London-headquartered media and education group Pearson, whose flagship property is the Financial Times newspaper, has entered into a $10 million joint venture with CTV Media, a unit of China’s state-owned broadcasting titan China Central Television.
The deal is one of the first allowing foreign entry to the hitherto 'forbidden city' of Chinese TV content. It revolves around a series of programmes that will teach conversational English – transmitted via two of CCTV’s ten channels and reaching a staggering 350 million households across the country.
There are two interrelated elements to the deal: content and services. The latter covers funding and technology plus operational servicing for the content.
The content strand will be split 50/50 between Pearson’s two Chinese partners – CTV Media and Beijing telecommunications company Cyber Solutions – although there is an option for Pearson to take a majority stake if and when China relaxes the ban on foreign ownership of its media.
On the services front, Pearson Broadband will own 50% of the equity, CTV Media 40% and Cyber Solutions 10%.
Pearson believes that the venture will break even as early as next year, thanks to TV advertising plus the provision of print, online and audio materials.
The deal, which took a mere four months to conclude – a breakneck dash by local standards – was fuelled by China’s need to have in place a legion of English-speakers by 2008 when it hosts the Olympic games. Observed Pearson broadband president John Hollar: “The business climate has changed dramatically.”
News source: Wall Street Journal