More opportunities are expected to arise for industry key players, but smaller firms could be forced out of the picture

The opening of the Mainland's publishing and broadcast media is creating huge business opportunities in certain sectors of the industry, according to Yang Lan, chairperson and CEO of Sun TV Network Holdings.

"We do find there is an opening market for printing, distribution and copyright exchanges in the publishing market, and a growing market for TV content, advertising and distribution," she told members at a Chamber luncheon on February 5.

Growth in the retail and wholesale of publications is increasingly coming through joint ventures between Mainland and international enterprises, but the content business remains the most important area for investors.

Ms Yang estimates that copyright exchanges between Mainland and international media firms account for about 30 per cent of educational and leisure book sales, 50 per cent of magazine sales, and as much as 75 per cent of all audio-video sales in the Mainland.

Rising incomes and a thirst for knowledge are also boosting business for online book clubs, which has prompted media giant Bertelsmann to sign a joint venture agreement with and Shanghai Packaging and Printing Group in January this year to form the biggest printing joint-venture in China.

Regarding the broad-cast media, Ms Yang said the greatest challenge facing the sector is the consolidation of local channels as domestic cable and TV networks team up to offer viewers better quality content. Such partnerships aim to stave off the Mainland's new policy that networks with capital of less than RMB10 million will be forced to shut down.

"Another new phenomena is that a greater percentage of programming is being purchased instead of being self produced," she said, adding that 26.8 per cent of broadcast media programming is now purchased content.

China's centralised satellite platform, which allows foreign companies operating on annually-renewed licenses to broadcast into certain areas, such as international hotels, could be expanded around the country. This will open the market to foreign companies, but will mean more competition for domestic broadcasters, she said.

Multimedia distribution also plays a critical role in Sun TV's success. Sharing copyrights has allowed it to produce over 300 hours of VCDs and 100 books.

Another trend is that instead of just broadcasting to the masses, advertisers are looking to target the better-educated segment of viewers, which although account for about 20-30 per cent of all viewers, their purchasing power is much higher.

While changes to the Mainland's media landscape are generally positive, there are some dark clouds on the horizon with no easy solution.

According to a report by Goldman Sachs, total advertising revenue in China is expected to reach US$7 billion by 2010, up from US$2 billion last year.

Much of that revenue comes from domestic companies, such as Chinese medicine manufacturers, who advertise their products aggressively in the Mainland. But Ms Yang pointed out that once China's WTO commitments start to be implemented, competition may force some of these advertisers to slash budgets, or they may not even be around.