Discovery looks to succeed where others have failed

WASHINGTON: In its joint venture with Chinese search engine Baidu, Discovery Communications may succeed where some Western media companies have failed by trying something many of its predecessors overlooked: humility.

"Many large media companies come to China expecting to be able to do business here the same way they do business in the (the West) and change Chinese policies and preferences in order to accommodate themselves," said David Wolf, president of Beijing-based media consulting firm Wolf Group Asia. "What Discovery did was to come to China and say, 'We want to do all we can to improve the quality of nonfiction and educational television. How can we help?' It has earned Discovery a lot of trust and credibility."

Silver Spring-based Discovery launched a website (discovery.baidu.com) with Baidu, the most popular Chinese search engine, on July 28. The website features topics pertaining to science, nature, paleontology, archeology, space, technology, and arts and culture. Discovery provides the content, which Baidu translates into Mandarin. Baidu designed and built the site, and will continue to manage it.

The two companies share advertising revenue, sold through a third party vendor. Down the line, there will be Chinese opportunities to contribute content, as well.

"It helps that we were an early entrant in China thereby establishing a relationship with the Chinese market," said Tom Keaveny, executive vice president and managing director of Discovery Networks Asia-Pacific.

Discovery already has had a television programming presence in China for the past 11 years on various cable operators. It saw a 10 percent increase in reach in the major cities of Beijing, Shanghai and Guangzhou and believes the new site complements its television programming well.

But Discovery's success is hardly guaranteed, if previous attempts by other Western media giants to crack the Chinese market are any gauge.

Rupert Murdoch's News Corp tried numerous times to break into the market through its purchase of Star TV, only to be reined in by government regulations and complaints from competitors that it was receiving special treatment.

In 2003, AOL-Time Warner sold its controlling stake in China Entertainment Television after capturing less than 2 percent market share. And the company's attempt to tap into the Chinese Internet market failed when AOL China laid off its entire Beijing web staff in March, less than a year after it opened.

Chris Reitermann, president of OgilvyOne China, said foreign companies need approval from headquarters to adapt business models and methods to the local scene, which can take months and suffer competitively with local companies. He said they also spend more than local players because of expat salaries.

Another difficult aspect for outside media companies is the fact that China's government regularly screens websites and issues a blacklist of portals it says contain inappropriate content. In January, Baidu and Google were added to that list. Other blocked sites include the nonprofit Wikipedia, which has Chinese-language pages and operating chapters in Hong Kong and Taiwan, but not on the mainland. And the popular video-sharing website Youtube is also blocked.

One big advantage for Discovery in its partnership is that it can piggyback on the good name Baidu has garnered in its home country with co-branding. Chinese Internet users may not have heard of the Discovery Channel, but they most likely are familiar with Baidu.

Founded in 2000, Baidu has captured 73 percent market share of search requests. For that reason, Keaveny believes Discovery's site will attract a large number of international advertisers. Projections show that in 2009, more than 300 million people in China use search engines, and that that number will reach 500 million by 2012. In 2008, China became the top nation of Internet users at 298 million, according to a report by the China Internet Network Information Center.

"By partnering with a strong delivery channel (Discovery) can effectively reach a huge audience without having to build the infrastructure and audience, both very costly undertakings," Reitermann said.

Discovery also benefits from having a large volume of content that has a longer shelf life because the subjects are less time-sensitive than media outlets covering current events. But more importantly, the subject matter of Discovery's content - nature and science programs - has far less potential to be controversial than that of a news outlet.

Highlights and related topics from shows like Discovery, Animal Planet, the Science Channel and Planet Green are the basis for the website. Highly visual, it includes photographs, videos, graphics, maps, articles and interactive features written in Chinese. The site can only be seen properly on computers with Chinese language software installed.

But that doesn't mean the network needn't be concerned, according to Rich Gordon, director of digital innovation at the Medill School of Journalism in Evanston, Illinois.

"The bigger question is whether the audience can grow large enough, and ad sales efforts be successful enough, to make a profit."

But it's Discovery's attitude that is earning its early success, Wolf said. Companies need to "approach this market with humility and a genuine desire to help, and plan to follow that approach," he said. "There are opportunities aplenty in China, and Discovery is one of a small number (of companies) that prove the point."

(China Daily 08/31/2009 page7)