AOL in TV Cable Deal With China

AOL Time Warner Inc. said Monday that it will soon begin broadcasting a 24-hour Chinese-language cable channel in a reciprocal deal with Chinese state television.

Under the deal, China Central Television’s English-language Channel 9 will be carried on select Time Warner cable systems in New York, Los Angeles and Houston.

The Chinese state television channel--the only English channel offered by China’s state broadcaster--will carry news, music, cooking, nature and travel shows, Chinese lessons and sports.

In exchange, AOL said it has approval from the Chinese government to broadcast its Chinese-language CETV channel early next year on cable systems in Guangdong province. AOL bought the channel last year and relaunched it in February.

Hong Kong-based CETV carries a mix of local content, entertainment and game shows, as well as other U.S. staples such as cartoons and “Miami Vice.”

AOL Chief Executive Officer Gerald Levin said the deal is a “landmark agreement which represents a significant step in the growing relationship between AOL Time Warner and the people of China.”

Zhao Huayong, president of China Central Television, said the deal is a “milestone, which has turned a new page in China’s history.”

Chinese officials said it is the first time a foreign broadcaster has been granted cable TV carriage rights in mainland China.

Like other media companies, AOL has been drawn to China’s vast market. Earlier this year, AOL, the world’s largest Internet service provider, announced a partnership with China’s biggest computer maker, Legend Holdings.

In February, Encore International renewed for five more years a pioneering venture. Encore has been providing U.S. movies, variety shows and TV dramas to a prime-time Chinese audience. It also has brought CCTV’s Chinese-language dramas and news shows to U.S. viewers.

Rupert Murdoch’s News Corp. is trying to reach a similar deal to AOL’s. But analysts said AOL’s deal is potentially the most far reaching between the Chinese government and a foreign broadcaster.

“I think it’s a very good deal,” said Desmond Wong, a China expert at Ernst & Young. “It’s quid pro quo. China gets to show their program channel in the U.S.--that’s a value to China in having a direct China source media outlet. What AOL gets, is a very affluent area in the Guangdong province. It’s a good place for them to be in.”

But AOL will face stiff competition from many other foreign channels that are already available via satellite in Guangdong.

And expanding its programming without offending the Chinese government could prove a delicate task for the media giant, said Mike Jendrzejczyk, Washington director for Asia Human Rights Watch.

“Anything that breaks the monopoly on the media and access to outside information is a good thing,” he said. “But it isn’t clear whether AOL has signed any provisions of Chinese censorship of their programming.”

Tricia Primrose, a spokeswoman for AOL, said the pact does not include censorship provisions.

“It’s not a news channel so that really isn’t an issue,” she said.

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Times wire services were used in compiling this report.