Viacom opens TV joint venture in Shanghai
By Liu Baijia (China Daily)
Updated: 2004-11-29 08:47

Viacom's soon-to-be-launched joint TV production venture with Shanghai Media Group (SMG) will play an increasingly important role in the expansion map of the US media conglomerate in China, says its China business chief.

"Our revenues from Orient Nickelodeon are likely to surpass those from MTV in the future and become our biggest revenue pool," said Li Yifei, chief representative of Viacom China.

She said the joint venture with SMG is expected to be launched in Shanghai in the first quarter of next year with the proposed name of Orient Nickelodeon.

The new venture is working on business registration, recruiting employees, planning content, and selecting an office location.

It will employ 10 to 20 people in the first stage.

Viacom announced the joint venture plan in March. At the time it was believed to be the first TV production company between a Chinese company and a foreign partner in China.

The State Administration of Radio, Film, and TV and the Ministry of Commerce issued a regulation on November 16 to allow foreign TV and film companies to form joint ventures with Chinese partners.

The regulation requires the Chinese party must own at least 51 per cent of the stakes of the joint ventures. It is supposed to be effective from yesterday.

The move is a big step in China's opening of its TV and film industry to foreign production companies, which only had limited access to broadcasting in China before.

Another world's entertainment giant, Sony Pictures Television International (SPTI), also announced on Thursday that its joint venture with Hua Long Film Digital Production Co Ltd of China Film Group (CFG) had been approved by the two government bodies and the joint venture will be set up this week.

Viacom's Li said the initial registered capital of Orient Nicke-lodeon will be US$2 million, but the two parties will continue to inject more capital into the venture, depending on its development.

She said SMG will appoint the chairman of Orient Nickelodeon, while Viacom will name the general manager.

Nickelodeon, Viacom's popular children's channel in the United States, will provide its brand and other intangible assets and some content free of charge to the JV.

Li expected Orient Nickelodeon would break even in two to three years.

The joint venture will mainly obtain revenues from TV advertise-ments and franchises of goods related to the TV programmes.

Li said she believed that as China has approved some 30 children's channels and three satellite channels this year, lack of high-quality content would be one major problem for channel operators.

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