News Corp. chairman/CEO Rupert Murdoch is expressing frustration with Chinese regulators' recent steps to put tighter controls on foreign media companies doing business in China.
NEW YORK (The Hollywood Reporter) -- News Corp. chairman/CEO Rupert Murdoch is expressing frustration with Chinese regulators' recent steps to put tighter controls on foreign media companies doing business in China.
"We've rather hit a brick wall in China," he said in a panel here Sept. 23 as part of the Clinton Global Initiative -- a gathering that discussed global business, social and political topics. "A year ago, I would have said there's a lot of opening up going on. Right now, not," he added later, according to a transcript on the Initiative's Web site.
Former President Clinton moderated the panel titled "Managing Major Media Companies In An Era of Globalization," in which Time Warner chairman/CEO Richard Parsons and Sony Corp. chairman/CEO Howard Stringer also participated.
China has this year moved to control more strictly foreign participation in the TV industry. During News Corp.'s most recent earnings call, Murdoch said that the regulatory environment has become more difficult to read.
The panel also spent some time debating Internet controls in China after recent criticism of Yahoo! Inc., which was required by the Chinese government to reveal some information about a journalist's online communications to be allowed to operate. The journalist was subsequently jailed.
Parsons argued that each company must make its own judgments on such issues. He said that TW's America Online service faced a similar issue and decided not to operate in China. "You're told that the government reserves the right to monitor all the traffic" and that you must block certain words, like "democracy," he said. "We bailed out," Parsons said even though only about "12 guys somewhere ... were going to try to monitor 3 billion messages a week or something."
"The Chinese are doing everything they can to manage the message," Parsons said. "And they're opening up in their own time and at their own speed."
"I think they were wrong," Murdoch said about Yahoo! "And they're good friends of mine."
He also suggested that in the current regulatory environment the Chinese regulators are tracking online communication more closely. "You have a lot more than 12 people watching it. They're quite paranoid about what gets through," he said.
Parsons signaled that TW might be willing to make some compromises in its entertainment units to honor that the Chinese have different taste and political views. "But you have to differentiate between news and other media -- entertainment media," he said. "I don't think you can compromise with respect to the news. News either has integrity or it doesn't. I don't think there's such a thing as mostly integrity."
This sometimes puts TW in a difficult position as "the Chinese have a way of looking at our company as one company," he said. "We frequently find our whole company in an unfavorable posture because of something that's been produced on the news."
For example, he said CNN used to use Tiananmen Square footage in teasers, even though "the Chinese hated it."
Stringer said acting in ways that takes Chinese culture into account also can be a business benefit. "We're learning as a result of that to adapt to local circumstances," he said. "It's forced us to employ local managers. It's forced us to work with the Chinese and develop an understanding of relationships, which in Asia is the first and best way to secure a business relationship."