BEIJING -- Viacom executives said here Wednesday that the company plans to deliver MTV content to 250,000 users of the China Mobile phone brand and broadcast Nickelodeon kids programming to 3.5 million households via a joint-venture partnership with the Shanghai Media Group.
The announcement was part of the planned launch Sunday in Shanghai of a 25-hour-a-week kids TV programming block, "HAHA Nick," said Li Yifei, chief representative of Viacom China and managing director of MTV China.
William Roedy, vice chairman of MTV Networks, said the company hopes to use its partnerships in China to help it become the world's leading provider of digital and kids content.
"China has the creative talent to become one of the world's leading animation hubs, and HAHA Nick is tapping into the local industry to produce high-quality programming that can be showcased in China and around the world," Roedy said.
Noting that 88% of global cell phone users are outside the United States, as are 76% of broadband users, Roedy said that Asia, led by China, South Korea and Japan, represented the future of digital entertainment.
"We see leadership coming from these markets," Roedy said, adding that Nickelodeon's Los Angeles animation studio director already spends one week each month in Shanghai, where animation is 80% cheaper to produce because of labor costs.
The Nickleodeon-SMG co-production deal, struck in 2004, was the result of two years of negotiations and close cooperation with the government. It was first foreign-Chinese joint venture approved by SARFT, Roedy said.
China's State Administration of Radio, Film and Television policy now dictates that foreign companies might not have more than one production joint venture, but MTV's Li said that the company is working toward a second partnership. "We are already in a strategic alliance with Beijing Television to co-produce six shows, but we hope this can be developed into a joint-venture partnership," Li said, citing SARFT policy wording that says strong backing from a municipal government could in the future create the conditions for an exception to the one joint-venture rule.
Under the deal with China Mobile, Roedy said MTV would earn a share of revenue from a subscription service called MTV Music Zone, offered to users of China Mobile, the world's second-largest mobile phone company.
"We are making money with MTV, but we are still in the investment phase with Nickelodeon," Roedy said.
The HAHA Nick co-produced programming, targeted at kids from preschool through age 14, is expected to be increased to 50 hours a week by the end of the year and to be syndicated in 30 additional Chinese markets with a potential audience of 100 million cable-ready households, executives said.
HAHA Nick's programming mix will include "Dora the Explorer," dubbed into Mandarin, and an original live-action show called "So Nick," which profiles Chinese kids.
Animation for all of the joint venture-produced programs has been created by Chinese animation houses in and around Shanghai, and much of the programming will be exported to serve other MTV channels worldwide, executives said at the launch.
Nickelodeon also is due next month to announce the June launch of a Chinese version of its popular Kids Choice Awards.
Until now, China's television diet has consisted of few co-productions, which have been done mostly one project at a time because of opaque policy governing foreign production participation and the fact that broadcasting deregulation is purely discretionary and is not part of agreements pertaining to World Trade Organization membership.
"Viacom is taking a strategic long-term view, which makes sense politically, since that's what it takes to build this entertainment market," said Anke Redl, managing director of communications analyst firm China Media Monitor. "There should be lots of shareholder value, but the timing of the return on investment remains an open question."