China has such strict regulations regarding broadcast and published media content that I have always questioned how network operators will manage to fill up the bandwidth created for Mobile TV, IPTV, and digital TV services in China. As China Mobile shows with its latest acquisition of 19.9% of Phoenix TV, buying out foreign content providers is one method to address that problem, albeit a very costly one. China Mobile (and other operators as well) certainly cannot afford to rely on this strategy alone, and will have to find other ways to acquire media content while following the strict restrictions as laid out by SARFT. Also, the type of content operators plan to sell must compete with the ever-flourishing pirated DVD market in China, as well as the endless amounts of free content available over the Internet.
This latest acquisition also shows how China Mobile is determined to offer more and more content directly to its subscribers (and thus taking a larger percentage of the revenue generated) instead of relying on WVAS providers such as Tom Online and Kongzhong for mobile content.
The China central government continues to dampen development in China's broadcasting industries by severely restricting the type of content that can be aired. By restricting private investment on digital TV content, SARFT is protecting state-owned content providers such as CCTV from competition. Private investors, which include the largest media companies in the world, are left waiting on the outside for opportunities in China, while Chinese government-owned companies get the pick of the lot to acquire media content through foreign investment or even company acquisitions (such as China Mobile’s recent purchase of 20% of Hong Kong’s Phoenix TV).
