Hong Kong - Many of the world's biggest cable TV networks, including HBO and Nickelodeon, are taking advantage of newly relaxed laws governing media investment to set up de facto channels in China.
 
Nearly all the new ventures are tie-ups where a foreign player supplies programme-developing expertise or actual programmes for use on a specific channel developed for digital TV by a Chinese media company.

Most of the partnerships are seizing on new rules that go into effect next week allowing foreign firms to own up to 49 per cent of joint ventures engaged in programme production. Such ventures were previously off-limits to foreigners.

The foreign networks have effectively found a back-door into China's potentially lucrative TV market by taking advantage of those new rules, along with Beijing's desire to develop the nation's digital TV infrastructure, observers say. 
 
Until now, only four foreign media firms have been allowed to operate TV channels in China's tightly controlled media market, and all four were limited to the affluent southern province of Guangdong for widespread broadcasts.

The new wave of channels will be limited to distribution over a handful of national digital platforms being rolled out by some of the country's biggest media firms, most notably the top two, China Central Television (CCTV) and Shanghai Media Group (SMG).

'As far as I know, just about everybody is talking to SMG or CCTV as well as some others like that,' said Mr Ward Platt, Asia managing director for the National Geographic Channel, which has formed a China-targeted channel, World Geographic, with CCTV.

'It's not really unique that we're doing it,' he said. 'We moved a little faster than some people.'

Viacom's Nickelodeon announced in March a deal to supply 90 minutes of daily programming for a children's channel being set up by CCTV.

Since then, Time Warner's HBO and National Geographic have entered into similar tie-ups. Sony Corp, owner of the Animax TV channel, is also in tie-up talks for a new cartoon channel being developed by Hunan Broadcasting Group, China's fourth biggest media firm.

Discovery Channel has an existing relationship with Shanghai Media Group, while ESPN Star Sports is also believed to be in discussions for a similar tie-up.

All of the players are seeking entry or expansion in a media market that has the potential to become one of the world's largest. Print and TV ad revenue totalled an estimated US$18.7 billion (S$30.6 billion) last year and is expected to grow at double-digit rates for the foreseeable future.

China previously gave highly limited broadcast rights to a small group of foreign-owned channels, including ones backed by News Corp, Time Warner and Viacom, in an effort to control their influence while domestic players developed.

China now boasts about 100 million cable TV subscribers, the vast majority with older analog service. But with the recent roll-out of newer digital distribution systems, Beijing has set a target of 30 million users within the next few years.

To do that, observers say, it will need compelling programming like the kind made by foreign media.