The Great Murdoch Faux Pas of 1993

About to shell out $871 million to Hong Kong's Richard Li in a two-stage deal for Star, giving him a potential audience of 3.3 billion in 53 countries, Murdoch told a London audience that technological advances in communications were a threat ‘to totalitarian regimes everywhere.'

Within months, China imposed strict rules on the use of satellite dishes. And when Star launched its Mandarin-language Phoenix Channel in 1996, Chinese officials reacted with a blizzard of hostile comments and dismissed the project as a ‘beautiful dream.'

Chang sees his job in part as explaining the Asian view at senior levels in News Corp. not least to Murdoch himself and putting it in the right historical context. Insiders say he has been tasked mainly with making progress in China, where the competition comprises 800 state-owned terrestrial channels and a further 1,200 on cable, and has been given about 18 months to do so. However, the Gareth Chang story leads observers to predict that if anyone can do it, Chang can.

Murdoch's own relationship with the Chinese authorities, meanwhile, has warmed, thanks substantially to his own charm offensive. This included dropping BBC-TV, attacked for a controversial profile of Mao Zedong from the Star mix. Recently Murdoch was appointed by Hong Kong Chief Executive Tung Chee Hwa to an international panel of advisers for the Special Administrative Region, and Tung's government has deregulated TV after extensive lobbying by Murdoch and his managers. 

But if the Phoenix is rising for Star in China, Star itself remains in limbo. While the parent has never received formal approval to beam in to China, nor is it banned; authorities instead have restricted receipt of the signal by limiting the use of imported decoders. Thus Star TV is received in hotels, via some cable packages and in expatriate housing estates. Star collects rental via the decoders, but it can't sell ads. ‘Landing rights' are seen as Chang's top priority.

As for local content, To capture the world market you have to gear yourself to local tastes, says Chang. Star and especially its new boss knows how to do ‘the sophisticated technical things.' The challenge is distribution: matching product to audience. And although Chang rates Star as essentially a platform for content produced elsewhere, he believes it must be involved in creation too.

Hong Kong, Taiwan and India all generate significant content, says Chang, and he sees great opportunities for Asian artists and entertainment industries to go global. But at present local movies, the most popular products, ‘are not up to world standards.' And while China is producing some terrific films on tiny budgets, packaging and distribution are extremely weak.

Chang hopes to persuade Fox to distribute more Asian films, with the first steps coming through natural history and geography programs. And Western content costs are getting too high, he adds. Joint ventures between Western and Asian filmmakers could make products with Asian content and flavor, and global appeal.

He says Star will acquire local content that does appeal by buying film libraries, for example. But it can't compute for us to be a total content creator. Our game should be to deliver the best-packaged content at a reasonably affordable price. Chang describes ‘a good balance' as half or 60 percent international programming.

It all boils down to a big opportunity to develop a network with an Asian ethos, and Chang is making a smart, if brave, start.