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April 05, 2007

Culture Club

The first thing you notice when you arrive in Shanghai is the cranes. They are everywhere. Free-standing cranes. Mobile cranes. Cranes on top of buildings. And they are in constant motion, hauling I-beams, window panes, and scaffolding, literally transforming the already stunning skyline of Shanghai as you sleep, operating 24 hours a day, 7 days a week.

The cranes are a symbol of the jaw-dropping growth of this city and country. When the rest of the world hears about the wealth pouring into China from overseas, it’s hard to imagine how that money is manifesting itself. But here in Shanghai, it is stunningly clear. With its ultra-modern architecture and endless tilt of high-rises, you get the feeling here that you are staring straight into the future.

With that in mind, we couldn’t help wondering whether this fantastic city has the potential to become the future center of the media universe. And so, in true GIO fashion, we collected some of the top minds in the media and content arena, put them in a room together in downtown Shanghai, and asked them what they thought.

We had distinguished professors from some of China’s top universities, including Peking, Tsinghua, and Shanghai Jiao Tong. We had representatives from venture capital players like Lehman Bros., WI Harper, and Gobi Partners. And of course we had a liberal sampling of old and new media representatives, like gaming companies The9 Limited and Shanda, newspaper Nanfang Daily, and IBM partners Disney and Sony Pictures China.

There was general agreement around the table that if China were to emerge as a global force in media and content production, it should use that position to educate the world about Chinese culture and values. This was a pretty foreign concept to me. I always thought that Hollywood had exported American culture throughout the world incidentally, as a byproduct of the entertainment products they were selling.

But in China, at least among the folks in this deep dive, there was a strong belief that entertainment, and other types of content, should not be about entertainment alone. That there should be educational value attached to any type of content that is produced here. It is a view that some believe the younger generation here does not share.

The Chinese people believe they have great stories to tell, and they are eager to express them to the rest of the world. But there are great challenges. The government still controls the media industry here, a fact that came up repeatedly in our discussion. One participant lamented that China has loads of creative talent, but that artists don’t feel comfortable pushing artistic boundaries for fear of censorship. And investors, both domestic and foreign, are skittish about investing in an industry that comes with so much regulatory baggage.

Also, the language barrier is high. One participant suggested that gaming could serve as a bridge, both for culture and language, and even become the platform that delivers the educational and cultural advancement the group was looking for. Another suggested that China should concern itself with applying its manufacturing prowess to the production of content (like movie production etc.) from other countries, and then worry about creating its own content later.

Piracy was also a major topic, and while everyone agreed that the problem was pervasive and damaging, there was little consensus on what to do about it. Some suggested that speed to market was the key, but some movies show up on the streets of Shanghai before they are even released in theaters. Another participant thought that moral education was the proper course of action. But most people feel that train left the station long ago.

There was one interesting thought that arose, however, about how piracy can be leveraged as an effective marketing tool. Big media companies sometimes struggle to distribute their product to the low end of the market, because of price, but also because they just don’t have the distribution network. This is where piracy actually fills a need. The question is whether or not it makes sense to seed the market sometimes through piracy, and then later offer that market a new value proposition with higher quality content they would be willing to pay more for. I can see eyes rolling all over America.

All in all, the Shanghai dive gave us an invaluable new perspective on the media and content space. It was a real education, and one small step in the exporting of Chinese culture to the rest of the world.

April 5, 2007 in Media and Content | Permalink

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