard to participate in the new opportunities that China has developed over the past 30 years.

Larry Namer, president and CEO. Metan Development Group

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phone: 310-804-0964  **jpeg artwork available

Metan Development Group Celebrates First Anniversary of Hello! Hollywood

Los Angeles, August 26, 2010 — Metan Development Group (Metan) will reach a milestone this September as it prepares to celebrate the first anniversary of its hit weekly entertainment news series Hello! Hollywood, the announcement was made today by Metan President/CEO Larry Namer.


Hello! Hollywood first launched on September 4, 2009 on 10 stations in China, and after only twelve months, is now available on over 50 stations, expanding its reach from 200 million to 600 million viewers. Hello! Hollywood is also available on 13 major Chinese online platforms with over 150,000 views weekly, with an estimated reach to 390 million Chinese netizens. The series also airs to Chinese-speaking audiences on multicultural channels around the globe.


“We developed Hello! Hollywood with the Chinese culture and viewer in mind,” said Namer. “Over the past year, the series has been extremely well received by Chinese-speaking audiences and has grown at an amazing pace. Metan is delighted by this success and we look forward to introducing new content tailored to the Chinese viewer over the next year.”


As recently reported, China has agreed to a timetable for opening its market to imported entertainment content, in compliance with a World Trade Organization ruling handed down last December.

Over the past year, Hello! Hollywood has interviewed some of the world’s top names from the world of entertainment including Adrien Brody, Patrick Dempsey, Zac Efron, Seth Rogan, Arnold Schwarzenegger, Steven Spielberg, Sylvester Stallone and John Woo, to name only a few. Hello! Hollywood also produced a series of segments surrounding Disney’s hit movie High School Musical China.



“We’re extremely pleased with Hello! Hollywood’s extensive coverage of High School Musical China,”  said Janet Yang, Producer, High School Musical China.  “The series provides a wonderful and effective vehicle to promote and showcase Western entertainment content to audiences in China.”



Since its launch, the series, the first of its kind in China, has attracted a number of major multinational brands, including Philips, Colgate and Ford.



Hosted by top radio personality Andy Dong, Hello! Hollywood reports on the latest in celebrity and lifestyle news, covering glamorous red carpet events and award shows and offering up special insider tours of Hollywood’s new hotspots. The series spotlights the latest nightclubs, hotels, restaurants and shops, uncovers the hottest music and fashion trends, and reports daily fun facts, direct from Hollywood.



Larry Namer, Rick Portin and Barbara Wellner are the series’ Executive Producers.


About Metan Development Group- Launched in 2009, Metan Development Group LLC (Metan) is a venture created to develop and distribute entertainment content and media specifically for international markets. The company’s founders are entertainment industry veteran Martin Pompadur, E! Entertainment Television co-founder Larry Namer and Amerilink founder Jean Zhang. www.metanmedia.com <http://www.metanmedia.com/>

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Forgetting the Past and Finding an Empty Future

The other week, I had a wonderful conversation with a good friend (and talented director) of mine, Aki Aleong. To give you context of who Aki is, he’s one of the first Asian-American actors in Hollywood and has appeared on-screen in over a hundred films since the mid-1950’s. He’s been an avid activist for Asian equality in the entertainment industry and is a pivotal part of paving the foundation for many Asian-Americans in Hollywood today.

Aki just finished a new film about the first generation of Chinese and their experiences coming to the United States back in the 1800’s (www.iamsomebodymovie.net) working on the railroads. I loved the film, but I was more deeply fascinated and drawn to talking to Aki about his experience developing the film and, more importantly, why. His answer was simple, prolific, powerful, and a wonderful reminder of how and why China is where it is today. His response? “Don’t forget where you came from…”

I admire Aki’s motive to produce this film… he never wanted to forget his, mine, and every other Chinese-Americans place in history – and that is to never neglect our rich culture and our Chinese predecessors who have laid their lives in order for us to be where we are today. I admit that I’ve often been focused in my previous newsletters largely by the business opportunities in China and I’ve never thought to look back in retrospect to just a generation before to know how China got to where it is today, and to have foresight to where China will be shaped tomorrow.

Today’s China

I wasn’t terribly surprised when I read this week that China has surpassed Japan as now the second largest economy in the world behind the United States. It was really a matter of when not so much a matter of if. The tough question is how China got to where it is today. And I’m not talking about macro-economic regulations China has done in the past 50 years, but by the culture, ideals, and the philosophy our previous generation embraced to propel China economically.

We’ve talked abundantly about today’s generation and the traits that characterize this emerging middle class. We’ve used such words as emperors / empresses, entitlement, and self-serving; but those words hardly fit the previous generation that have painstakingly laid the infrastructure of modern China. Better words to describe this generation are humble, modest, conservative, and unselfish. This generation worked hard for a better future – not for themselves, but for future generations and for the country as a whole.

I am often (and I do mean often) am reminded by my mother the tribulations living in China. She humbly lived in a remote village in Guangdong the majority of her life and came to the United States to attend college. Surprisingly, it isn’t a look back in her life that triggers a negative connotation, but in fact, she remembers it with triumph and with a proud ownership of an experience that shapes her success in the United States today. I know she tells me so I never forget where I come from (admittedly I do), but more so, it’s a way for her to communicate the love and care she’s put in to my future. It’s got me thinking that this is very indicative of our previous generation and the reverence we owe them to where we are today.

Somehow between the last and current generation of Chinese, there grew a widening chasm of philosophies and ideals. I guess that it’s normal for any modern society where media can influence and define an entire generation – but I can’t say that I fully understand how that gap has grown as much as it has in today’s China. Previous generations before varied, but nothing to the extent of where we see it today. Much of it is by the media exposure today’s generation has with not just international cultures, but with themselves as well. Instant messaging, SMS messages, and chat rooms have replaced much of the core family values China once had. Television, online gaming, and shopping have replaced much of the family activities China experienced in the past. In short, China’s success and modernization is as much responsible in today’s change as any other factors.

China’s Tomorrow

What does China’s tomorrow hold for us? To be perfectly honest, it’s still a big question mark. This is the first time China has lived as a global powerhouse and with the luxury of a booming economy. Secondly, with this generation’s differing culture and set of ideals, how will they shape and define the growth of China’s tomorrow. Will they add to the success previous generations have laid for them, or will they work for the now – and not for the future.

We talked about how China’s modernization plays a pivotal role in the changing generation and the Chinese government have and will respond accordingly. It’s no wonder that recently the Chinese culture minister openly said that Chinese media is ‘vulgar’ and advocates consumerism versus moral and cultural quality. The message isn’t directed to say business is bad, but it’s to communicate to conduct business responsibly. To conduct business with respect for the previous generations who have paved the road for today’s generation. For me, it’s a powerful reminder to remember what made China so great and why there is opportunity. It’s not based on the ‘now’, but on a long-term investment in building a proper foundation for China’s future.

Don’t Forget Where You Come From

Conducting business in China is not easy. It requires a myriad of different aspects of business that is completely foreign from a MBA / Business School point of view. However, if you are to do business in China, remember to bring respect because that carries further than any arsenal of business tools you can pack. Its respect for the opportunity, respect in how you conduct business, and, most importantly, respect in China’s culture. If you remember where China comes from, it’ll help guide you to where it’s going as well.

This brings me back to my conversation with Aki. His words haunted me for days after we had met. The mixed emotions of guilt and revelation were a definite reminder to view China in a completely different light. For me and many others, it’s easy to get lost in the flurry of China’s business opportunities especially as it pertains to media, but it should be about slowing down and remembering where I came from. We have a responsibility here to create something much better than what we can ever imagine – but to do it with respect and reverence to China’s rich cultural history. Previous generations deserve better than this. China deserves better than this.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

China’s youth market captivates and perplexes brands and marketers. Chinese society places noticeable emphasis on generational gaps; I’ve heard people talk about the ‘gap’ that exists between two people born just one year apart. Others settle on a 3-year term until citing a real difference. Broader, universally recognized classifications place people into categories known as ba ling hou (born after 1980) and, take a deep breath, jiu ling hou (born after 1990). With China’s youth population swelling to a startling 500M in the next few years, reaching this elusive group is crucial for any brand wishing to succeed.

This week, I sat down with John Solomon, co-founder of Enovate China and industry-renowned guru on the Chinese youth market. After earning his degree in international relations from Duke University, John began a career in management consulting, a field that eventually shuttled him to Shanghai, where he undertook large-scale market entry consulting projects. Leveraging his experience both in the U.S. and China and satisfying his desire to work in a more consumer-related field, John co-founded Enovate China, an insights, strategy, and design firm based in Shanghai and Beijing. The following are excerpts from our conversation:

How did you get involved with the youth market in China?

When I was working in D.C., I did a master’s program and Johns Hopkins and studied a lot on China. As part of one of the most interesting classes we took, one professor taught from Washington, D.C., and the other professor went out to Shanghai to teach a similar class at Fudan. We had a video conference link set up each week, so we were actually sitting there staring at Fudan students. I think I learned a lot through that course about my Chinese peers, and that really made me interested in learning more about this.

I came out to Shanghai wanting to do something focusing on the kind of new, younger, under-30 generation, specifically all that they had gone through and how different they were than their parents or grandparents. I had the opportunity to co-found Enovate, so I’ve been doing that for over a year now. I’m really focusing on understanding these consumers, the under-30. I call them emerging consumers.

As anyone living or studying in China sees, there’s a huge generational difference between some of the older maybe grandparents to parent level than there is with youth. Anyone born after the post-1978 economic reform has had a much different China than previous generations in terms of being more globalized and having more influences from within China and outside of China. This has resulted in different consumption behaviors, different outlooks in terms of what they people want to do with their lives and dreams and aspirations and goals. I always tell myself that they are a really important group to study and understand, and whether you’re dealing in politics or in business, this group is really going to be shaping the future of China.

Are Chinese more or less influenced by their peers than other consumers?

When you’re dealing with youth around the world, and we have a partnership of other kind of Enovate-like groups in places like India and Indonesia, Malaysia, South Africa, and the U.S., there are some broad strokes you can take with characterizing youth. Trying to find themselves and wanting to gain acceptance amongst peers are the kind of general values and issues you see amongst youth in general.

But if you look at China, it’s even more a place where peers greatly influence each other. I’m from the United States, where laws like the One Child Policy don’t prevent me from having siblings or other core groups of offline friends that I’m used to. As a result of the One Child Policy, a lot of Chinese youth have had to go other places to find kind of bonds and friendships and relationships. If you examine closely, Chinese youth typically have a few university friends, no siblings, but a few other family members who play an important role in decision-making and maybe a few work friends. But generally, the friend circles tend to be a lot smaller than some other markets or countries, like Japan, as an example. But, if you look at the increasing number of online friends, friends that they haven’t met before, friends that fill that social void, I think Chinese youth fill that void with online friends.

The Chinese internet is a very powerful place for influence and word of mouth. And it’s not necessarily your closest peer or person that you’ve worked with or grown up with or known face to face; people follow someone’s weibo (Chinese micro blog) or BBS site. If you combine that influence offline and online, you see that there is a greater amount of kind of peer word of mouth influence in the China market. And I think that’s very hard for brands to understand, and it’s very elusive as well.

Which foreign brands stand out as having an exceptional grasp of Chinese youth culture?

This is something we’re constantly trying to look at. And unfortunately, I’d say that the biggest brands, the brands that have done the best with youth so far are also kind of the bigger players that usually do pretty well with youth. People point to Nike, Converse, Pepsi, global brands that have attracted males between 20 and 30. They tend to do well globally with youth, so I’m sure they have a lot of kind of resources to pull out and best practices. Generally, these are the brands that are very good about engaging at what we usually call a ‘cultural context.’ Whether it’s Nike building a snowboarding park outside of Beijing, or Converse organizing artist collaborations or a music tour with Indie bands, or Pepsi’s Battle of the Bands, these brands are allowing the youth culture to become part of their brand DNA.

Take the MG car company as an example. They’ve tried to position themselves as younger, and in the process they’ve engaged local young artists, a parkour runner, and a DJ. I don’t think they’ve leveraged these resources as well as they can, but at least they’re getting in with the youth culture. Nike does this well with skateboarding. Quicksilver has done this well in the past with sponsoring surfers in Hainan, or getting involved with skate parks. Mountain Dew, a Pepsi brand, has done a lot with the snowboarding park here in Shanghai, and with action sports worldwide.

I think it’s getting more and more saturated though, so that’s putting a premium on brands that market in an innovative way. And to date, there has not been that much innovative marketing or branding. Marketing strategy has been dominated by tailoring global approaches to the China market, but now I think we’re going to see, instead of starting a campaign in the U.S. and adapting it to China, you’re going to see more originating here.

One of our main clients, New Balance, is creating lifestyle apparel specifically for the China market instead of trying to exploit the smaller running market from the outset. New Balance has been around since 1906, and as one of the first running show companies, they have a story to tell. They had to develop this lifestyle brand not only to push sales, but to explain the brand and its history. New Balance’s president walked in the store, he’s from Boston and said, this is incredible, this is great, a history of New Balance, we never told our story like this! And this retail concept, originated in Beijing and Shanghai, is being rolled out globally. So it’s just interesting when you start to see the demands of the market are really going to cause the innovation to happen here, and then really be exported out.

What issues have you not touched yet that you’re keen to investigate in Chinese youth culture?

To date, we’ve focused mostly on the ‘80s generation, people born between 1980 and 1989, so I think we understand them pretty well as a consumer. On one end of the scale, you can investigate how these youth, who are now 27, 28, 29 are getting married and starting families, and how they are different than the last generation of newlyweds and new parents. I wrote an article for AdAge last week (http://adage.com/china/article?article_id=143527) looking at young mothers, who are different than previous mother generations in how they perceive themselves and their own dreams and aspirations. It’s not all about the child anymore; it’s about the child and themselves, and living a well-balanced life. So I think it’s interesting to look at the mothers and families that are forming and how they’re different, and eventually how those kids will be different.

On the other end of the scale, the ‘90s generation, China’s teenagers, are still a mystery to a lot of people. We use broader generalizations, like, ‘they’re spoiled, they’re crazy, they’re more out there,’ and ‘less conservative, more provocative, more risqué, an ADD generation, no discipline.’ Everyone has their own opinions about them. But I think that we need to take a harder look at what’s going on. I think we really need to understand their values, what’s driving them, what shifts are happening within that group. As they get older and their spending power increases and start to hit brands’ target zone, it will be really interesting. We’ll see bigger changes. Some of the stereotypes will be true, but we need to look at it in more depth. I’m excited to expand into this space.

For more information and past newsletters, visit METAN’s site at http://www.metandevelopmentgroup.com/

Where is your “Ugly Betty”?

When the Korean all-girls group, ‘Wonder Girls’, debuted in the US market, Chinese netizens started an online debate of when it was ‘their turn’ where the US would embrace such a creation coming from China. Oddly enough, those arguments eventually evolved in how to group together an all-girls group of Chinese ‘hotties’ and make their own similar business model in the US – but that’s for another conversation at another time. It dawned on me while reading this big online hoopla – the Chinese youth really have really evolved from the days of the old school business mantra ‘made in China’. No longer are they content that 80% of iPhones and Xbox 360s are manufactured in China. Now they want to see China as the epicenter of the world and especially so in the creative industry. Unfortunately, all those thoughts came to a screeching halt after the premier of ‘Avatar’ (which lifted China box office by 86% last year) when even they knew China could ever create or replicate the quality and output of the movie.

Still, this whole thought of creative epicenter CAN be changed in a different direction… in the form of media formats.

What are Formats

Simply put, formats are copyright protected programming ideas / templates versus that of a finished product. It could be as simple as a story idea or can be divided into multiple layers which include ways a character is developed, how to integrate brands and advertisers into the programs, etc. As Eggo Muller (Head of Screen Arts and Cultures Department at University of Michigan) points out, “the international trade of format is an exchange of ‘culture of production’ rather than a ‘production of culture.’” While in most cases, formats apply to the television and film industry, but can be applied to any media-based business model as well.

Why Sell Formats

International formats of television programs have a strong and proven track record of success in one or several countries. What’s good for one market is often good for another as well – especially if you have such hits such as ‘American Idol’ (licensed reality TV format by Freemantle UK).

As a content provider, the primary motivation is to generate another stream of revenue by licensing the formats in other territories. It’s ‘found’ money and goes straight to the bottom line (financially) for many companies.  As a potential buyer, the primary motivation is to mitigate risk as much as possible by getting a proven formula. In recent years, TV dramas like “Ugly Betty”, originally developed by a Columbian production company, has been a tremendous hit in the US through format licensing.

Where is my ‘Ugly Betty’?

The format business has changed and evolved over the last few years – and especially with the price. For a premium format (a la ‘American Idol’), format fees are estimated to be as high as $1.0M – $1.5M per episode (Tradingmarkets.com, 2010) versus for a popular European format of $50K – $60k per episode just a few years back in 2006 (Understanding the Global TV Formats, 2006).

On one side, you see an increasing cost of formats especially in the US. On the other, we also see a decline in budgets for television due to an oversaturation of media options along with an overall economic hit on advertisers. So, you have declining budgets coupled with more expensive projects and there is a definite need for more cost-effective media options in the US. In the case of ‘Ugly Betty’ where in some estimates, the format rights were less than $200K per episode, this was the exception to the rule where it was both cheap and a format that worked.

So, the million dollar question: Why not have the best of both worlds – something that is well-tested but is cheap? Where are there more ‘Ugly Betty’ around?

Made in China

Here comes the part of China… Here is a country with over 3,500 TV stations and thousands upon thousands of hours of programming that has served well in a market of 1.3 billion people. Why wouldn’t this make sense?

Unfortunately for those looking at China with big money signs, China has not exactly been exemplary in the world of media innovation. TV stations and production companies in China are definitely busy; however, they are busy producing “knock-offs” of programs (thanks to the poor intellectual property laws) and spend very little effort in creating new and original formats. Fortunately for the rest of us, these TV folks are no longer driving the decisions. The new driving forces are:

Global Advertisers

‘Super Girl’ was a knock-off imitation of the popular program, ‘American Idol’. Broadcast over Hunan Satellite TV, the show was sponsored by a local Chinese yogurt brand. Riding the coattails of ‘Super Girl’, Unilever quickly snatched up the ‘Ugly Wudi’ format despite paying much more than they had anticipated (season 2 included many more brands to offset costs). These are two prime examples of format success in China albeit one legitimate (‘Ugly Wudi’) and the other not (‘SuperGirls’).

So, here’s the breakdown of China’s media landscape: relatively cheap(er) media costs on TV, the largest consumer market in the world, and 31 nation-wide TV networks without much quality content on-air. All of this means China is becoming one of the very cost-effective markets for global brands to test-run different ideas on television. Imagine if global brands can outright pay for a format and test its validity in China. Test the China market and eventually export the formats to Tier 1 markets (like the US). For brands, it’s another way to generate revenue and a low(er) risk method to get proven formats at the cheap.

“Other” Media Companies

Other Chinese media entertainment companies will also jointly push the innovation of entertainment formats business in China. Companies that are not typically aligned with television and film are now showing their own respective swing at television production.

In 2009, Shanda Interactive Entertainment, a company that is well-known for online games versus that of television, co-produced a reality TV program with Zhengjiang Satellite TV around the art of Karaoke (if that really IS an art). Part of the hook was integrating Shanda’s online Karaoke game engine into the program that showcases the scores of participating contestants.

New media companies such as Shanda are driving cross-platform integration of TV formats alongside with the global brands. Moreover, Shanda is also taking a chapter out of comics and acquiring comic / fiction formats from emerging artists and writers around China to develop them into film, television, games and comics. Especially with the ability to create a true multi-platform viewing experience alongside of television, Shanda is poised to be one of the few companies in China that will proven formats with that capability.

Conclusion:

Many things remain to be seen about the emerging trends of exporting formats from China to other international markets. However, when it does happen (and I truly believe that it will), we’ll see a flurry of activity in the China market as production companies, global brands, and new media companies built up their portfolio of this new and untapped resource of media gold.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

Global Newswire | July 28, 2010

IMAX to Expand Board of Directors

TORONTO, July 28, 2010 (GLOBE NEWSWIRE) — IMAX Corporation (Nasdaq:IMAX) (TSX:IMX) today announced a special meeting of shareholders, scheduled for September 28, 2010 in New York, NY, to elect two directors to fill vacancies created by the recent increase in the number of directors from seven to nine. The nominees for election are I. Martin Pompadur and Eric A. Demirian.

Currently, Mr. Pompadur is Chairman of Metan Development Group, which is based in Los Angeles and Beijing. Prior to Metan, Mr. Pompadur worked for News Corp. for 10 years, in several positions including Chairman of News Corp. Europe and President of News Corporation Eastern and Central Europe. Mr. Pompadur serves on the board of Nexstar Broadcasting Group Inc.

Mr. Demirian has been President of Parklea Capital, Inc., since September 2003. Previously, he served as Executive Vice President, Corporate Development and Member of the executive management team at GT Group Telecom Inc. from January 2000 to February 2003. Prior to 2000, he held executive positions at PricewaterhouseCoopers. Mr. Demirian serves on the boards of Enghouse Systems Ltd. and Menu Foods Income Fund.

“We are very pleased to have Marty and Eric join the Board,” said Bradley J. Wechsler, Chairman of the Board of IMAX Corporation. ”With their extensive experience in media, technology and finance, Marty and Eric bring valuable expertise and knowledge that will benefit IMAX as we continue to execute on our operating strategy going forward.”

Richard L. Gelfond, IMAX’s CEO, added, “Marty and Eric are strong additions to our Board, with proven track records growing and managing global companies. Marty and Eric are also strong business operators and we look forward to working with them as we continue to grow our worldwide theatre network and embark on future growth initiatives for the IMAX brand.”

Messrs. Demirian and Pompadur qualify as independent directors within the meaning of the Marketplace Rules of the Nasdaq Stock Market, LLC and, if elected, will serve as Class II and III directors, respectively.

About IMAX Corporation

IMAX Corporation is one of the world’s leading entertainment technology companies, specializing in immersive motion picture technologies. The worldwide IMAX network is among the most important and successful theatrical distribution platforms for major event Hollywood films around the globe, with IMAX^® theatres delivering the world’s best cinematic presentations using proprietary IMAX, IMAX^® 3D, and IMAX DMR^® technology.  IMAX DMR^® is the Company’s groundbreaking digital re-mastering technology that allows it to digitally transform virtually any conventional motion picture into the unparalleled image and sound quality of The IMAX Experience^®. The IMAX brand is recognized throughout the world for extraordinary and immersive entertainment experiences for consumers. As of March 31, 2010, there were 438 IMAX theatres (316 commercial, 122 institutional) operating in 47 countries.

The IMAX Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6469

IMAX^®, IMAX^® 3D, IMAX DMR^®, An IMAX 3D Experience^® and The IMAX Experience^® are trademarks of IMAX Corporation. More information about the Company can be found at www.imax.com. You may also connect with IMAX on Facebook (www.facebook.com/imax), Twitter (www.twitter.com/imax) and YouTube (www.youtube.com/imaxmovies).

This press release contains forward looking statements that are based on management’s assumptions and existing information and involve certain risks and uncertainties which could cause actual results to differ materially from future results expressed or implied by such forward looking statements. Important factors that could affect these statements include ongoing discussions with the SEC and OSC relating to their ongoing inquiries and the Company’s accounting, the performance of films, the signing of theatre system agreements, the viability of new technologies, businesses and products, the timing of theatre system deliveries, the mix of theatre systems shipped, the timing of the recognition of revenues and expenses on film production and distribution agreements, risks arising from potential material weaknesses in internal control over financial reporting and fluctuations in foreign currency and in the large format, general commercial exhibition and out-of-home entertainment markets. These factors and other risks and uncertainties are discussed in the Company’s most recent Annual Report on Form 10-K and most recent Quarterly Reports on Form 10-Q.

CONTACT: IMAX Corporation, New York Media: Sarah Gormley 212-821-0155 sgormley@imax.com Investors: Heather Anthony 212-821-0121 hanthony@imax.com Principal Communications Group, Los Angeles Entertainment Media: Melissa Zukerman melissa@pcommgroup.com Paul Pflug paul@pcommgroup.com 323-658-1555 Sloane & Company, New York Business Media: Whit Clay 212-446-1864 wclay@sloanepr.com

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What I Learned from Chinese Reality TV

On one of my frequent extended stints in China, I had a quiet evening to kick up my feet and to peruse the hundreds of channels Chinese television has to offer (for pure market research purposes of course). Admittedly, I have a short attention span already as-is, so you can imagine the flurry of remote clicking that occurred if the myriads of soap operas and variety shows did not catch my eye. Then, “it” hit me… “It” is like a bad automobile accident you see by the roadside – you know you shouldn’t turn your head to see, but out of pure curiosity for the wicked, you simply cannot help yourself. “It” is, at the rawest and most basic form, a great sociological study on everything that is wrong with fame, relationships, and greed… in other words, “it” is great TV.

I’m talking about the hit phenomenon program, “If You Are the One” that is taking water cooler chatter by storm in China. To give context to anyone who has not heard about this program, it’s a match-making reality show where singles meet singles in front of millions of people each show (talk about pressure). And the hook for the whole show? The often questionable money-driven (aka “Gold-Digging” antics) requirements that this now very relevant generation of singles are looking for in their soul mates.

The show has taken notice even of the Chinese government prompting them to immediately shut down production and exhibition of the show due to the often sexual innuendos and references to a very anti-traditional moral basis where money is the main driver for many of the singles. Watching this show, it’s not that difficult to understand why the government would be concerned with the way the program portrays this new up and coming generation of singles.

Girls’ Perspective

On the show, girls are depicted as ‘gold-digging’ animals – only attracted by the number of RMBs that are attached to the suitor’s name. A stable job is no longer the litmus for ‘enough’ for girls, but is the entry point for girls to consider. Don’t have a car? Get in the back of the line. Have a house? Hello Mr. Right…

Best put, a contestant on “If You are the One” said to a potential suitor offering her a ride on his bike, “I’d rather be crying in a BMW than to be laughing on a bike”.

Largely, the attitude of girls can be largely accredited to the cultural upbringing of this generation of single children. Often labeled as a generation of “little emperors and little empresses”, the first generation is now at the age for marriage and is a depiction of just how strong the level of entitlement is. Surrounded by new-earned money and incredible growth, money is what drives the lives of this new generation and is very apparent in the marriage process.

Guys’ Perspective

On the flip side, the attitude of girls can also be largely accredited to how guys operate and think about marriage in the Chinese culture.

Equally on the show, guys are depicted as spineless creatures – more of the prey than the predator between the sexes. No longer are the traditional equal roles of man and woman taken into consideration, but the guys cower behind what appears to be very over-dominating female figures on the program. They accept the new status quo and adapt their lifestyles to the new norm.

So, the question begs to where did this shift happen in the fragile balance between men and women.

Ask any guy in China about marriage and I would venture to say that much of the pressure is done by themselves and their families. Especially with single boys in the family expected to carry on the family name, it’s not uncommon for the guys to feel the pinch and pressure by their parents to settle down, get married, and start popping out babies sooner than later.

Thus this interesting supply-and-demand relationship between guys and girls in China. Guys feel the familial pressures to find a mate and the demand for girls go up. Girls understand their shrinking supply and drive standards to an all-time high. While this may be an over-simplication of the actual matter at-hand, it’s hard to argue against the fact that culturally, the dynamic between guys and girls are changing.

Generations Divided

To further complicate the matter, the show not only caused stir between genders, it also created a chasm between generations. Comparing even to the previous generation, the ideals, philosophy, and moral basis has been almost completely eradicated with no trace of evidence.

Economically, the previous generation spent much of their lives paving the foundation for their children and successors. They painfully went through the turmoil of growing the country to the powerhouse that it is today. This was a result of savings, family unity, and an unselfish attitude that the country was towards a single goal – all vastly different that is evident to today’s generation in China.

What Does this all Mean?

Success is often a double-edged sword and is particularly the case when the growth of success is as fast as China had experienced over the last 30 years.

Entitlement will be a definite issue to consider. No longer will the powerhouse labor force that paved the foundation for success is able to keep the pace as it has and the baton will soon have to be passed to the responsibilities of this new generation. How will this new generation react to the call for the continual growth of the economy? How will this generation of “little emperors and empresses” contend with the rude awakening that the doting lifestyle they’ve experienced for their entire lives will someday be their own responsibilities to endure?

Opportunity will also play a crucial role in China’s future growth. The previous generation has already built the foundation for growth – it is now this generation’s work to build upon growth. Previously, the aspiration to get schooling abroad and to build roots in the United States was every Chinese dream. It was thought of as the epitome of success and to build upon a better life. Today, it’s not uncommon for college graduates to want to stay after graduation and build a base in China – a far different cry than it was even just 10 years ago.

Control will ultimately be the biggest force in defining China’s future growth for this new generation. Largely controlled by how much the government intervention will let the free market reign, it will ultimately impact opportunities, innovation, and growth for China. Opportunities will become more abundant as more cross-border business will continue to foster China’s economy. Innovation will flourish and be encouraged as resources (both human and monetary) will continue to flood China’s doors. And growth for China will continue as it defines itself to be a leader in the world market.

Conclusion

Who would have thought I would have this new-found epiphany of China’s growth based on a reality dating show that emphasizes money over matter. It wasn’t the actual act that was appalling to watch, it was what the acts meant that surprised me to see how fast and how far China has evolved in its thinking.

By Ren Fang | August 03, 2010

When the Korean all-girls group, ‘Wonder Girls’, debuted in the US market, Chinese netizens started an online debate of when it was ‘their turn’ where the US would embrace such a creation coming from China. Oddly enough, those arguments eventually evolved in how to group together an all-girls group of Chinese ‘hotties’ and make their own similar business model in the US – but that’s for another conversation at another time. It dawned on me while reading this big online hoopla – the Chinese youth really have really evolved from the days of the old school business mantra ‘made in China’. No longer are they content that 80% of iPhones and Xbox 360s are manufactured in China. Now they want to see China as the epicenter of the world and especially so in the creative industry. Unfortunately, all those thoughts came to a screeching halt after the premier of ‘Avatar’ (which lifted China box office by 86% last year) when even they knew China could ever create or replicate the quality and output of the movie.

Still, this whole thought of creative epicenter CAN be changed in a different direction… in the form of media formats.

What are Formats

Simply put, formats are copyright protected programming ideas / templates versus that of a finished product. It could be as simple as a story idea or can be divided into multiple layers which include ways a character is developed, how to integrate brands and advertisers into the programs, etc. As Eggo Muller (Head of Screen Arts and Cultures Department at University of Michigan) points out, “the international trade of format is an exchange of ‘culture of production’ rather than a ‘production of culture.’” While in most cases, formats apply to the television and film industry, but can be applied to any media-based business model as well.

Why Sell Formats

International formats of television programs have a strong and proven track record of success in one or several countries. What’s good for one market is often good for another as well – especially if you have such hits such as ‘American Idol’ (licensed reality TV format by Freemantle UK).

As a content provider, the primary motivation is to generate another stream of revenue by licensing the formats in other territories. It’s ‘found’ money and goes straight to the bottom line (financially) for many companies. As a potential buyer, the primary motivation is to mitigate risk as much as possible by getting a proven formula. In recent years, TV dramas like “Ugly Betty”, originally developed by a Columbian production company, has been a tremendous hit in the US through format licensing.

Where is my ‘Ugly Betty’?

The format business has changed and evolved over the last few years – and especially with the price. For a premium format (a la ‘American Idol’), format fees are estimated to be as high as $1.0M – $1.5M per episode (Tradingmarkets.com, 2010) versus for a popular European format of $50K – $60k per episode just a few years back in 2006 (Understanding the Global TV Formats, 2006).

On one side, you see an increasing cost of formats especially in the US. On the other, we also see a decline in budgets for television due to an oversaturation of media options along with an overall economic hit on advertisers. So, you have declining budgets coupled with more expensive projects and there is a definite need for more cost-effective media options in the US. In the case of ‘Ugly Betty’ where in some estimates, the format rights were less than $200K per episode, this was the exception to the rule where it was both cheap and a format that worked.

So, the million dollar question: Why not have the best of both worlds – something that is well-tested but is cheap? Where are there more ‘Ugly Betty’ around?

Made in China

Here comes the part of China… Here is a country with over 3,500 TV stations and thousands upon thousands of hours of programming that has served well in a market of 1.3 billion people. Why wouldn’t this make sense?

Unfortunately for those looking at China with big money signs, China has not exactly been exemplary in the world of media innovation. TV stations and production companies in China are definitely busy; however, they are busy producing “knock-offs” of programs (thanks to the poor intellectual property laws) and spend very little effort in creating new and original formats. Fortunately for the rest of us, these TV folks are no longer driving the decisions. The new driving forces are:

Global Advertisers

‘Super Girl’ was a knock-off imitation of the popular program, ‘American Idol’. Broadcast over Hunan Satellite TV, the show was sponsored by a local Chinese yogurt brand. Riding the coattails of ‘Super Girl’, Unilever quickly snatched up the ‘Ugly Wudi’ format despite paying much more than they had anticipated (season 2 included many more brands to offset costs). These are two prime examples of format success in China albeit one legitimate (‘Ugly Wudi’) and the other not (‘SuperGirls’).

So, here’s the breakdown of China’s media landscape: relatively cheap(er) media costs on TV, the largest consumer market in the world, and 31 nation-wide TV networks without much quality content on-air. All of this means China is becoming one of the very cost-effective markets for global brands to test-run different ideas on television. Imagine if global brands can outright pay for a format and test its validity in China. Test the China market and eventually export the formats to Tier 1 markets (like the US). For brands, it’s another way to generate revenue and a low(er) risk method to get proven formats at the cheap.

“Other” Media Companies

Other Chinese media entertainment companies will also jointly push the innovation of entertainment formats business in China. Companies that are not typically aligned with television and film are now showing their own respective swing at television production.

In 2009, Shanda Interactive Entertainment, a company that is well-known for online games versus that of television, co-produced a reality TV program with Zhengjiang Satellite TV around the art of Karaoke (if that really IS an art). Part of the hook was integrating Shanda’s online Karaoke game engine into the program that showcases the scores of participating contestants.

New media companies such as Shanda are driving cross-platform integration of TV formats alongside with the global brands. Moreover, Shanda is also taking a chapter out of comics and acquiring comic / fiction formats from emerging artists and writers around China to develop them into film, television, games and comics. Especially with the ability to create a true multi-platform viewing experience alongside of television, Shanda is poised to be one of the few companies in China that will proven formats with that capability.

Conclusion:

Many things remain to be seen about the emerging trends of exporting formats from China to other international markets. However, when it does happen (and I truly believe that it will), we’ll see a flurry of activity in the China market as production companies, global brands, and new media companies built up their portfolio of this new and untapped resource of media gold.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

To read the full article, click here.

Todo TV News | July 23, 2010

Agreement for joint developments between Metan and Ruyi Media

Metan Development Group, a company created to develop and distribute entertainment and media content specifically for international markets, signed a strategic alliance with Beijing Ruyi Xinxin Film Investment Company, the film arm of Ruyi Media Group, a Chinese production company and distributor of quality film and television content.

According to the companies, from this alliance they will work together in various forms of media development with a major focus in film and intensify the experience and resources of both channels.

“Metan is pleased to collaborate with Ruyi Film while discovering new strategic ways of working together as we went in search of global markets and to develop TV and film projects of the highest quality,” said Larry Namer, President and CEO of Metan.

Ray Lei, CEO of Ruyi Media Group, referred to the confidence on this partership, adding: “Since our founding, we have tried to become a leading entertainment company in China with an international vision. Working with Metan, I think we can offer more TV shows and movies of excellent quality for Chinese audiences.”

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]]> http://metandevelopmentgroup.com/agreement-for-joint-developments-between-metan-and-ruyi-media/feed/ 0 http://metandevelopmentgroup.com/metan-brings-entertainment-news-to-china-hello-hollywood-expands-gains-sponsors/ http://metandevelopmentgroup.com/metan-brings-entertainment-news-to-china-hello-hollywood-expands-gains-sponsors/#comments Sun, 18 Jul 2010 00:04:34 +0000 admin http://metandevelopmentgroup.com/?p=1607

By Jonathan Landreth

www.thehollywoodreporter.com | July 18, 2010

Metan brings entertainment news to China ‘Hello! Hollywood!’ expands, gains sponsors

July 18, 2010, 11:00 PM ET
A Los Angeles-based production company started by E! co-founder Larry Namer and former News Corp. exec Martin Pompadour is gaining traction in China with a year-old syndication model up and running in 48 cities and on several video portals with nationwide reach.

Bypassing top markets Beijing and Shanghai and targeting second-tier cities such as Guangzhou (population 10 million), Shenzhen (9 million) and Tianjin (12 million), Metan Development Group and its Chinese production partner have landed sponsors Ford, Colgate and Philips for its flagship entertainment news program “Hello! Hollywood!”

Subtitled “THRtv,” Metan in 2008 licensed the name The Hollywood Reporter to raise its profile at industry events and has occasionally shared video footage with the online unit of the 80-year-old newspaper owned by e5 Global Media.

“Hello! Hollywood!” airs Saturdays at 10 p.m., and Metan has taped 40 episodes since it began production last summer. It’s hosted in Beijing by China Radio International personality Andy Dong and, in Los Angeles, by newcomer Yang Yang. Their peppy Mandarin commentary over jump-cut footage of everything from Malibu celebrity fund-raisers to Hollywood premieres reaches 250 million Chinese TV households.

Barbara Wellner, Metan’s programming head, started shows such as “The Soup” for E! and other fare for Twentieth Television, Bravo and others. Wellner said she never imagined she’d start a show in a language she can’t understand.

“China has a rampant love for pop culture, but starting a show is a process in building trust — both the publicists’ and that of the audience,” she said. “First we’ll get C- and D-list stars, and once publicists understand the value of the Chinese audience, they’ll give us their B- and A-list talent.”

She tells her Hollywood contacts: “You might not be in China now, but you will be.”

Metan’s ratings are respectable, according to media research agency CSM. Cumulative ratings measured at the end of May showed “Hello! Hollywood!” drew 0.76% of the market share in its time slot in Tianjin and 0.34% in Shenzhen and 2.12% Yunnan Province, where the capital, Kunming, is home to 7 million.

So it was that Ford, at the advice of New York-based advertising agency JWT, was willing to try out “Hello! Hollywood!” — boarding the show as title sponsor this month to promote the Chinese-made Ford Fiesta to upwardly mobile urban car-buyers in their 20s.

“There have been local game shows in the past, but no show had the international flavor in a Chinese production until now,” said Mike Nash, who handles Changan Ford’s account for JWT from Shanghai.

“Hello! Hollywood!” also appealed to Ford because it has the potential to reach many more viewers via 12 partner websites, including Sohu, Youku and Tudou, three of the most-viewed by the world’s largest online population — now more than 400 million Chinese strong.

“The clincher was the digital portion of the platform, which made it much more attractive than just a TV deal,” Nash said.

One recent episode of “Hello! Hollywood!” features an interview with Janet Yang (“The People vs. Larry Flynt”) and the cast of “Disney High School Musical: China,” which Yang produced. The localized movie version of the hit global franchise is due out in August, just as China’s boxoffice gross is poised to outstrip last year’s 43% jump in ticket sales.

CAA, which represents Yang (and the director and lead actress of “Disney High School Musical: China,”), set up the interview because the agency believed in the reach of “Hello! Hollywood!” which repeats each Sunday at noon. Namer said Metan is adding one new city channel a week.

Metan is not alone in attempting to bring Hollywood to China. The big studios have tried it but have been disappointed by Chinese law that says imported content can’t run in primetime.

Comcast launched an Asia-wide initiative without the Chinese piece of the puzzle. In 2006-07, a Mandarin-language “Access Hollywood”-branded show co-produced in Beijing by New York-based Small World TV aired 80 episodes before being canceled by Inner Mongolian Satellite TV.

Metan appears to have avoided the risk of cancellation by a national broadcaster by going the city-by-city syndication route.

As Metan navigates a tough market, producing “Hello! Hollywood!” for $20,000 an episode, investor-partner Oganes Sobolev, a co-founder in 1992 of Video International, which turns around more than half of Russian television’s ad budgets, said Metan should break even by the end of the fourth quarter.

Metan recently hired Neil Strum, a career studio executive with a legal and operations background who most recently worked for William Morris. Strum’s job is to try to sign content for Metan to produce for Chinese viewers.

“The important thing is that we don’t inundate and insult China’s new sophisticated consumers,” Strum said.

To source other content and talent, Metan is developing a relationship with CAA and WME, Wellner said, and Namer said the company hopes to work with Los Angeles-based Comcast International Media Group to create Chinese versions of shows from its cablers that includes E!, Style, G4 and Versus.

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AdAge China | June 30, 2010

Ford Says ‘Hello! Hollywood’ to Reach 20-Somethings

SHANGHAI (AdAgeChina.com) — Ford Motor Co. is partnering with Hollywood veterans to elevate the revitalized image of the New Ford Fiesta brand among hip, young Chinese car buyers.

Starting in mid-July, the U.S. auto company’s Fiesta brand will be the title sponsor of “Hello! Hollywood,” a half-hour weekly Mandarin-language entertainment program filmed in Los Angeles and mainland China.

Metan Development Group, an entertainment production and distribution company started by Entertainment Television founder Larry Namer; former News Corp. executive Martin Pompadur and Amerilink founder Jean Zhang, created the syndicated show that debuted in January 2010.

Hosted by Chinese radio personality Andy Dong, “Hello! Hollywood” broadcasts celebrity and lifestyle news, including red carpet events, award shows, interviews with stars and features on Hollywood hot spots. And for Ford, episodes feature reporters driving the car on assignment and a New Ford Fiesta in music countdown videos.

“This is not a cut-and-paste version of a foreign show. It is being made specifically with the Chinese consumer in mind and the actual vehicle will be in the format. That was attractive for us,” said Mike Nash, Shanghai-based director in charge of JWT’s Ford business in China.

Segments highlight relevant connections between the American and Chinese film industries. A recent episode featured four stars of the Chinese remake of Disney’s hit High School Musical, which was shot in Shanghai and will be released next month.

“Hello! Hollywood” also provides background that would bore U.S. audiences. A planned two-minute segment about the new 3-D King Kong ride at Universal Studios, for instance, was stretched to six minutes to explain the King Kong character and the history of the studio to Chinese.

The show’s reporters cater to Chinese interests when interviewing celebrities, asking more questions about their lifestyles and background.

“The Fiesta target market is young vibrant Chinese, so obviously things like fashion, music and red-carpet events are areas they are interested in. The content was a perfect fit for the passion points of the Fiesta consumer,” Mr. Nash said.

Fiesta has younger target market than Buick and Cadillac
The New Ford Fiesta was launched fifteen months ago by Changan Ford Mazda Automobile Co., a joint venture between Ford Motor Co. and Changan Automobile Group. The car is one of Ford’s most youthful brands in China — with good reason.

Ford Fiesta ads by JWT, Shanghai depart from standard lifestyle images.

White-collar 20-somethings are a vital market for Ford in China. The company’s two other models manufactured there, Buick and Cadillac, are aimed at older drivers. In the U.S., roughly 800 out of 1,000 people own a car, but in China, that number is just 80 out of 1,000. Most growth for foreign car makers in China today is coming from buyers in their 20s and 30s.

Fiesta is already a success for Changan Ford. The joint venture reported a 17.8% jump in sales in May 2010 to a record 23,742 units. Sales of Fiesta sedans soared nearly 50% year-on-year to 6,547 units last month, making the car the biggest contributor fueling Ford’s strong sales.

The sticker price for the eco-friendly Fiesta ranges from $11,500 to $16,400, making it affordable for young adults buying their first car, often with financial assistance from parents who have never owned a car themselves.

Ads feature digital media
Designed and priced to appeal to young Chinese, the car is also marketed to them with a bold, sexy and mostly digital ad campaign connecting the brand with entertainment and music.

Ford’s association with the “Hello! Hollywood” series will, the company hopes, expand the brand’s awareness among young consumers who watch the show on TV or online. “Hello! Hollywood” airs on 47 city and provincial TV stations reaching 250 million households throughout China. During its prime-time Saturday night slot, it reaches an estimated six million viewers, mostly 16-to-30 year-olds.

An average of 300,000 web users watch the show online each week on one of the dozen web portals and video-sharing sites that carry the series. The show also airs on local TV channels for the Chinese community in New York, San Francisco and Vancouver.

“Hello! Hollywood” premiered in January 2010 with sponsorship by brands like Colgate and Philips Electronics, but their involvement “is not even close to the same level” as Ford’s deal, said Mr. Namer, Metan’s president & CEO in Los Angeles.

Fiesta will sponsor segments featuring the car
As title sponsor of “Hello! Hollywood” starting in mid-July, ads and on-air billboards for the Fiesta will air at the beginning and end of the program.

Changan Ford and the Fiesta will also be integrated into each episode, and the car will be featured during the five music countdown videos in each episode. Reporters will drive a New Ford Fiesta to events they cover in China.

The sponsorship will also extend to Metan’s online video portal partners, as part of the “Hello! Hollywood” digital program.

Ford will co-promote the show on its Chinese web site (www.ford-fiesta.com.cn), “but I’m not particularly worried about there being too much activity on the Ford web site,” Mr. Nash said. With more than 400 million Chinese now online, “we want to be a part of what our consumers are doing day-to-day online.”

Ford wants to connect Fiesta-sponsored segments on “Hello! Hollywood” with its other online campaigns and marketing events, like sponsorship of foreign music acts playing in China.

Ford sees the deal with Hello! Hollywood as part of a bigger activation program for the New Ford Fiesta that also includes events, said Bryce Whitwam, Shanghai-based general manager of Wunderman, Ford’s direct marketing agency in China.

“There are a lot of different opportunities to expand on it and the show is well done. China needs better content,” Mr. Whitwam said.

“Our deal is not just about TV program sponsorship, there’s a fairly large digital element. That’s definitely an area we see ourselves playing in,” Mr. Nash said. “The plan is to build the relationship long-term and be looking for other opportunities.”

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www.realscreen.com | June 01, 2010

Former SVP of William Morris Agency joins Metan

Metan Development Group has announced that industry veteran Neil Strum will become Executive Vice President this month. Metan, which creates and distributes content made specifically for Chinese audiences, will task Strum with overseeing operations for the company. Previously, Strum was SVP at William Morris Agency, and had a hand in the Hasbro-Discovery Networks joint venture, The HUB. Before WMA, Strum has worked for Universal Television, where he was EVP, The Family Channel, Touchstone Television, Sony Television and ABC Network.

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Babies, Babies, and More Babies. China’s B-A-B-Y Market.

The other weekend, I went out to dinner with my good friend from college. Big reason why was because she was breaking the news to me that her and her fiancé were taking the big plunge and moving back to China for better career prospects.

Then she asks me, “Will you be able to ship baby formula for me in the future?” I can’t say that this caught me by total surprise – after all, she was the third person already who has asked me to do the same thing. Logically speaking, it does make perfect sense. Especially after the 2008 melamine contaminated milk scandal that killed six babies and sickened 300,000 others across China has possibly permanently ruined parents’ faith in domestic Chinese dairy products (I know it has for me).

Safety and Quality Concerns

Unlike the US market, the Chinese baby market is still underdeveloped. First main focus for any associated products is quality and safety. This is quite evident in the advertising industry for the baby market since the ads are focused on not the product benefits, but the product safety.

“If you look at international brands, their advertising is based around the fact that their milk powder is imported,” says Kelvin Gin, director of Synovate in Shanghai. “Local brands say their product is natural, and they have government certification. Consumers are looking for reassurance.”

According to a recent survey by Sina Baby channel, up to 81.1% of consumers are worried about product safety, 63.2% of the consumers cannot distinguish between good and bad quality of the product, and 34.6% of them feel the baby products currently in the market lack scientific guidance. Looking at these facts, it’s no wonder why the market is focusing so much on quality concerns above all else.

Market Overview

So the market has had a bad wrap for quite some time now, which is the bad news. The good news is that there is still an enormous opportunity for growth in this market as well. According to Beijing Answer Marketing Consulting, China is currently the world’s second largest consumer market for babies and children goods (after the United States). With annual growth of 30% since 2000, this market was worth RMB 750 billion ($110 billion) at the end of 2008, and is expected to reach RMB 1 trillion ($146 billion) by end of 2010.

Given China’s rising economic status, China’s “baby boom” has led to a massive development of goods and services related to babies and children. In 2009, 16 million new babies were born in China. Scholars believe that it is the fourth “baby boom” since the birth of New China (1949), and the number of newborn babies would peak in 2015. In other words, the Chinese baby market is forecasted to grow for the next 20 years or so.

Little Emperors’ Little Ones

The One Child Policy

The one child policy, though has many implications on Chinese culture today (see article “I am a ‘Gold Mine’, Memoirs of a Post-80s Chinese Girl.” for more on this), it does also play a role in China’s growing baby market today. The policy was first implemented to children born in 1979, so that children born after the 1980’s have no siblings to share (or contend) with and are doted on by parents and possibly four grandparents – considered today as little emperors and little princesses.

The first generation of little emperors are now in their twenties, so many of them already are or will soon become parents. With increases in living standards, education and income levels, these young parents naturally spoil their little ones – just like their parents doted on them. They have the financial capacity and are willing to buy better products for their babies even if the prices are higher.

The “4+2+1” structure has become the standard family structure in the cities nowadays, which means four grandparents, two parents and one child. As a result, the only child is the focal point and “hope” for the entire family, three generations. Chinese parents spend up to 50% of their total family income on their child, according to China Academy of Social Sciences.

Young Mothers

Young mothers born after the 1980’s usually follow the trends and have strong brand awareness since they grew up in a better environment than their parents. So, mid-to-high-end items are selling particularly well to them. They look for safety and quality when they buy items for their babies – and they don’t mind paying a bit more for the benefit of their children, which is opening up doors for foreign brands to enter the baby’s market.

In general, mothers trust foreign brands more than domestic ones. “Many affluent women were actually flying to Hong Kong or Korea to buy baby formula, even before the melamine scandals.” said Shaun Rein, MD of China Market Research Group (CMR).

In addition, young mothers are more technology savvy. In the past, young mothers went to their own parents or doctors to ask for information. But nowadays, they shop online and use the internet to learn about baby care and share tips with the other mothers. Brands should be aware of the importance of digital marketing to young mothers, and the outreach that these mothers can bring to a brand.

Beyond the One Child Policy

Truth be told, approximately 35.9% of China’s population is currently subject to the one child restriction. The market for the little emperors’ little ones will continue to grow however, because rich urban families can afford to have more than one child as they can give birth abroad or pay the fines associated with a second / third child. The government has in recent years also allowed for parents without siblings to have 2 children.

Lower Tier Cities and Rural Areas Cannot be Ignored

Back to the melamine contaminated milk scandal. According to Shaun Rein, Managing Director of China Market Research Group (CMR), the scandal did not come as a surprise to upper-middle class Chinese, who tended to look overseas for milk brands. “The hardest hit are those with lower incomes. Now they are the ones who are scared.”

After the scandal, many parents switched from standard to premium products and from local to international brands, and most noticeably in the lower tier cities. However, same as the people living in lower tier cities, there is another group pushing demand for quality products to the highest levels ever.

Thanks to increased urbanization and the Chinese government’s recent effort to stimulate the rural economy, rural consumers have more disposable income and are willing to spend, especially for their babies.

Another market opportunity: there is a void for branded infant products in rural areas, where “irregular vendors” are everywhere creating an informal market with questionable products. Typical Chinese parents would devote everything to their kids, would they buy those low quality products for their babies if they had alternatives? I don’t think so.

International brands can leverage their competitive advantages by offering better quality, safer, and affordable products to lower tier cities and rural areas.

Conclusion

Bottom line, urbanization and the baby boom are bringing the biggest market opportunities. The baby products sector in China has already become one of the most lucrative segments ever coveted by foreign and domestic marketers. However, as I must stress again, China’s baby market is still fairly underdeveloped, especially in the less urbanized areas.

Quality and safety are still the major concerns. International brands can make excellent use of their existing reputations by offering better quality and safer products since the demand is at an all-time high. Chinese companies will have their work cut out for them as they need to catch up given the enormous opportunities in this market, and it will take a long time before those changes take effect.

Lin Bai is a New Ventures Analyst at METAN Development Group. For comments/questions, email lin@metanmedia.com

Online Marketing 101: Lessons From Hello Hollywood

We started our online marketing campaign for our entertainment show, ‘Hello! Hollywood’ a few months ago. As most of the Chinese online websites don’t have a conventional way to treat traditional online marketing techniques (for example, pre-rolls / banner ads / etc. are charged on a per day basis), we put our thinking caps on and thought about spreading the word virally. Needless to say, we had our ups and downs, but here are some of the few things we’ve learned along the way:

Fan-base VS Friend-base

We first tackled the social-networking sites as a way to promote our program online After all, with sites like RenRen and KaiXin001 is really one of the birth places of viral marketing. It starts here, it lives here, and it grows here.

Before we started any social-media initiatives, we did a best practice study on our competitors’ shows. Initial results show that having a television show on-air does give you a certain advantage online. However, notoriety is just one half of the equation… (to be discussed in a little bit).

Back to the social-networking sites. Just by being part of these social networks and continually updating it with fresh content, news stories, ‘tweeting’, etc., will continually grow the fan base. I equate it the way you would treat a plan – you water it everyday, give it the sunshine it needs, and it’ll eventually keep growing.

After a few days of us on the social networks, the number of ‘friends’ steadily grew… unfortunately, that is not a direct correlation with our online viewership of our program. More so, as soon as we stopped adding ‘friends’ to our profiles, the ‘steadily growing’ rate slowed down to a trickle. Yes, we had a few comments, few revisits, and few re-tweets from ‘friends’. And yes, we tried different content, increased our update frequency as well as match content with our ‘friends’ interest, but the awareness and the branding of ‘Hello! Hollywood’ was still low.

We were not alone in this endeavor as our competitors exhibited the same folley – large ‘friend’ base doesn’t always translate or convert into a large ‘fan’ base.

Beyond Social-Networking

So, the dilemma of ‘friend’ base versus ‘fan’ base spurred discussions with what to do beyond that of just the social networks. We decided going after related online forums where ‘Hollywood’ would be more relevant and targeted. To our surprise, responses were vey active and we started to get our momentum back again with marketing our show.

For starters, users of the social networks started to add us again as ‘friends’ because they read and like the posts from those outside forums. We took advantage of the short burst of interest, started to re-tweet the posts, and really focused on building a more credible and interesting brand position for ‘Hello! Hollywood’ in these social-networking sites. As a result, we had an 84% increase of re-tweets of our posts, a 56% increase in our online views brought by the social networking sites, and exhibited over 60% of the content that was updated on our social-networking sites were actually re-posts of the text / media posts that we had from our outside forums.

Bottom line, you can add all the fresh new content as much as you like, but credibility trumps all. Chinese social network users relish in gaining ‘social credits’ (what I like to call it) by becoming the primary source of information for their friends and peers. Who would have thought that being ‘cool’ was going to be one of the backbones of our social-networking strategy.

Picking the Right Partners

Syndicating content to the online communities and forums did increase the views of our show – no doubt about that. However, we’re all very big believers of ‘interactivity’ with our audience and increasing the number of ‘viewers’ doesn’t necessarily mean generating audience engagement. The way we see it, the viewing experience will ultimately be our the base branding of our ‘Hello! Hollywood’ show.

We tested different ways to engage our audience – inviting them to leave comments, encourage them to participate in online polls, rewarding our audience who shared our posts to friends; however, at the end of the day, I think there’s an element of not enough motivation for viewers to participate more.

We did notice that most of our ‘regular’ visitors to our sites were the folks we really wanted to approach and engage. They were the ones who kept the spirit of ‘Hello! Hollywood’ alive and regularly submitted questions about Hollywood. That’s when it hit us – if we can engage this core group with our program, they would eventually drive the rest of the community (thought leaders).

We formed a strategic partnership with one of the top online Hollywood-centric communities to collect questions from movie fans across China. A new segment was made for the television program where our hosts would answer those ‘fan questions’. When every new episode premiered, the segment would be posted back on the community for everyone to view.

Results: we received hundreds of questions within the first week and total traffic to our official ‘Hello! Hollywood’ site increased 66%. Goes to tell you that picking the right partners means everything.

Organic Marketing VS. Push Marketing

People have argued that, due to the ‘free’ nature of the Internet, that viral marketing should be organic. A good viral content will spread and will drive the buzz by itself. Purists would argue that it should be completely grass-root driven and viral means just that – without any assistance.

Yes, in an ideal world, that would be the case… but we’re talking about China here. For myself, while keeping the spirit of viral marketing alive, creating close relationships with the thought-leaders or ‘gate-keepers’ can really help elevate the viral campaign to the next level – saving plenty of time and costs.

I like to define our relationships with the online communities as a way to take an ownership in how our program will look, feel, and present. We tried our best to keep the content we posted fresh and to encourage all the members to continually post questions to the site. However, results weren’t quite as exciting as when we first launched and didn’t understand why.

Here’s the secret – the community managers / administrators played an extremely crucial role in building our credit level on these sites. They are ultimately the ones who bless or disregard whether there’s any worth to the posts / content to begin with. As a result, we traded our pure grass-root driven model with developing the good relationships with these key folks. To date, I’m proud to say we’re continually breaking new grounds and seeing great results as it pertains to our show.

Conclusion:

There is a lot (and I do mean a LOT) of research out there that talks about online marketing the age of Web 2.0. I feel, on one hand, that these people have pioneered the way for online marketing. These guys INVENTED online marketing in many cases. Yet, on the other hand, I’m deeply confused whether applying these real applications to China makes sense… yet. For now, the verdict is still out there and I’m more than happy navigating through the way we see it fits for our program. After all, if it’s not broken, why fix it?

Ren Fang is the Director of Business Development at METAN Development Group. For questions/comments, email ren@metanmedia.com

www.variety.com | April 11, 2010

Metan to produce ‘Icons’ for China

‘Icons’ will offer a new perspective on the true stories of some of the world’s most well-known personalities,” said Metan prexy and CEO Larry Namer who is in Cannes for the Mip TV mart. “The series is being created specifically for the Chinese viewer in mind.”

Subjects will vary from sports superstars David Beckham and Tiger Woods, to A-list film stars Johnny Depp and Angelina Jolie to music legends Luciano Pavarotti and Madonna to business leaders Warren Buffet and Walt Disney.

“Icons” will debut in July on Tianjin Satellite TV and Tianjin’s Binhai Channel.

Tianjin Satellite TV has a national reach of 600 million people across China with strong emphasis in Beijing, Guangzhou and Shanghai, while Binhai Channel has a local reach of 20 million viewers across Tianjin.

Metan also holds broadcast rights outside of China for Mandarin-language TV stations, and plans to air the series in the U.S. and other markets.

Metan was set up last year by industry veteran Martin Pompadur, E! Entertainment Television co-founder Namer and Amerilink founder Jean Zhang.

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Age of Digital Television

For those who follow the stock market, there was a flurry of action in Shanghai this past week in the media and telecom sectors. Why you ask? It was mainly driven by optimistic news on the Chinese government looking to invest and push the convergence of television, internet, and phone – otherwise more commonly known as triple play network.

From a purely technology perspective, triple play is really a no-brainer decision for the respective industries. While each of the three industries often operates separately and with different business models, all of them have the same technological backbone. More than just a technology benefit, triple play is really a natural evolutionary convergence of television (IPTV), internet, and telephony as it adapts to how consumers consume media. Especially now with multiple platform content that can exist online, television or mobile, triple play offers the perfect one-stop shop solution for all the viewing needs.

So far, the commercial success has been a great case study in the United States. It’s been having an enormous amount of success here in the States and on can theorize it will similarly have the same impact in China as well.

In the United States, elements of triple play’s full functionality has been available to consumers for several years, but since the launch of the bundled service in 2008, the market has seen tremendous growth in adoption (and this is just the beginning).

Since I live in a TV world, television is the be all end all of the three (just my opinion). As an active consumer of digital television, distributing television and adding Internet access across the same bandwidth resulted in three life-altering changes in how I consume media: Internet, High-Definition (HD), and Video-on-Demand (VOD). Call me what you will, but now that I’ve grown quite accustomed to all three services, I can’t say that I can ever (or won’t want to) go back to how things once were (distant memory already). Take away the bells and whistles of what the set-top box can do for television, the Internet and other value-add services such as VOD are really just another means of media consumption. At the end, each of these is nothing more than distribution platforms that offer cable (or telecom) companies that offer triple play another means of revenue.

Moving on to China, the idea of triple play is still in its early infancy stage. For starters, it wasn’t until mid-January until the Chinese government gave the official green light to allow bundled services. More importantly, we’re still talking about China here and the big question comes down to a matter of will the Chinese consumer follow the same path as their US counterparts.

Truth be told, China has already dabbled in multifaceted broadband services as a test bed or a trial-run for what’s to come. In fact, the Shanghai Media Group (SMG) has already over 4M subscribers to its IPTV services. Thoughts are that if IPTV (precursor to that of triple play) can work in a city such as Shanghai, the business can exist also in other markets within China.

Despite China’s media industry doing everything it humanly possibly can to mitigate the risks of launching such an endeavor like triple-play (make no mistake, it is very expensive to consolidate), there are still many factors that will dictate and influence this market.

Television to Online

We’ve talked plenty about the state of television and online in China. For my one-sentence recap of the situation, television and online both cater to two very different audience groups in China and can arguably be seen as two separate silos in the China market today. So, in other words, culturally, there is a deep chasm between audience groups between television and online. Obviously, this brings up a big dilemma when you argue that triple-play is here to bring those two platforms together in one when, in reality, will have a difficult time bridging the widening gap after so many years of this migration from television to online.

Rise of Mobile Phones

Television and Internet have been the main focus so far in our discussion about triple play, but there is a third leg to the stool and it’s that of telephone. I feel bad for telephone service just because it seems to be so buried and forgotten behind that of its big brother, television and online. And not to say that communicating with our voices is a thing of the past, but the idea of landline telephones seem such a thing of the past.

Now and for the foreseeable future, it’s difficult to argue against the fact mobile phones is the dominant force when it comes to telephone services. Nearly everyone has a mobile phone and more and more are relying on it as their primary means to a telephone. Even I’ve fallen victim to the same mentality and I recently banned having a landline in my own home in lieu of my iPhone.

Multi-Platform Content

I’m still a firm believer of the mantra, ‘content is king’ and will eventually be one of the more influential drivers of triple play in China. Comparing content from just ten years ago to where it is today, content has really made some significant leaps and bounds. Forget production value and the celebrity factor of television today, the dynamic nature of how the content lives and breathes on multiple platforms is where I feel content has made most headway.

Content is no longer static and does not just exist in one point in time like it did in television 10-15 years ago. Now, television drives viewers to online and vice versa. Now, the characters and the storyline breathe new life and exist between television broadcast on the Internet and mobile phones. Now, content is produced for more than just the eyeballs on the television screen, but for all the other ways consumers consume media today. The overlay of online and mobile to television introduces a brand-new viewing experience that simply cannot be replicated in each respective industry alone.

Looking beyond the short horizon if and when triple play makes headway in the China market, there will be new uncharted areas for advertisers, consumers, and content providers. So, what does this all mean?

For Advertisers

The concept of digital content should be a something all advertisers are salivating over now. Afterall, it’s a new ay to work in-between all three platforms of television, Internet, and phone. Think about interactive advertisements, television banner ads, pre-rolls, and how branded entertainment can exist in a much more robust environment with all three platforms.

For advertisers, triple-play is a new area for brands to play a more active role in reaching their target markets. The use of technology is a huge benefit in terms of flexibility and being able to more effectively market to audience groups in the future.

For Consumers

Consumers might be considered the biggest winners in the push for a triple-play network. For one, there’s the convenience factor of a one-stop solution for all three services. Now rather than having to deal with three companies for three services, consumers can work directly with just one that covers all of the above.

More importantly, for consumers the most significant benefit is all the value-add services triple play has to offer. From VOD to HD to niche channels, a triple-play network offers consumers all the media they can consume –

For Content Providers

And last, but not least, what does a triple play network mean for content providers. It comes down to one word: distribution. Distribution trumps all in China and a triple-play network offers a whole new dimension to distribution for content providers. Digital channels, VOD, and HD services are just the start of the potential triple-play has for the market.

We’ve already seen indication of how content providers are taking advantage of this brand-new digital world. In the United States, Comcast has joined forces with NBC Universal and makes a serious push to fill the symbiotic relationship between content provider and distributor. In China, we see the NBA, a behemoth in its own rights, experiment with IPTV by testing with SMG’s IPTV services in Shanghai. It’s a matter of time before the trend gains momentum and more content providers begin to flood the void of digital television.

Conclusion

I’m optimistic about where this is headed in China. And I’m not biased only because what I observe and see here in the United States. Unlike most trends I see in the media industry today, this one actually makes good solid sense – a win-win-win situation for all parties involved. I’m not saying it will be easy nor do I think it will be quick, but if done right and with a little patience, this will be a game-changer in China as it is here in the States.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

How American TV is Shaping China’s Media Landscape

It’s no mystery that Western culture has infiltrated its way to the China market. Go down any of the many streets in Shanghai that are lined with little boutiques for women clothing, and don’t be surprised to see, “As seen on ‘Gossip Girl’” plastered across the store window. Also not surprising is anytime our program “Hello! Hollywood” has any mention of “Gossip Girl”, we get outstanding ratings and views on both television and online.

The fact Blake Lively and Ed Westwick (stars of ‘Gossip Girl’) are already household names in China without ever having a single program of ‘Gossip Girl’ on-air is a testament to just how much and to what degree American television has been pervasive in the China market. The reason why is the only way to see these two on-air is online where millions of the Chinese youth spend their time downloading and consuming much of their entertainment today. This underbelly of China’s media market is often overlooked and misunderstood; and has a significant role in how China’s market will evolve and continue to thrive.

Welcome to the Underbelly

I think it’s best to start from the beginning. To lay the dirty truth for what it is and have a no-holds barred attitude towards how American television finds its way to China.

No surprise here, it starts with the Internet. Let’s use NBC’s “Heroes” for purposes of an example. Ten-minutes after the premier in the States, our favorite show is quickly available on the many P2P and BitTorrent sites that roam the world wide web.

With much luck and anticipation, hordes of Chinese college students pull down the program (preferably with Closed Captioning) and start the arduous process of translation and subtitling. Note – this is not some mechanical process that is taken lightly. In fact, it’s much more of an art than a science to many of these ‘teams’ of translators. They say they are making it ‘better’, more local for consumption by the Chinese market – personally, I appreciate it when anybody takes pride in their work.

Several hours later, these teams populate Chinese P2P sites and, voila – you have Hiro, Claire, and Sylar (characters of ‘Heroes’) battling it on your very own computer screen, perfectly subtitled, only hours off the press in the United States.

The Chinese government has made it very clear they are cracking down on these sites and have made it abundantly public their intentions to do so (even as recent as December 2009). And while there will be efforts to shut down many of these P2P sites, you simply cannot ignore the fact that there is a void in the China market. And as they say, “When there is a will, there is a way.”

Signs of the Time

So, this phenomenon with illegal downloads of American TV programs online – what does this really say about the China market.

Quality over Quantity

For one, the truth of the matter is that Chinese TV is simply not that attractive for many Chinese consumers (mainly the youth). For years, state-controlled television was often associated with bad programming. Is this always the case? No. Is this a good litmus test of the general consensus? Possibly.

With over 3500 television stations in China, one has to think there should be an abundance of attractive programming that viewers would. Rather, we see quite the opposite with millions of Internet users herding to these illegal P2P sites only to watch the grainy quality of “Heroes” on a 13.5 inch laptop screen. In China, quality trumps quantity. Hands down.

Censorship is not the Issue

I will be very frank about how I feel about the government’s position on cracking down illegal downloads. To them, I say kudos.

This crackdown is not an issue of censorship in any form or matter. Any of the programs that are illegally downloaded can easily be edited accordingly to fit the strictest of SARFT rules. Censorship is meant for communications over much bigger issues like Tibet / Taiwan – and should not be mentioned in the same breath with the likes of “Gossip Girl” or “Heroes”.

The truth of the matter is the government’s stance against illegal downloads is a way to exhibit soft power to the rest of the world. China recognizes that in order to be a world leader, it has to play nice and know all the rules of the sandbox. In this case, piracy and intellectual property is a very big deal for the rest of the world and the Chinese government is handling this perfectly – directly and indiscriminately.

Efficient Markets

The fact there is these kinds of issues in the market is a classic business school case of inefficient markets. One thing I can say about my experience working in China thus far, the Chinese are resourceful. They are most definitely not the ones to settle for mediocrity and will always find ways to supply what the market wants. In this case, good entertainment.

I do believe the Chinese media market will have to evolve to meet the needs of the people – especially as it pertains to television and the Internet. However, there are several important factors that will dictate how the market will evolve. Each of them have significant influence for better or for the worse.

For starters, television is the one platform that the Chinese government has control over. There’s no escape to that nor does it really matter. It’s a matter of fact and is absolutely fine as a media company working in the China market. With that being said, television will continue to be the dominant platform.

Secondly, the fact is that television is still the predominant and preferred platform for advertisers. They have a very strong hold of the market share of advertising buy and will be so for as long as I can foretell (not to say that the Internet will put a sizable dent into that share). As for my own philosophy, the market will go where the money goes.

Lastly, the momentum of a multi-platform play will eventually find its way to China. The lines between television, Internet, and mobile will increasingly be blurred and the philosophy of isolated silos of how media is consumed will be a thing of the past. Television, online, and mobile will be synonymous with the idea of consuming entertainment – and despite all the amounts of restrictions we can implement to control this trend, momentum trumps all. And this will not be an exception in China.

The good thing about each of these driving forces in China today is it will ultimately lead to better quality of content, better options for brands, and a better viewing experience for viewers / consumers. We can see glimpses of this already with even the flood of advertising dollars being poured into China today and how quickly television programming has evolved even within the last two years. Online video portals like Youku and Tudou are now crossing over and becoming much more consumer facing that they have been in the past. We see examples of how mobile phones have evolved despite the noticeable absence of 3G technology and how it seamlessly extends from its big brother, the Internet.

Growing pains now, but good for the overall market in the future.

Conclusion

After spending much time in China, I’m always surprised by how far American TV has been part of the Chinese culture. The hit US show, “Friends” is often used as an English-learning tool for many university students. Stars from “Prisonbreak” are icons in China and often frequent the television waves in the form of commercials.

No matter how we slice or dice it, American television has made a permanent footprint in China. It may not be entirely the programming themselves, but the culture and variety of programs that the Chinese viewers are drawn to. And for content providers and advertisers, this is something we can all rally behind.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

What Makes China’s No. 1 Entertainment TV Station a Market Leader

Hunan Province is most well-known for a several things. Yes, it is the birthplace of Chairman Mao. Yes, it also has some of the spiciest (and best) Chinese food anywhere in the world. But, in the media industry, Hunan is very well-known for its excellent TV station.

Since 1997, Hunan Satellite TV (HSTV) is one of China’s most successful state broadcasters and has been widely recognized as the number one entertainment media outlet in China. News articles report about HST V, “Over the past 12 years, the company has grown rapidly, expanding its audience from 65 million to 880 million viewers. It also broadcasts to viewers in parts of North America, Asia, and Australia.” Not fully believing this statement until I was having dinner in a Chinese restaurant in Monterey Park, California when the TV behind me had the Hunan Satellite TV-produced program ‘Ugly Wudi’ televised – which begs the question as to why this inland province broadcaster has been so incredibly successful amongst giants such as CCTV, Beijing TV, and Shanghai Media Group.

To give some context, here are some major milestones in HSTV’s history:

1997 –  First Hunan Satellite TV Program transmitted via satellite

1997 – “Happy Camp” program launch

1999 – Shenzhen Stock Exchange listing (the very first China Media IPO)

2002 – Entertainment Positioning: a new mission to create a “comprehensive channel highlighting entertainment and information”

2004 –  “Super Girl” program launch

2004 – Brand Positioning: Launch of a new “Happy China” campaign that focuses on building nationwide brand awareness

2006 – “Happy Shopping” channel launched (the first national chain and new modern style TV shopping company in China)

2007 – “Happy Boy” launch

2009 –  Awarded No. 1 Television Entertainment Brand in China ranking by the World Brand Lab in its “500 Most Valuable Brands in China.”

Hunan TV Program Highlights

Happy Camp variety program – breakout hit amidst the TV production wars of the ‘90s (1997)

Talk or variety shows are quite common in China nowadays, but back in 1997, nearly all the state broadcasters made a living exclusively from TV series. It was a drama-driven market and there was no appetite for variety shows. Every TV station was fighting to secure the first broadcasting right and copy right of TV drama series.

Unlike most, Hunan TV took the initiative “to be the first one to eat a crab” and launched Happy Camp (In Chinese, the phrase “The first one to eat a crab” refers to the first person who dares to take risks and try something new). The show was adapted from Hong Kong and Taiwan programs (where they flourished in those respective markets) where Chinese celebrity hosts and Chinese guests compete in various creative and humorous games. The show became a huge hit and soon established massive audience loyalty.

Princess Huan Zhu series (2000)

When Princess Huan Zhu first launched in 2000, audience ratings reached record highs – the highest of any in recorded TV series history. This light comedy brought laughter into Chinese families’ homes. Following its massive success, Hunan TV produced two other versions, selling the show to both Beijing and Shanghai TV stations.

Super Girl series (2004 – 2006)

Hunan TV’s Super Girl series was also another immensely popular hit show. Partly inspired by the UK’s “Pop Idol” series, Super Girl was an ultra popular national singing contest in China. It was an annual, exclusively female contest – any woman could participate, no matter their age or talent level.

On August 26^th, 2005, the final contest on Super Girl secured 400 million Chinese viewers, according to Nielsen – and took Hunan TV’s viewership from less than 4% to 31.38% during the same time slot. This meaning nearly one out of every three Chinese person watching television was watching Super Girl – a phenomenon in Chinese TV history.

Ugly Wudi (Ugly Betty)

Sponsored by Unilever and perhaps the most well-known example of branded content in China, Ugly Wudi is the Chinese version of the US hit show Ugly Betty. With an estimated 73 million viewers on its opening night, Ugly Wudi ranked number one in its time slot across 30 markets everyday throughout the first season which garnered an audience share of 8.7%.

According to Millward Brown, at the end of the show’s first season, unaided awareness of Dove (main Unilever product marketed) rose 44% percent among all target consumers and more than tripled among those who watched the program. Needless to say, Ugly Wudi will continue to be the successful case study of branded content.

Targeted Brand Positioning

Entertainment

Well-defined brand positioning is the key of Hunan TV’s success. Ever since Hunan TV was established, it has always positioned itself as an entertainment channel whose mission it is to bring happiness to Chinese people. The idea of entertainment and “Happy China” was very well-received by the Chinese audience and was exactly what the market needed.

As Ms. Long, a Hunan TV producer, comments: “It’s all about entertainment. We are not interested in politics.”

If we examine all the Chinese regional satellite TV stations – of which there are over 30 – only Hunan TV and Shanghai Oriental TV apply targeted brand positioning. While Hunan TV is focused on entertainment, Shanghai Oriental targets the news. In the regional satellite TV sector in China, Hunan is ranked first while Shanghai Oriental is ranked second in terms of viewer ratings.

Targeting young people

Given its ‘pure entertainment’ position in the market, Hunan TV typically targets a young demographic – a group with tremendous purchase power.

“…Many TV stations want to diversify their programming and reach the largest audience. We, however, target only people age under 35, and with high production values – our attractive presenters and actors always capture the most viewers.”  reports Mr. Chen Xiaodong, a producer at Hunan TV.

In August 2009, full-day Hunan Satellite TV’s CSM-22 ratings (22 cities’ viewership data during 24 hours) overtook CCTV ranking for the first time in history, and it was also the first time that a regional TV station surpassed CCTV in terms of overall ratings as well.

The ability to reach a wider and younger audience has made Hunan TV the favorite for brands such as P&G, Unilever, Coca Cola, NOKIA, China Mobile, China Telecom, and many more. Today, Hunan TV is still considered to be a media powerhouse and is considered a favorite for brands to market their products on the station.

Playing the Celebrity Card

Hunan Satellite TV has been widely recognized as a star-making platform. From Super Girl and Super Boy presenters to several other TV hosts, the TV station has turned many faces into big celebrities across China. From Olympic championship winners to celebrities and famous film directors, Hunan TV has increased its brand awareness by inviting celebrities to interact with its massive audience.

Exploiting the Success of Pre-Existing Formats

Another reason for Hunan Satellite TV’s success is its savvy use of pre-existing format that have proven success in other markets. By using proven concepts, it saves on R&D cost and eliminates risks of new program development, a significant shortcut to maximizing its audience, and a cost-effective way to operate.

From Happy Camp (an adaptation of Taiwan’s “Super Sunday”), to Super Girl (an adaptation of the UK’s Pop Idol series), to Ugly Wudi (an adaptation the Colombian soap-opera Betty la Fea), Hunan TV has greatly entertained a huge Chinese audience while continuing to grow its market share in China.

Conclusion

Chinese TV stations can take a page from the Hunan TV playbook, and understand that TV is nothing more than entertainment.

It is no wonder why other Chinese TV stations often copy show formats once adapted by Hunan TV – then again, it is often said ‘Imitation is the best form of Flattery’. Whatever the case might be, Hunan TV continues to innovate and push ahead in front of everyone else. With recent partnerships with Shanda and ITV, Hunan TV will continue to lead this increasingly fragmented TV market.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

From Search to Videos, Baidu’s Bet on the Online Market

In the past few weeks, we have seen a flurry of news articles about how online platforms are jumping on the bandwagon to invest in licensed content. First came the report of the new SARFT mandate to regulate and restrict P2P downloads of illegal content. Unfortunately for many online viewers, this ultimately means an abrupt goodbye to hit US shows like Heroes and Lost. However, these turn of events also means many online video sites need to radically change their business models – a balance between playing ‘right’ with SARFT and getting the content they need for the viewers.

Ku6 and Sohu came out of the woods first with their pledge to allocate a $10M fund to license content. Tudou upped the ante with a $40M raise at the end of December which they claim is to be utilized to also license programs. Now I will admit that when the cynical side of me first read these reports, I chalked them up as public relation pieces to ease investors that the platforms were playing by the rules. However, the biggest news this week switched my mind with Baidu, China’s top online search company, linking together with Providence Equity to invest a total of $70M to develop a video online channel to the likes of US site, Hulu by the first quarter of 2010.

I have one word to describe what this means to me: wow. Wow for Baidu championing themselves with Providence Equity (Note: although this was reportedly inked with Providence Equity in Hong Kong, Providence Equity was still involved with the original investment for Hulu). Wow for Baidu taking a leap of faith into online videos. And, most importantly, wow for content providers and brands looking at this as the ‘sign’ to enter into China.

IMPORTANCE

Although all the reports with online platforms paving the way to set-up funds are all landmark moves in the online marketplace, to me, Baidu’s news sets precedence to indicate really where this market is headed towards.

Piracy No More

On a very macro level as starters, this could very well be the beginning of the end of online piracy. China has been plagued by piracy issues ever since the advent of the Internet, but this is great news for content providers and brands alike that are looking to China as a legitimate marketplace that takes their assets as value. For what it seems to be ages, content providers have felt slighted to how their content was treated in China.

I will say that this is by no means an easy or fast transformation for the online platforms. From a cultural perspective, the Chinese actually think quite highly of content; however, this ‘knowledge’ is a privilege and should be shared with everyone thus the rampant and liberal share of content. This transformation will take some time and certainly will have its ups and downs before everything is settled. Despite the uphill climb ahead, this is the right first step for everyone.

From Search to Online Videos

From an outsider, this $70M venture is a stretch from its normal lines of business. After all, Baidu is at its core, an online search company – not an online video channel. However, looking west to its counterpart in the US, Google, this move should not be a huge surprise considering Google’s $1.65B acquisition of Youtube in 2006.

The real question is what will Baidu do with their new Hulu-esque site? Any savvy investor can look into Google’s financial statements to realize that, despite all of Youtube’s eyeballs and potential, they are still bleeding money and have yet to make a profit. For me, I’m most interested in Yu Gong, the appointed new CEO of the site. Why you ask? Gong was a former China Unicom executive which might shed some light to where this Chinese Hulu might be headed to… Not making any speculations here, but I definitely like where my thoughts are.

When reading into the Baidu / Providence deal, I noticed one very apparent absentee in the equation – the content providers. This deal is not a joint venture with content providers as it was with Hulu (with ABC, Fox, and NBC). Like the other online platforms that have started their own funds to license content, Baidu is in the very same boat as they are right off the start. This bears the question…

WILL IT WORK

Before I dive right into the thick of things, let me preface this section by dissecting this into two parts of the question:

What is China willing to pay? And…

Is it too late?

What is China willing to pay?

For starters, we had already talked about how philosophical differences between how to treat content will inevitably draw out long-winded negotiations between that of content providers and the online platforms.

Content providers will need to decide what they will accept as reasonable license fees. After all, getting fair market value will be a tough pill to swallow for any online platform dealing with the sheer size like China.

And for online platforms that continually bleed cash due to high bandwidth costs, how will they take on another burden of licensing content to an already stacking outflow of money?

Now, while I don’t anticipate a standstill in negotiations, I do think there will be a significant amount of time to make sure this gets done right. Especially this early in the paradigm shift, these meetings and negotiations will set precedence for the online video market for the foreseeable future.

Is It Too Late?

One of the first business jargons I learned during my MBA: first mover advantage. Definition: An advantage gained by the first significant company entering into a new market. For a predictive new online video market, the first mover’s advantage will play a big role in the definition of pecking order amongst the online platforms.

So, the question is: with all these online platforms all going after the same goal, who has first mover’s advantage? And, more importantly, is it too late for a company such as Baidu to enter the game on the same playing field as the rest?

My personal thoughts are not too late at all. Unlike the US market, the China market is big enough to sustain fairly good competition. In the US where there is Youtube and everyone else, in China, there are plenty of options of online platforms that all fair well in their own respect (i.e. Youku, Tudou, Ku6, Sina, Sohu, etc.). For Baidu, they are right in the mix and I feel they will perform well amongst its new peers of online video sites (granted they have lots of work ahead of them if they are to launch Q1 of 2010).

WHAT DOES THIS ALL MEAN

At the end of the day, this is great news all the way around as it pertains to online platforms, content providers, and advertisers.

For content providers, all these raised issues are good problems to have. After all, you’re going from questioning whether to expand into China at all, to a business model of getting license fees for your content.

For brands, this is a brand new playing field that everyone should be seriously looking to. All-of-a-sudden, programs such as Heroes and Lost can feasibly be available for brands to attach themselves to. Regardless, this opens up a myriad of new opportunities for brands and just might be the missing key to opening the floodgates for online spends. Quality of content will be vital, but as a brand advocate, we should all rejoice in this new dawn.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

www.amchamchina.org | January 10, 2010

From Hollywood to Beijing, the Age of Branded Entertainment in China

From Hollywood to Beijing, the Age of Branded Entertainment in China Larry Namer discusses the new opportunities in China’s media market 4:00 PM -7:00 PM, Tuesday, January 26th, Kerry Centre Hotel.

]]> http://metandevelopmentgroup.com/from-hollywood-to-beijing-the-age-of-branded-entertainment-in-china/feed/ 0 http://metandevelopmentgroup.com/online-video-present-and-future/ http://metandevelopmentgroup.com/online-video-present-and-future/#comments Tue, 29 Dec 2009 22:35:26 +0000 admin http://metandevelopmentgroup.com/?p=1888 By Gordon Chu | December 29, 2009

Online Video: Present and Future

Political Context

After pampering you with marketing and media news for the past few months, allow me to begin this newsletter with a much-needed dose of politics, of the international persuasion.

Back in 2007 the U.S. Trade Representative brought a case against China in the WTO focused on three primary concerns: first, China’s restrictions on importing foreign entertainment materials such as books, CDs, movies, and DVDs; second, China’s restrictions on distributing foreign books and music electronically; and third, China’s lengthy government-mandated review process for foreign television shows, movies, and music distributed domestically.

These three distinct but interrelated issues riled U.S. and Chinese trade officials for the better part of two years, with other more run-of-the-mill disputes thrown into the mix (Chinese tires?!).

This December, the WTO ruled against China’s appeal, thereby validating the U.S.’s complaints against the Chinese government’s restrictions on foreign entertainment distributed on the Mainland.  After the WTO’s Appellate Body adopts the measures decided upon by the Organization’s officials, China will have 30 days to respond with what amounts to a plan of action to acquiesce to international demands.

Was that so painful?  Perhaps, but to the extent it helps us understand the current state of China’s online media marketplace and where it might be headed, I think we can stomach it.

China’s participation in international organizations means it must, in theory, protect the intellectual property of both domestic and foreign enterprises.  The Internet has long been a haven of shanzhai (copied) content readily available to even the least-savvy wangyou (literally ‘web friend,’ or internet user).  Video sites have often ignored international copyrights and posted versions of currently broadcasted TV shows and movies still showing in theaters.

Overview of Online Media Marketplace in China

A few giants dominate China’s online content universe.  Besides the online chat kings QQ and MSN, China’s web portals (Sina, Sohu) and online video sharing sites (Tudou, Ku6, Youku, 56.com, Tencent) reign supreme.  Many of these portals and video sites have locked horns over copyright disputes over the past few months, with mixed outcomes.  (http://www.media.asia/searcharticle/2009_09/Youku-files-dual-suits-against-Sohu/37169).  The competition is fierce for dominance in the marketplace.

Earlier this year, Chinese online gaming giant (and NASDAQ listed company) Shanda Online Gaming Interactive agreed to acquire Ku6, one of China’s up and coming online video sites.  The acquisition marks the first time a Chinese online video sharing site finds itself listed on a Western stock exchange, an interesting conundrum for a firm in this space.

The online video ‘law of the jungle’ necessitates that sites will post content which attracts the most page views and maximizes advertising revenue, the lifeblood of free content online video sharing sites.   Through the merger, Shanda expands its already formidable on- and off-line media reach in China, and will leverage the extent of its resources to ensure the budding site flourishes.

With more internet users (338M, and growing by the hour) than the U.S. (227M, and growing significantly slower), and a population that increasingly turns to the internet as a source of entertainment (see Metan’s newsletter on Internet Cafes, LINK, and online video, LINK), the online video marketplace will need to accommodate an audience growing in both size and sophistication.  The sites might also find themselves well-positioned in one of this millennium’s most lucrative advertising revenue pools.

Online market, Announcements by Ku6/Sohu and Youku

On Tuesday, December 22, 2009, Ku6, along with partner Sohu, announced that the video sharing site and web portal would each invest rmb 50,000,000 (for a total of rmb 100,000,000) to acquire legally licensed content copyrights both domestically and from overseas.  Ku6 and Sohu share similar blood; Ku6 CEO Kevin (Shanyou) Li spent years at Sohu under the portal’s renowned Internet tycoon Charles (Chaoyang) Zhang.

It appears there’s no hard feelings between the one-time colleagues, as Mr. Zhang participated enthusiastically in Mr. Li’s artfully orchestrated press conference on December 22 at the Grand Hyatt Hotel in Beijing’s iconic Oriental Plaza.  The conference featured a Chinese drum performance by qipao­-clad dancers, a laser light show, and yes, interesting viewpoints from industry experts.

Tudou, the video sharing giant, wasted no time in announcing the establishment of its own rmb 100,000,000 content development and acquisition fund on Wednesday, December 23.  It remains to be seen exactly what content these sites have their eye on, and how the market for foreign copyrighted content broadcast online in China will shape up amongst fierce competition.

Speculation for the future of China’s online video market

These pledges by online video sites Ku6, Sohu, and Tudou to take down pirated content exemplify a trend in China towards increased protection of international copyrights.  That being said, the issue of broadcasting pirated content presents a prisoners’ dilemma for online video sites.  Talk is cheap, and despite industry leaders’ signing the China Online Video Anti-Piracy Alliance on September 15, 2009, pirated content has not been altogether eliminated.  Companies risk losing valuable advertising revenue if appropriate legal and competitive steps are not taken.

Ku6 and Sohu, along with Tudou, might know something their competitors do not.  Perhaps they foresee a time in the not-so-distant future when pirated content holds no place in the online video marketplace.  This first-mover strategy could prove vital to their survival.  Or, the relevant Chinese authorities have already made it very clear to the online industry that it will no longer tolerate broadcasting pirated content, and that the sites will have to find new ways to attract viewers or else cough up the funds to acquire copyrights.  Either way, change is afoot.

Conclusion

One last caveat to this equation: China’s state-controlled media starts and ends with TV.  The CCTV live advertising auction this year netted over $1.25B in a matter of hours.  If China’s online video portals grow too big too fast, sucking ad dollars away from CCTV and satellite, provincial, and city TV stations, they can expect to get an earful (and possibly more) from the government.  The portals must manage their relationships with TV outlets to ensure a ‘harmonious’ and simultaneous media industry growth.

Indeed, if these newly-announced funds are any indication, China’s web portals are on the verge of building up large libraries of online content, both current and past, to elbow their way into the video entertainment marketplace. It remains to be seen exactly how these portals will position themselves against each other and against the rest of the industry.  I’ll be watching, and I hope you will, too.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

2010: My Predictions for China Advertising

As my primary role in business development, I have my hands in a little bit of every division at METAN – from TV production and marketing to operations and digital. However, as my New Year’s resolution, I’m pledging to go back to the METAN basics to where our entire business model is rooted: brand advertising. This is our forte, our core competency, and certainly our bread and butter. This is also the biggest opportunity in the China market today.

I read that total measured advertising expenditures in the first half of 2009 fell nearly 14.3% versus a year ago (to $60.9B USD) in the United States. Compare that to China’s ad spend and you see an inverse of that figure of nearly growth of 12% in the first three quarters of 2009 (to $54B USD) according to the latest figures by CTR Market Research.

Hardly anyone will argue against the fact China is becoming the global hot spot for any global brands. With nearly all roads leading into China today, there’s no question paying close attention to the growing China market will be a critical step in any global brand’s strategy for expansion. However, the idea of advertising is vague. And statistics are just that – statistics. A more critical look into 2010 for the two platforms leading the way (television and online) will unveil a better idea of where the money is and where it’s going.

TV – KING OF THE HILL

Television remains as the predominant media platform with a 78% market share of the total ad spend in China . I will note that although I say sarcastically it grew a mere 14% in the first three quarters of 2009 versus the previous year, television has given up some distance to other forms of advertising including that of Internet and outdoor. I will also note that television in China will never be undermined or ever go away (at least not in the foreseeable future) – as long as the mass media is under current regime and regulations, television will forever have a footprint in how media is consumed and preferred.

For 2010, Chinese advertising on television will shift from that of driving viewers to that of media value. This really should not have taken anybody by a big surprise. After all, in the US, this transformation has started long age starting with the advent of online videos and digital video recorders. These technologies allowed viewers to skirt traditional advertising and put more pressure on media value and brand integration in the content themselves.

In China, although technologies have made a significant impact in how content is consumed on an on-demand basis, the biggest factor in this shift comes from that of advertising inventory. Effective January 1, 2010, SARFT (State of Administration of Radio, Film and Television) is implementing regulation #61 whereby TV commercial airtimes cannot exceed 12 minutes per hour. As a result, estimates of an increase of 24-25% on advertising rate cards will ultimately drive advertisers to focus on getting more for their money.

With more advertisers scrambling to stretch their advertising dollars, the idea of branded integration will continue to be the new buzz word amongst agencies and content providers. Several months ago, we talked about ‘Ugly Wudi’ as one of the first to pioneer branded integration in Chinese television programming. Today, there are already new shows on-air and in the works that are riding the coattails of ‘Ugly Wudi’. Yet, with over 3,000 TV stations in China to fill of content, programming still has a long ways to mature before it meets the branded integration needs for global brands.

At the end, good content is king. I note ‘good’ only because advertisers still need to balance the idea of brand image with that of media value. To put it shortly, I do believe branded content will be more readily available, but media value is not about availability but if it’s ‘right’ for the brand.

ONLINE – THE NEW KID ON THE BLOCK

Online opened up in China with a flurry. With over 360 million Chinese netizens in just over 10 years, online media is a formidable alternative platform to that of television.

While Internet advertising revenue growth in the US has hit a plateau of under 5%, China’s forecast of 20% growth in 2010 has digital advertising agencies appearing out of nowhere for the first time in the past few years. After all, this is where the key elusive demographic that the majority of global advertisers are salivating to get a chance to market is consuming their media.

For 2010, the big question about online advertising is not about why, but how. Unlike television where advertising has more of a defined role of where trends are shaping the industry, online is still the wild west for advertisers. For one, everyone is a content provider whether legitimate or not which really puts more pressures on content providers to produce more quality programming and on platforms to create the right marketing and promotion campaigns to make online advertising a legitimate success.

More importantly for 2010 on answering the ‘how’, online is still a fluid and dynamic platform.  Advertisers understand the language of ROI (return on investment) and with constantly evolving platforms without rules and metrics, providing a sustainable business model will constantly be in-flux. For 2010, it will be a year of proving out the validity of online as content providers, platforms, and advertisers converge to figure out the right business model in the China market.

TV & ONLINE – WHOLE IS GREATER THAN THE SUM OF ITS PARTS

From my personal experience, the Chinese have a very ‘silo’-ed way of thinking of media platforms. As a content provider, it is either television or online – never that of both. With that, advertising has evolved their thinking in the same. However, from looking at media consumption behavior, I believe there will be a convergence of the two. Whether that happens sooner than later, I wouldn’t even know where to speculate; but this inevitable convergence of platforms will provide the richest and most effective opportunity for advertisers and content providers alike.

For 2010, platform convergence will shed light to a new way of media is consumed in China. The idea of platform convergence is more than just having the content available on both online and television, but utilizing both platforms to cross-promote the content and ultimately enhance the viewer experience. For television, online provides a whole new dimension of watching programs from audience interactivity and behind-the-scenes footage to an e-commerce component and social-networking aspect. For online, television provides the ultimate platform for promotion to drive viewers across to the digital threshold.

In this convergence scenario, both television and online fills the void where neither one could do successful on its own – simply put, at the end, advertisers win. For advertisers, the convergence of platforms is the pinnacle of media value. In a recent conversation with Kenny Bloom, CEO of Visitek Holdings, Bloom states it best, “At the end, brands care about driving sales….” – a statement that perfectly encapsulates the idea of how online and television can work together.

CONCLUSION

From online to television, China is an endless market of media opportunity. Despite the ever-changing media landscape and the difficulties following a moving target, I do believe Chinese media is evolving and shaping the right way.

As 2009 dwindles to its final days, I’m personally encouraged and excited to tackle 2010 with vigor and a new focus on brand advertising. Despite the ups and downs of navigating through the China market, 2010 only promises more of the same – and I wouldn’t have it any other way.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

By Lin Bai | December 15, 2009

Confessions of a Chinese Shopper

In the US, ‘Black Friday’ is the unofficial start of the holiday shopping season. Marked as the Friday after Thanksgiving, hordes of people line up at retail stores hours before the store opens in hopes to be one of the first to get in on early holiday shopping.

In China, while they may not have ‘Black Friday’, the idea of bargain shopping is not novel and is part of the shopping culture that now is prevalent in the market today. On November 14^th, there was a line 600 people deep waiting patiently hours before the opening of H&M store in China – all waiting for the worldwide start date of H&M’s Jimmy Choo line.

‘M-SHAPE’ SOCIETY

For me, the whole dichotomy of an affordable apparel brand with high-end style such as H&M is hard for me to grasp. ‘Affordable’ and ‘high-end’ doesn’t belong in the same sentence together and I’ve been accustomed to the idea of very segmented shopping tiers.

For many retail analysts, the trend of ‘affordable luxury’ is the sign of a shrinking middle class – otherwise known as the M-shaped phenomenon. Japanese economist and strategist Kenichi Ohmae refers the ‘M’ as the polarization of the extreme rich and extreme poor in society – thus the ‘M’ shape with peaks and valleys in societal status.

In a well-developed modern society, class distribution is often inverted where the middle class forms the bulk of society. However, with China’s economy booming as fast as it is as a consequence of rapid globalization (whether for good or bad), the middle class diminished and quickly assimilated on to either side of the economic class spectrum.

I should preface that the M-Shape phenomenon is a global phenomenon and China is not just the exception. Even here in the United States, the middle class is slowly disappearing and the gap between rich and poor continue to grow. Unfortunately, going ‘upwards’ is often much more difficult than sliding ‘backwards’ and more of the polarization of the Chinese middle class has shifted to the poor.

So, how does this tie together with H&M and what does this mean for brands in China. For starters, this does present a very unique consumer market where, like everyone around the world, these lower-end consumers still aspire to a better quality of life. However, they are value buyers and have monumental expectations for great quality at affordable prices. For brands such as H&M and IKEA, China is a golden opportunity to tap into this enormous market.

H&M: SUCCESS IN CHINA

I admit that I am a self-professed avid fan of H&M. H&M brings a chic Euro-style to China with trendy replicas of luxury products at inexpensive prices, fitting the needs of the majority of Chinese consumers (low-income but pursuing expensive taste). Contrary in India where only upper middle class consumers follow Western fashion, the majority of Chinese consumers follow Western trends no matter where they fall in the economic spectrum.

H&M has been one of the most popular Western retail brands since first entering China in 2007. There is a common joke that says the only 2 places in Shanghai that requires waiting in line are banks and your local H&M store. According to H&M, first day sales at their Shanghai store reached 2 million RMB ($292,000), which easily eclipses the total daily sales of 100 Chinese domestic brands put together.

It is also important to note that the price of foreign brands is typically higher in China than anywhere else around the world – namely due to the high tariffs China places on imports. However, H&M kept to their pricing integrity and remained prices similar to that of Europe.

“Of course I love Louis Vuitton, Chanel, and Dior, but I can’t afford their prices,” 25-year-old Zhang Xi tells a reporter, “H&M have reasonable prices, and yet keep pace with the trends. You can always find the most fashionable items in their store.”

According to market research from China, H&M is priced at a fraction of some luxury brands yet features similar trend-savvy seasonal design elements – a winning combination that has generated an unprecedented buying upsurge in the market.

FOREIGN BRANDS IN CHINA

H&M’s strategy is not rocket science. Logic is actually very simple – chic clothes coupled with affordable prices is a winning combination in retail. However in China, there is more than winning on price alone. Especially with foreign brands increasingly entering the China market, the retail strategy has shifted from focus on the wealthy to where the majority of where the Chinese market stands.

Brand Strategy

For foreign brands, prices are typically 20%-30% higher in China than overseas due to China’s high import taxes on foreign goods and to the brand positioning strategy where there is a concerted effort to set foreign brands apart from their local counterparts.

For example in China, Starbucks is considered “a symbol of status and success”, young people go to KFC and McDonalds to date since it’s often regarded as “romantic” (but mainly because it has nice lighting, air conditioning, and a nicer bathroom), and owning a pair of Nike shoes or Levi’s jeans is just a young person’s dream.

“[Foreign retailers in China] don’t feel that they have to compete on price, because they are offering a wider selection of goods and a more pleasant shopping experience than domestic competitors”, said Ann Chen, a retail analyst at Boston-based consultancy Bain & Co.

Pricing Strategy

In contrast to the overall high-price approach, some foreign brands have recently adopted a price-cutting strategy in order to attract more customers. When IKEA (known for its inexpensive and modern furniture) first entered China in 1998, it positioned itself as high-end brand and offered their products at premium prices. This strategy failed as many Chinese consumers crowded the IKEA stores not particularly shopping, but enjoying the ‘freebies’ the store had to offer (e.g. air-conditioning, comfy chairs). Needless to say, window shopping doesn’t always result in sales and IKEA fell short in their revenue expectations.

Consequently, in the last few years, the company has adjusted its marketing position by transitioning into a mainstream commodity. Because of its success in localizing products for the China market specifically, IKEA has been able to cut prices by an average of 54% in more than 1,000 categories since 2005. IKEA broke the regular foreign brand pricing strategy and succeed in China because they decided to “stand on the side of the majority of people”.

“I had to make a break, change [Chinese] perceptions that Western-branded goods are normally more expensive…,” said Ian Duffy, IKEA president for Asia Pacific said.

In the face of fierce competition from both global and domestic competitors, more and more global brands are adopting this mentality of ‘standing on the majority side of the people’ by cutting prices. For example, McDonalds recently cut nearly 40% off its prices for its special lunch package. Even premier brands like Louis Vuitton, Gucci, and Salvatore Ferragamo are dropping prices “to trim the price gap between China and other regions and to entice customers”.

CONCLUSION

What does this all mean for brands and consumers in this M-Shaped China market? For consumers, even the lower-end of the M-Shape consumer market is striving for excellence and quality. However, they are not willing at premium prices usually associated with many foreign brands.

For foreign brands, both a branding and pricing strategy is necessary to succeed in China. Given its ‘M’ consumer distribution, cutting prices to create larger sales volume is a trend many brands have adopted and are successful at. Will this trend continue even as China continues to grow economically and people will have more money on-hand? Hard to say, but as a consumer who fits the ‘mold’ and mentality of the majority of the China market, my thoughts gravitate towards no. While ‘branding’ and ‘pricing’ are both very important factors in my shopping behavior, ‘value’ drives me to say ‘yes’ and that only happens when you have both.

Lin Bai is a New Ventures Analyst at METAN Development Group. For comments/questions, email lin@metanmedia.com

Rock Music in China – An Overview

Today in China, there are two distinct styles of music that tend to dominate the airwaves: traditional pop music and Yaogun Yinyue (Chinese rock music).

“Yaogun” literally means rock-and-roll.  The introduction of western style rock music in China can be traced back to the early 1980s. In Beijing at that time, young adults became increasingly exposed to Western music and in turn, tried to emulate what they were hearing – and they did quite a good job. As early as 1980, the first band to ever play modern style western rock in China was formed — Wan Li Ma Wang. Their first shows were held mainly in foreign hotels in downtown Beijing to audiences of mostly foreign students. Wan Li Ma Wang was famous for playing mostly western-style classic rock.

While the genre of rock music in China was pioneered by a multitude of talented and gifted artists, only one artist has been  referred to as the “Father of Chinese Rock”— Cui Jian.  Born in Beijing, Jian showed aptitude toward music at a very young age. At the age of fourteen he began playing trumpet and by the age of twenty, he joined the esteemed Chinese Philharmonic Orchestra.

According to Jian, he was inspired to learn guitar by Western musicians such as Simon and Garfunkel, the Beatles, Talking Heads, and the Rolling Stones.  In the mid-1980s, Jian formed the band “Seven Ply Board” (later renamed ADO). The band played music inspired by the Northwest Wind music style – a traditional folk style music originating in China’s northern Shaanxi Province. Northwest Wind style music was predominately popular between 1986 and 1989 and was influenced significantly by Cui Jian.

Jian’s style drew heavily on the traditional folk Northwest Wind music while also incorporating elements of western rock such as the fast tempo and strong bass. For many fans and listeners, his music represented a cultural movement – one that can also be discerned in Chinese literature and films produced around the same time.

In 1986, Jian’s hit song titled “Nothing to My Name,” became the first popular song written in China to use electric guitar. Jian performed the song on a television talent show, and became an overnight sensation. The song is now widely considered to be one of the most influential songs of his generation. Even to this day, some even consider “Nothing to My Name” an “unofficial” anthem for the student protestors during the Tiananmen Square uprising in 1989.

The brilliance of Jian’s work is often attributed to his unique way of incorporating the sounds of traditional Chinese instruments with electric guitar and other elements he admired in the western recordings he enjoyed.  In fact, when Jian first listened to western rock music on smuggled recordings from Hong Kong and Bangkok at 20 years old, he knew that he needed to spread this genre of music throughout China.

“We learned a lot by imitating,” said Cui Jian, “But we have our own problems, our own feelings to express, so we’ve started making our own music.”

If we explore the evolution of Chinese Rock through to today, the first part of Cui’s words is what typically bothers many young Chinese rock bands, while the later part (to a certain degree) give the excuse for those bands to think that they should not be bothered.

Does “Imitation” Work?

By most accounts, rock-and-roll music originated in the United States during the late 1940s and early 1950s and became increasingly popular with singles such as Elvis’ “That’s All Right (Mama)” in 1954 and Bill Haley’s “Rock Around the Clock” in 1955. However, through rock music in the late 1950s and early 1960s, the Beatles, drove rock music into the international mainstream and catapulted western pop culture around the world. However, over 20 years after Cui started his “rebellious” band, the share of rock music today in the Chinese market is even smaller than during the 1980s – less than 5%. There are many arguments for this; political restriction, music pirating, declining record business, etc. However, in China, you will get a simple answer when you ask people what they think of rock music: it’s NOISY. And the answer has not changed much even after 20 years.

On a very basic level, many westerners arguably develop an appreciation for rock music because – to some extent – the so-called NOISE satisfies their need to express their inner cravings to “rebel”. It can often be taken for granted that the Confucianism culture is deeply rooted in China – and is so strong that it makes people feel that “to rebel” is a bad thing. Consequently “noise” must be bad and the whole “rock” idea is a difficult notion for the Chinese to understand.

So the assumption I am making here is that, in China, the youth don’t relate “rebelling” to “noise” but rather to the “image” of rock n’roll. It’s the idea and image of rebellion versus the love for the actual melodies and sounds itself. The fact of the matter is that the Chinese prefer visual communication over alternative forms. This topic could be stretched far beyond rock music, but we will just keep it to the topic on-hand: Does “imitation” work?

What are the Implications?

Let’s return to the last part of Cui’s quote “We have our own feeling to express, so we start to make our own music”. For the youth in China, the desire to “rebel” is certainly personified in the image, but not expressed in the music itself. If we look at some emerging pop trends below, you can see how the way to “rebel” heavily relies on visual experiences.

Super Girl

As far as music celebrities, the “Idol” concept has become an incredible phenomenon in China.  With “American Idol” dominating the US market, the Chinese developed their own version, titled “Super Girl.”  To illustrate just how popular “Super Girl” became in China: the show’s popularity also attracted many critics that after 2006 it was cancelled, and has just recently been brought back onto the air.

Super Girl is, at its core, a karaoke competition television show. However it is considered the biggest music cultural event in the past10 years as well. The key to its success is likely that it creates visual experiences to attract the youth market and drive them to vote, which is considered a primary way to voice their opinions and to be a “rebel” in the sense of an individual opinion and not limited by authority.

Conclusion

Today, rock bands are learning from every emerging pop trend. The television reality show “Battle of the Bands”, sponsored by Pepsi Co., has become one the latest top-rated shows in China—with the number of bands’ live performances around the country increasing at a phenomenal rate of 300% per year. For most new and up-and-coming musicians, it is important to heed these lessons and learn how important it is today to create visual experiences to engage audiences and to enlarge a fan base. I a broader sense perhaps these are lessons the bands and label managers should learn from the history of western rock-and-roll.

Reference:

CANTO POP

Canto-pop was thrust into the spotlight in the 1970s – a decade before rock music was on the scene in China.  As television sitcoms began to gain popularity, it became apparent that a “theme song” would be a good way to tie in music to television.  Sandra Lang sang the first television theme song in China in 1971 – “The Yuanfen of a Wedding that Cries and Laughs”. Following the overwhelming response, pop stars from all over China tried to follow suit..  Theme songs fueled pop musicians careers throughout the rest of the decade.  In the 1980s, the genre really took off, and  remained at the top of the charts till the end of 90s, when its place is taken by Mando-pop

MANDO POP

Mando-pop’s biggest hub of distribution has long been Taiwan. Mando-pop aims to stay true to its shidaiqu roots from the 1920s, while incorporating newer and more modern instrumentation. Today, mando-pop stars such as Faye Wong, called the “Diva of Asia” after she was the first Chinese artist to perform in Japan, Jay Chou, and David Tao carry the genre.  Despite the popularity of canto-pop within China, Mando-pop has gained a great export value for China.  Outlets in Canada, the U.S., and Australia all have great markets for mando-pop and other Chinese music. Moreover, mando-pop has proven to be an effective profit-making industry that has heavily influences Asian trends.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

By Gordon Chu | November 17, 2009

Breaking the Fourth Wall: Shanda’s Venture into Television

Very little surprises me about pop culture in China, but I have to admit it took me a very long time to wrap my head around the magnitude of online games. From MMORPG (massively multiplayer online role-playing games) to fun casual games, online games are a staple in the pop culture of China’s youth.

The latest figure for the online game market is just shy of 27.5 billion yuan – or close to a little over $4B (USD). While the current numbers fall short compared to that of the United States (currently first in the world), China is expected to grow up to 68 billion yuan ($10B USD) accounting for almost half of the world market by 2012. While I do take these figures with a grain of salt, it’s hard to argue against general consensus on the growth opportunity of online games in China.

Currently, the online game marketed by Shanda, ‘Aion’ is the latest buzz – or, at least the very least, for the foreseeable future. While I have the upmost faith in the game’s ability to continue to dominate the online game market, they really have not been around for all that long. Just one year ago, it was all about Blizzard’s ‘World of Warcraft’ until regulatory restrictions and time lag significantly sapped Blizzard’s momentum to continue its growing market share.

And so, Shanda was quick to pick up where Blizzard had left off and poached the online community with Shanda’s adoption of Korea’s most popular MMORPG, ‘Aion’. Just to give you an idea of the magnitude of ‘Aion’ in China today, in a corner of Tai Jiang City (Zheijiang Province) lies the future home of an amusement park around the central theme of the popular game. In the latest report released by Shanda, there are over 6.8M online players and continues to grow since its beta release in April 2009.

I see the game’s growth as more of a strategic move by Shanda and, frankly, am not all that surprised by the initial success. Looking at Shanda, it appears that luck always seem to find its way to them and with the latest news on Shanda’s joint venture with Hunan TV, I would not be surprised if luck strikes again and could very well be the biggest pay off yet.

BACKSTORY OF SHANDA

I admit, I am a big fan of Shanda. They are quintessentially on the cutting edge on both their online game strategy as well as their aspirations to be a true multi-platform media company. They may be the leading entertainment media company, but complacency is certainly is not in their vocabulary and are extremely active in breaking out of their niche and extend their footprint in the media industry.

In 2006, Shanda introduced their Chinese version of the set-top TV box (think Apple TV) called Shanda EZ-Pod. The concept was to integrate the television and PC experience in an interactive entertainment platform. Sounds easy, right? Unfortunately, the EZ-Pod failed to make any significant penetration in the China market mainly due to the fact the China market was simply not ready yet. Regardless, you have to admire the ambitious nature of Shanda to horizontally integrate itself from PC to the television set.

The EZ-Pod is just one example of Shanda’s business history (albeit a good example). They’ve dabbled as a private equity company investing in emerging game studios as well as entering the mobile market with the acquisition of a mobile entertainment service company in June 2009. Some ideas will work, some will not; however, I think this new venture will be the best bet yet.

BACKSTORY OF HUNAN SATELLITE TV

How Shanda is to online games, Hunan TV is to television programming. Really, Hunan TV (as I know it) has only been around since 2002 when it transformed from a news channel to an entertainment channel targeting exclusively at the young demographic. Since then, Hunan TV has pioneered programs that are still being used as the standard in excellence including ‘Super Girl’ (Chinese version of US ‘American Idol’) and, my personal favorite, ‘Ugly Wudi’ (Chinese version of US ‘Ugly Betty’).

These shows excelled beyond just that of production value and concept – these shows revolutionized different programming strategies that all other TV stations are now looking to emulate. With ‘Super Girl’, the idea of integrating mobile text messages introduced the idea of audience interactivity. And, with ‘Ugly Wudi’, the idea of brand integration is certainly the hot key topic in nearly all programming discussions.

So, question in-mind, what does this mean as a joint venture between the two mega-companies? Too soon to predict (beyond launching their original programs); however, the partnership itself has significance and will certainly be an indicator of what the media industry in China has in-store.

SIGNIFICANCE OF THE JOINT VENTURE

More Money, More Problems

The idea of ‘more money, more problems’ really applies to that of Shanda. Shanda Games having gone public at the end of September on NASDAQ (ticker: GAME), they all of a sudden are sitting on a heap of cash and a very strong fiduciary duty to make good returns to their investors. So, the billion dollar question is – what will Shanda do with $2B (USD) in cash?

In this particular case, using the proceeds of the IPO to fund non-game initiatives – such as this particular $88M (USD) joint venture with Hunan TV to produce and distribute movies / television series. Will the investment  pan out as planned? Too soon to make mention, but the best way to mitigate risk is finding the right partner (nice transition to the next point).

Perfect Match

If I was maestro of this deal and orchestrated the different partners who would be put into place, I could not think of a better partner for Shanda than that of Hunan TV. It’s not just about the innovative nature of Hunan TV’s business, but it’s also about the right timing of it all.

‘Ugly Wudi’ was a runaway hit the last two years and advertisers are flooding to Hunan TV to hopefully join the branded content bandwagon. Hunan TV already has in-place four more original series similar in programming style and continues to trail blaze new grounds in Chinese television. Now, here comes Shanda with the same philosophy to push the limits of new media, sitting on a $2B (USD) heap of cash, and ready to make this work for all.

The joint venture’s first project will be a remake of a TV series, ‘Princess Huanzhu,’ which is adapted from a Taiwanese novel of the same name. The second is to produce a movie based on ‘Xing Chen Bian’ – a popular novel from Shanda Literature (how convenient) with an adapted online game soon to follow.

From Games to Television

If it wasn’t obvious enough, this joint venture would be the first example of an online game company making headway into other facets of media. For years, online games and television have been placed in their nice respective silos separate from one another. Yes, there would be cross-platform marketing campaigns and other channels where the two would co-exist, but never has the integration between the two very different markets has been so incredibly meshed together like this joint venture.

To me, the deal signifies more than a mash-up between industries, but is the catalyst of other companies looking to cross barriers and push the envelope of media integration. Who knows what the next ‘big thing’ might be, but creativity is the only limit and this joint venture marks one of the flagship times of history in the making.

Share in Financial Risk

For years, China’s TV industry operated very much on a one-way street: content providers and advertisers worked with (or for) the television stations. Distribution is king in China and has always held the power when working with both content providers and advertisers. After all, they were state-ran and there was no need to necessarily be commercially efficient.

However, as of recent, there is a new world order. Not to say that the power has shifted entirely to the content providers / advertisers, but they are making significant leeway. Case in point – the joint venture involved two parties investing $88M (USD) in total. Now, what the splits were between Shanda and Hunan TV, I really do not know, but the idea that Hunan TV would invest hard cash into any new venture marks a big swing in leverage in China.

CONCLUSION

Nobody really knows if the joint venture will really work as they expect it to. It may be wildly successful, or could be an $88M (USD) flop. Whatever the future holds the macro effects of these deals will define the media industry in China (and with ramifications globally as well). Of course, I’m fairly optimistic on the idea and look forward to a brighter and more dynamic media future.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

By Gordon Chu | November 10, 2009

Disney China: “The Happiest Place on Earth”

In business school, case study after case study, Disney was the belle of the ball in nearly all of my classes. From marketing to finance, you couldn’t escape the Disney name without seeing them in one form or another. And I say why not – after all, they have undeniable brand power internationally. Mickey Mouse is synonymous to US pop culture and Walt Disney’s marquee signature is universally recognized in any language around the world.

This year especially, Disney seems to be very active in extending their reach in all facets of media. In movies, Disney’s summertime blockbuster lineups (from ‘Up’ to ‘A Christmas Carol’) show little signs of wear from this bad economy here domestically in the United States. Then there was the $4B (USD) plan to acquire all of comic behemoth Marvel’s assets. And to top off this illustrious year, breaking news to create a brand-new Disney China outside of Shanghai valued at over $3.5B (USD).

BACKSTORY OF DISNEY CHINA

Now, I should be very clear that Disney China is not a spur-of-the-moment decision by the Chinese government to bring Western media groups over to China. The idea has been percolating for over 20 years to bring a brand-new amusement park for the Chinese market. Previous attempts were curtailed mainly due to perceived unwanted foreign cultural influences in the China market by the government.

After numerous attempts to bring an amusement park on to mainland China, Disney eventually ‘settled’ on Disney Hong Kong as a constellation prize. Unfortunately for Disney, the park has not fared well and paled in comparison to corporate’s grandiose expectations for the landmark.

Still, Disney Hong Kong was a great first run for Disney to test the waters when dealing with China.

SIGNIFICANCE OF DISNEY CHINA

When you first glance at the idea of a Disney park in mainland China, the gravity of such an event is not obviously apparent. There are over 300 theme parks throughout China and one more to that list doesn’t seem to be all that ground-breaking of media news. However, remove the roller coasters, the different attractions, and the physical location of Disney China as a whole, and the details and symbolism of Disney China takes front stage of worldwide importance.

Invitation of Western Media

Until recently, the whole Chinese media industry was very happy with status quo. And rightfully so. With state-run money as a sure income to your revenue top line, I don’t find it incredibly difficult to understand that Chinese-ran media companies had little motivation to go beyond that of status quo.

However, now with less reliance on government money and more dependence to be commercially viable, the entire Chinese media industry is evolving as we speak and have undeniably been more open to the ideas of Western companies and philosophy.

For China, the nod and the green light to develop Disney China is really an invitation of Western media companies to the China market. Not only does this exude miles upon miles of ‘soft power’ the Chinese have been very disciplined at practicing since the Beijing Olympics, but this is a way of China making their footprint as a worldwide media player.

Media’s Two-Way Street

It’s no mystery that China is on the rise and is the fastest growing consumer market in the world. While nearly the rest of the world is in an economic slump, China has been on the fast lane to aggressively build and grow their market during these troubled times.

Since even before the Olympics, China has invested billions in infrastructure to develop their cities to be a global spectacle. It’s also no mystery that tourism plays a big role in China’s plan (dovetails very nicely with the 2008 Olympics and the 2010 Shanghai World Expo) to extend their image. The approval for Disney China comes amid China’s ongoing efforts to develop its tourism sector – expected to grow 3% in 2009.

However, the build-it-and-they-will-come model does not always pan out according to plan. In this case, China understands that if it wants to play nice and rebrand themselves to be more open, they will ultimately need to learn the first lesson in the golden rule of sharing. In this particular case, opening their doors to Disney is a way to exemplify a spirit of a two-way street for Western companies and themselves.

Disney’s Way into China

We’ve focused a lot on describing the significance of Disney China on a more macro level for all Western companies alike. However, if we look into the micro, this new theme park is a significant boost in Disney’s presence in China.

For Disney, every move is a carefully analyzed decision that helps either build the company brand image or is a way to add to the income statement’s bottom line. I personally view Disney’s choices as a good indicator of where they see future growth. In the case for theme parks, Disney has real estate in Los Angeles, California; Orlando, Florida; Tokyo, Japan; Paris, France and Hong Kong. To carefully choose Shanghai (and 20-something odd years ago) as a near $4B (USD) bet is probably a good indicator of Disney’s thoughts on the Chinese market.

We’ve talked a lot about the difficulties and intricacies that go into entering in the China market. Many have tried and many have retreated simply because there is no simple way of doing so. Take Disney for example, in the United States, Disney operates an entire 24-hour TV channel and radio station – not to mention the numerous movies it produces every year as well. In China, Disney is limited to sporadic blocks of programming on local TV stations and has yet to capture the potential it sees in the China market.

Despite the barriers and hurdles to get across the goal line, Western companies still try and this is an excellent example at how Disney can really make a significant impact in the media industry in China going forward. It’s too soon to reveal the ‘how’ but landing a theme park is a great way to start the dialogue.

Share in Financial Risk

In my opinion, the most significant piece to the Disney China deal is understanding the flow of money. In this case, it’s rumored that Disney will only have 40% stake of the entire deal with the rest by Chinese monies.

To piggyback my previous comment about ‘playing nice’ with others, one of the most significant ways to demonstrate trust in any business transaction is a share in financial risk. For China, investing in 60% in this new venture demonstrates a real serious nature about being a global media country that is committed to make this a successful venture for all.

Especially with business in China where culturally, transactions are commonly lopsided in favor for the Chinese partner, this is a positive invitation for other Western companies to create ventures in China once again. This time – without the prejudice and without the notion of ‘playing by the rules’.

CONCLUSION

The whole concept of Disney China is still in its infancy stage. Yes, there are already committees and teams dedicated to creatively start drafting the ideas for the theme park altogether. I hear they’ve already tackled issues of localization (remembering the follies of Disneyland Paris) for the China market and are well aware of the fine lines they need to tread when working in China.

There will be hiccups along the way and I’m sure there will be areas of disagreement; however, Disney China is such an important venture for more than just operational reasons to Disney. It symbolizes an opportunity for Western companies to partake in China; and is a platform for China to demonstrate their ability to exude ‘soft power’ on a global stage. In either case, I see China truly being the place ‘where dreams come true’.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

“Because you’re worth it” – L’Oréal’s success in China

“Because you’re worth it”  “你值得拥有”– ask anybody in the streets of China and they will recognize L’Oréal’s memorable brand tagline. However, scratch the surface further, few would have known that the cosmetics beauty giant L’Oréal Group also owns 16 other brands in China since first entering in the market in 1996.

China Looks Beautiful to L’Oréal

If you compare L’Oréal with its competitors, L’Oréal entered the China market late. However, compare L’Oréal’s growth in China and they are simply in a league of their own. Their sales in China last year grew 27.7% year-over-year to 6.95M RMB (USD $1.02B) – a double digit growth in China for eight consecutive years (compared to a decline in sales in Western Europe and North America in 2008).

Multi- Brand Strategy

L’Oréal uses a multi-brand strategy to cover the mass market in China. The best way to describe their diversified brands is that of a pyramid:

At the base of the pyramid comprise of L’Oréal Paris, Maybelline Garnier, and Mini-Nurse – all products that target the mass market.

Brands such as Vichy, Kerastase, and Matrix make up the middle of this pyramid. These products are sold in pharmacies and hair salons meant for consumers looking for that mid-level quality of products.

The very top of that pyramid is reserved strictly for the high-end products such as Lancome, Biotherm, Shu Uemura, and Kiehl’s. These products are sold in retail outlets, high-end department stores, and specialized boutiques.

Each level of L’Oréal brand pyramid occupies a certain price area, which meets the needs of Chinese consumers from a price sensitivity perspective namely due to the wide income gaps in China.

Now beyond price, L’Oréal products go through different tiers of sales channels including supermarkets, pharmacies, hair salons, department stores, and specialized boutiques. Even L’Oréal brands have their own unique ‘personality’ – L’Oréal Paris is a high-performance technology brand, Maybelline New York is fashion driven, and Garnier is often characterized as a natural brand. Diversity in products, branding, and sales distribution all contribute to L’Oréal’s success in cornering the beauty and cosmetic market in China today.

Local Acquisitions

As in many large corporations, acquisition plays a big role in L’Oréal’s strategy in China. In this particular case, acquisitions of local brands help cover another dimension of market along with their other global products. Case in point, L’Oréal China acquired Mini-Nurse (Chinese mass-market skin care brand) in late 2003 and Yue-Sai (a local make-up and skin care brand) in early 2004.

Mini-Nurse was distributed in 280,000 outlets across China, and held a large share of the low-end market at that time. The acquisition enabled L’Oréal to access mass-market consumers that have never been able to access the products before as well as securing local distribution/operation knowledge to L’Oréal.

As Lan Zhenzhen (Vice President of L’Oréal China) commented, nearly 60% of the company’s sales in China come from the bottom base of L’Oréal’s brand pyramid (i.e. local brands and mass-market products).  It’s not hard to see how important the local brand acquisitions are for the company’s growth over the long run.

Localization Details

As we known, no matter what strategies companies implement, localization is a MUST in any foreign market.  And for L’Oréal China, they are no exception.

R&D

First example, L’Oréal Research Center in Pudong, Shanghai. L’Oréal invests over 3% of sales every year in product R&D (industry average is 1.5%-2%). This research center was opened in 2005 in order to get a better understanding of unique properties of the hair and skin of Chinese consumers. This was “the first facility of its kind to be operated by a cosmetics company”.

For example, most Chinese women like skin whiteners rather than tanning products. Odd for us folks in the US (especially here in Los Angeles), but a sign of beauty for those in China. Also, the texture of Chinese hair is thicker and more course if compared to typical US Caucasian hair. This requires different product mix, different marketing, and really a different knowledge set to effectively sell and move these products in China. L’Oréal has dedicated in-depth research to these and other issues, and followed up with more innovations in products to suit the needs and preferences of Chinese consumers.

Chinese Employees

Out of a workforce of nearly 4,000, 95% of L’Oréal China employees are local – and most brand managers as well as marketing/sales executives are Chinese. Hiring local employees is essential for doing business in China – simply because the employees have a better understanding of the market, the culture, the consumer’s needs and, last but not least, are more cost-effective than overseas employees.

Smart Human Resources

We’ve established that most of L’Oréal’s employees are Chinese. The interesting bit to me is that the average age of the employee in L’Oréal China is actually less than 31 years old (coincidentally, the same age as their consumer target). In fact, their youngest brand manager was 25, according to Jean-Paul Ago, CEO of  L’Oréal Group.

L’Oréal started many different competitions among Chinese students since 2001, including the “Innovation Lab Challenge”, the “L’Oréal Brandstorm”, and the “Industrial Challenge”. These various competitions allowed college students to not only get introduced to the cosmetics industry, but more importantly, brings a deep and wide talent pool for L’Oréal in regards to creative ideas and future employees.

L’Oréal’s continuous recruitment and selection of young people has two significant benefits: first, fresh and innovative ideas for the company (since young people follow trends), and second, a savings on salaries, as young graduates means less money.

Social Responsibility

Lastly, L’Oréal China has always been a good corporate citizen. While fifteen years ago that may not have been high on the priority list for companies, today is an important branding aspect that companies must be consciously aware of now. Below are a few of the different ‘social responsibility’ campaigns L’Oréal China has launched – each to carefully brand L’Oréal’s brand image in the China market:

o   The first French sponsor of Expo 2010 Shanghai (2009)

o   Donated 9,000,000 RMB and materials worth 8,000,000 RMB to all earthquake disaster areas (2008)

o   Launched “I Am Proud of Saving Resources” campaign to conserve energy, recycle (2002-today)

o   Initiated “Protecting the Yangtze River and Save the White-flag Dolphin” campaign (2005)

o   With UNESCO, established the “World Young Women Scientist Award” (2000) and with All-China Women’s Federation, China Association for Science and Technology, and Chinese National Commission for UNESCO established the “China Young Women Scientists Award”

Future Challenges

In the foreseeable future, L’Oréal’s future is optimistic in China. However, the cosmetics market in China is filled with stiff competition from both foreign and local brands. Besides its major competitors that exist today, South Korean and Japanese cosmetics giants (Amorepacific, Kao, Shiseido) are targeting China as well.

Not only is there the general consensus that Asian brands are more suited for Asian skin, South Korean and Japanese cosmetics also benefit from the fact their local soap operas are extremely popular in China. These soap opera stars exhibit a desirable look and thus have strong affiliation to their particular native brands.

Despite the growing competition, the overall market is growing with opportunity. However, for L’Oréal, they’ve tackled the market intelligently and take one step at a time. As Paolo Gasparrini, the President of L’Oréal China noted, “all of our achievements of today started from absolutely zero”. It’s just the beginning of the China journey and there is still a long road ahead …

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

Journey to the West: China’s Move to the US

Sitting here in Los Angeles, California, I often find myself fixated on one single deliberate thought of my role here at METAN – how to get into China. My usual Monday morning rants start off with a “what if we did this…” or “we need to do that…”, but never do my thoughts deviate far from what needs to be done in China (as evident in nearly all my past newsletters).

However, China is a two-way street. And as much as we see this golden opportunity to and make a splash, Chinese companies see us nearly the same – how to get into the US market. Sure, Chinese brands have made their way outside of China to their Asian neighbors or even further west to pockets of Europe. But the United States – this is the major leagues for these companies. This is where they can make a real name for themselves outside of their four walls in China.

Whether through an acquisition or just creating a better global marketing presence, Chinese brands making the leap to the US should not take anybody by surprise. The sagging US economy is struggling to pull itself out of this current recession while the booming China market is clearly on the uptick. Think of this as the ‘perfect storm’ for Chinese brands to enter the US market while the price is right.

Still, there will inevitably be hurdles with Chinese brands entering the US market and expecting immediate (or any) results. In a recent article by the China Market Research Group, it reports several issues Chinese brands will face when entering the US market.

BRANDING

It’s no mystery that Chinese companies have traditionally not been great at branding / marketing. Part of this can be attributed to China’s disconcerting view of brand value as a whole. Take a stroll in Beijing’s silk road market and the streets are lined with fake luxury bags, watches, and wallets. A $5,000 designer hand bag can be conveniently yours for a mere price of $5 if you haggle enough with the street merchant.

Fundamentally, China business has operated under one rule of thumb – you compete on price. And when costs become the main driver in the business model, the idea of building value in a brand becomes low on the priority list.

To succeed in the US, Chinese brands need to recognize (and quickly) that the long-term requires brand value and not just growing revenues at marginal profits.

HUMAN CAPITAL

For many Chinese companies, when a business issue arises, the solution is often to throw more resources and bodies until it’s properly solved. It might be crude, it might be short-term, but in China, it certainly is effective.

Human capital is viewed more as a commodity than it is an investment in the US. Remember, China operates with quantity, not necessarily quality, and this certainly applies to how companies treat employees. Retaining quality employees is a concern for any Chinese brand looking to grow in any market – either in China or elsewhere.

The ability to leverage the knowledge and operate more efficiently will be a major pitfall for many companies looking to grow beyond status quo. It’s no wonder there has been a flurry of acquisitions by Chinese companies of US entities to retain these assets. Chinese companies are not just buying brands, they are acquiring the expertise necessary to compete in developed markets.

PATIENCE

Usually, diversification is a positive attribute for any portfolio of companies. It hedges risks and builds a solid foundation for steady growth. However, in China, the idea of ‘steady’ is subjective and the mentality of ‘now’ is more appropriate of how many Chinese companies operate.

The exponential growth of China’s economy really reflects their own ambitions to be number one. Whether it is a small company selling widgets for mobile phones or big conglomerates aiming to be the next Google, the goal has never been to be second-best.

The issue is not so much the ambition, but in the journey along the way. Companies such as Toyota and Sony have taken decades in the US to build a brand that communicates value. Branding is often a matter of patience and time for consumers and foreign markets to feel comfortable with the brand. For many Chinese companies, the ambition to grow and to be number one often eclipses the subtleties between brand marketing and brand building.

Now, beyond branding, human capital, and the idea of patience, there are several other issues Chinese brands need to consider when entering into China that the article does not state. As much caution to the wind we throw to those who look to enter the China market, the same can arguably said to those Chinese companies embarking on American soil.

CULTURE

The idea of a business culture runs along the same vein as that of how a company brands itself. Just how there has been a lack of attention and awareness to a company’s brand, the very same can be said to that of the business culture.

Some may argue that the business culture is organically derived and is a bi-product of the success of the company, but there are still fundamental traits that are consistent across nearly all working class in China. From the organization structure to the way communication flows, there are differences and subtleties that can make or break the functionality of a company. Throw in a US entity that bares no similar assimilation to that of their Chinese counterpart and the complications of the business culture becomes much more tangible for many Chinese companies.

Bottom line, launching a US presence requires more than occupying an office space and filling in the operational nuts and bolts of the business. It requires the qualitative awareness to align both cultures to function as one – an area that many Chinese companies are getting accustomed to for the first time.

INNOVATION

These discussions of branding, human capital, patience, and business culture all culminate to one key factor to the success of globalization: innovation.

At the end, innovation drives success and is rewarded in nearly all developed markets. Despite China’s booming economy and ability to succeed on the laurels of low-cost, innovation is a void many Chinese companies need to address in order to succeed in the US.

In a culture where independent thinking is not encouraged and where intellectual properties are undervalued, China will face monumental hurdles to develop their domestic brands overseas that match their own expectations of growth. For now, a cheaper alternative through acquisition of ready-to-wear companies such as Lenovo and Hummer have the required infrastructure and operations for innovation. However, as the US market begins to recover, options for acquisition will soon run dry and force Chinese companies to look internally for their own path forward.

CONCLUSION

These points are not to say Chinese companies cannot succeed exploring in the US. In fact, the short and long horizons are paved with great opportunities for China to globalize their domestic brands in the US market. In an increasingly smaller world, the evolution of business requires globalization in order to grow.

For the Chinese, these mentioned issues are not hurdles, but rather opportunities to better raise the status quo for a growing business. And as the US market recovers from the economic downturn in the near future, US companies will need to be prepared for a revamped market with new Chinese competitors.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

By Ren Fang | October 20, 2009

Brand Me if You Can: The Curious Case of “Sufei’s Diary”

Four hours after the premier of the 4^th season of Heroes on NBC, the show was available for download on all the Chinese P2P websites, subtitled by anonymous ‘translation volunteers’. Forty-eight hours after, the total number of downloads number eclipsed 2 million.

I consider myself one of the 336 million ‘Chinese netitizens’ hunting for free content on every P2P corner (proud member since 1997). The volume of free online content in China is absolutely astounding – a conservative estimate of 100 times more than that in the United States. I really shouldn’t say ‘free’ really – after all, there’s no such thing as a free lunch. In this particular case, with all this ‘free’ content, there are the layers upon layers of advertising (mainly banner ads) that these digital ecosystems rely on for bandwidth and overhead costs.

If there is one thing to be said about the Chinese Internet user (age 18-30), they are resourceful. Like every efficient market and every evolution of technology, these users have found a way to circumvent the unwanted, the fluff. They have become far more skilled – nay, I will actually use the word ‘experts’ – at detecting, filtering, and blocking every known way of online ad messages.

Like their counterpart in the US, Chinese brand managers are scratching their heads wondering just how to reach this elusive market. Finally in 2008, they designed “Sufei’s Diary” – the first online branded content. “Sufei’s Diary” is based on a Portugese  series, “Sofia’s Diary” about an 18-year old girl moving to the big city (Shanghai) for college. The first run of the campaign was as follows:

Webisodes: 40 x Daily 5-minutes

Run of Webisodes: 8 weeks

Channel/Platform Partners: 3 video portals, 1 mobile platform

Anchor Sponsor: Estee Lauder/Clinique

Additional Sponsors: Sony (Cybershot, VAIO), 51job.com, P&G

Target Audience: female 18-30 years old

Total Views: 20 Million (4 months accumulated)

Avg. Views / Episode: 453,000

As an original program, “Sufei’s Diary” is armed to the teeth with fully integrated brands/products and audience interactivity functionality. Go on to Sufei’s blog online and discuss the Clinique products Sufei used in the show or participate in weekly polls that determine the plot for the next few episodes. With 20 million views in a four-month period, advertisers are scrambling to emulate this same runaway success. Here are a few lessons to be learned -

BE A FRIEND

In China, even worse than being hated, is being ignored. For online advertising, banner ads have been classified has evolved from the former to the latter. Today, brands need to realize that they have to be ‘friends’ of this ad-blocker generation in order to even be noticed – thus, by using a more effective tool, i.e. branded content.

Metrics of success is typically measured by impressions / eyeballs for the program. While fine and useful as a matter of quantitative measure, I personally think these impressions only make sense when they are gauged against an engaged-viewer which is a far more qualitative quality. In the case of “Sufei’s Diary”, the after-campaign survey of 1500 respondents showed over 50% of viewers were more motivated to purchase Clinique products after watching the show.  In my mind, this was a way of them to say “thank you Clinique for not bombarding me”.

CONTENT SCARCITY

Compared with many other western countries with well-developed media/entertainment industries, the underdeveloped media market in China has been facing content scarcity for years and the only sustainable business model is advertising. That is to say, compared with branded content in other western countries, it is logical that with the right program and brand, you can make more of a splash in China compared to here in the US (of course, all theory). Following the success of “Sufei’s Diary”, other web-based sitcoms seemed to come out of the dark corners of the Internet. Shows like “Office Quartet” (think US-based “The Office”) sponsored by soft drink brand Kang Master or “Color Ladies” (think a female “The Office”) sponsored by Samsung. Despite the not-so-good production quality, these distant cousins of “Sufei’s Diary” reached similar levels of success as their predecessor indicating that the Chinese netizens have a huge appetite for a new model of programming.

LOOSE REGULATIONS

In China, SARFT and Ministry of Culture (MOC) basically rule what can and what cannot be aired on traditional media – i.e. television and radio. However, the Internet is another story and is very much considered the ‘Wild West’ where content innovation can flourish. I should say that it’s not that SARFT and MOC does not care about online world, but the fact that they lack the execution power over the Internet. Will this change in the future ahead? No one really knows at this point – but, for the time being, these loose regulations means a lot of open opportunities for content and brands.

RETURN ON INVESTMENT (ROI)

Finally – my favorite part… Returns On Investments (ROI). No matter how we dice it or splice it, it all comes down to the money. And in our (METAN) world, we spend a considerable time making sure this works too. Let’s take “Sufei’s Diary” and breakdown a simple scenario:

With 18 million paid views (453K views / episode x 40 episodes) and estimated CPM (cost per thousand) of $10, the total campaign would have cost $180,000. Expensive? Yes. Value? Hold that thought. The after-campaign survey showed that purchase intention was nearly 50% of the respondents, so a CPM of those who intend to buy comes out to $20 ($10 divided by the 50%).

Let’s compare that number against other traditional ads available for online, namely: video pre-rolls and banner ads. With video pre-rolls, Tudou, a top Chinese video portal, has a listed 2009 rate card of $17 for a 15 second pre-roll. With an average CTR (click-through rate) of 10% (based off of US metrics which is higher than that of China), the equivalent CPM of those who intend to buy comes out to a whopping $170 ($17 divided by 10%).

Banner ads fair even worse unfortunately. From my estimates, CPM comes out to be $2 ($14,300 / day x 7 million daily average viewers) for a homepage banner ad on Tudou. With an average CTR of 0.25% (again, based off of US metrics), the equivalent CPM of those who intend to buy comes out to $800 ($2 divided by 0.25%).

Let’s compare – branded content at $20, pre-rolls at $170, and banner ads at a modest $800. Doesn’t take rocket science to figure what’s the best bang for your buck in this situation. Obviously, these are very rough numbers and gross estimations, but it is a good litmus to determine the efficacy and value of where branded content is.

Most importantly, a successful run of a branded content program is the association of the program and the brand itself. For the case of “Sufei’s Diary”, whether you are Sony, Clinique, or 51job.com, the idea of the program and your brand is synonymous – they are one in the same. For brand managers, you couldn’t ask for much more.

CONCLUSION

The other night, my friends in China called asking about a clutch (apparently that is a small strapless purse according to my wife – I thought it was associated with a car) they had seen on an episode of “Gossip Girl” online. Lucky for me, my guy friends over in China have not asked me for a General Motors SUV after watching an episode of “Prison Break”. In any case, the message is clear – branded content works and works well in China. And for myself and the millions of content-hungry netizens, we are always asking for more.

Ren Fang is the Director of Business Development at METAN Development Group. For comments/questions, email ren@metanmedia.com.

China’s Multi-Billion Dollar Bet: TV

Recent news came out from China stating that they plan to spend billions of dollars in the next few years to develop media and entertainment companies to that of global media conglomerates such as News Corporation and Time Warner.

With top-level guidelines set by China’s State Council, the overall plan envisions the creation of entertainment, news, and culture companies that depend less on government backing, and more on private investments both local and abroad. In short, China will finally open up doors to foreign investments and control.

A bit of background on the China media market – for years, the market has been tightly controlled by the Chinese government. With influence both on the content creation process as well as on distribution, the Chinese government really has had full-reign and control on the entire media market in China. With CCTV on-hand and a number of large provincial players (i.e. Shanghai Media Group, Beijing TV, etc.) that are also state-run, international media companies such as Time Warner or News Corporation have had many difficulties effectively penetrating the Chinese market.

However, with this announcement, China is taking the first step towards evolving their media industry.

What Does This All Mean

From my first reaction, this bit of news meant one thing – China recognized the need to change. If we take a look at the rest of the world and how media and television has evolved, China is the only country that really has maintained the same business model of government control for years.

This might be great news for the government, but is a double-edged sword when it comes to commercial viability for the television industry. With advancements in Internet and access to other programming, the Chinese audience has been able to circumvent a lot of that government control and simply chose another platform to consume their media. With less viewers and a more fragmented marketplace, the flow of ad dollars are eroding and we can see how advertisers are flocking to online marketing as a way to reach their target audience.

Now we have this open invitation for foreign investment into Chinese media companies. I should note that I do not think this is going to result in a flood of these big media conglomerates in China – we should all heed Rupert Murdoch’s conquest into China years back (Chinese government stopped his attempt to go around the system and buy distribution) and understand that a similar fate would probably result the second time around. What this does mean is more of a walk-before-we-run approach in that dollars will be coming in forms of partnerships with these Chinese companies. Take, for example, the joint venture formed by Gehua Cultural Development Group (state-owned media company) and Live Nation, the world’s largest concert promotion company back in 2005 where Gehua has first right of refusal for any live event promotion in the China territory.

In other words, while this plan does not necessarily mean hard dollars invested for higher stakes into Chinese media companies, it does mean new business opportunities that private equity and investment groups can pursue and leverage in the China market.

What Does This Mean for Content Providers

For media companies such as METAN, this news is great news in both short and long-term goals. In terms of content, I do believe that these changes will necessarily loosen content control. After all, if the whole goal is to institute a commercially-viable business model to revamp the sagging television industry in China, content will ultimately need to change accordingly. Note, I will say that this will not mean a rampant and radical deviation from today’s norm – in fact, I would not be surprised if there was a ramp-up of government scrutiny with the programs on-air.

What this does mean more money for higher production and quality of programming. It will mean access to appropriate programming never been available to China before and an overall facelift of today’s current shows.

In terms of distribution, I do believe that these changes will eventually see a consolidation of media companies in the market. This means better distribution, better control, and ultimately flexibility and options for advertisers. And with a more consolidated market, competition for better quality content will arise leading to a closer resemblance to the television landscape here in the US.

What Does This Mean for Advertisers

For advertisers, this should be sweet music to their ears after years of playing by the rules of Chinese media companies.

After speaking with numerous brands about their experience in China, I’ve heard my fair share of horror stories with Chinese television. Not knowing whether the ads would be placed next to the news or in a soap opera, brands were literally at the mercy of the terms dictated by the Chinese media companies. The simple fact was with only one station with a national footprint, CCTV, brands were competing for ad space on the network – the law of supply and demand. Not enough ad space for a growing number of brands.

With dollars flowing into Chinese media companies over the next several years, we can expect to see more options open up for advertisers beyond that of CCTV. SMG (Shanghai Media Group) and BTV (Beijing TV) are two very prominent media conglomerates in their own rights who are right on the heels of CCTV to bring brands new platforms to advertise on. Not to say we need should discount the gravitas of CCTV – in fact, I’m particularly interested in seeing how they will arise and evolve their business model to compete for their share of the market.

We can also expect for advertisers new programming strategies beyond that of current TV today. With the likes of branded content (see Ugly Wudi) and digital interactivity, not only will programs be privy to new viewers and viewer experience, but brands will benefit the same.

Conclusion

The way I see it, this plan to open doors for foreign investments is not so much the money (let’s not kid ourselves – money still has a lot to do with it), but for an overhaul of the media industry in China.

For years, the Chinese television market has seen deep erosion in the way business has been done – a complete contradiction with the rest of Chinese economy which has experienced unprecedented growth. The bottom-line is China is ready and willing to create a more efficient media market. They are open to new business models and programming strategies in order to make this ‘work’. For content providers, the new media landscape will mean better programming, better distribution, and better future for Chinese viewers. For the brands, this new media landscape will mean better programming, new advertising vehicles, and a better more effective way to reach a growing Chinese consumer market. For myself and METAN, this only means more and better opportunities. A win-win situation in this multi-billion dollar bet.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

www.thehollywoodreporter.com | October 05, 2009

METAN Brings U.S. Daytime Soaps To China

Popular U.S. daytime dramas “Guiding Light” and “As the World Turns” will head to China thanks to a new deal between Metan Development Group and Power for the distribution of the soaps in that territory, METAN and Power said Monday. The deal was negotiated by Metan’s Gordon Chu, Power’s George Sakkalli and TeleNext Media’s Brian T. Cahill.

Popular U.S. daytime dramas “Guiding Light” and “As the World Turns” will head to China thanks to a new deal between Metan Development Group and Power for the distribution of the soaps in that territory, METAN and Power said Monday.

The deal was negotiated by Metan’s Gordon Chu, Power’s George Sakkalli and TeleNext Media’s Brian T. Cahill.

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www.asiamediajournal.com | October 04, 2009

Mellisa Gillies Joins Metan As Sales, Marketing

Global marketing veteran Mellisa Gillies has joined Metan Development Group (Metan) as Vice President, Sales & Marketing, the announcement was made today by Metan founding partner and President/CEO Larry Namer.

“Mellisa possesses the experience and insight to oversee Metan’s marketing activities,” said Namer. “Her expertise in business and brand development and marketing sales coupled with her solid financial background make her a wonderful addition to our senior management team.”

With over 20 years experience in media and entertainment, Ms. Gilles most recently served as Associate Director, Licensing and Brand Services, ACP Magazines. Prior to this, she consulted to television, radio and entertainment companies and held various executive level positions in marketing, promotion and publicity during her 12 year tenure at Twentieth Century Fox Film Distributors and a joint venture with Columbia TriStar Pictures.

“I’m excited to have the opportunity to join Metan at such an exciting time in this new company’s evolution,” said Gillies. “I look forward to working together with Metan’s talented executive team as we grow the company’s potential and reach new milestones in China, as well as other key global territories.

A key member of Metan’s global corporate strategy team, Ms. Gillies will oversee sponsorship, advertising sales and marketing operations, as well as related business activities in China. She will also be responsible for human resource and financial management for the company’s sales and marketing division. She will be based at Metan’s Beijing office.

Ms. Gillies holds a Master’s of Business Administration from the Australian Graduate School of Management and a Bachelor of Fine Arts from Victorian College of the Arts. She received the Award for Excellence in Marketing Communications from the Public Relations Institute Australia.

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By Kevin Yee | September 22, 2009

Financial Crisis Impact On China

China and the Current Financial Crisis
Growth in Turbulent Times

The current financial crisis emanated from souring US subprime loans and has led to a shutdown in global credit and slowdown in world trade.  Financial markets worldwide are in disorder and most major economies have been crippled.  However, once again, China is managing better than its Asian counterparts, and the rest of the world for that matter.

The central government believes that China’s stimulus is expected to push GDP growth to 8% or more, and Premier Wen Jiaobao reiterated that the government would introduce more stimuli to further boost the economy.  The current $4 trillion Yuan stimulus (18% of GDP), contains $1.18 trillion Yuan of new spending.  With retail sales and fixed asset investments achieving double-digit growth, China may be able to achieve 8% growth in 2009.

Accolade has been given to China for its efforts to bolster its economy.  Global financier, George Soros has called China a “positive force” in the world and in the markets, and believes that China will grow faster than most expect in the near future.  He also expects China’s influence to increase along with its economic power.  While most other Asian currencies have been falling due to weak exports and less FDI, the Yuan has maintained its strength.  On the contrary, the relative strength of the Yuan negatively impacts China’s exports.

To be clear, this does not imply that China is immune to the financial crisis.  The country’s GDP has dropped from 11.2% to 9% in 2007 and 2008, respectively.  In the first quarter of 2009, GDP growth has dipped to 6.1%, well below the government’s target.  Coincidentally, a minimum of 8% GDP growth is required to absorb the new labor into the workforce and prevent unemployment from spiking to levels that would cause civil unrest.  Whether 8% GDP growth is a modestly achievable figure or a naïve political target, China’s focus is not only to emerge from the financial carnage in good shape, but also to achieve unprecedented growth during this time.

China is addressing a few key areas to overcome the financial crisis, namely: aggressive bank loans, reinforcing manufacturing exports, and a potential shift toward domestic consumption growth.

China’s Future Economic Growth

AFC and the Crisis Today:  China’s Perseverance

If China’s emergence from the 1997 Asian Financial Crisis is any indication of how it will handle the current Financial Crisis, then there is no reason to doubt their future strategic vision.  Many of the policies implemented to solve this crisis parallel those employed a decade ago.  Some of these similarities include: spend on public housing, expansion of fiscal policies, relaxed monetary policies, and currency stability via maintain the RMB peg to the USD.

To cope with current challenges, China has undertaken some extensive changes since persevering through the AFC.  In particular, sections of the stimulus package address issues related to healthcare, energy conservation and the environment, and an increased proportion spent on infrastructure.

In the financial industry, the banking sector was gradually liberalized.  While global investors endorse the change, experts such as Nobel laureate Joseph Stiglitz believe that “capital market liberalization may not always be good as the only two major developing countries to be spared [by] the crisis [are] India and China”.  This was true for China during the AFC, and may also true for the current crisis.  Chinese banks were less invested and minimally exposed to the complex securities that imploded and had not invested much in mortgage-backed securities.

Investments, FDI, and exports helped the region emerge from the AFC.  The strategy worked due to demand from the U.S and Europe. With global demand weakened and exports dropping, Asian countries such as China can no longer rely on the same strategy help their economies return to high growth.  Therefore, China is shifting its source of growth from external buyers to domestic consumers.

Once a Dragon, always a Dragon?

Although the overall demand for exports will decline this year, China’s unrivaled supply chain network and manufacturing capabilities remain formidable.  Looking ahead, labor-intensive products such as apparel and toys still stand to capitalize on the average $1.26 per hour factory wage.  In technology-based industries like consumer electronics, China retains an edge as a top assembly destination due to its parts supply chain throughout the region.  Charitable government incentives support rapidly expanding industries such as renewable energy and cars—areas that have a massive total factor productivity potential.  These indications support the theory that China is reluctant to relinquish their status as the world’s manufacturing capital at this point in time, perhaps especially in the face of the financial crisis.  As a result, China may emerge from the financial crisis relatively unharmed.  Who can blame China for sticking to their strengths and maintaining a tested model for growth at the possible expense of short-term thinking? 

However, there are glaring indications that (re) adopting this strategy may not be so easy.  China’s once-fearsome advantage in manufacturing may soon become restricted to select industries.  Outsourcing to China is not as reactive as it once was, and emerging countries like Mexico are now viewed by the US as an ideal destination for an increasing number of products.

In a growing number of cases, price savings has reached a negligible difference by the time US outsourcers receive their Chinese-made goods.  Add to the mix challenges of quality, logistics, and language, US companies are forced to reconsider the hassle of manufacturing in China.  Moreover, dealing with an average lead-time of 45 days for goods to reach US shores causes great discomfort for companies in an age when lean processes and inventories are becoming the norm.

Despite these pressures, China’s attitude toward export-driven growth remains relatively undaunted.  China continually invests in manufacturing and infrastructure and has increased tax rebates on a range of exports.  This has spurred concern that China will fall back on exports in the short-term to weather the financial crisis storm.  Due to the recession, many US manufacturers are postponing major disruptions to supply chains right now.  This has afforded China some valuable time to retool and reconsider its long-term strategy.

Save Less and Buy More—of the Right Things

China may be able to reach 8% GDP growth target with its stimulus package in 2009, but it is difficult for any country to maintain high growth rates based on high government spending and high levels of lending for extended periods of time.  For the past decade, China has pursued a growth strategy based on investments (both domestic and FDI), manufacturing, and exports.  This strategy paid off handsomely, allowing China to achieve high growth for more than a decade.  However, whether this strategy will continue to yield the same payoff in the future has been—and will continue to be—a hot topic of debate.

The Chinese government has recognized that the growth of the economy will need to be less investment- and more consumption-driven.  In 2008, China’s consumption as a percentage of GDP was 37%, greatly lower than the 70% in the U.S and 58% in Hong Kong.  Few would argue that China’s emphasis on investment in the past was detrimental to its growth.  More attention has been given to the possibility of overinvesting, and that China’s current trajectory will lead to an inefficient allocation of capital.  Total factor productivity is diluted if China invests excessively in infrastructure—underutilized ports in Dalian—and will not contribute to economic growth.

More Money ≠ More Consumption

China has a very high savings rate because of strong cultural norms and a weak social safety net.  The Chinese have developed a habit of saving a large percentage of their income for numerous reasons, including: medical costs, retirement expenses, rural to urban migration, and education.  Most of these savings stem from an ingrained culture that comes with the inherent responsibility to take care of one’s family.  With China’s one child policy enforcing population control, GDP growth per capita was kept in line with GDP growth.  This allowed wages to increase and helped improve standards of living, but did not directly translate into greater consumption.  In fact, China’s savings and investment as a percentage of GDP increased from 39% to 51% in 2001 and 2008, respectively.  Although Chinese laborers earned more, the extra money was correlated with an increase in investments and savings, not consumption.

Policies have since been implemented to address this issue and further promote a domestic consumption-driven economy.  China has dedicated 150 billion RMB in its stimulus package for healthcare and education.  An additional 850 billion RMB has been budgeted specifically to provide basic, universal healthcare for 90% of the population by 2011.  By improving the country’s social safety net, China hopes that the people will be less inclined to save and more inclined to spend.  These actions will definitely help advance the government’s push for domestic consumption.  However, due to the Chinese propensity to save, it may take an adjustment period before observing any dramatic results.  (On a side note, it also remains to be seen whether the people will trust the healthcare system provided by the government.  China Road is a good read about the local government covering up the HIV epidemic in Henan province.)

Conclusion

Today, China holds $2 trillion USD in foreign reserves, is the largest holder of US Treasuries, and the largest foreign creditor of the US government with $1 trillion in securities.  Often accused of currency manipulation to boast an unfair trade advantage, China is closely monitored as the country navigates through the current financial crisis.

During a recent trip to China, US Treasury Secretary Timothy Geithner pressured China to alter their economic growth strategy toward sales to domestic consumers and less on export sales.  He encouraged China to offer more support in healthcare, welfare, and education to persuade the Chinese to reduce precautionary savings.  The implications here are that the US is interested in reducing mounting trade deficits with China.  Geithner stopped short of controversy and was cautious about recommending the RMB to move freely against the USD.

Only time will tell what the future holds for China.  Although the central government has explicitly expressed its desire to shift to a consumption-driven economy, many short-term actions imply reinforcing its reliance on exports.  Despite China’s strength in manufacturing, there are telling signs that their advantage is slowly eroding.  Other countries like Mexico are competing for a share and becoming an increasingly attractive alternative for (US) outsourcers.

With government reforms aimed at encouraging domestic spending, all indications point toward the importance of a domestic consumption-driven economy.  It remains to be seen how quickly and the degree to which the Chinese consumer will respond to these initiatives to stop saving and start spending.

Kevin Yee was a Project Manager at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

By Lin Bai | September 15, 2009

THE “SHE” MARKET

There is an old saying from a profitable businessman: “Want to make money?! Make it from the women and children!!” Direct and absurd as this sounds, this is especially true for women in the current Chinese consumer market. Today, this is truly a “she” market.

During the past two decades, the social and economic status of Chinese women has improved dramatically. China’s rapid economic growth has led to greater access to education, better employment opportunities, and ultimately an increased level of economic freedom and income.

Today, the Chinese female consumer has truly become the major driver of the consumer market. As David Lung, Partner, Retail & Consumer Products Practice, Ernst & Young, commented:

“…Chinese female consumers are shaping the consumption landscape in China to such a degree that companies need to have a profound awareness of who these consumers are and what their needs are. Failure to do so may undermine a company’s ambitions in one of the world’s biggest and most exciting consumer markets…”

Increasing social status

There is an old Chinese saying: “The longer the hair, the lesser the knowledge”, a saying that once reflected the attitude and sentiments towards women in China.  Repressed for generations, women were not given the equal opportunities in terms of a professional career.

Today, the new “she” market is far different: more women are accepted into top universities and therefore, able to get better jobs and make more money. Even in rural areas, women’s social status has improved due to urbanization where fewer hands are needed for farming and more job opportunities in the cities are open to them.

China has a terribly skewed men-to-women ratio in the past several decades, and this situation will worsen even more so over the next twenty years namely as a cultural ramification of the one-child policy (most family favors boys). Today, there are 118 males for every 100 females. As the difference between male and females grow, the Chinese people have an expression for this, that girls will become more “ZhiQian” (valuable) now than ever.

Increasing financial power

Despite their progress, Chinese women do not take their new opportunities for granted – they work extremely hard and are, on the whole, more financially independent than before. According to recent surveys, even if their partner or family had enough money to support them, 88% of urban women would choose to work.

If pure economic reasons are not enough to support the rise of the “she” market, culturally, the “she” market is and will continue to be a force to be reckoned with. About half of Chinese women believe that “My partner’s money is my money, and my money is also mine.” indicating that a large part of spending power will continue to reside with female consumers. What might be great for women and terrible for men, is fantastic for brands and marketers alike.

Family “CFO”

Chairman Mao Zedong once has said, “Women hold up half of the sky” meaning women in China have equal importance compared to men. However culturally speaking, women hold up more than ‘half of the sky’ in China in terms of making financial decisions for the family.  With their improving social and economic status, Chinese women are effectively groomed as the “CFO” in their family and partners’ business affairs. Their personal preferences have great influence on family purchases and many of them are the actual financial decision makers altogether.

According to Ernst & Young, 74% of married women are making less than their partners, but they have a substantial ‘say’ on how those earnings are spent – 78% of married women make the decisions for grocery and clothing purchasing for the family, and 23% of married women indicate they are able to make independent purchase decision on big-ticket items such as cars and houses.

Spoiled Girls

If the whole what-is-mine-is-mine attitude isn’t enough, the Chinese also believe that little girls should be spoiled (“Fu Yang”) while boys should be raised in a strict frugal manner (“Qiong Yang”).  This philosophy has had a long-term impact on today’s society: spoiled girls have grown up, married their respective spouses, and now expect the same level of care and monetary attention to provide for them.  For men, it has become second nature to take care of their wives – as evident in the endless shopping, dinner, monthly rent or mortgage payments.  For women, this is just the way of life. With the extra free money on-hand in their personal account, women spend as they wish.

Increasing purchasing power

According to many reports, the Chinese female consumer spends up to seven times the amount as their male counterparts. Surprising as that metric may be, this will only increase as the female market gains more economic status in China. To put things into perspective, according to Mastercard estimates, the total purchasing power of Chinese women is likely to rise from $330 billion in 2005 to $525 billion in 2015.

“More women choose to spend today and save tomorrow: 65% of Chinese female consumers spend 60% or more of their monthly wages.” – Ernst & Young

These numbers not only illustrate this growing “she” market in China, but is a good indicator of where and how global brands will look to benefit from this new trend.

Shopping becomes a hobby

Ask any women in China (including myself) about favorite past-times; a very common response will be that of shopping. Unlike here in the US where there are plenty of activities to occupy one’s time, in China, options are limited and shopping is an excellent outlet for something to do. Extend that to a group of girl friends and it is an all-day event of eating out, gossiping, and, of course, shopping. For the working-class woman, going “out to lunch” is a very common alternative of saying, “gone shopping.”

Desire for luxury

As Chinese women continue their economic development, they will want to display their increased status more and more.  The most direct way of doing so is through purchasing something recognizably valuable. As foreign brands continue to enter China, under Western influence, more and more women are becoming familiar with international luxury brands including Gucci, Louis Vuitton, Chanel, etc.  Being able to own such branded items has become a measure of their wealth, social status, career advancement and even personal worth.

A typical example is that girls will save a half-year of their salary to just buy a Louis Vuitton handbag. While this may be more the exception than the majority, it is still an important trend to point out as China’s economic growth catches up with consumer behavior.

Conclusion

It is no wonder why brand marketers are trying to target this particular segment of consumers. Every media angle in China, much of the focus is on this growing and influential segment in the market. From magazines and specialized websites to even women-centric TV stations (there’s a 30-minute program just on showing women how to put on eyelashes!), the market is flooded with different manners to target this group. It may be a “diva” attitude in China, but this is just the beginning of a growing “she” market.

Lin Bai is a New Ventures Analyst at METAN Development Group. For comments/questions, email lin@metanmedia.com

NBA China – Home Court Advantage

Of all the Olympics I remember watching since the 1984 Los Angeles games, last year’s 2008 Beijing Olympics is the only one I remember taking my breath away in absolute awe. From the opening to closing ceremonies and for 16 days, all the worlds’ eyes were on Beijing. And, in true Hollywood fashion, the drama that unfolded at the Beijing Olympics did not fall short – from Usain Bolt’s 100M and 200M world records to Michael Phelp’s eight Olympic gold medals. But for the Chinese, nothing could be more exciting and more representative of China than basketball.

The moment you walk into the heart of any metropolitan city in China, you will be hard-pressed to not find a slew of NBA jerseys amongst the urban crowd. The Chinese may not understand the word “thank you” in English, but you can be sure that they will all recognize the name, “Kobe Bryant.” Today, basketball is more than just a past-time or hobby, but is engrained into the very cultural fibers in today’s China’s youth. A brief NBA history in China:

HISTORY

1979 – NBA’s first venture into China with the Washington Bullets touring all of China as a team

1985 – David Stern invites the Chinese national team to the US for exhibition games against several NBA teams

1987 – NBA aired the 1987 All-Star game on CCTV

1989 – NBA struck a deal with CCTV to start broadcasting games on China’s only national TV station

1994 – First live feed for Game 1 of the NBA Finals

2002 – Yao Ming was picked number 1 in the NBA draft by the Houston Rockets

2003 – Mandarin Chinese site for NBA.com was launched

2007 – NBA China was formed to serve the China market

TODAY

Popular as it was pre-2002, Yao Ming was the catalyst to transform the popularity of basketball in China to epic proportions. Today, an estimated 300 million Chinese play basketball. Over 83% of Chinese males aged 15 – 24 claim they are a basketball fan. Today, basketball has eclipsed even the popularity of soccer and is on the forefront of ‘sports’ in China. Recently, the NFL (National Football League) and the MLB (Major League Baseball) have both tried to penetrate the China market by coat-tailing the success of the NBA; however, with a 30-year head start of either and plans to expand the NBA with a strategic partnership with AEG to construct 12 new basketball arenas, the NBA has a clear market share of sports in China.

MARKETING MACHINE

Let’s not kid ourselves and pretend the NBA’s aspiration to be an international sport – but truth be told, the NBA is a very successful marketing machine. With the growing popularity of the NBA in China, it’s no mystery that companies have flocked and gravitated towards basketball as a viable medium to attach their brands.

The advent of digital media, the emergence of the upper middle class in China, and the 7’6 phenomenon named Yao Ming – was the perfect storm to open the doors (and wallets) of brands looking to penetrate the China market. As way of example, in 2008, Nike had sales of over $1 billion in China – second to that of the United States. Previously in 2002, Nike’s sale was a mere $100 million in China.

Today, more companies than just Nike are riding the NBA wave in China. Thirty years after their inaugural visit to China, the Washington Bullets (Wizards) will go back to where NBA China all started – this time not as ambassadors to the sport, but as an open ambassador for brands and sponsorships. The financial crisis has no doubt negatively impacted most sports franchises, but China is one of the few markets and resource that has been relatively untapped and is a glimmer of hope for many teams.

For China, the number one foreign import IS sports and the brand association with the NBA is highly favorable. Some companies even go to questionable extents in order to attach themselves with branding next to the NBA in order to boost image. Beyond companies marketing through the NBA, the real lesson to be learned is how the NBA marketed themselves to be the force that they are in China today.

THERE IS NO “I” IN “TEAM”

As a sports fanatic, I’ve heard that cliché term used by numerous coaches throughout my recreational sports career. Although true in the spirit of the game, the ideal falls short in China in terms of the NBA’s success. China loves personalities – and plenty of it.

In China, the NBA is driven by individual players – not by the team they play. The drama, the heroics, and the spotlight of everything basketball is what the Chinese thrive on and is what drives where the money goes. Kobe Bryant sits at the top with his spectacular basketball play, but over-the-top personalities such as Shaquille O’Neal is still a big money-draw about how the NBA portrays and markets itself in China.

LOCALIZATION, LOCALIZATION, AND LOCALIZATION

First golden rule of marketing in China – localization. Granted this is a golden rule for any international business, China is one very unforgiving market and localization can very much make or break a brand. For the NBA, marketing itself went far beyond the traditional marketing strategies we would often assume and think. Brand association does not cut the muster and in order to really capture a true following, localization to the culture and social awareness are equally important.

Today, visits to China, donations to charitable Chinese funds (i.e. Sichuan earthquake), time at basketball camps and colleges are all important ways for the NBA to demonstrate their interest and good intent in China. For the Chinese people, this level of localization and interest in the people is what drives the popularity and fanship for the NBA.

GIVE FIRST, RECEIVE LATER

I have to give a lot of credit to David Stern and the NBA for his vision to grow basketball in China. Unlike many other sport franchises (and companies) who look to quickly penetrate and enter the China market, the NBA really has invested the time and resources to secure a long-term relationship with the Chinese. Thirty years to be exact. Thirty years of painstaking rejection, thousands of visits, and unprofitable ventures. For years, the NBA practically paid to air its NBA games on national television which brings up my next point of NBA marketing – give first, receive later.

Despite the ‘dark’ years of NBA China, today it reigns on top for the Chinese market. After years of giving, today – the NBA China is reaping hand over fist the benefits of going in first, generous giving, and lots of patience.

CONCLUSION

I should caveat that the NBA does indeed have deep pockets to market themselves ‘right’. And I will also caveat that the NBA explosion in China closely patterns the same growth as in the US which lends itself convenient. But, marketing is marketing and I have to give credit when it is due… in this case, the NBA has done a remarkable job at marketing itself – not only as a true international sport, but one seemingly ‘made in China.’

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

China Daily | September 1, 2009

Cameras rolling on cinema collaborations

Golden Mountain will be produced by Los Angeles-based Metan Development Group, founded in February by US television veterans Larry Namer and Martin Pompadur, with Jean Zhang of San Francisco-based China business consultancy AmeriLink.

Confessions of a Music Criminal

Here in the US, it’s no mystery that music and record labels have been slowly dying due since the birth of the Internet over 10 years ago. In China, it goes as far as saying that the music labels are officially dead. Just looking over the past couple decades in my life in China, it adequately explains why record labels are a thing of the past in China::

1993: I thought I bought an original copy of Michael Jackson’s “Dangerous” as my first introduction to Western pop only to find that three songs from “Thriller” were added as ‘bonus’ by music pirates.

1994: I bought a tape album of an obscure Chinese folk singer – my first purchase of a legitimate original copy of music. That was my first and it also happened to be my last.

1995~2002: I bought 500 pounds of “dakou” tapes and CDs, from artists such as Muddy Water to Prodigy, but later found out that I was the proud buyer and owner of music “trash”:

“Record labels and retailers from across the world took their surplus tapes/CDs — the ones with the telltale notches in the cases — and shipped them out as trash. Thousands of these ‘dakou’ or ‘saw-gash’ tapes/CDs ended up in Chinese garbage dumps. Then, through a network of scavengers and middlemen, these ‘dakou’ tapes/CDs found their way into China’s alternative record stores.”

1999~2002: I was a drummer in a college band – playing cover songs at the local pubs in China. Our set would usually consist of one song Beatles, one song Metallic, and one song Joy Division in our 10 minute performance. I like to say that we were the top 1 band in the genre of ‘no genre’ category.

2002-present: With Baidu’s free MP3 search/download and P2P sharing, I lead a happy and digital life.

I saved the time on the classic argument of the fate of record labels and am going straight to the ‘rules of no money’ for those companies throwing their bets in the music business in China.

1 – Sales of music content, whether in physical form or digital form, makes no money.

I cannot stress enough that the music business in China is very underdeveloped. 80% of revenue for the major labels is from endorsements of the artists. For the smaller labels, revenue sources are diversified but the ones bringing in the big bucks are almost always non-music related.

For example, Modern Sky, the largest indie label in China, has survived over 10 years in China by offering creative service for advertisers/agencies. If we were to break that down to defined revenue sources, these labels are talent agents, designing studios (or tea-houses / restaurants), but NEVER actually as a genuine record labels. It’s more essential to know the ins-and-outs of launching a restaurant than it is to run a proper label.

2 – Sales of music genres make no money

Music is usually classified in silos of certain genres. You have country, indie, rock, rap, etc. And for advertisers, these genres help recognize their target demographics and, more importantly, how the flow of advertising dollars go.

In China, there are two genres of music: pop and non-pop. Pop takes over 95% of music fans while the ‘rest’ dwindles in the shadows. It’s not uncommon to find a girl dressed head-to-toe in all Goth black listening and singing along to her favorite band of the Backstreet Boys. The size of defined music genres is too small and the average loyalty is too low to support any genre-based revenue model.

3 – Concert makes no money

From estimates, the total revenue of the major labels is generated by concerts. However, if you less cost, it may only contribute 10% to the bottom line. High performance fees, the underdeveloped nature of music industry in China (for example, the scarcity of promoters and the high cost of using imported equipments), and the cost of throwing a live event really means razor thin margins for the concert industry.

Today with limited number of capable venues and high ticket prices (one ticket could cost over 1/10 of the average monthly income for the typical fan), the concert industry is not a viable business model. For the labels, concerts are nothing more than a promotional tool to increase the advertising value of their artists.

There are always the companies pining and obsessed with the size of the China market and caring less about the realities of the industry. It’s hard to ignore that of the 380 million internet users in China, listening to online music is ranked as top third most frequent behavior. However, don’t less these figures create illusions of monetary success:

Illusion I – Talent is king

Back to 2005, Super Girl, the Chinese version of “American Idol”, grabbed 400 million viewers. The top winner was signed with the top Chinese record label, Taihe Maitian. Could this be?? A REAL talent, selected (through SMS votes) by millions of China’s youth, could be the savior of the music industry? Truth be told – sales were less than impressive with sales of 70,000. The only true winner for Super Girl was MengNiu Milk, the title sponsor, who increased their annual sales by 170%.

Illusion II – Ad-supported online music will save the world

The ad-supported music has been generating global buzz since 2007. Pioneers like InTune.fm, Mog, Last.fm, Imeem, etc. have been around for awhile and some of them have reached break-even by selling ads to music affiliates. This model seems to be a perfect match for the China market. However, the key point of such a service is that they can offer more targeted and relevant ads that will generate more leads than traditional banner ads.

While Lastfm could sell the ads to all kinds of music affiliates, from Amazon to iTunes, whom should Google sell the ads to in China? Very few of the music affiliates have the deep pockets to pay for ads on this underdeveloped value chain in China. There is no such thing as iTunes or Amazon. No, you have small shops that barely can stay afloat in this digital jungle.

Illusion III – Mobile music subscription is the future.

Recent news point that Apple has penned a deal with China Unicom for the iPhone. Believers all aggregate together that this is “the time” – the time that Chinese consumers will finally realize the value of one-click-to-download service is.

And I ask – how do you value the power of convenience? What is a few dollars for hundreds of downloads per month on mobile? Not now – and, most likely, not ever. First, there are very few innovative/good-quality songs to support this huge content library due to the dying record labels. Second, the average number of new songs to download for one person is usually less than 100, while the repeat frequency is high – i.e. welcome to the beautiful world of Karaoke.

The Future

To make money out of music business in China, you should rethink of what is a good “music package”, instead of what is a good “song”.

1 – Sell the Experience

In 2008, Converse sponsored the first on-the-road tour of 2 indie bands in 5 cities in China. Converse documented the entire trip and a film was produced based on the tour that was distributed free online and conveniently sitting in all Converse stores. In 2009, Pepsi hosted a reality show, “Battle of Bands” which promoted participation of nearly 5,000 bands altogether. Truth of the matter, if you were to ask me, I am NOT a fan of the music generated by the campaigns. However, I did not care so much about the sound, but more about the cool lifestyle and fun experience it offers. No exact metrics are revealed on campaign result, but Pepsi established their own music label soon after the campaign.

2 – Who Sells

Short answer – it could be consumer brands, game companies, live event companies, anyone able to create a “sellable” experiences… but just NOT the record labels. Due to the lack of defined music genres, this is where sellers can really re-define music as they see fit. Don’t be surprised that one day there is a “Pepsi Genre“ or “Converse” in China.

3 – Whom to sell to

Go for the youth. They are the ones looking for participation, empowerment, self-expression, etc., which are all the elements that could be easily integrated with music. Most importantly, they are the ones who have high volume needs and are willing to pay for lifestyle/experiences-based products.

I genuinely and sincerely do hope that the music industry will one day evolve to a point where a viable music industry CAN exist in China. Not only will this open up channels for new business opportunities, but, more importantly, be a big step towards a more diverse and art-filled China culture. In the meanwhile, if you play by the rules and play ‘smart’, there is money to be made and that’s music to everyone’s ears.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

More Questions Than Answers – The New Chinese Consumers

In the past decade China has been the buzz of companies and brands from all four corners of the world. Everyone dotes on China as the anchor in global expansion from McDonalds to Intel – there really isn’t an industry that hasn’t recognized the sheer potential of China’s economic standings. Today, it’s almost difficult to not read in every advertising news article the mention of opportunity or this “emerging middle class” in the China market. Especially in dire economic times on the domestic front, many companies find reprise by merely looking east towards the new land of global consumerism. But, underneath the superficial layer of understanding the “what” or opportunity to be had, we are still trying new ways to figure the “how” part of the equation and capitalize on this wave of Chinese consumers.

Needless to say, there is no magic answer to the “how” but understanding the overwhelming complexity of the Chinese consumer is a great first step at paving your own way.

Part of that complication roots from hypocrisy of cultural, geographic, and economic influences that really have surfaced recently with the boom of China’s economy. Not only do we (as brand advertisers and content providers) need to contest with a culturally isolated country that has only begun to open its doors to global persuasion, but we have to deal with an unprecedented and ever-changing /growing consumer group at unprecedented speeds. In other words, making sense is the first step to understanding.

Consumer Psychographic – Frugal / Lavish Shopper

With years of endured struggle of poor economic times and 1.3 billion people to contend with, the idea of social Darwinism is a natural part of growth in China’s modern history. Consumers were poor and luxury items weren’t even a thought when your main concern revolved around putting food on the table on a daily basis. Thus, the advent of the frugal shopper where saving is a matter of survival. Although the mindset of saving may be foreign to the rest of the world, it has been engrained and passed down from generations to generations and is a big factor in buying behavior.

On one hand, there is the inclination to be frugal with spending and saving as noted above. On the other, we have a booming “emerging middle class” with access to significant purchasing power that is paving the way with consumer and retail spending.

Consumer Psychographic – Domestic / Global Brands

China is a proud country of its history, its abilities, and its culture. After all, China in Chinese literally translates to “middle country” meaning the rest of the world revolves around China. So, for the proud nationalist consumers, buying local / domestic is a part of their buying behavior. Local brands flourish very well in China and there is something to be said when a local company has the ability to compete against much larger Western companies who look to enter the Chinese market (for examples, look at Taobao vs. eBay; Baidu vs. Google).

On one hand, there is the inclination to side with Chinese local brands. On the other, we see a spike in uptake of Western brands where, for the first time, Chinese consumers have access and the ability to purchase these items.

Now, I understand that neither of my examples above is mutually exclusive to the psychographic of the Chinese consumer, but it does briefly illustrate the complexity of going forward with marketing / branding efforts to align all sides of this growing market. The two examples above also lay the foundation of some of the more pertinent factors in the purchasing decision process where buying boils down to branding, value, and trust.

Branding

Especially in today’s market where Western influence does impact the purchase-making process, this generation of “emerging middle class” consumers yearns to stand apart from the rest. Branding is a statement for consumers to declare their own individuality and set them apart from everyone else. In many cases, the ability to purchase these brands is a statement of its own. For example, the cachet of ordering an expensive bottle of top-shelf cognac at a Chinese nightclub far outweighs the pleasure of actual consumption.

You see examples upon examples of how branding influences purchase behavior across all products and industries. Louis Vuitton and Christian Dior are two of the most popular brands amongst Chinese women despite the fact they often save up to a year’s worth of income in order to purchase a single item. Porsche launches a four-door sedan recently in China to meet the demands of ultra-wealthy consumers looking to make a statement by the way of transportation. Functionality and practicality aside, branding will continue to heavily influence buying behavior.

Value

If you have ever visited China before, you would understand that price is merely a suggestion when shopping. Haggling and negotiations is expected of consumers and is driven by what Chinese consumers deem as value.

Let’s not mistake the difference between value and costs because they can be interpreted very differently in the eyes of consumers. Where ‘cost’ is a function of monetary value (which will universally always be a factor in buying behavior), ‘value’ is intrinsic to how the product / service benefits the lifestyle or convenience of the consumer.

For example, the latest craze in China is chocolate with added calcium which is eaten primarily for health benefits and not for taste alone. Consumers view this as an extra benefit or an added ‘value’ which will influence their buying behavior. The introduction of mobile phone 3G network is an example of how the extra ‘value’ of the 3G network was not deemed as beneficial for consumers to buy when the added benefits were already available through other means (i.e. WiFi, Bluetooth, etc.).

In China where every RMB counts, value will also continue to drive consumer buying behavior.

Trust

We all remember the recent formula milk debacle in China where consumer products are often faked with heavy consequences. Granted, the formula milk example is an extreme case of this situation, but trust is a big issue in the eyes of Chinese consumers. Today, Chinese mothers will pay more than 30% for safe formula milk (benefits foreign brands) over local domestic brands.

Fortunately for us, Chinese consumers’ favorable trust / impression of Western brands roots in a higher quality product or service. It may take some time to win over trust (not uncommon for consumers to take up to 6 months reviewing brands before the purchase of a PC), but brand loyalty runs deep and consumers do not easily sway unlike their Western counterparts. Still not convinced? Take a look at Nokia, Coke, Intel, and Buick to see how they’ve built their sizable market share in China.

China Today

While these broad ideas of the Chinese consumer psychographic only scratch the surface of buying behavior, they are one layer of what we have to be aware in our efforts in China. Mix in geographic, cultural, and economic differences from region to region / city to city, all of a sudden there is an endless maze of complexity to the “how” question we first addressed. Despite these obstacles, the good news is China is slowly moving towards globalization where we (as brands and content providers) can meet all on common ground. When this might happen? No one will really know, but when it does – there is plenty to offer to this group of new Chinese consumers.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

By Frank Jiang | August 18, 2009

“Jia Junpeng” – The Face of Viral Marketing

The online world is an amazing yet bizarre place where the unexpected happens at any time and with no reason or sign. Ask anyone in China about the latest craze buzzing the wonderful world wide web, and you will hear in unison the hottest catch phrase, “Jia Junpeng, your mom is calling you to eat at home.” Today, that phrase is a cultural phenomenon and is used in everyday conversation from online to television. As odd and funny as it sounds, this is a testament to the vast online reach in China and the power of viral marketing.

Background

In July this year, in a popular World of Warcraft forum, an anonymous user made a post titled, “Jia Junpeng, your mom is calling you to eat at home.” Within 24 hours, the number of postings increased to over 7,000 pages, 4.5 million views, and over 200,000 replies to that one single catch phrase. To date, there are over 10,500 pages, over 8 million views, and 315,000 replies. Additional posts are blocked, but the forum posting still generates plenty of traffic to the site.

Soon, the “Jia Junpeng, your mom is calling you to eat at home” momentum drew spoofs from all angles of the Internet. Online IDs came out with names such as “Jia Junpeng’s mom”. Comics and images have been created with stories revolving around “Jia Junpeng” and his fictional mother.  Songs have even been produced according to this post and were released online, which have been played for several hundred thousand times.

Power of Viral Marketing

Of the many websites, newspapers, and TV stories that have reported on this online phenomenon, most of them point to understanding the origin and just how this incident came to be.

It wasn’t until Ao Chunhua, CEO of a small website marketing company based out in Chonqing, said in a blog article that the whole event was an elaborate marketing campaign planned by him and his team. As a business case for one of his online gaming companies (although not specifically identifying one company, all fingers point to World of Warcraft which the posting was originally posted), Mr. Chunhua hired over 800 people to register over 20,000 online IDs to flood the forums and create 100,000 replies / postings.

There is still debate whether the validity of Mr. Chunhua’s claim – some say this was a desperate attempt at fame and a cheap tactic to monetize the popularity of the “Jia Junpeng” phenomenon. Today, the debate still continues on.

Several Guesses

Nobody knows for certain whether the whole idea was a marketing scheme hatched by Mr. Chunhua’s team or if the “Jia Junpeng” phenomenon was a spontaneous act that virally caught on.  Nevertheless, you cannot deny that the millions of netizens involved have jumped on the bandwagon, only adding fuel to the fire.

Now, the question is – how did this all happen and, more importantly, why did this all happen? Even experts in the field of communication studies cannot explain how this phenomenon grew, but there are certainly theories why.

First, China’s youth demographic is a generation of “followers”. Most of the growth of online popularity drew from the youth market of teenagers in China. From the angle of sub-culture of teenagers we can say that one of the reflections of sub-culture conflicting mainstream culture is anti intellectual. The young people don’t care about the nature, value, or intrinsic quality of matters.  Instead, they are lost and confused; they would rather follow like sheep than think independently.

Second, “mom calling you home to eat” creates an emotional response that everybody can relate to. Many people in China recall childhood memories playing outside with their friends.  When dinner was ready, mom always called them to go back home and eat.  This is a vivid and warm memory for everyone, not to mention probably sometimes embarrassing. The viral post reminds people of the old times full of childhood memories of mom and home.

The third explanation to this phenomenon is collective unconsciousness. With the fast-pace of society, people need to release themselves of high pressures, bouts of loneliness, monotony, and dissatisfaction.  The internet is an ideal place to escape from the rigors of the world. With increasing pressures for creative control on other media platforms, the Internet is a haven for netizens to openly vent their creativity and ideals.

Online Frenzy

The “Jia Junpeng” phenomenon is not a novel idea in China. In fact, viral marketing or word-of-mouth marketing has been an effective way to communicate with Chinese consumers and create favorable brand image amongst the market. Phil Dorman, co-founder of Shanghai-based agency ConfuciusSays, states, “Chinese consumers are now more than ready to embrace WOM – it’s their medium. This is a global trend to some extent, but much more so here in China where trust levels for traditional media are incredibly low, and guanxi (Chinese for personal relationship) can affect everything from your career to finding that unique pair of retro sneakers.”

The key behind viral marketing revolves around the story and it creates. Whether favorable or notorious, the momentum that carries viral marketing is if it’s worth talking about. And like Dorman had stated, the effectiveness of viral marketing roots from how Chinese consumers conduct business altogether – through trust and relationships. A recent survey found that nearly 40% of Chinese men aged 18-34 ranked word-of-mouth marketing as their top influence for electronic purchases. More so, unlike in America, viral marketing is an important tool for nearly the whole host of product categories from electronic products to pharmaceuticals.

Lastly, the rise of viral marketing in China can be attributed to costs. Developing viral marketing campaigns can be relatively inexpensive when compared to traditional ad buys of television, radio, and print. Because the idea and concept of viral marketing remains more grass-root and depends on the virility of word-of-mouth momentum, campaigns can be created and executed with a much better CPM value.

Conclusion

As the China market matures and consumers become more savvy to brand advertisers, they will evolve similarly to their Western counterparts and scrutinize traditional marketing campaigns. In turn, advertisers will adopt new marketing strategies in order to capture and communicate with their captive audience. On television, we already see this with brand and product integration into the content of the show (i.e. Ugly Wudi). And online, we already see how quickly the Chinese have adapted to pre-roll and in-streaming advertising in lieu of traditional banner ads. Viral marketing is merely the next stage of marketing evolution and has proven to be a successful and effective tool in the China market.

Frank Jiang is the Manager of Strategic Planning at METAN Development Group. For comments/questions, email frank.jiang@metanmedia.com.

By Gordon Chu | August 11, 2009

Burgers to Fries: McDonald’s Success in China

On a recent trip to China and after many meals of decadent Chinese food, I found comfort and safe haven seeing the familiar golden arches of McDonald’s amongst the lit streets of Shanghai. Along with the hundreds of patrons who frequent the same restaurant, we lined up waiting to order our guilty meal of the day. The menu was different but the same – there was the same familiar (and all-time favorite) Big Macs, Chicken McNuggets, and fries; but there were new entries I was not familiar with and were targeting a more localized taste including a delicious looking pork sandwich.

Despite the differences in menu, the same smile graced the person taking my order, the same efficient bustle behind the counter as they gather my food, the same “feel” I would get going to any McDonald’s I’ve visited the last 30 years.  McDonald’s is one of the handful of very successful companies growing in China. Having only launched their first stores in China in 1990, they now have nearly 1,000 stores across China and over 50,000 employees strong in their workforce. Secret to their success? Boils down to what all good businesses need – good leadership, a good eye on costs, and a little bit of luck.

Leadership

There’s no big surprise when I say leadership is an important factor in any company’s success; however, McDonald’s example should be a testament to why it is one of the biggest conglomerates globally.

Since 1955, McDonald’s core value has always revolved around employee development. Yes, you do start off clearing tables and taking out trash, but with a little bit of patience and a natural knack to succeed, McDonald’s has a strong reputation to groom talent for long-term success internally. McDonald’s has seven “Hamburger Universities” around the world that train future management level employees the fundamentals of finance, marketing, supply chain management, etc. Training is for more than just immediate operational needs, but select employees are molded for long-term growth.

With international expansion, employee development was more than the basics of “Hamburger University,” training / education lacked the necessary sensibility of knowing and understanding the local environment. And with that, training emphasized more on to homegrown talent. Operating McDonald’s in Nebraska is entirely different than operating one in the heart of Guangzhou or Shenzen. So, McDonald’s saw their role upon entering China as a catalyst to get the business started, then developing local talent to take over the long-term leadership roles. In fact, 42 percent of the company’s worldwide top management team started their careers flashing their pearly whites serving customers. Current head of McDonald’s China Kenneth Chan has been with the company since 1993. And before Chan, Jeffrey Schwartz (former head of McDonald’s China) started his career as a restaurant worker at the age of 15.

Eye on Costs

I read an interesting interview with Tim Fenton (CEO of McDonald’s Asia, Middle East, and Africa) regarding McDonald’s growth strategy in China. He mentions:

“Mistakes we made in the past: you don’t open just one store. You get three or four or five deals done, build them consecutively, train the crew consecutively so you have on the money. So when a truck goes out from the distribution center, it’s no carrying one store, it’s carrying the products for three to five.”

How I read that comment was the importance of costs savings. When operating in China, you have to change your frame of mind to work in quantity. Margins are often low and you have to operate on sheer volume to meet profitability.

Fixed costs can be the bane to your business and should be a very big focus when operating in China. It’s a time warp back to the days of playing Monopoly and understanding cash flow and a proper P&L. China has seemingly endless potential with 1.3 billion people, but having to shift emphasis from sales and revenue to controlling cost is extremely important for long-term growth and success. Don’t get me wrong – there is still plenty (and I do mean plenty) of money to be made, but controlling good ol’ G&A should be the first focus.

McDonald’s is no stranger to controlling costs. Just look at their hamburger empire and it’s obvious they understand the fundamentals of cost-savings. Fenton’s comment above emphasized McDonald’s ability to benefit from economies of scale. Go big or go home. Whether through supply chain management or vertical integration, McDonald’s employs economies of scale to bring costs down. How that applies to any business is just a careful look at how money is spent.

A Little bit of Luck

An old proverb goes, “Luck is a matter of preparation meeting opportunity.” This could not be more true than McDonald’s venture into China. Some would argue many of McDonald’s strategic growth plans in China were big risks. Really – any new venture is a risk, but it’s how the risks are mitigated that reveals the genius and success.

Case one – introduction of the drive-through. In the US, we take this as a given for any fast-food service. If you’re on the go and a standing line will just not do, the drive-through is a valid and servable option. In China, this concept was completely new and novel until recently in 2005. Before, the streets were filled with bikes. Miles upon miles of bikes. There is plenty of truth when they say Beijng is the “City of Bikes.” But with China’s economic growth the past few years, bikes evolved into motorcycles which evolved into cars. So today, miles upon miles of automobiles.

In the mind of McDonald’s, a drive-through service was obvious. There was a learning curve for consumers to understand what a drive-through was at first – after all, even I can objectively imagine it foreign to not have to get out of your car in order to be served. But after a little time, drive-throughs are now a norm and has been a key factor in McDonald’s growing sales. Today, with a partnership with Chinese state oil company Sinopec, McDonald’s has the right to open McDonald’s store at any of Sinopec’s new and existing gas stations (all equipped with drive-through capability) – all 30,000 stores.

Case two – expansion choices into Tier 3- 4 cities. While logic would point expansion in the Tier 1-2 cities in China, McDonald’s strategy is to take a swing at up-and-coming locations. Fenton says it best, “It’s really not that difficult (of a gamble). You look at a developing area, and you see where it’s going. You see the corners. You see the retail. You see the apartments and the condos coming in… we’ve done a lot of real estate. We’ve done it, like, 34,000 times.”

With the bank of experience in real estate and choosing the right locations for McDonald’s stores, Fenton is 100 percent on-the-point. As the cities grow, so will the recognition for the McDonald’s brand and their products. For McDonald’s, they are not betting on what the sales are today, but what the sales will be for the future.

Case three – going digital. Recently, McDonald’s has broken the fourth wall and has gone digital. In February 2009, McDonald’s launched an online shop on Alibaba’s Taobao – China’s top online auction site similar to that of eBay. Why you ask? It’s all about customers, customers, and customers. Yes, the whole online shop to sell “regular” consumer goods such as MP3 players, mobile phones, and gift certificates is a keen marketing ploy to promote McDonald’s products, but more importantly, the move keeps McDonald’s relevant. And especially if they’re talking to their target group of youths, online is the natural extension and distribution channel to reach them all.

Future challenges

McDonald’s future is not all rosey and a simple coast on easy street. The market is filled with stiff competition from both US and local Chinese brands. KFC has nearly 2,000 stores, double that of McDonald’s. And not to mention the limitless variety of food options that fit into McDonald’s “fast food” market.

McDonald’s will have to continue to press the envelope in all aspects of their business. From marketing to costs-savings, McDonald’s has their hands full with what they need to do in China. But as former head of McDonald’s China says, “US (population) 300 million, 13,000 restaurants. China (population) 1.3 billion, 800 restaurants…. So the opportunity is endless.”

For McDonald’s, though introduced to China in 1990 – this is just the beginning for a very long road ahead. And with everything that they’re doing, we’ll be seeing McDonald’s and their golden arches all the way to the bank.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

By Kevin Yee | August 04, 2009

Wal-Mart: “Made” in China

Nearly all Americans are familiar with the name brand Wal-Mart and their mantra of “Everyday Low Prices”.  For those who do not know, Wal-Mart is a grocery store, discount center, and hypermarket, bringing value to the US suburban and rural market.  Strategically, they are masters of their supply chain and an expert in logistics and information systems.  Any idea where a large portion of their goods come from?  You guessed it.  China.

The Wal-Mart Effect Shielding China

For the last decade, exports have sustained China’s development by growing eight-fold.  Enter the financial crisis.  By the end of 2009, China’s exports are projected to fall by 20%.  Historically, regional countries such as Japan, South Korea, and Taiwan have experienced even larger declines.  This is grim news for any country, especially those heavily reliant on manufacturing.  However, China has not expressed much concern, partially due to its primary role as the supplier in the “Wal-Mart effect”.

In general, the Wal-Mart effect describes economic ripples attributed to the low-cost retail giant, such as driving down prices and forcing local competitors out of business in the US.  As the world’s largest retailer, Wal-Mart accounted for 11% of the growth of US trade deficit with China between 2001 and 2006, importing $27 billion in 2006 alone.

In the US, Wal-Mart’s superstores display an enormous selection of products and are a testament to China’s manufacturing prowess across a diverse composition of goods.  In addition to stereotypical goods such as apparel and electronics, China manufactures many basic necessities and low-cost goods characterized by relatively inelastic demands.  During the US recession, these inferior goods may actually experience an increase in demand by retailers such as Wal-Mart.  Aforementioned countries such as Japan, South Korea, and Taiwan that primarily produce sophisticated and expensive goods have witnessed a more significant drop in export levels in comparison to China.  The initial reaction of the US consumer to weather the storm is to be thriftier, but the demand for inelastic products will nevertheless remain.

Wal-Mart in China

We have just discussed the symbiotic relationship Wal-Mart and China possess.  China exports goods, US imports and consumes.  But what if the goods never left and China consumed them?  What about Wal-Mart in China?  How does the US superstore expand quickly in a highly competitive environment?

Getting in was difficult; it took two years before Wal-Mart opened.  They created a small team to recruit local talent that understood the market.  Wal-Mart was supposed to enter a joint venture with a Thai conglomerate that had massive investments in China, but because of control issues, the deal fell through.  Instead, Wal-Mart made arrangements with politically connected partners in Shenzhen.  In 1996, it was here that Wal-Mart finally opened its doors for business.

Since then, Wal-Mart has expanded rapidly.  Currently, they have 121 supercenters with over 70,000 employees.  The company has had its share of challenges, including: unionization, competition with wet and black markets, lack of a nationwide logistics network leading to high distribution costs, acquisition of retail locations, merchandising, retention of local talent, and obtaining official approvals of retail practices.  Wal-Mart overcame many of these challenges by abiding by the rules, developing strong rapport with the national government, and establishing a working relationship with local officials.

Wal-Mart’s strategy has been to adapt their marketing methods to meet the needs of locals.  Recognizing the strength of sales surrounding the Chinese holiday periods, Wal-Mart has promoted large discounts leading up to Lunar New Year and the beginning of universities.  They have implemented nationwide rollouts, in-store events, and sustainability programs.

Moreover, Wal-Mart has catered to the Chinese market in two noticeable ways.  First, Wal-Mart has listened to the consumer.  They offer more perishable products, such as live seafood, to compete with the wet markets.  Items are tailored for people with lower disposable income.  Labels are printed with the local language and products are adjusted for smaller quantities per visit.  In the US, customers typically drive to Wal-Mart and purchase in bulk for the week.  In China, customers typically walk or bike to Wal-Mart and purchase just enough for the day.  After all, Chinese apartments tend to be much smaller than American homes.

Second, Wal-Mart has localized its supply chain.  They have worked with government officials and producers to purchase locally grown foods and increase delivery frequency.  Realizing they could not rely on the same hub-and-spoke (warehouse-to-stores) logistics model that was so successful in the US, Wal-Mart revamped its strategy to accommodate for China.  Backhaul services helped suppliers reach more consumers despite infrastructure and resource limitations.  Goods were transported using smaller trucks, rather than large 18-wheelers, to work around poor road conditions.  The point is, in comparison to the US, Wal-Mart runs a totally different business in China.

Road to Success

What can be learned from Wal-Mart’s foray into China?  And more generally speaking, how can a foreign company be successful in China?  There are three broad lessons to take away.  Lesson 1 is partnering the local governments and businesses.  Developing good business relationships with important people is the key to get things done in China.  Remember the old adage, it’s not so much what you know, but who you know.  This is especially true in China.

Lesson 2 is adaptation.  Businesses need to adapt to the local culture, the local infrastructure, and the local talent.  Sometimes, this means positioning your overseas brand beyond the traditional domestic boundaries.  For example, in the US, Pizza Hut is largely viewed as a fast-food, take-out restaurant.  In China, Pizza Hut is an upscale, sit-down dining experience.  Global strategies must align with local appetites and nuances.

Lesson 3 is education of the market and promotion of brand awareness.  In depth local consumer research is required to understand the target demographic.  What do people consume?  How do they consume?  And why?  Answers to these questions drive a product’s development.  Eventually, the product’s benefits will address customer values and tastes.

The Future of Wal-Mart in China

Many corporations are starting to understand that success in large emerging economies demands more than just realizing a greater sensitivity to cultural differences.  It involves living and breathing the same air, truly embracing the local market.  Wal-Mart is no different.  To continue its penetration in China, Wal-Mart has a few opportunities.  They can push deeper into the countryside and expand into third tier cities.  Wal-Mart can increase their product offerings that cater to local taste.  Increased partnerships with local suppliers can increase efficiencies and help drive down costs.  To build a brand name, Wal-Mart can increase sustainability programs to influence other firms and the government.  Doing so strengthens Wal-Mart’s business in China and cements its position as a global brand.

Kevin Yee was a Project Manager at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

By Gordon Chu | July 28, 2009

Starbucks’ Special Blend of Brewed Success

I was raised on what some people may say as “sub par” coffee. Folgers. Tasters’ Choice. Instant coffee was pretty much what my parents ingested on a daily basis. Throw in a splash of 2% lowfat milk (no sugar) and you have yourself one cup of hot java mess.

In college, I fought and battled hard against drinking coffee for the first two years – but after several all-nighters, I collapsed and enjoyed my first brewed cup of “proper” coffee at Starbucks. From then on… I was hooked. The aroma. The hissing sound of boiling hot espresso. Shouts of random names, coffee drinks, special orders (“No Foam!”, “Non-fat!”, “Extra hot!”). Yes – it’s like music to my ears.

Today, I drink coffee like it’s been a part of me all my life. Taking a shower, checking email, Starbucks coffee – yes, all of that is up there on my daily things to do. Granted, the excitement of going to Starbucks is not all there like it was at the beginning, in fact, of all the different choices you have to choose from, I still prefer my good ol’ cup of cup of regular coffee. Sumatra. Black.

You can imagine my relief and my safe haven going to China and seeing my beloved green logo (albeit in Chinese). It was like going home. Starbucks in China is not a novel idea. They’ve been around since 1999 (mainland China) and succeeding quite well going into their 10^th anniversary there. Here is a timeline of notable Starbucks moment in China:

1998: Starbucks opens its first store in China in Taipei, Taiwan

1999: Starbucks opens its first store in mainland China in Beijing

2000: Shanghai store opens

2002: Green Tea Frappucino is announced by President of Starbucks Taiwan to the world

2005: Starbucks donates $5M and establishes Starbucks China Education Program

2006: Reach to 19 mainland cities

2008: Reach to 26 mainland cities

2009: Celebrates 10 year anniversary in China with over 350 total stores

2010: Introduction of China coffee with beans grown in China’s countryside

All in all, it’s a great case study about a company successfully entering the China market. Not bad for a brand and a product in a country where tea is the primary cultural beverage consumed and coffee is just an afterthought.

Recently, Starbucks announced that the global recession has not impacted China sales and anticipate continued growth in the market. So, what is Starbucks’ secret to China? How did they do go about building a brand, building a following, and continue to grow their business – all without sacrificing quality, pricing, and / or business model? Here’s a hint – it’s not because of the wonderful selection of pastries (which I do absolutely love).

Go Big Or Go Home. I wished I knew the history of that saying, but it applies very well to working in China. Starbucks did what a lot of big companies looking to enter in China does – they bought their way in.

Starbucks entered into Taiwan through a joint venture with President Enterprise Corporation. In Beijing, through a licensing agreement with Mei Da Coffee Company. Shanghai? Joint venture agreement with President Cayman Holdings. Perhaps I exaggerated a tad and I would not go as far and say that Starbucks “bought” market share for entry into China, but I will say partnering up with these other companies makes a big difference in distribution, operations, and branding.

Not everyone is going to have the capability to out into China like Starbucks. It’s expensive and you need to be ready to commit for the long-term. But, the bigger you go, the faster you can get your brand out. And in China, you don’t want to get left behind.

Customer Service. Living in Los Angeles, I cannot say that I’m terribly used to fantastic customer service. I even admit that the few places I DO get fantastic customer service is at Starbucks (no shameless plug). By the time I get to the front of the line, the register has my cup in-hand, says a “Good morning Gordon,” and is ready to take my three dollars.  This is a big deal to the Starbucks model and they’ve brought that same level of customer service to China.

Go to Beijing or Shanghai, the skies are lit with neon lights of brands, stores, and restaurants. It is if the marketing mantra is the bigger, the brighter, the better. In lieu of glitzy lights and over-the-top advertising, Starbucks kept relatively low-key and focused their efforts on hiring the right people to staff the stores. Nothing does more for a brand than a friendly smile, a “good morning to you”, and making them feel welcomed for a cup of coffee.

Starbucks saw themselves in the service sector – not as a consumer product. Customer service is their calling card and it has served them well.

The Great China Escape. For Starbucks, they serve more than just a cup of coffee – they serve an escape from everything else.

Even if for 10 minutes, sitting in a Starbucks has a certain relaxing appeal. Nevermind the bustle of people lining up for their turn for java, but the culture and idea of a coffee shop is to kick up your feet, grab the Sunday paper, and relax. And for China, this resonated well.

Aside from the numerous choices of products they offer, Starbucks is equally a place to meet – a destination spot for any weary person. Its important to understand for China, three dollars is a small price to pay for space and a place away from the bustle and hustle of China’s main metropolitan streets.

Tier I or Bust. The idea of focusing business and expansion in main metropolitan areas is not new or ground-breaking. However, Starbucks has taken that idea to a whole new level with stores on nearly every corner and, for whatever reason, works.

China is no different in the high level of Starbucks store per square block. It is not uncommon to have two Starbucks across the street from one another and both succeeding quite well despite having the same products within throwing distance.

More importantly, Starbucks did this to create and build their brand. They want to offer that escape anywhere a consumer wants or feels the need. Think coffee and you think Starbucks. It’s not quite as blatant and in-your-face as the bright neon lights, but eventually, the branding works.

Again, not everyone has the same operational budget to pull this marketing scheme off, but the concept can still be replicated similarly. If brands concentrate on the Tier 1 and 2 cities with hammering home the brand message, eventually the message will spread. It has worked for Coke. It has worked for Pepsi. It can definitely work for you.

Starbucks is ubiquitous to coffee both here and in China. Creating that kind of brand imagery is difficult and certainly was the fruit of 10 years of hard labor that Starbucks has had in China. Don’t get me wrong – Starbucks has lost some battles such as consumer backlash on over-presence of Western brands (Starbucks at the Forbidden city closed), but they’ve still maintained a high visibility and that’s what any brand can really ask.

Some will argue Starbucks success is an anomaly and figment of luck. There is an element of luck and great timing, but at the same time, 10 years to build a brand and launching over 350 stores is nothing to squawk about. This was also a result of hard work and careful strategy.

So, next time you’re in Starbucks and hear that familiar hiss of boiling water, don’t think espresso but the sound of success.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

By Gordon Chu | July 21, 2009

Taobao: An Underdog Story

I love underdog movies. Watching Rocky Balboa struggle up those courthouse stairs and throwing his hands in the air in victory, how can you NOT be rooting for him in his epic fight with Apollo Creed. Here’s this man who wasn’t born into a whole lot of money or had much luck, but made his way up the boxing ranks for the fight of his career by sheer determination and grit. This is what movies are made of. This is what glory is made of.

I digress – perhaps I got too misty-eyed thinking of Rocky movie(s), but we get the point. Underdog stories are a fan favorite and certainly translate between the silver screen and the business world.

Taobao (Chinese version of eBay) versus eBay is a classic David and Goliath story. In one corner, there’s eBay. With a near $25 billion market cap, no question that eBay is the Goliath of this story. It practically has a monopoly on the online market and you know it’s big when the company’s name unofficially becomes a verb (Just ‘eBay’ it online).

On the other corner, we have Taobao. I’d be lying if I said that Taobao started off with modest roots because it actually was birthed from Alibaba, one of China’s largest online companies. But, for argument sake, if you compare the two companies and where they were several years ago, Taobao really was microscopic in comparison.

eBay entered the market in 2002 with pretty ambitious goals. Meg Whitman (former CEO of eBay) toted China to be THE market in 2005 as the anchor to the company itself. And when eBay bought 33% sake of Eachnet (now de-bunked China online site) for $30M, no one argued that eBay was serious about China. In one swift acquisition, here comes eBay that now owned nearly 90% of the market share in China.

Taobao entered the market in 2003. A subsidiary of Alibaba, Taobao was the first legitimate competitor to eBay but without the deep pockets, without the marketing force, and without the know-how of the vast experience eBay had brought from the US. However, in two years’ time, Taobao did the unthinkable – it eclipsed eBay’s market share and became the leader in online auctions in China. Today, Taobao has over 100 million registered users and has around 70% of the market share in China.

So, where did eBay go wrong? Or, rightfully, what did Taobao do right? I wished there was a climatic Rocky-esque training session that Taobao undertook, but the real answer comes from smart, practical, and logical business 101. What eBay had thought were strengths, were actual barriers for growth; and what Taobao had as a start-up, were what makes it what it is today.

Consumers versus Products. We’ve talked a lot about localization and customers for China in past newsletters. Well, let me carve it in stone – Know Thy Customers.  I cannot stress how important this is and how critical for marketing to reflect that knowledge of understanding your customers. Looking at eBay versus Taobao superficially, there are not a lot of differences in function. They both are C2C platforms and the sites facilitate the transaction between seller and buyer, right?

Here’s where details count and makes all the difference for the consumers and especially in China. Where as eBay categorizes and organizes the site by products (i.e. by “buyers” and “sellers”), Taobao categorizes and organizes the site for the consumers (i.e. for “men” and “children”). Small detail, right? However, in a nascent and budding Internet market like China circa 2003, the whole idea of online shopping had to be about consumers. In fact, that mentality still is prevalent today and small details like this can be the bane for even the biggest sites.

Fees, Fees, and Fees. I forgot to mention fees. eBay’s revenue model works on taking fees from sellers. You sell something on eBay, there’s a little bit that goes to uncle eBay. It might be small and nominal, but over millions of transactions, then the revenue becomes more sizable and, thus, you can garner a $25 billion market cap in the public market.

Taobao, on the other hand, has no fees for either sellers or buyers. On a side note, that is not entirely true – Taobao charges a fee for their online payment transaction, but for comparison purposes, there are no fees to either sellers or buyers. This may or may not seem to be a deal-breaker between eBay and Taobao, but for the vast China market, this is a big selling point in the psychographic of the Chinese online consumer.

If you take a look into everyday frenzy of the 1.3 billion population in China, there’s a common thread that is woven into the culture of every individual – competition. This is a culture that competes for the small arm space they have in the crowded buses, you have to believe that this spirit of give-me-what-I-can-take mentality is going to bleed into their buying behavior as well.

At the end, Chinese consumers do not like middlemen. This is a highly efficient market and if a Chinese consumer can make a transaction by eliminating the unnecessary, they will go at lengths to get that better deal. Unfortunately for eBay, they got that China lesson 101 the hard way.

On-the-ground Leadership. In any country, having local knowledge of your market is good. Having local leadership on-the-ground is better.

eBay had the advantage coming into China. Here’s the company that INVENTED the online auction business model and primed to launch it in a market that is a perfect fit for eBay. One issue – business was done in China, but senior management resided in San Jose, CA.

You can make all the argument that we live in an information-driven world and how the Internet has bridged the gaps of international lines, but the big advantage goes to Taobao with management on-the-ground with on-the-ground knowledge and on-the-ground execution.

Treating China Differently. Here’s the tricky part for any company looking to expand globally: how to create a uniform global business model that works on all territories. Sounds easy enough, right? eBay tried that with China and its market share shrank from 90% to a modest 30%. Where did it go wrong? Here we are talking about the company that invented the C2C business model, the brainchild behind online communities, the geniuses that was able to actually MAKE money online…

The moment it decided to enter in China with a preconceived notion of simply extending the business model across the Pacific Ocean was really the beginning of the end. How does a static business model in China? Simple answer – it can’t. China needs to be treated separately and business models need to be tweaked in order to succeed. Not convinced? Look at Google, Microsoft, eBay, and Yahoo! Every one of them is still evolving the business model to work in China. There is no easy answer – you just have to be flexible.

Taobao, on the other hand, had the luxury to learn from eBay’s mistakes. Without any preconceived business model it had to adhere to, Taobao was quick to adapt, quick to act, and quick to capitalize on what the China market wanted. Sure, it helps to have Alibaba’s on your side, but there is still truth to what Taobao did right – it created a business model specifically for the China market.

There is a plethora of information, theories, and case studies on the differences between Taobao and eBay. Some I agree with, some I do not – but, at the end, the proof is in the pudding. Taobao did what eBay could not which is to create a successful online auction for the China market.

Taobao’s success wasn’t based on hardcore marketing analytics or even by the backed Alibaba dollars – Taobao’s success is a function of business smarts and product differentiation.

So, next time you feel like an underdog, seize the opportunity and make sure you come out on top!

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

By Max Klein | July 14, 2009

The “Other” 500M People in China

You ask any average Joe / Jane their first impressions of China and it will invariably take root in one of the country’s largest, first-tier cities.  You think of China, you think of Beijing, Shanghai, and MAYBE Guangzhou. After all, if an airplane is your preferred mode of international travel, there are far fewer flights from London to Zhengzhou (the second-tier capital of China’s Henan Province, with a mere population of 7 million) than there are to Shanghai or Guangzhou.

For me, like many other foreign students, I formed my first impressions of China in the university district in Beijing’s bustling northwest district, Haidian, where upwardly mobile college students from around the country seized at every opportunity to learn, interact, and carve out their niche in one of the world’s most exciting and, increasingly competitive, mega metropolises.

I remember walking down the streets and both Western and Chinese brands shout at you from left and right in the big city: following you through the tunnels on the subway, talking to you in the backseat of a Beijing taxi, waving to you from a brilliantly-colored public bus billboard.  The presence of Chinese brands Yili and Mengniu placards alongside those of Nike and Coca-Cola are the only clues that indicate you’re not wandering through Times Square or down Michigan Avenue.

But as most people find out during their first excursion outside China’s first-tier cities, the Peoples’ Republic of China is more than the modern skylines and cutting-edge transportation grids.  I can guarantee you that there’s a China out there that is its own separate world. Despite one of the largest urban migrations in history taking place in China today, 37% of China’s population still lives in what are considered fourth- to sixth-tier cities. That’s 37% of 1.3 billion people. You do the math and that amounts to approximately 481 million people. That’s more than the population of the entire United States. Now, when a company contemplates its marketing strategy in ‘China,’ which ‘China’ are they most worried about, the first- to third-tier China, or the fourth- to sixth-tier China?

Let’s depart ‘China-Lite’ (Beijing, Shanghai, Guangzhou, Tianjin, etc.) for a mind-bending journey to the hinterland, the fourth- to sixth-tier cities, where an unprecedented battle for brands is taking place.  It’s a place few business travelers dare to go because of its daunting complexity and outwardly apparent disorder and ambiguity.  It’s difficult enough to wrap your head around China’s big cities, but if you can develop a strategy for more outlying areas the potential benefits are tremendous.  After all, isn’t Chinese consumerism supposed to be the fledgling world economy’s savior?  Go get your share!

Key Characteristics of Small Market Consumers in China

In developing a strategy to reach customers in fourth- to sixth-tier cities, understanding the consumer and where he/she comes from remains absolutely crucial.  We know brands have taken huge steps towards communicating with urban Chinese and have enjoyed many successes, but few brands have managed to accomplish notable exposure in the markets we’re discussing.  In fact, according to observations in one recent Ogilvy & Mather study, only Coke, Sprite, and P&G boast a notable presence in these markets.  That’s three major players, in a population sea of nearly 500 million people!  On top of that, you’ll find that recognizable Western brands play second fiddle to Chinese brands such as Dabao, Mini Nurse and T-Joy in terms of shelf-placement, according to the study.  Let’s ru xiang sui su (Chinese for ‘when in Rome…’) and learn a thing or two about the fourth- through sixth-tier customer.

Family

If you go outside the major urban areas, you see how life and priorities change. Smaller cities and towns are defined by their interconnection – most notably within their family ties.  With fewer institutionalized, outside influences, family plays a larger role in daily decision-making from deciding what to eat to what type of rice-cooker to buy, there are no exceptions to that rule.

With three generations living together under one roof, even if you avoid your mother’s nagging opinion about what type of groceries to buy, your grandmother is right there to pick up the slack.  Not to mention your aunt, whose house adjoins yours to the right, and your uncle on your father’s side and his family, who live down just the block.  These family members constitute a larger decision-making body that advertisers might want to keep in mind as they examine the large lower-tier markets.

Unlike in the largest urban areas, most families in fourth- to sixth-tier markets have two children. In fact, some mothers even relocate to small cities and change their hukou (Chinese residence permit) to that location in order to give birth to more than one child (China is under a one-child policy to control population growth).  Children in these areas might not shoulder the societal pressure that their peers in Beijing and Shenzhen are made to endure; parents are less likely to cultivate a xiao huangdi (‘little emperor,’ a term that describes only-children in China’s cities) in a fifth-tier city than they are in a larger urban area.

From a brand perspective, these areas are a growing population of youth that have more free time to spend with their friends outdoors, forming their own ideas about what to wear, eat, and even drive.  How this freedom combines with the interconnectedness of small-town family living presents an interesting dilemma for any marketing analyst.

Retail, Perceptions

For any international brand, there’s a fine balance between localization to the China market and what the brand portrays to the rest of the world. How much credibility does my previous brand image carry in a place like China, and conversely, how local should I go with my marketing and branding?  These types of dilemmas intensify in the types of markets we’ve been discussing because the lens through which fourth- to sixth-tier city dwelling customers view the outside world is measurably narrower than the panoramic enjoyed by the hippest urbanites.

Let’s take retail as an example.  It’s true that China’s largest supermarket chains have begun pushing further and further into fourth- and sixth-tier markets, but they should tread lightly.  Chinese customers carry a price-savvy shopping disposition that can affect where they trust they will find the best price for a dependable product.  Even if the price of bananas might be the same in the Carrefour (major supermarket chain) as in the local mom-and-pop outfit, the large supermarket’s imposing façade, bright lights, and expansive parking lot might give the false impression that higher prices account for these extra amenities.

That being said, the right retail formula might help take advantage of easier-to-navigate sales channels in the complex lower-tier markets.  A recent McKinsey Quarterly study cited the importance of in-store marketing campaigns to attract customers’ attention once they’ve entered the store.  One visit to a Chinese supermarket and you’ll notice brands do everything but check their image at the door.  Posters, LCD displays, even attractively-clad sales clerks guide you to the right shampoo or instant noodle brand.  Of course, reaching these customers before they enter the store is best left for another time, another newsletter.

Conclusion…

For now, if you’re not in charge of developing an international brand’s China market strategy, at the very least consider an exploratory trip to China’s hinterland.  These places offer diverse cultural and linguistic experiences and might change the image the word ‘China’ currently conjures up in your mind.

Max Klein was the Manager of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

By Gordon Chu | July 07, 2009

Social Media’s “Tweet”-ssentials

Huddling around the TV set with my family, television has historically marked the iconic moments of my life – the fall of the Berlin Wall, death of Princess Diana, and, of course, who could forget the OJ Simpson’s white Bronco barreling down the Los Angeles freeways. News used to be a lot simpler back then.

Fast-forward several years to 1999 and the advances of technology bring us to a new era of information – the dawn of the Internet. September 11, 1999 – all of us can remember exactly where we were, what we were doing, and how we felt. I was en route to the 37^th floor of a San Francisco skyscraper when I got that one email on my Skytel pager (I miss that thing) – we (the US) were being attacked.

Fast-forward again to the present and here we are – the Internet has advanced and who can argue that we now live in a pure and unbridled era of instant information, namely the dawn of Twitter. June 25, 2009 – for all the Michael Jackson fans out there (including myself), who can forget when that breaking news came out about his untimely death. I will say that I first found out of MJ’s heart attack through tweets sitting in my METAN office. Curious as I am, I jump on Twitter search and within MINUTES, news breaks out of his unconfirmed death (thanks to TMZ) and over 50,000 new tweets (in a span of 5 minutes) were pouring into every single person’s email, cell phone, and news source about Michael Jackson.

Tragedy aside, imagine that – Twitter, a form of micro-blogging, is the new way we consume information. Whether the business model is commercially viable for a business (or for Twitter itself for that matter), tweets is the new trend of instant access and communication.

Beyond information, let’s take a look at the utilizing Twitter as a marketing tool for any brand. Afterall, the ability to mobilize and get to your core audience in such a real-time manner is immeasurable.  Here are five reasons why Twitter should be used in your marketing campaigns:

Drives Awareness. How thought-provoking you might think. I’ll be frank, Twitter is not going to re-invent the wheel… but it is a medium that can easily be implemented and extend your reach to a nice core group of your audience. Plus, it’s pretty inexpensive. And, during these times, wouldn’t you want a cheaper alternative for your media campaigns?

Makes you an Expert. Let me caveat this one first – it takes time. Imagine you’re courting someone new. You’re not going to down on bended knee within the first date – no, because in all relationships (including a Twitter one), you need to build trust. So, offer up advice. Offer up your two cents. This builds credibility and in any sales seminar 101, that’s the golden rule.

Timely information to your consumers. The whole beauty of Twitter is that anyone can get this information in real-time. Having a sale that you want to promote right then and there? Tweet. Have a contest you need more responses for? Tweet. Latest news update on Miley Cyrus? Well – you should keep that one to yourself.

Consumer Interactivity. This idea piggy-backs off of the ability to get real-time information to AND from your consumers. Where else can you get feedback and response to a campaign you’ve just sent outside of Twitter? Not only is it quantitative (number of tweets), but it’s qualitative as well. If you want responses and want to know how the consumer feels, take a yonder on Twitter search – it’s a nice dose of marketing reality.

Keeps you relevant. In this post-modern age of Internet and mobile, technology evolves faster than the blink of an eye. Twitter is no exception and it’s something you need to do in order to keep relevant. If this is not your schtick  – let me suggest that you MAKE it your schtick. Relevance is the name of the game if you want to keep your customers at-hand.

Now that we’ve talked about Twitter – let’s shift gears to Twitter in China. Even in China, micro-blogging isn’t a novel idea. In fact, China has been VERY quick to embrace the Twitter movement and other similar companies have already replicated the same idea including Taotao.com, Fanfou.com, Jiwai.de, and newcomer Digu.com. Currently, Taotao rules the Chinese micro-blog markets by a considerable amount (they partnered with Tencent QQ and leveraged their already existing 900M registered user base).

I’ve talked about the viability of Twitter in China to several peers and many point out the role of government and censorship on the potential future of micro-bloggin. We’ve all read about reports in China how the government has shut down Twitter (or temporarily at least) from the 20^th anniversary of Tiananmen Square on June 4^th to more recently with the uprising of riots in western China. But let me say these incidences are more the exception than they are the majority. Yes, we do need to be careful of what we say – and yes, there will be monitoring of information. We should be doing that regardless, but if you keep it simple, don’t ruffle any feathers, Twitter can be one of your best friends. [ Off proverbial soap box ]

Let’s take a step back and objectively think about Twitter in China. The more I dig into this, the more I think that Twitter is EXACTLY what the China market needs. It’s as if Twitter was created and tailor-made for a country like China. If Twitter works commercially anywhere in the world – my money is in China. Four reasons why:

Fragmented, fragmented, fragmented. Some of my peers at METAN tell me I sound like a broken record. Every newsletter I write, I talk about how fragmented the China market is. Well, I will say it again. And I will say it next time as well. China is big and China is fragmented. The Internet has done WONDERS in unifying the country and youths alike and the evolution of Twitter will only support what the Internet has already done.

Consumer Driven Internet. It’s no mystery that Chinese consumers flock to the Internet more than any other media channels available. The Internet is robust, it bridges across all of China, and information is the currency that these consumers use to define themselves in the world wide web. What does this all mean for Twitter? If good and fast information is what drives consumers – Twitter is going to be here for a very long time.

Marketing in China is expensive. China’s sheer geographic size just makes it a logistical nightmare for marketers to effectively and efficiently build a strong target market group. The beauty of Twitter is that the consumers CHOOSE to follow you. Build enough of trustworthy followers and now you have a pure target market who wants your information.

Relationship-based China. If you haven’t worked in China before, one word you should tattoo into your arm: relationships. Everything is done through relationships from conducting business to finding yourself a soul-mate, you need to know and honor the relationships that you foster. Online is no exception and even if you were to build a pseudo-relationship with your consumers, that’s one step further to win their sale.

Now that we’ve talked through the ABC’s of Twitter in China, we always have to remind ourselves exactly how to Twitter in China. In my opinion, it’s half science / half art and takes a little finesse to get it just right.

For starters, we need to embrace technology and not be scared of the what-if’s and how-to’s. Embrace the ability to reach a targeted market that WANTS to “follow” you.

Secondly, be patient. This is still new to China, so take it easy in the beginning. You don’t become best friends right away – you need to take it slow and steady. Build their trust, they will follow.

Lastly, social media of all kinds (including Twitter) is about habit. I think of it like working out – some of you will love it and others will do it because they need to. For those who love it, kudos to you. For those who do not, your discipline will pay off. It’s marketing. It’s advertising. It’s business… in 140 characters or less.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

www.thehollywoodreporter.com | June 30, 2009

Shandong and Metan are ‘Golden’

BEIJING — A TV drama series following Chinese immigrant families from Gold Rush-era California into the present day christens a partnership between Shandong Film and TV Group and the Sino-U.S. startup Metan Development Group

To download the full PDF version, click here.

By Lin Bai | June 30, 2009

I am a “Gold Mine.” Memoirs of a Post-80s Chinese Girl.

As one of China’s post-80s generation (aka Generation Y), I still remember my glory days in high school. A pair of Nike Michael Jordan sneakers, a Motorola pager, or a Giant-brand mountain bike – and you were the most popular kid in your class.

For reference, in Mainland China, the post-80s generation refers to those born after 1980 and before 1990. And according to China’s census yearbooks, 200 million babies were born during this time period, 90 million of them in urban areas. How many is that? 90 million is more than the population of the top 3 states in the United States: California, Texas, and New York. I don’t know about you – but, that’s a lot for one generation.

They have been labeled as “spoiled, egotistical, self-centered, and rebellious”. While I may not fully agree with those kind words (my mother thinks otherwise), my personal thought is, in reality, my generation happened to be born into the most technological, most highly advanced networked age to date. With that, we are more concerned about social responsibility and smart investing than any of our predecessors.

In 2009, the youngest are 19 years of age – and this generation is playing an increasingly important role in China’s consumer market, gradually becoming one of the most lucrative segments ever coveted by marketers, the so-called China “gold mine”.

Why is this generation the “Gold Mine”?

Reason 1– An International Generation

We are the first born after China’s economic reforms growing up in a better environment than our parents could ever dream. We have more disposable income and a greater appetite for consumption, partly driven by international ties. This generation is addicted to the Internet and video games. We seldom read newspapers but many of us are quite knowledgeable about the latest Hollywood trends and fashion trends. We constitute the majority of online shoppers. We live in a world of KFC (considered a chic Western fast food in China), mp3s, QQ, Mobile phones, streamlined TV dramas and Hollywood movies. We dye our hair blue and wear distressed designer jeans with holes. And unlike our parents’ generation, we are more receptive to new things, follow latest fashion and trends, and are quickly becoming the face of China.

Reason 2 – The Little Emperors and Little Princesses

As a result of China’s one–child policy, this generation is cursed with the “me” factor. With no siblings to compete with, we are considered the “little emperors and the little princesses” of the family, doted on by our parents and possibly four grandparents.

And unlike kids in the US or in the other countries, this “gold mine” generation is financially fully supported by parents well into their twenties or, at the very least, until they graduate from college (many of them still rely on their parents even after they get a job). To throw in a little fact – according to China Research Center on Aging, a surprising 30% of working age employees in China are supported by their parents.

This generation represents the “hope” of the family. Just like most parents all over the world, Chinese parents save the best for their kids and might even spend their entire life’s savings on their children’s education, wedding, or a purchase of a new apartment (or if not, at least the down payment).

The short saying, “son drives Porsche and dad drives Honda” is really not all that uncommon in China. We have an incredible influence over our parents’ spending, especially for big-ticket items.

Reason 3 – A Different Consumer Attitude

The post-80s generation has a markedly different behavior in consuming than their parents.

First, unlike their predecessors who lived frugally and save as much as they can, this generation believes that money is something to be made and not saved. We are confident that we can (and will) definitely make big “bucks” in the future – especially after an intensive education starting at primary school, there is an expectation for a higher standard of living after college graduation.

If this “expected” mentality isn’t enough, we also believe if we cannot afford a high-rise apartment or a Mercedes Benz with our current salary, why not spend and pretend that we can. Thus, an introduction to the so-called “Moonlight Group” (people who live paycheck to paycheck, spending it all by month’s end). There is a saying in China that they are “spending tomorrow’s money on today’s dreams”.

Second, it is not only a mode of thinking, but is also how we are spending which is a big differentiation in attitude. Unlike our parents, who spend money for necessities such as basic appliances and groceries, this generation likes to live big… and luxuriously. We spend on leisure, entertainment and luxury consumer goods. Our rule for buying is not based on how well it is made, but whether we “like” it (or not). We focus less on a product’s usefulness than on its appeal. Purchases are heavily based on appearance, popularity, and, what I like to refer to as, the “flash” factor (how much attention they would get from the others if they own it).

Xing Yuan, a noted Sociology Professor at Shanxi University, states that:

“This generation has no idea of thrift because as they grew up, they live in an environment with a rich supply of commodities”.

Reason 4 –The Future Middle Class

In the next few years, the post-80s generation will constitute (as some of them already do) most of China’s entire middle-class. Compared with previous generations, the past-80s generation “as a whole has the advantage of daring to overthrow traditions and challenge old ways of doing things”. We have strong motivation and drive for making money and society has given us plenty of opportunities. Not only are we better educated and start earlier at making substantial money than previous generations, we are doing this across all industries including sports, entertainment, IT and business. Piano prodigy Lang Lang, world champion hurdler Liu Xiang, NBA basketball players Yao Ming and Yi Jianlian are some of this generation’s celebrities – who are also representatives of this new generation of China’s “gold mine”. In fact, in Forbes’ 2009 annual “Top 10 Chinese celebrities list”, 50% of those listed belong to the post-80s generation.

How have companies today been targeting this “Gold Mine”?

Coca-Cola has always understood how to target this particular generation. Whether it is sponsoring live events around college basketball games or cross-promoting “World of Warcraft” (the no.1 online video game in China) to promote Coke products, Coke is fully aware of just how pivotal this new generation is and will become. The taste of Coke stays the same, but the experience Coke brings to young folks is always new– this change is exactly what we’re seeking.

Gucci and Louis Vuitton understand that their staple audience in mainland China will actually be 22 to 32 year olds. So, in response, they’ve promoted 500 yuan ($73) to 1,000 yuan ($146) bags for that segment.

Globally, the Swiss brand Swatch has positioned themselves as a must-have for people from 8 to 80 years old. In order to target post-80s generation in China, Swatch realigned their marketing strategy: they selected a Chinese pop icon singer Liyuchun (born 1984) to be the brand spokesperson.

A national example, China Merchants Bank has launched the “Hello Kitty card” and “MSN card” to attract the post-80s generation.

Conclusion: the Gold Mine is the next frontier of advertising

This generation’s product consumption was a key factor in China’s retail growth in 2008 – representing 20% of all spending (China Market Research Group).

And if everything said and done in China is still not an indicator of this future – according to China’s National Bureau of Statistics, the number of Chinese younger than 30 will surge by 61 percent to 500 million people by 2015. That’s more than the current population of the United States. Enough said.

As part of this lucrative member of this post-80s generation, I’m actually quite excited what the future holds in China. I can proudly boast that I’m making history and changing China as an economic force. Whether it’s for the better (or for the worse), I’m a proud part of that change. So, the next time you decide you want to tap into the largest group of consumers in the world – think of this “spoiled, egotistical, self-centered, and rebellious” crowd. Think China and join the gold rush!

Lin Bai is a New Ventures Analyst at METAN Development Group. For comments/questions, email lin@metanmedia.com

By Gordon Chu | June 23, 2009

The Case for Online Videos

Last Thanksgiving, my sisters and I decided to indoctrinate my mother with the holiest of holy – an email address. This was her first (but certainly not her last) and really her first introduction to what she fondly referred to as, “the www thing.”

Today, she went from the stone age of non-Internet, to having a Facebook account and selling knick-knacks from around the house on eBay. Today, my inbox is flooded with recipes of her favorite foods, news articles of my old hometown, pictures of kittens in bowls, and, of course, her love for viral online videos (she cannot get enough of how Mentos and Diet Coke react).

While I do not have the patience to scour all through Youtube, I am deeply fascinated by the behavior of online videos and avid viewers, such as my mom. She encompasses why Youtube exists (despite still operating at a loss) and why online videos is the media channel of the future.

China has more than adopted the way of online videos. Online is more than merely an option to consume media, it is where all eyes and brands are focused – where media begins, and where media ends. It is engrained in the culture of China’s youth and is as regular of an activity as getting a Starbuck’s coffee or checking your email.

Several weeks ago, we had talked about the sheer size of China’s Internet market to the tune of 298M users (and growing). What we did not make mention is just how much of that Internet use was consumed by video watching. In fact, online videos is the 3^rd most utilized activity (behind instant messaging and online music) and eclipses even the viewership of television for certain demographics. To put things in perspective – Youku, China’s leading video sharing site, has more than 50% market share of online videos. Throw in Tudou, 56.com, Tencent QQ, all of a sudden, the whole world of online videos just got that much bigger.

Brands have most definitely taken notice of this whole online phenomenon. Online marketing campaigns are not just an ancillary business to television’s bread and butter – but are an absolute staple to any successful marketing penetration in China. Beyond the sheer volume of viewers, there are other beneficial advantages to why brands are migrating online.

Reason 1 – Follow the consumer. Its no mystery that China’s youth consumes media a different way than just television. Whether this is a function of content, a function of technology, or a function of culture, China’s youth flock to the Internet for media more so than any other media forms.

I was surprised to find out that Fox’s “Prisonbreak” is one of the most popular shows in all of China. So much so, I’m willing to bet China has more fanatic fans than even here domestically in the US. Chevrolet took notice and produced both Internet and television commercials with Wentworth Miller (star of Prisonbreak) starring in an action-filled commercial that resembles the fast-pace of the hit show. The funny thing is “Prisonbreak” has never aired on television nor will it ever. The only way you can catch “Prisonbreak” is – yup – online.

Reason 2 – Offer more to consumers. An online platform has certain advantages over a platform such as television. For one, the Internet offers choices. Yes, there are 3,000+ TV stations in China, but an online platform has millions all at the user’s control. Secondly, and most importantly, an online platform introduces a brand new world for consumers with interactivity.

Nokia is a prime example of interactivity between content and viewers. Recently, Nokia launched an online event streamed live on Youku. Viewers came to the site and were able to choose from four different angles to watch the live event. Still not enough? Viewers were able to join the interactive press room and see their favorite performers answer questions asked by fellow netizens. In all, nearly 7M people came to the site to watch – making the 3-hour event the largest of its kind in the virtual world.

Reason 3 – Instant gratification. This really works two-fold, instant gratification for both the consumers and instant gratification for the content providers. For consumers, this is a no-brainer. All the content they could ever want at the tip of the PC mouse. In the mood for some NBC Heroes? There’s more than enough online channels to fill season 1, 2, 3 and 4. I digress – you get the point.

For content providers, instant gratification comes with information. They want information that is measurable, direct, and fast about their viewers. Television offers little more than a rating and an estimated number of viewers. Online provides richer and instant information about the content. Viewer comments, number of downloads, geographic demographics – all this information is available in real-time. When’s the last time content providers were able to gather that information from a Nielsen box?

Reason 4 – Mobile, the next big thing. Last week, we talked about the introduction of the 3G network to China. Whether it will make a big splash or not in a country already adapting to the different technologies of mobile, that is up for debate. However, there’s no argument about how consumers will adopt the use of mobile in media. One thing we do know, 3G  will only boost the consumption of video via mobile with faster access to the Internet.

Nokia’s recent online live event was the first strategic move to put Nokia’s brand on the forefront of online videos. Nokia is, by-large, China’s number one mobile manufacturer brand – and are well aware of the implications of mobile and online video. In fact, in May 2009, China Telecom announced in partnership through Nokia Siemens Networks, they would roll-out high-quality video streaming services across mainland China. Subscribers would have the capability to access multimedia mobile applications such as live TV, video-on-demand, and media download.

So, is this the end of a prehistoric television era? I will adamantly answer that with an affirmative no. Television and online videos are not mutually exclusive and both will exist in the same media ecosystem. In fact, the pie will only get larger as more media channels are developed and as technology dictates how consumers view media. Rests assure, both television and online videos will have their place.

Censorship will play a big role in the balance between television and online. Today in China, SARFT (State Administration of Radio, Film, and Television) heavily influences the content on television through quotas, regulations, and just a general “Big Brother” approach of media in the marketplace. And today in China, SARFT is looking to have the same control online. Whether online will have the same restrictive rules and control as television – this is more of a political and social decision that, and like the China market, will just have to wait and see.

Despite this massive wave of online videos flooding the China market today, I still believe television is and will be the most effective way to market and advertise. Like any other products, technology will evolve and adapt to the way of consumers. The lines of entertainment will be blurred and rather than a distinct online / television division, we WILL see a blur of technologies as well (see IPTV if you want a hint).

For now, as brand managers and content providers, we can view these changes in technology as a blessing – more distribution and more options for us to choose. Going forward, our job is to figure out the how-to. Afterall, if Youtube could have such a profound effect on my mother, I have to believe this is just the beginning of more than just an online revolution. And if you’re like me, this is where the fun begins.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

By Gordon Chu | June 16, 2009

My 3G Nephew

January 2009 marked a momentous moment in China – 3G licenses were issued to just 3 mobile companies in China. It was a long-time waiting, with rumors of 3G in China since the middle of 2004, the global mobile industry waits in anticipation to see how it will play out in China. Although The Economist suggested in 2001 that the sizable investment in the 3G infrastructure is one “the biggest gamble in the economic history of mankind”, the sheer size of China’s market makes this a very interesting market for content providers with huge risks and huge rewards.

To put China’s mobile market in perspective – China has the largest ‘pure mobile population’ – 670 million subscribers, 400 million of whom does not own a personal computer (MIIT 2009). China is also the largest mobile entertainment population – with 35% of the mobile subscribers in China who use their phones to listen to music, compared to 6% in the US (M:Metrics 2008). China also happens to be the largest mobile Internet population – with 117 million mobile subscribers who have accessed Internet through mobile in China (CNNIC 2009). Lastly, China is the largest mobile operator – feeding the 3G network with $6.2 billion in 2009.

Even the deep-frozen tundras of venture capitals investments are thawing and more dollars are flowing to Chinese 3G start-ups despite this cold economic winter. And, the global media companies, who have been scared off for years from this ‘pirate land’, are also eyeing the China market with new 3G strategies. It seems that with all this buzz about the 3G network in China, everyone is packing (and packing well) for a ride on the ‘3G train.”

As Mr. Tomi Ahonen, the former Global Head of Business Consulting at Nokia, pointed out:

“We can now say, with great confidence, that any 3G investment in an Industrialized World country, that has been reasonably well managed, should turn a profit.”

Let me stop right there before I claim my ticket on the 3G bandwagon. Yes, all roads seem to point very positively for an unprecedented growth for China’s mobile industry. Yes, content providers and mobile operators all herald and praise the beginning of the 3G network. However, in a country where free content is king and consumers behave with their wallets, you have to wonder will China be the exception to the rule?

As a general mobile rule, many have argued that the 3G network is a content driven business. Apple’s iPhone is a prime example of this argument – within 9 months, iPhone application downloads have reached 1 billion. In the first three days of iPhone’s 3G launch, sales were over 1 million. Even rumors of Hulu developing an iPhone application to further harness the power of iPhone 3G. You can make a very strong case that (at least in the US), content drives the mobile business.

But in China, where the market has been waiting patiently for a comparable 3G network for the last 5 years, the business model has changed. Seeing the rest of the world benefit from the evolution of 3G, China is not the country to sit along the sidelines until 3G was available. China is a country that is quick to learn and to adapt in order to get what they want. Very similar to how unavailable content on terrestrial television drove the masses to consumer content via the Internet, the lack of fast content over a 3G network drove consumers to think about alternatives. In this particular case, the business model shifted to the handsets.

In China, cell phones have never been bounded with operator plans and term agreements until the 3G phone came out. Thousands of cell-phone brands are stocked in chain stores and mom-and-pop stores all over China, including those ‘‘bandit cell phone’ manufactured by small-scale factories offering Wi-Fi phone below $200. Let’s take my 15-year old nephew in Beijing as an example. Last year, I knew just how hard my nephew begged his mother to buy him a bandit cell phone heavily loaded with all the latest technology functionalities available – Wi-Fi, Bluetooth, 4 gig storage, 4.0 Mega-pixels Camera, and, let’s not forget, the 6 Stereo Speakers set built-in. Within 10 minutes of getting his new phone, the phone was filled with hundreds of applications, MP3 music, comics, games and 10 episodes of NBC Heroes – all of which he downloaded online and were transferred to the phone through a USB cable. Mind you – this is my nephew’s third cell-phone in 2 years, a little behind all his peers’ 6-month turnover rule. Needless to say, I felt embarrassed when ‘educating’ my nephew about the magic of 3G as obviously I was the one being schooled about just how the market functions in China.

Content will only drive the mobile business when the market feels comfortable with pricing flexibility. Most of the digital content distribution businesses in China have evolved to either an ads-support or a micro-transaction model. Case in point – seven years after Baidu, Google finally launched their ads-supported free MP3 download in China. Most of the online games are free to play and make money from selling virtual items. Another example, in 2008, Tencent made $279 million from virtual item/value added service sale through its online virtual communities.

All is not lost in China however. Despite how much my nephew has robbed the likes of NBC for its proper royalty rights on Heroes, the mobile industry in China is nothing like the Internet, where no one wants to pay for the content. My nephew still received a ‘the most valuable customer’ reward card from China Mobile since he spends $10/per month on ringtones and Internet surfing while sitting in his history class. But $10 is the price for 2.5G network. 3G? Well – 3G is a much more expensive network that leaves very little space for pricing flexibility, which is the key to drive a business to grow in China.

I am not saying 3G will not succeed and operators will stay in SMS and the ring-tone business for the next 10 years. The emerging new powerful players, such as Apple who are currently in talk with China Unicom, might be able to reshape the market with different business models, especially for the high-end user market. For example, if the future iPhone business applications are innovative and localized to the China market, it could be the spur of something much bigger and utilizing the 3G network to the potential everyone envisions it to be. With the introduction of new business models into China, the mobile space has much to anticipate and look forward to.

Like most introduction of new business practices in China, there is no one “right” answer to mobile. But it is important not to let your mind to be led by the news such as ’2-year investment on 3G will reach $58.8 Billion’ and to think of all the ‘potential talents’ a cell-phone can have in China.

Like Internet businesses in China, everything starts with content. In the early days of Baidu, the largest Chinese search engine, over 70% of the traffic is brought by its ‘free MP3 search & download’ service. The Chinese youth have been hungrily searching for content for years and they are the ‘alpha users’ of ring-tone and WAP surfing. As long as your content service is well packaged, those 35% of the mobile subscribers who use their phones to listen to music will come.

If you are a content provider, think about all channels for mobile. Your business may be in 3G, what what about WiFi? Bluetooth? Or CMMB (China Multimedia Mobile Broadcasting)? A typical pay-back period for a 3G operators is 7-10 years, which is an eternity considering how fast technology evolves and before any of Chinese 3G operators are able to lower the price. Be cognizant that multiple substitute mobile channels for 3G will emerge. They will be much cheaper, more flexible, and come loaded with all kinds of multimedia services and content. For example, the CMMB’s mobile TV coverage has reached all the tier 1-2 cities and 113 smaller cities. Operated by TV stations, it offers free basic channels and additional channels for pay-to-watch.

So, what does this all mean for mobile business in China. It is quirky, it is consumer-driven, and it definitely does not behave like the rest of the world. Like all new business, it’s about a understanding the market, understanding your product, and definitely understanding how consumers act. My nephew is the best example for this. He called yesterday and informed me that he had just reached investment profitability, meaning his self-made cell-phone comic business has covered his new cell-phone cost. Not bad for a 15-year old.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

By Gordon Chu | June 09, 2009

When in Rome, Do as the Chinese

I remember in business school, one of the first case-studies I worked on was Euro Disney. I specifically remember reading the severe backlash from the public about the park’s “squeaky-clean” American image despite Disney’s promise to angle the park for a more European taste. Sure, there were the European themes on the rides and Mickey would wear his cultural garment when parading around, but I’m talking about the real cultural sensitivities.

Let’s take service of wine at the park for an example – for a year after Euro Disney’s opening, wine was not served in accordance to Disney’s other amusement park rulings despite, culturally, Europeans regularly drink wine with nearly each and every one of their meals. This might be a ‘small’ example of market ‘misinterpretation’, but imagine a dozen of these and that single problem, all of a sudden, doesn’t seem to be so ‘small’ anymore.
That was my first lesson in localization early on and definitely a lesson that, as a brand marketer, we need to breathe, sleep, and live by in our marketing handbook.

Why such the heavy emphasis on this lesson on localization? Because this is the one biggest mistake companies make when making the plunge across international lines. It does not matter if you are a media company or a brand, do not assume your name or brand will be enough – there is still an absolute need to acclimate your product for the surrounding market. And in China, this cannot be amplified more – with 1.3 billion people across the country, localization is a must.

Let’s take a closer look at the impact of localization on two companies from two different perspectives: Coke and Kentucky Fried Chicken (KFC). For Coke, localization is much more relevant on its marketing / branding strategy in China. And for KFC, localization is found all the way to KFC’s product offerings.

COCA-COLA

Coke has been in China for a very long time now. It built its first bottling plant in China immediately after World War I. However, Coke’s real growth has come only recently post-1999.

Before 1999, the branding position was still very US-centric. In fact, TV ads were merely dubbed versions from the US – nothing in particular cried out to the Chinese market.

After 1999, Coke reinvented its marketing campaigns to be more direct and tailored for China. It incorporated the Chinese culture into the marketing creatives including inspiration from Chinese folklore, colors, and themes that helped emphasize some of China’s traditional core values. Come to China during Chinese New Year and you can experience first-hand just the amount of effort Coke invests on properly localizing their brand strategy to the Chinese market – you’d swear Coke was made in China and not in 1886 in Atlanta, Georgia.

KENTUCKY FRIED CHICKEN (KFC)

KFC has only been in China since 1987; however, has grown to the top of the highly coveted list of king-of-the-fast-foods. One of their secrets to their recipe of success is product localization. Over in China, you have more options than just your regular, extra crispy, and grilled. You’ve got the option for Peking Chicken or Chicken Sichuan-style. And for the side dishes? Try a seasonal salad with bamboo and fungus or Chinese-style porridge along with your chicken.

KFC went as far as to reinventing their product offerings to fit the Chinese consumer preference – a very bold move considering the US strategy of decades of avoiding dramatic changes in their consumer offerings. However, they were quick to adapt to the new environment and are now are the ones leading the very competitive fast-food market in China.

Coke and KFC are only two companies of many that are practicing localization. In fact, there probably is not a single major global brand that has not taken into consideration the cultural and market differences in China. Its no mystery that localization is a marketing must, but you have to wonder – is it enough?

Localization reaches beyond just our branding position or product offerings, but also encompasses the media channels we go through, the areas for growth, and recognizing the different trends that are happening in China today. In other words, localization is a process, an iteration, and a practice. Coke and KFC’s success did not come without their own hiccups and bumps along the road – I’m certain Coke has missed the boat on many occasions and I’m equally certain not all of KFC’s new products had raving reviews. Nevertheless, both companies pushed the envelope of localization and brought marketing to a whole new standard to China.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

By Gordon Chu | June 02, 2009

The Good, The Bad, and The “Ugly Betty”

I admit it. I have grown to like ABC’s “Ugly Betty”. In fact, it now has its own time slot on my DVR priority list. Seeing those trademark braces and bad bangs just brings a smile to my face. I’m not the only person who tunes in every week – “Ugly Betty” has an extraordinary fan-base and is a huge hit in the United States. It consistently ranks in the Top 10 Nielsen ratings in a very competitive Thursday primetime line-up. The show’s format and concept was adopted from the Columbian phenomenon – “Betty La Fea” (“Betty the Ugly One”) and can pretty much be found in one form of incarnation on all four corners of the world. Some good, some bad, but all distinctly “Betty”.

China is no exception – its version is suitably titled “Ugly Wudi”. And yes, it’s still the classic fish-out-of-water story about a girl trying to make her way in life and her budding career. And yes, there are the sub-plots of family issues, Dove soap, work scandals, Dove soap, inner-work romance, and Dove soap. Did I mention Dove soap? There’s no mystery Unilever is the main brand sponsor for “Ugly Wudi” – in fact, they’ve taken product placement and brand integration to a whole new level of its own. The Dove product is inter-woven into the story itself (they work in an ad agency) and the in-your-face product placement in the foreground, the background, and even stitched in the clothes is a strong reminder that “Ugly Wudi” is just one mega-marketing vehicle.

Still, despite the aggressive product placement in “Ugly Wudi”, the show is an incredible success and is now going into its third season. In the US, brand integration in TV programs is not a novel idea; however, this in-your-face tactic would most likely be classified under the “tacky” bucket. So I ask, why is this strategy successful in China? When is “enough” just “too much”?

TV programs in the US have dabbled in product placements since the birth of television. In the 1950’s, the term “soap operas” originated from Proctor & Gamble’s household products prominently displayed in the foreground of the set. And throughout the years, both movies and TV have always managed to weave this very important advertising vehicle in nearly all of the content.

Today, especially in an age of DVR’s and TiVo’s, there are not a lot of alternatives than to have brand products tied in the show. And today in the US, product placement just isn’t enough and brand integration is that next level of involvement with the consumers themselves. Some shows have done this very well – when the lines are blurred between brand sponsorship and show content. For example, NBC’s “The Apprentice” used brands as part of the challenges for the competition. It may be a little contrived, but it still had purpose and it had legitimacy on the show itself. Some shows are still trying to figure the right balance out (aka not doing such a good job) – a tougher enigma than you would expect considering a hypercritical American audience (for examples of bad, go see Dr. Pepper’s sponsorship in the CW’s “90210” or how Subway made its way in NBC’s “Chuck”). In any case, there is a fine balance for viewers with what makes sense and what’s “too much”.

In China, “Ugly Wudi” pulls no punches back and barrages the viewers with an onslaught of Dove products. Granted, the plot revolves around an ad agency working on Dove’s marketing campaign, the show’s producer spared no cost in making sure Dove is very prominent on the screen. From the opening scene to the closing credits, Dove manages to squeeze its way in one form or the other in every available spot. Now, what is “Ugly Wudi” doing so differently than all these other US companies to make it as wildly successful (and accepted) with viewers? Some will say the key to success is good creative writing. Others will say success is in the power of the brand. I call bluff – and credit it to plain ol’ good timing.

For starters, China is not the US and has not had a long illustrious history of product placement / brand integration. In fact, for a very long time now, TV program formats have been somewhat cookie-cutter and have not changed or evolved. For brands, if you want to be part of a show? Take a number in line and pay for your 15-second ad spot. That was many times the only option. Yes, brands can get “creative” and there may be a sponsor on the lower-right hand corner of the television screen, but beyond a quick blurb at the end of your show – there is not much more excitement beyond that.

With “Ugly Wudi”, this idea of creating a story line around a product is practically brand new in China. This was uncharted territory and there was no measure of success or failure. When I say all of this, by no means, is it a knock on “Ugly Wudi” or its production value in any one bit. In fact, I think the Chinese version is wildly entertaining and can absolutely see how millions of other viewers in China (73 million on its first night on television) feel the same way. The bottom-line is I think Unilever’s bold move with “Ugly Wudi” is brilliant and kudos to impeccable timing. Mindshare (the agency behind “Ugly Wudi” and Unilever) did an excellent job at boldly creating a show and introducing a new business model for brands. The consumers recognize it. The viewers accept it. And, most importantly, the checks keep on coming in.

However, like all great ideas, there will be followers and I am 100% positive “Ugly Wudi” and its brand marketing content is no exception. There WILL be a flood of in-your-face brand integration and product placement on China television programs. Some will be more subtle – others will be outlandish and downright silly. And there WILL be ramifications with the viewers themselves. They accept “Ugly Wudi” for what it is (a big commercial)… for now. A very big asterix when I say for now.

Will any format with such prominent brand advertising within the show continue to thrive? Absolutely not. One thing about Chinese viewers today – they are savvy, opinionated, and, more importantly, they have a voice. Armed with blogs, forums, and chat rooms, Chinese viewers today will not settle for just status quo. Complacency is simply not an option and, from nearly every trend you can see between Chinese viewers and TV programs, they are quick to voice their distaste with anything that presents a roadblock between what they want – including an eventual overbearing surplus of brand integration gone wild.

Is there a happy medium where both viewers and brands / shows win? Sure. Do I think it will be as extreme as the current mode of brand integration in “Ugly Wudi”? Probably not, but I do think they will be successful for a very long time. One thing I do know, as brand marketers, we all need to hear the viewers’ voice and continue to intelligently utilize product placement / brand integration. It is no longer something we simply piggyback on our programs, but the brands have to be the centerpiece first. Develop the program around the brands and all of a sudden, the blur between program and blatant advertising seems a little more seamless.

Television is NOT an easy industry and television in China makes it all that much more challenging. However, with new business models never tried before, China is also the new wild wild west along with all the opportunities and fortune. With a little luck, a little logic and common sense, who knows – maybe the future holds a little bit of “Ugly Wudi” in all of us.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

]]> http://metandevelopmentgroup.com/the-good-the-bad-and-the-%e2%80%9cugly-betty%e2%80%9d/feed/ 0 http://metandevelopmentgroup.com/a-cup-of-coffee-with-that-internet/ http://metandevelopmentgroup.com/a-cup-of-coffee-with-that-internet/#comments Tue, 26 May 2009 23:48:42 +0000 admin http://metandevelopmentgroup.com/?p=1682 To download the full PDF version, click here.

By Gordon Chu | May 26, 2009

A Cup of Coffee with that Internet?

With nearly 300 million Internet users according to the China Internet Network Information Center (CNNIC), China now eclipses even the United States with the most Internet users in the world. To put things into perspective, China alone, comprises nearly 20% of the world’s population of Internet users. Their growth rate grew over 1200% from 2000 – 2008 making China one of the fastest adopters of technology in the world. And the scary part of these figures? We’ve only seen the beginning – China still has only penetrated under 25% of its population with Internet access (versus nearly 80% of Americans are Internet users).

So, I ask – how do we reach this massive sea of Internet users. What Internet marketing arsenal can we pull out of our toolbox? Key word search? Nah – that would be too obvious. Social networking communities? Sure – that could work, but prepare to take a number in line when looking to partner with one of the big Chinese social-networks. Here’s a hint – think outside of the Internet “cloud”. Instead of investing your efforts in China’s digital realm, go around the corner and experience first-hand the droves of people crammed into a single room with 100 purring PCs. Welcome to the world of Internet Cafés.

Unassuming from the outside and certainly nothing out of the ordinary when you walk in, the phenomenon of Internet Cafés is like no other when compared to the rest of the world. Everyone is sitting in front of a PC either playing an online game or chatting. Nothing different, right? The hours pass and some of the kids decide to take a break from the World of Warcraft and go watch ABC’s Lost instead. Others decide its time for food and grab a bowl of beef noodles. And still others decide they’d like to go a round of karaoke with their best rendition of Christina Aguilera. Still no big ‘a-ha’ moment? Let me say that ALL of these activities are happening still in that one crammed room with 100 purring PCs. All the convenience for you and your friends under one roof. In fact, a lot of the Internet Cafés have nice plush couches for sleeping and showers to freshen up if the person wants – making the Internet Café the home-away-from-home for many.

The whole Internet Café phenomenon first came to the scene as a result of limited options. Home Internet broadband was expensive (or unavailable) and there were no other real viable way to access information. Even with cost of home broadband coming down, Internet Cafés still comprise nearly 40% of all Internet usage. As for access to information – the obvious solution? Open a place up and wire up PCs with access to the Internet. Information was aplenty, information was fast, but information was only the beginning. While information may have been the catalyst for the spur of Internet Cafés, the sub-culture is what keeps it alive today and will keep it thriving in the future.

Internet Cafés were not just a place to check new music, read news, or watch your occasional viral video. It was an escape from the rest of the world – actually, it was the ONLY escape available for the Chinese youth market. A space and time where friends intermingle and have fun (albeit all via the Internet) without over-bearing supervision. Nevermind this is one of the few ways to interact, this is the preferred way to interact – nearly 82% of Internet users in China use instant messaging regularly. If you compare that to the United States, we’re at a whopping 39%.

While the manner of how people consume media through the Internet may not be a big surprise when compared with the trends of technology, the sub-culture of the Internet Cafés was certainly an unanticipated result. Who knew that Internet Cafés were going to be THE place to be – the birthplace of friendships, relationships, and a digital / real community. Even within this community, further diversification and niches have evolved from the growing trend of this sub-culture.  Crazy about World of Warcraft? There’s an Internet Café equipped with the best PC hardware you can find with a space that’s decorated and themed for your game play. Lonely while surfing the Web? Go to the “Surf Mate” Internet Café and surf the web with a lovely lady next to your side.  No matter what your fancy might be, there’s an Internet Café and a waiting seat for you.

Just how big is the Internet Café market today? In 2008, there were 147,000 registered Internet Cafés that made up 126 million Internet users. Roughly 90% of Internet Café users are between 18-30 and over 85% of them are male. Over 45% of the users frequent the Internet Café at least 4 times a week and the average user spends nearly 4 hours per day. And that’s only registered licensed Internet Cafés. Estimates for the number of unlicensed Internet Cafés topple 130,000 and consist of an additional 100 million Internet users.

Marketing to Internet Cafés is not a question of when – but a question of how. Companies have already taken notice of this market and we can see the advertising dollars flow to this particular Internet segment. For example, in 2005, Coke partnered with 9-City, the Chinese operator of War of Warcraft Online, to host co-promotion campaigns. In all affiliate Internet Cafés with 9-City, Coke became the exclusive carbonated drink that would be sold. Today, Coke still continues to heavily invest in targeting this market. Still not convinced? Other companies have made their business with Internet Cafés. For example, in 2005, Giant Game launched their first MMORPG (Massively Multi-player Online Roll-Playing Game) game ‘ZhengTu’. With a full grass-root marketing blitz to encourage users to join the virtual game (nearly $9M in advertising was spent in 2007 Q3 alone), Giant Game managed to reach critical mass and IPOed in the New York Stock Exchange with their one game alone.

Yes, Internet Cafés seem quirky. Yes, there will be parts of Internet Cafés that we can never grasp or understand. But, it’s a market that is only beginning to grow. It’s a market that has its own rules, its own culture, its own life. The reality is there will be no way to fully capture the entire market. The market is fragmented and scattered throughout both rural and metropolitans cities. But with numbers upward of 200+ million users frequenting and congregating together in this network of Internet Cafés, there is opportunity to be had and, from the ways looks, lots of it.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

By Gordon Chu | May 19, 2009

Marketing ABCs of China – The Buick Way

Everyday, I continue to read the dismal news of the US auto market. From the end of Pontiac (I miss the Fiero) to worldwide drop in auto sales, the auto industry is taking a full-size beating in this global economy. Yet, despite the onslaught of when-it-rains-it-pours bad news, there is a car-haven and a glimmer of hope for the auto industry: China.

China continues to show strong sales and the automobile industry is taking notice. With news such as GM reporting China sales hitting a monthly record in April (50% higher year-over-year in China versus a slumping 34% drop in US sales), how could any automaker ignore the vast market opportunity in China. Granted, much of the sales increase is accredited to a slash in sales tax by the Chinese government, it does not take away the sheer fact China is hungry, they have money, and they are ready to spend.

So, what does this all mean for marketing and business in China. Not everyone is an automaker and not everyone has the same marketing dollars available. But we can all acknowledge the potential and we can all learn a few lessons on just how the automakers are taking advantage of this open season to get their best foot in the door.

Let’s take a look at one of the top US automakers making a big splash in China: Buick. Buick has done an incredible job in positioning themselves to hit the right market at the right time – all the classic scenarios of Business 101 and Marketing’s 4 P’s (Product, Placement, Pricing, and Promotion). They came to China with their homework done and we can all take a few pointers from their early success.

LESSON 1: Know your product. Sounds trivial, right? Let me repeat – know your product. Understand who is it for, how to market the product, and, most importantly, why it makes sense.

Since entering China in 1999, Buick’s primary market has been the emerging middle class  - more specifically, the business folks, government VIPs, and entertainment stars that influence what high society is in China. Think what Blackberry did for corporate America, Buick has done the same in corporate China. Getting picked up for a business meeting at the airport? There is a good chance you would be picked up in a Buick. Fancy symphony to catch at night? Buick. In fact, Buick did everything in their power to make sure they hit this market hard and they hit this market “right”. They went as far as redesigning the interior space and engine power to emphasize the comfort and safety factors for their lines of cars in China. Why go through all the hassle and expenses to differentiate? Because Buick knows their products and they tailored it to perfectly mirror their target customer – the successful business person where inner quality is more important than the outside appearance and the status symbol itself.

LESSON 2: Know the market landscape. This goes hand-in-hand with “know your product”, but in a very complex and fragmented market such as China, I felt it deserved it’s own section in this article. Here’s the bottom line: You need to know your way around in China in order to reach and communicate to the customers. Without understanding what you’re dealing with, navigating and spending your valuable advertising dollars can quickly get you a whole lot of nowhere.

Buick understood the difficulties with the Chinese media and they made all the right moves to choose the right basket of media channels to efficiently and effectively advertise their products. For example, Buick assumes that television and print media was the primary way to reach their consumers and, not surprisingly, the company is among the top 3 automakers in television advertising spending. Go one level deeper and Buick’s media buys concentrate on CCTV-2 Economy Channel and CCTV-4 International Channel – both channels with high audience ratings from Buick’s target demographic. Online, Buick recognized how the Chinese consume information and heavily invested in online marketing campaigns including through social networks and viral videos. The proof? On Youku, the top online video streaming portal in China, the number of viral videos Buick vs. Ford: 466 to 36.

LESSON 3: Know your message. This should really read, “Know your people”. This is really a two-step process. Step 1: Take the time to do your homework when figuring out your marketing strategy. Step 2: Look at Step 1. Never assume you know how the Chinese market will react – it’s like a crapshoot and your first impression should be your best foot forward. One thing about Chinese consumers, every purchase is a personal choice with strong emotional connections to the brand and product itself. Remember buying your first car? I remember how I felt sitting in mine for the first time and smelling the faint smell of sun-baked pleather. Nevertheless, it was mine and it was what defined me. Now, imagine that amplified tenfold and that is your Chinese consumer. Connecting to your customer base on the right level has many payoffs and is the only way to market in China.

Since Buick’s introduction into the China market, they have iterated, reinforced, and fortified the same brand message all along: business luxury. This rings true from Buick’s top-of-the-line model to their  most economical sub-compact, Buick never sways from the same message of safety, comfort, and luxury.

“Safe and silent” is the mantra Buick follows and that message is specifically positioned to bode well with the savvy Chinese business person – who wants to keep a low-key profile, an essential quality when conducting business in China. Some argue that the message resonates with Chinese consumers on a much deeper philosophical level of Confucianism where one should lead a humble life of inner quality and harmony versus one of glitz and glamour. And some will argue this is a bi-product of marketing persistence, great timing, and plain luck. Whatever the case might be, the purchase decision is a personal choice and needs to reflect the same identity of the consumer. Making sure that message is conveyed should be the top of any marketing priorities.

Buick’s success did not come without their own bumps and obstacles in the road as well. In 2008, as Buick’s official spokesperson, Tiger Woods helped promote Buick’s new model line, “Park Avenue” to the Chinese market. Despite Tiger Wood’s near-rockstar celebrity status here in the US, the same cannot be said in a country where golf is still an odd sport played on a ridiculous waste of good land. Sales were less than stellar and Buick is still reinventing this model to the market today.

It’s a brand new China and there is a vast market yet to be touched. Yes, it is unruly and daunting, but it’s got every marketer salivating and pining the age-old question, “Just how do I do this again?” It’s a market with no right answers but many wrong ones. The auto industry is just one of many industries that we can continue to learn and push the envelope of what works (and what does not). Larry Namer (METAN’s President) says it best about the Chinese market,

“China is like chess ‐ it’s not the next move that
wins you the game, it’s knowing what you’re
going to do in the next three.”

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.

www.worldscreen.com | April 22, 2009

Gordon Chu Joins METAN Development Group, LLC

Former Live Nation executive Gordon Chu is joining METAN Development Group as VP of business development to oversee global and U.S. business operations for the company.

Chu most recently served as director of business development for Live Nation’s ticketing system, where he focused on the support and launch of the new division created in early 2009. At Live Nation, Chu supported in research, analysis and deal negotiations, and worked closely with senior management to drive and support business development efforts for the new unit. Previously, Chu was director of business development for Growthink Consulting, a boutique strategic consulting and investment banking services firm. Launched in February, METAN is a new venture created to develop and distribute entertainment content for the Chinese market, as well as introduce Chinese film and television content and live events to Western markets. It was founded by E! Entertainment Television co-founder Larry Namer, Amerilink founder Jean Zhang and industry veteran Martin Pompadur. “We’re pleased to have Gordon join our talented team at METAN,” said Namer. “His extensive experience as a business strategist and analyst coupled with his vast media background, arm Gordon with the tools to effectively lead METAN’s global business development interests.

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www.onscreenasia.com | March 30, 2009

Former ABC News Producer Jennifer Moravitz Joins METAN Development Group as Director, International Media Development/Special Projects

METAN co-founder Larry Namer announced that Jennifer Moravitz joins METAN Development Group LLC as Director, International Media Development/Special Projects. Moravitz will forge business alliances and strategic media partnerships within the global entertainment community.

Prior to joining METAN, Moravitz worked for ABC Network News in Los Angeles and at the network headquarters in New York City. In Los Angeles, Moravitz focused on production in various capacities such as a field producer and assignment editor. In New York, she worked as a researcher for the network’s award-winning World News Tonight, as a news consultant for the ABC News Investigative Unit on national security related issues, and for ABC’s Special Events division.

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www.screendaily.com | March 12, 2009

Adam Cohen Joins METAN Development Group, LLC

Development and marketing executive Adam Cohen has been hired as production executive of original programming at METAN Development Group, the content producer and distributor launched in February to target the Chinese market.

Cohen will seek to strengthen ties with feature and television producers in Hollywood with a view to developing the slate. It is understood METAN has signed a number of carriage deals, however the company said it was too soon to announce. Former E! Entertainment Television founder Larry Namer, who co-founded METAN with Amerilink founder Jean Zhang and former News Corporation executive Martin Pompadur, said the hiring of Cohen would be a big step in raising the profile of Metan in China. Cohen previously served as account director at Mulholland Drive Entertainment and was head of marketing, public relations and brand building at Sidetrack Films and vice-president of development at Thor Films.

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www.thehollywoodreporter.com | February 06, 2009

TV Vets’ Startup Targets Chinese Market

Two TV industry veterans, former ABC. exec Martin Pompadur and E co-founder Larry Namer, are taking on the tough Chinese market with content customized for 3,000-odd local and regional stations serving 1.3 billion viewers. Along with Chinese business consultant Jean Zhang,Pompadur and Namer are set to unveil a production,acquisition and distribution venture called METAN – a play on “beautiful sky” in Mandarin – to disseminate entertainment content throughout China. The idea is to produce cost-effective pop-culture newsmagazines and become the syndicator of choice for Hollywood suppliers seeking a local distributor.

The privately held start-up, based in Encino and secondarily in Beijing, soon will have 60 employees, mostly Chinese, who will be responsible for the show’s content. A Shanghai office is envisioned by year’s end. The start-up is getting off the ground with several million dollars from the founders’ pocketbooks. (Its China-based offshoots will draw local investors.) METAN’s first project is the 15-minute daily celebrity newsmag “Hollywood Today,” which Namer said will be more like “Entertainment Tonight” than “TMZ” because Chinese audiences are not into “the dirt about celebs,” but rather are intrigued by “fundamental questions” about Tinseltown. (Namer has considerable experience in China, having trained local TV executives on behalf of Shanghai Media Group.)

The show will feature two anchors reporting from METAN’s Beijing studio and Mandarin-speaking field reporters in the U.S. Footage will be cobbled together from the Hollywood majors. Other newsmags in the works include “Music News,” “World Film News” and “World Sports Report” all to be made available by early 2010. Pompadur said deals with local stations in China will be classic barter arrangements, whereby Metan keeps and sells several minutes of advertisements to multinational clients.

“We’ll be offering Chinese stations the opportunity to expand their revenue by making this connection to Western brands,” said Namer, who, years ago, got the U.S. soap “Santa Barbara” launched in Russia. What makes METAN’s proposition viable, Namer added, is not only the trio’s expertise but also their contacts in the region, including top-level relationships with China Central Television and China’s State Administration of Radio, Film & Television. (A Metan news release includes glowing quotes from several top Chinese officials.)

Namer will be the company’s managing partner responsible for day-to-day activities; Pompadur will be the managing partner focused on business development and strategic relationships. Zhang is in charge of China operations and will report to Namer.

The company, whose full name is the METAN Development Group, will be, he added, a conduit for Western brand managers to target Chinese consumers, geographically and demographically. Beyond the nonfiction fare METAN will put together, there will be a lot of U.S. programming, especially ad-friendly daytime soaps, that has not seen the light of day in that territory.

In a second phase, METAN plans to launch a live-event division and present Western music, dance and stage acts to the Chinese audience. Pompadur and Namer have extensive experience in the U.S. and abroad.

Pompadur began his career at ABC in 1960, holding posts including general manager of the TV network. He joined News Corp. as executive vp Eastern and Central Europe and became a member of the firm’s executive management committee in 1998. Two years later, he was appointed chairman of News Corp. Europe. In the fall, Pompadur stepped down as a full-time News Corp. employee to become an adviser, allowing him to pursue myriad interests around the world.

Having begun his career during the early 1970s at Manhattan Cable and then Valley Cable in Los Angeles, Namer co-founded E! and later started several companies in the U.S. and overseas. Among those were Comspan, which introduced American shows to the former Soviet Union, and Steeplechase Media, which served as a consultant to Microsoft for interactive applications.

Zhang founded Ameri-Link, a consulting firm specializing in promoting cooperation among government officials and corporate executives in the U.S. and China. Previously, she worked for several Silicon Valley companies as a financial analyst.

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