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The role of the nation-state: Evolution of STAR TV in China and India

Yu-li Chang*

Department of Communication Northern Illinois University

*Corresponding Author:
Yu-li Chang
Assistant Professor
Department of Communication
Northern Illinois University
Phone: (815)753-1711
Email: ychang2@niu.edu

Copyright: © 2006 by Yu-li Chang Paper Submitted to the 6th Annual Global Fusion Conference Chicago, 2006

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Abstract

The purpose of this study is to examine the role of the nation-state by analyzing the evolution of STAR TV’s in India and China. STAR TV, the first pan-Asian satellite television, represents the global force; while the governments in India and China represent the local forces faced with challenges brought about by globalization. This study found that the nation-states in China and India still were forces that had to be dealt with. In China, the state continued to exercise tight control over foreign broadcasters in almost every aspect – be it content or distribution. In India, the global force seemed to have greater leverage in counteracting the state, but only in areas where the state was willing to compromise, such as allowing entertainment channels to be fully owned by foreign broadcasters. In areas where the government thought needed protection to ensure national security and identity, the state still exercised autonomy to formulate and implement policies restricting the global force.

Author Bio

The author earned her Ph.D. from the E.W. Scripps School of Journalism at Ohio University in 2000 and is now an assistant professor in the department of communication at Northern Illinois University. Her major research interest focuses on globalization of mass media, especially programming strategies of transnational satellite broadcasters in Asia and the implications of their programming strategies on theory building in the research field of globalization. Her research also covers topics of international news flow, news framing, and news content in local US television stations.The role of the nation-state: Evolution of STAR TV in China and India A recent paradox in the field of international communication is the process of globalization. According to Tomlinson, the theoretical paradigm in international communication has shifted from imperialism to globalization with the end of the Cold War and the collapse of the Soviet Union:

The shift toward theorizing around globalization, according to Sreberny-Mohammadi, et al, represents maturation of thinking in the field as “a way of pursuing a more fruitful encounter between political economy and cultural studies and of thinking through some of the sterile polarized arguments that have dominated the recent history of international communication scholarship (Sreberny-Mohammadi et al, 1997, p. ix)”

This paradigm shift of theoretical framework, however, does not render the term globalization a unified meaning. The traditional conceptualization of globalization denotes a world system where the Western ideology and practice prevail throughout the world and homogenize the world (Waters, 1995). This line of reasoning regards globalization as universalization and homogenization of Western culture and the demise of local or indigenous cultures. Hall describes the characteristics of a global mass culture as one centered in the West, especially the United States:

That is to say, Western technology, the concentration of capital, the concentration of techniques, the concentration of advanced labor in the Western societies, and the stories and the imagery of Western societies: these remain the driving powerhouse of this global mass culture. In that sense, it is centered in the West and it always speaks English (Hall, 1991, p. 28).

The traditional theorization of globalization as a world system that transcends nation-states and propels cultural universality or homogeneity encountered challenges in the early 1990s with movements to save local societies from domination (Dirlik, 1996). As a response to globalization as homogenization, localization has emerged as a primary expression of resistance to globalization. Wolff notes that the over-generalizing sweep of globalization overlooks difference at the local scale (Wolff, 1991). Featherstone also points out that sweeping globalization has provoked and intensified reactions to rediscover particularity and difference at the local level (Featherstone, 1996).

For Dirlik, the local represents the opposite of the global: heterogeneity over homogeneity, ‘local knowledge’ against universal scientific rationality; native sensibilities over reason; ‘politics of difference’ against global politics. He sees the reconstruction of localization as an articulation not of powerlessness, but of new found power among social groups (Dirlik, 1996). Hall also regards localization as a site of resistance to globalization: opposed to homogenization and absorption of globalization, localization demonstrates plurality and diversity (Hall, 1991).

One of the most contentious issue in the debate over globalization centers on the role of the nation-state. Nation-states have traditionally taken on the definition provided by Max Weber. He defined states as compulsory associations claiming control over territories and the people within them. The core of any state included administrative, legal, extractive and coercive organizations (Skocpol, 1985).

Scholars adhering to the belief of globalization as a new phase of imperialism maintained that the emergence of a single global market is bringing about a ‘denationalization’ of economies in which national governments are relegated to little more than transmission belts for global capital (Held et al., 1999). In Ohmae’s (1995) terms, the older patterns of nation-to-nation linkage have lost their dominance in economics as in politics. In other words, nation-states have already lost their role as meaningful units of participation in the global economy of today’s borderless world.

According to Miyoshi (1996), transnational corporations have replaced nation states to continue colonialism. In the current period of Third Industrial Revolution, even though the nation-state still performs certain functions such as defining citizenship, controlling currency, providing education, and maintaining security, its autonomy has been greatly compromised and thoroughly appropriated by transnational corporations. In the realm of communication, Hamelink (2006) observed that today’s global governance system differs from the system operated during the past 100 years in that the old system existed to coordinate national policies that were independently shaped by sovereign governments, while the new system determines supranationally the space that national governments have for independent policy making.

For scholars calling for a reconsideration of globalization as a continution of imperialism, the aforementioned thesis not only flawed but also politically naive because it underestimates the enduring power of national government to regulate all kind of economic and communication polocies. The force of globalization themselves depend on the regulatory

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Early Days of STAR TV

STAR TV was the first regional satellite television in Asia. Established by a Hong Kong business tycoon, Li Ka-shing, STAR TV launched five channels in August 1991, including Prime Sports, MTV Asia, BBC World Television Service, Star Plus (family entertainment), and Chinese Channel (Mandarin drama, movies and entertainment), and was broadcasting to 38 countries in Asia and the Middle East. STAR TV’s initial strategy was to target the top 5 per cent of Asian elites who spoke English and had buying power by offering mainly pan-Asian English programming (Tanzer, 1991).

Rupert Murdoch, chairman of News Corp., wanted to include Asia in his media empire, which had had operations in Australia, Europe, and the United States. He began talks with STAR TV at the end of 1992 (Tanzer, 1993), and a deal was struck in July 1993 in which Murdoch purchased 63.6 per cent of STAR TV for $525 million (Karp, 1993a). News Corp. gained full control of STAR TV by buying out the remaining 36.4 per cent stake from Li Ka-shing for $346.6 million in July 1995 (‘Murdoch buys rest of Star TV,’ 1995). By incorporating STAR TV into News Corp.’s global operation, Murdoch turned STAR TV from a regional satellite broadcaster to a global player.

Asia’s growing middle class was probably the most important reason that attracted Murdoch into this market. For the past two decades, Asia’s economic growth has outstripped the rest of the world. The average annual growth rate for Asia was 7 percent, compared with 2.5 percent for the West, 3 percent for Latin America, and 2 percent for Africa. Asia also had the bulk of the world’s population. In these years, the predominantly young population of Asia would move out of adolescence and into the high-consuming years of the 20s and 30s (“Murdoch’s Asian bet,” 1993). It was also predicted that by 2000, the number of middle-class households in Asia with incomes over $30,000 would increase by 50 percent to fifty-one million (Cited in Lovelock & Schoenfeld, 1995).

As more Asians moved up to the middle class, they became strong consumers of satellite and cable television. Take China and India, the two largest markets in Asia, for example. TV households connected to cable and satellites were predicted to more than triple from 1995 to 2005 in China from 40 to 130 million. In terms of penetration, the percentage would increase from 12 to 34 per cent. In India, satellite and cable households would grow from 14 to 53 million. In terms of penetration, the percentage would rise from 8 to 25 per cent (“Money by numbers,” 1995). With a growing middle class, East Asia had the potential of becoming the greatest television market in the world with potential revenue of $3 trillion (Cited in Weber, 1995). Yet, Forbes reported that Asia was inadequately served with an average of 2.4 television channels per country until the early 1990s, and this marketplace was “starved for television programming (Tanzar, 1991, p. 58).” Murdoch’s move of buying into STAR TV, as perceived by The Economist, meant that he was “buying into the idea of a middle class Asia (Murdoch’s Asian bet,” 1993, p. 13)” Time also reported: “In helping American culture proliferate, Rupert Murdoch has locked himself into the rising fortunes of the Asian middle class, which is now, by anyone’s measure, the most upwardly mobile group in the world (McCarroll, 1993, p. 53).”

For a while after Murdoch’s takeover of STAR TV, he had such strong belief in technology that he thought technology held the key to conquer the Asian market:

Everything will be satellite, and if the cable picks up the satellite, that’s fine. The regulators are getting more and more powerless in every country as satellite comes in, as cable comes in. They just have more choice for everybody. The regulators who used to say only one program could be seen by their people are just being swamped by technology (Mermigas, 1993, p. 28).

Murdoch was right. Most Asian countries, when first confronted with challenges from STAR TV, took measures to block satellite television. But they soon realized the difficulties and disadvantages of resisting satellite broadcasting and eventually deregulated their broadcasting industries and opened their skies to outsiders. India was an example of government adopting an open-sky policy towards STAR TV (Chan, 1994; Lee & Wang, 1995). The reasons behind this policy included promoting the government’s initiative of fostering a climate of open investment and liberalized trade to attract foreign investment, an initiative affected by the global economy; and accommodating to a growing middle class who demanded for increased program choices other than the staid fare provided by the state television monopoly – Doordarshan (Shields & Muppidi, 1996). By allowing global broadcast players into India, the government deregulated the television industry in India.

Not all Asian governments embraced the open-sky policy. China, Malaysia, and Singapore remained resistant and imposed certain mechanisms to ensure state control. The close-sky policy in China, however, was not that effective. Satellite dishes mushroomed on the roofs of many inland households, giving people access to STAR TV. With the trend of globalization going in full-gear in the early 1990s, Asia experienced an astounding growth of television channels, and viewers were no longer confined to two or three state-owned channels.

Murdoch was right about how communication technology would change Asia, but the problem was sometimes he pushed too hard in his belief in technology and his attitude as a conqueror. When speaking to a London audience in September 1993, Murdoch said something that he later regretted for its boldness:

Advances in the technology of telecommunications have proved an unambiguous threat to totalitarian regimes everywhere…. Fax machines enable dissidents to bypass state-controlled print media; direct-dial telephone makes it difficult for a state to control interpersonal voice communications. And satellite broadcasting makes it possible for information-hungry residents of many closed societies to bypass state-controlled television channels (Karp, 1993b, pp. 72-73).

This speech got a quick response from the Chinese government. China passed State Council Proclamation No. 129 in October, banning the purchase, installation, and use of satellite dishes by individuals or companies unless they obtained special permission to operate satellite equipment. Though there were doubts about whether Beijing could effectively enforce the new measures, the Chinese authority made it clear that the state remained in firm control of the television industry (Karp, 1993b). Any questions about Beijing’s determination to fend off STAR TV were soon crushed. To counteract the complexity of regulating satellite signals, the government began to promote cable television development, making services at such low cost that satellite dishes no longer seemed attractive. These measures proved so successful that News Corp. managers realized it would take years to amend the relationship with Chinese leaders and gain any foothold in the largest television market in the world (Curtin, 2005).

Because of this experience in China, Murdoch changed his tactics to kowtow to the Chinese government. He visited Beijing in November 1993 (Karp, 1994). He also dropped BBC World Television from its channel lineup. The issue centered on a BBC documentary that portrayed former Chinese Communist leader Mao Zedong as having had a special sexual interest in young girls. This documentary aired only in Britain, but Beijing was furious (Cahill, 1994). Thus, at a time when Murdoch was trying to improve his relationship with China, the BBC caused him “lots of headaches (“Murdoch in Asia,” 1993, p. 75).”

STAR TV and the BBC resolved the dispute in March 1994. STAR TV dropped the BBC World Television Service from its northern beam, which mainly covered China and East Asia, and replaced it with a Mandarin-language film channel. The BBC news remained in service in STAR TV’s southern beam, reaching mainly India and the Middle East, until at least March 31, 1996 (“BBC reduces use of Murdoch’s STAR TV in Asia,” 1994). Murdoch abandoned the idea of launching his own news channel to replace the BBC, indicating that he realized the political risk involved in news operations in Asia. Murdoch, after all, seldom let, as one reporter put it, “ideology stand in the way of profits (“Murdoch in Asia,” 1993).”

STAR TV’s move to separate its satellite signal into northern and southern beams reflected a drastic change in its programming strategy from a pan-Asian approach to a local approach targeting the two largest television markets. The northern beam included Prime Sports, Channel V, STAR Plus, STAR Movies, and the Chinese Channel. The southern beam featured Prime Sports, STAR Plus, Channel V, BBC World Service, Zee TV, and Zee Cinema (“An entertainment bazaar,” 1995). STAR TV’s sports channel, for example, gave Chinese more soccer, gymnastics, and track through its northern beam; its southern signal carried a heavier dose of cricket for Indian viewers (Engardio, 1994). STAR TV’s market position was further strengthened in India by the purchase of 49.9 percent of India’s popular Hindi-language station, Zee TV, in early 1994. This move added two more Hindi-language channels – Zee News and Zee Cinema in addition to Zee TV to STAR’ channel lineup (Zee TV had been broadcasting in India by leasing a channel from STAR TV since October 1992) (Karp, 1994).

Despite the fact that STAR TV’s viewership kept climbing, the network still operated in the red mainly because the rise in viewership did not translate into advertising revenue (Cahill, 1994). STAR TV, therefore, made another major change in programming distribution, from free-over-the-air channels to subscription pay TV. By shifting its distribution toward subscription, STAR TV had to rely on local cable operators, further pushing it to maintain good relationships with local sectors, especially the state government. Even though this move proved to be difficult because of the large number of cable operators in each country, STAR TV made progress. In September 1994, subscription only accounted for 5 percent of its revenue. By June 1995, the balance of subscription had reached 20 percent (“STAR promises new channels for greater choice,” 1994).

In July 1995, News Corp. bought out the remaining stake of STAR TV from Hutch Vision for $346.6 million (“Murdoch buys rest of STAR TV,” 1995). From then on, Murdoch gained full control of STAR TV and saw his empire’s assets value jump from $11 billion in 1993 to $19 billion in 1995 (Drohan, 1995). Since then, STAR TV hastened efforts to localize its programming and reaching more audiences. In early 1996, STAR TV formed a three-party joint venture called Phoenix Satellite Television Company, which aired three channels targeting China, including Phoenix Chinese Channel (general entertainment), STAR Sports, and Phoenix Movies (‘Star’s Phoenix rises over China,’ 1996). Starting from September 1996, STAR TV signed up New Delhi Television (NDTV) to provide news content to its prime time slot (“Murdoch’s STAR takes over India’s NDTV,” 1996). This joint venture expanded into a 24-hour Hindi-language news channel called STAR News following the elections in 1998 (Bamzai, 1998).

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STAR TV in India: 2000 to 2006

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Conclusion

When analyzing the role of the nation-state, most research examines two dimensions – state autonomy in formulating policies and state capacity in implementing and realizing policy goals. STAR TV’s recent developments in India and China prove that nation-states are not irrelevant when it comes to formulating and implementing broadcast policies to counteract the global force’s push into their territories.

In China, the government has always adopted restrictive measures towards the television industry. At the onset of satellite television in the early 1990s, the Chinese government was slow to respond to this new technology. Satellite dishes were set up among rooftops allowing foreign broadcast signals bringing uncensored content into private homes. Yet, in 1993 after Murdoch delivered the speech about the potential of satellite technology to dismantle totalitarian regimes, the Chinese government cracked down hard on STAR TV by passing a law banning the purchase, installation, and use of satellite dishes unless given permission by the state. To ensure this measure would work, the government began to promote the development of cable television and offer the service at such a low cost that average consumers could afford. This proved effective in counteracting the popularity of satellite dishes among Chinese consumers.

After reining in Murdoch, the Chinese government began cautiously to open up its television industry for foreign broadcasters. In 2002, STAR TV’s joint venture called Starry Sky Satellite television – a 24-hour Mandarin entertainment channel, was permitted to broadcast through a local cable operator in Guandong province to about 1 million viewers. The service was later expanded to two additional cable operators bringing in a viewership of 2 million, and to hotels above three stars and foreign compounds nationwide. Even though the viewership for Starry Sky was not impressive, media analysts expected STAR TV to make more advances in this market since the climate fostered by the Beijing authority was changing towards loosening tight control over foreign broadcasters.

This honeymoon with the Chinese government did not last long. First, the leadership in China changed. Then, STAR TV upset the government by broadcasting to inner China without getting permission and leasing satellite channels to be sold to unauthorized customers. Beijing reacted by introducing new regulations limiting foreign involvement in the media, banning local broadcasters from co-operating with foreign firms, and stopped issuing additional licenses to foreign television channels.

Many media analysts commented that instead of gaining a foothold in China, STAR TV only managed to gain a toehold even after more than a decade’s of Murdoch kowtowing to the Chinese government.

India seemingly is quite a different story for STAR TV compared to China. The Indian government has adopted a more open policy towards broadcasting since the onset of globalization in the early 1990s. Even though STAR TV officials still complained about the government setting arbitrary rules governing foreign investment, STAR TV had experienced unprecedented growth in India, where an estimated 70 per cent of the company’s revenues are earned (Armitage, 2005). The current rules allow foreign ownership of telecommunications up to 74 per cent, of cable to 49 per cent, and of DTH to 20 per cent. For content producers, foreign ownership could reach 100 per cent in entertainment and 26 per cent for news (Johnson, 2005).

While STAR TV had been riding on the success of its entertainment channels, it encountered setbacks in launching a DTH service and a news channel. It is in these areas that the powerful role of the state was demonstrated. STAR TV had planned to launch a direct-to-home digital TV service for India in April 1997, but the plan was stalled because no existing government regulations could apply to this new technology. After eight years of power wrangling with the government, STAR was issued the license to start the DTH service in May 2005.

The process for launching a 24-hour Hindi news channel involved the most complexities. Again, the India government did not have clear guidelines regarding uplinking news content to satellites for foreign broadcasters. Star News Channel – 100 percent owned by News Corp. hoped to get government approval for uplinking from India after it ended the contract with NDTV, but the government was caught off-guard. First, different ministries in the Cabinet could not agree. Once the decision was made to cap foreign investment at 26 per cent, questions emerged about editorial control in news content and personnel matters. During these deliberations, local media groups and conservative nationalists exercised significant leverage to pressure the government to formulate a more restrictive measure towards foreign broadcasters. The government then unveiled new rules requiring foreign news broadcasters to be majority-owned by a single domestic entity. This incident demonstrated that the India state maintains firm control over those broadcast sectors in which it deems important to foster national security and national identity. Powerful domestic media interest groups also played an important role in shaping the government’s policy.

STAR TV was established at a time when globalization was sweeping through Asia. In India, the government was trying to foster an environment to attract foreign investment and privatize many state-owned industries to make them more competitive in the global economy. In China, economic reform was also going full gear. The different political systems in India and China, one democratic and the other totalitarian, largely determined the path of STAR TV’s developments in these two markets. In China, the state continued to exercise tight control over foreign broadcasters in almost every aspect – be it content or distribution. In India, the global force seemed to have greater leverage in counteracting the state, but only in areas where the state was willing to compromise, such as allowing entertainment channels to be fully owned by foreign broadcasters. In areas where the government thought needs protection to ensure national security and identity, the state still exercised formidable autonomy to formulate and implement policies restricting the global force.

The evolution of STAR TV illustrates that international satellite broadcasters’ globalization strategies have to adapt to local conditions. Rather than regarding globalization as a process that uniformly subverts local imperatives, local sectors can and will exercise leverage in the process of constructing the global. The nation-state in the era of globalization still matters.

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