One Billion Customers - James McGregor [102]
Advertisers knew a good thing when they saw it. Chinese consumers were a blank slate. Virtually no Chinese brand names had survived the decades of communism. Suddenly everyone from Japanese appliance makers to American baby food producers opened their wallets to introduce their products to the Chinese consumer. Television programming was a boring procession of Chinese operas interspersed with patriotic variety shows. But the commercials, now that was entertainment! Surveys showed that viewers eagerly watched well-produced commercials, then wandered off to the kitchen or bathroom during the regular programming. As people became more affluent, advertising taught them how to groom and dress, what to eat, and which electronics or automobiles to purchase to show their sophistication and prosperity. It quickly became apparent that Chinese sodas, soaps, and appliances were no match for products from Coca-Cola, Procter & Gamble, and Hitachi. A Gallup poll in the mid-1990s showed that of the ten best-known brands in China, six were Japanese (Hitachi, National, Toshiba, Toyota, Suzuki, and Honda), three were American (Coke, Mickey Mouse, and Marlboro), and one was Chinese (Tsingtao beer). More than any other consumers in the world, the Chinese equated the quality of a given brand with the quantity of the advertising for it. The reason was simple: when they purchased the products that were advertised, the products turned out to be good.
To catch this wave, hundreds of enterprising bureaucrats and businesspeople opened new newspapers, magazines, and television stations. By the early 1990s, China had more than two thousand newspapers, seven thousand periodicals, and some seven hundred fifty local television stations that either produced their own programming or acted as relays for CCTV. Major cities were wired for cable TV. By 1993, Shanghai cable had 700,000 household subscribers who received twelve channels for the equivalent of one dollar a month. The little old ladies who in less-affluent times served as Communist Party watchdogs in their neighborhoods now became effective saleswomen for the government cable operator. Sprawling Soviet-style factories wired their huge compounds to VCRs to build their own entertainment stations. At the end of 1993, Chinese consumers were purchasing 20 million televisions per year and 97 percent of urban families had at least one television.
The rapid growth alarmed the party. The media was getting out of control. In October 1993, Li Peng signed State Council Proclamation 129 banning the purchase or possession of satellite dishes by ordinary Chinese citizens. Editors and TV station directors were told that their main goal was not to make money, but to “educate the people about patriotism,” “promptly defuse sensitive issues,” “guide public opinion correctly,” and “don’t speak in a middle position” (i.e., don’t be objective).
Midlife Renewal
For Murdoch, China was both a midlife crisis and a renewal. Since his company’s near collapse in 1990, caused by a wild acquisition spree and heavy debt, Murdoch’s wife had been pushing him to slow down, to ease toward retirement, to temper his ambitions for building the first global media empire. Instead, Murdoch came out fighting. He sold off a slew of his U.S. magazines, gathered more cash by floating a few properties on the stock markets, and continued his global march with the purchase of STAR TV in Hong Kong, investments in television networks in Japan and Germany, and the purchase of more U.S. stations to add to his Fox network.
The STAR TV purchase was a problem. Murdoch thought he had been bamboozled. He had paid Hong Kong tycoon Li Ka-shing and his twenty-eight-year-old son Richard Li nearly $1 billion for the fledgling network, even though the Li family had spent only about $100 million to build it. According to a former News Corp. executive, STAR TV had led Murdoch to believe that it had a tacit agreement with the Chinese