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Shanghai Media Group Blazes Trail in China's Fledgling Market

The state-owned firm and its president hold keys to the largest TV audience in the world.

May 13, 2006|Don Lee | Times Staff Writer

SHANGHAI — When Sumner Redstone, the billionaire chairman of Viacom Inc., visits China this year, one of the first people he expects to meet is Li Ruigang.

Li, 38, is the president of Shanghai Media Group, a state-owned conglomerate that has emerged as a powerful force in China's fledgling media market.

Though he wants to emulate media moguls such as Redstone and News Corp. Chairman Rupert Murdoch, Li is blazing a trail that Redstone and Murdoch might have to follow. He is pioneering efforts that could transform how people watch news and entertainment on the Internet and cellular phones.

From his cluttered 31st-floor office in a glass tower here, the Shanghai native oversees an empire that includes 13 TV channels, 11 radio stations, five newspapers and magazines, and ventures in Internet and mobile TV.

For The Record
Los Angeles Times Wednesday May 17, 2006 Home Edition Main News Part A Page 2 National Desk 1 inches; 36 words Type of Material: Correction
Chinese media executive: An article in Saturday's Business section about Li Ruigang, president of Shanghai Media Group, said he received a master of business administration degree from Fudan University. His master's from Fudan was in journalism.

Li and Shanghai Media hold keys to the largest television audience in the world. Already, Viacom and Shanghai Media co-produce Nickelodeon-branded children's programming and MTV-style awards seen by millions of Chinese.

Li and Redstone have talked recently about teaming up to make movies.

"He's a friend of mine," Redstone said, recalling that Li was a guest at his Beverly Hills home last year. "We consider him a visionary and pioneer, a key driver to bringing foreign content into China."

Sony, Universal Music and CNBC also have cut deals with Shanghai Media, as have a number of Silicon Valley companies, from giant Intel Corp. to small tech companies.

"We have no doubt [that Shanghai Media] is going to grow their channels and programming services. We want to be part of all that," said Alain Fernando-Santana, chief marketing officer for South San Francisco-based Envivio Inc., which is providing the company with technology to enhance its video images.

Li has an MBA from Shanghai's Fudan University and is fluent in English. He studied briefly at Columbia University as a visiting scholar. He has made no secret about his desire to expand globally and to raise money by selling shares in Shanghai Media.

But Li faces obstacles in getting Beijing to open up the national media.

After Beijing decreed last year that foreigners couldn't operate channels in the Middle Kingdom -- because it wanted to preserve "national cultural security" -- Li was like a TV addict with no remote control. He put on hold plans to partner with foreign media companies and to raise private capital.

"You know, I have a lot of ambitions, to be frank," Li said in a recent interview. "I want to do a lot more.... But I feel there are still some limits."

If Li is frustrated by the government's restrictions, he tries not to show it. He insists that he is a "civil servant" and that Shanghai Media is not a company but "a media arm of the government."

Shanghai Media was formed in 2002 when the city's television and radio stations merged. It has a staff of 5,200 and its revenue reached $475 million in 2005, up 35% from the previous year.

Li puts in 14-hour days and work weekends to manage his dual roles as a government official and entrepreneur. But it's clear that real power is still wielded in Beijing.

In March, Shanghai Media's China Business Network pulled the plug on a talk show hosted by Larry Lang, a finance professor in Hong Kong who has railed against corrupt management buyouts of state-owned enterprises and other ills of the mainland's economic changes.

At the time, Shanghai Media spokesmen would say only that the Taiwan-born Lang did not have the required government license to host a talk show. But some analysts said they believed Beijing had heard enough of Lang's criticisms.

Although Lang has declined to comment, Li said, "It's nonsense that he was taken off the air because of political reasons."

Li insisted that Lang was still a candidate for shows at Shanghai Media, which has built a reputation for producing lively talk, children's programming and trendy dramas. Li also created China's first documentary channel, which is starting to make a profit, said Meng Jian, associate dean of the School of Journalism and Communications at Fudan University.

"Li has been a reformer," Meng said.

With their innovations, Shanghai Media and other provincial networks have put pressure on CCTV, China's national network that dominates the country's $6-billion television market, to discard dreary Communist Party fare and offer a wider range of programming.

Last summer, the finale of "Super Girl," a Chinese version of the "American Idol" series, was watched by about 400 million people who voted for the contestants. The program brought in more than $70 million in advertising revenue for its producer, Hunan Satellite TV.

"In the past, people sat on their couch and watched stars. There was no interaction," Li said. "Now, a lot of young people want to reveal their opinions and ideas."

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