Chinese Media Investment In Africa

Via Balancing Act, an interesting commentary on Chinese investment in African media:

Both private and state-owned Chinese companies are investing heavily in Africa. Part of this media push into Africa is about winning new friends and influencing the right people. The other part is straightforwardly looking to create new markets for both its technology and content. Sylvain Beletre, Balancing Act’s Broadcast Analyst looks at how the impact of the new Chinese media presence will affect Africa.

The biggest part of the new Chinese media presence is from its state-owned media. China’s government has reportedly allocated 45bn yuan ($7.2bn) to fund the global expansion of state media. As China increasingly becomes a more powerful global player, it needs to have media through which it can transmit its messages to a global audience.

Africa is very much on the frontline of this task because of the considerable trade links with the continent. China’s total direct investment in Africa was $15 billion in the year ending June last year, about 30 times the figure 10 years ago. China has also become Africa’s largest trade partner, based on oil and mineral resources. In 2011 a million Chinese visited Africa as tourists and 0.5 million Africans went in the other direction to China. These hard trade links are underpinned by regular invitations to China for politicians (around large deals) and training visits of the kind already familiar in the USA and Europe.

There is a huge battle for mindshare being waged in the field of international news through public and privately backed channels. The USA (CNN-CNBC, VoA and several channels on payTV bouquets), the UK (the BBC), France (France24 and TV5MondeAfrique, CFI, RFI, Canal+, AFP), Canada, Germany (Deutsche Welle TV and Radio) and Russia (Russia Today) are also broadcasting heavily in Africa in a race for audience share, along with the globally high profile challenger Al Jazeera.

China has entered this battle with CCTV opening of an office in Nairobi for its global news channel and is seeking to increase its African news coverage and is also commissioning local factual programmes. Those familiar with the company say that it’s hard to discern any particular news agenda but its presence alone speaks volumes about its seriousness of intent. It is easy to forget that this international media expansion (and therefore what to do with it) is as new to the Chinese as it is to the African continent.

Chinese media also bring high operating standards (for example, CCTV’s Africa operation is equipped with state-of-the-art facilities, including two HD broadcasting studios), and technology training. CCTV’s mobile TV application “I Love Africa” was officially launched in 2012 after 6 months of trial. Designed as a brand new platform for Africans to learn more about China and the world, CNTV, the Online Broadcast Center of CCTV, allows viewers in Africa to watch documentaries, educational programs, TV dramas and films through mobile terminal devices. China media also employ and train local people. CCTV Africa for example has about one hundred employees from different culture backgrounds including many Kenyan citizens.

CCTV is joined by the Xhinua News Agency, which as a news provider is often picked up by African newspapers. At a domestic level, China’s largest newspaper, the China Daily, is now publishing a weekly magazine on Africa. Each of these organisations has opened offices in Nairobi. The coverage may be bland and uncontroversial but it does not regularly treat Africa as the world’s basket case.

If this can be described as the missionary side of the Chinese media role, the more mercenary side is represented by its biggest private sector player Star Times. It was regarded rather patronisingly when it first launched but has played a skilful hand. Its strategy has been to approach the state broadcaster and offer to help with the process of the digital transition in exchange for the opportunity to get enough channels to run a pay TV service. (Chinese Government backed banks are offering loans to cover the costs of the digital transition process.) Star Times found that initial subscriber levels were disappointing but it hung in there and has been rewarded with a growing footprint, particularly in the large Nigerian market (see story below).

Its role encompasses both content and technology. It has successfully delivered both transmission infrastructure and set-top boxes. Like a number of others, it has sought to offer a low-cost bouquet that will attract greater numbers and as Nigeria demonstrates it is beginning to have some serious level of success.

At first, it did not appear to be knowledgeable about content but it has worked assiduously to increase the level and quality of its content. And it has gone from one bouquet to two, adding a more premium package, with rumours of a third in the works. DStv may still have continental Pay TV dominance in Anglophone markets but Star Times along with Wananchi, is now an increasingly serious challenger. DStv’s launch of its DTT service GoTV was a defensive spoiling tactic that is unlikely to succeed in its current form.

Since the Chinese Government is very much behind this export-led strategy, its arrival and successes are celebrated over and over again with ceremonies attended by public officials. Indeed it is not always easy to see the dividing line between public and private in China as the two often seem to march forward in lock step.

And just as broadcast has provided an opening for Star Times so it will for Chinese telecoms equipment vendors, Huawei and ZTE, selling converged communications solutions. The Chinese can deliver global technology at nearly always the bottom of the price range and accompany its set-up and operation with skilled personnel.

But hardware and software are two very different things. Chinese vendors are world-beating and the companies in this field have a long-track record of success. But the software side is more difficult: content requires cultrural understanding for translation and some significant level of freedom of expression to say what needs to be said.

Chinese news coverage of Africa will undoubtedly improve but is unlikely to topple the existing heavyweight international channels. These are most highly valued where domestic African censorship is in place and the Chinese have shown they will not rock the boat, particularly where their economic interests are at stake.

But the even harder part is whether Chinese content will ever become a feature of African TV households’ viewing. They have already welcomed telenovelas from Latin America and the Phillipines and may yet embrade Turkish TV drama series. But it’s harder to imagine Chinese drama series enjoying the same degree of success. Nevertheless the story below in Distribution News is perhaps a portent of a different future. Maybe Africa will see more Chinese people in their living room in the not so distant future.

This entry was posted on Thursday, April 4th, 2013 at 9:37 am and is filed under China.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

Comments are closed.

Wildcats & Black Sheep is a personal interest blog dedicated to the identification and evaluation of maverick investment opportunities arising in frontier - and, what some may consider to be, “rogue” or “black sheep” - markets around the world.

Focusing primarily on The New Seven Sisters - the largely state owned petroleum companies from the emerging world that have become key players in the oil & gas industry as identified by Carola Hoyos, Chief Energy Correspondent for The Financial Times - but spanning other nascent opportunities around the globe that may hold potential in the years ahead, Wildcats & Black Sheep is a place for the adventurous to contemplate & evaluate the emerging markets of tomorrow.