China may not be the growth market television broadcasters once hoped for.
Earlier this month, China’s state TV regulators announced new regulations in 2014 that limit satellite TV channels to only one new TV show a year based on a foreign format. The authorities are also requesting that TV channels abstain from broadcasting shows based on foreign formats during prime time—between 7:30 and 10 p.m.—next year.
So what? According to analysts at Janney Capital Markets, China is forecast to be the largest pay TV market by the end of 2018 with 313 million households, and this will put a damper on growth prospects for program developers.
All is not lost. According to Janney analysts Toby Wilbe and Murali Sankar, there are some exceptions. Documentaries will not face these restrictions, which could bode well for Discovery Communications and 21st Century Fox’s National Geographic channel, and potentially for some of Scripps Networks Interactive properties.
Also, Chinese viewers consume a lot of TV over the Internet, which does not appear impacted by these restrictions. Janney’s Wilbe and Sankas argue that Dreamworks Animations SKG and other “companies that are investing locally may have an advantage in accessing the Chinese market.”