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Programming Strategies of U.S.-Originated Cable Networks in Asian Markets

Permanent Link: http://ufdc.ufl.edu/UFE0020260/00001

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Title: Programming Strategies of U.S.-Originated Cable Networks in Asian Markets Descriptive Study Based on the Product Standardization/Adaptation Theory
Physical Description: 1 online resource (389 p.)
Language: english
Creator: Oba, Goro
Publisher: University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: 2007

Subjects

Subjects / Keywords: asian, cable, global, international, programming
Journalism and Communications -- Dissertations, Academic -- UF
Genre: Mass Communication thesis, Ph.D.
bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
born-digital   ( sobekcm )
Electronic Thesis or Dissertation

Notes

Abstract: Transnational media corporations dominate cable television network ownership in the United States and have aggressively established many foreign subsidiaries and affiliates for their cable networks, expanding their worldwide audiences. This multiple-case study explored television programming products of U.S.-originated cable networks, namely, MTV, Cartoon Network, ESPN, and Discovery Channel, in Asian markets and what factors are perceived as determinants of programming decisions by the networks. On the basis of theoretical foundations concerning product standardization/adaptation in international marketing research, the present study was intended to provide a framework for understanding how various external as well as intra-firm factors could affect the programming product offerings of global television networks. Primary data for analysis were gathered through personal interviews with executive and managers of the aforementioned networks in such Asian markets as Japan, Taiwan, and Singapore. In light of actual programming product offerings, each of U.S.-originated cable networks employed unique programming strategy in Asian markets. While some networks attempted to distribute the same programming on a global scale, others encouraged local teams to develop more localized programming. The possibility for each programming strategy is contingent on various factors. Given the fact that viewers generally prefer products more relevant to them, the significance of programming products adapted to individual local markets was emphasized by networks. Yet, the degree to which local viewers prefer locally adapted programming to standardized programming seemed dependent on the national cultural characteristic. Meanwhile, programming products tended to be distributed on a global basis, if they were perceived to have universal appeal, and networks pursued the economies of scale and scope and cost savings. It was also believed that by offering the same programming product worldwide, networks could maintain and reinforce their global brands. Ultimately, characteristics inside the network, such as orientations and philosophies with respect to international operations, resources possessed by them, and the centralization or decentralization of authority, affected the direction of their programming strategies.
General Note: In the series University of Florida Digital Collections.
General Note: Includes vita.
Bibliography: Includes bibliographical references.
Source of Description: Description based on online resource; title from PDF title page.
Source of Description: This bibliographic record is available under the Creative Commons CC0 public domain dedication. The University of Florida Libraries, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Statement of Responsibility: by Goro Oba.
Thesis: Thesis (Ph.D.)--University of Florida, 2007.
Local: Adviser: Chan-Olmsted, Sylvia M.
Electronic Access: RESTRICTED TO UF STUDENTS, STAFF, FACULTY, AND ON-CAMPUS USE UNTIL 2009-08-31

Record Information

Source Institution: UFRGP
Rights Management: Applicable rights reserved.
Classification: lcc - LD1780 2007
System ID: UFE0020260:00001

Permanent Link: http://ufdc.ufl.edu/UFE0020260/00001

Material Information

Title: Programming Strategies of U.S.-Originated Cable Networks in Asian Markets Descriptive Study Based on the Product Standardization/Adaptation Theory
Physical Description: 1 online resource (389 p.)
Language: english
Creator: Oba, Goro
Publisher: University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: 2007

Subjects

Subjects / Keywords: asian, cable, global, international, programming
Journalism and Communications -- Dissertations, Academic -- UF
Genre: Mass Communication thesis, Ph.D.
bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
born-digital   ( sobekcm )
Electronic Thesis or Dissertation

Notes

Abstract: Transnational media corporations dominate cable television network ownership in the United States and have aggressively established many foreign subsidiaries and affiliates for their cable networks, expanding their worldwide audiences. This multiple-case study explored television programming products of U.S.-originated cable networks, namely, MTV, Cartoon Network, ESPN, and Discovery Channel, in Asian markets and what factors are perceived as determinants of programming decisions by the networks. On the basis of theoretical foundations concerning product standardization/adaptation in international marketing research, the present study was intended to provide a framework for understanding how various external as well as intra-firm factors could affect the programming product offerings of global television networks. Primary data for analysis were gathered through personal interviews with executive and managers of the aforementioned networks in such Asian markets as Japan, Taiwan, and Singapore. In light of actual programming product offerings, each of U.S.-originated cable networks employed unique programming strategy in Asian markets. While some networks attempted to distribute the same programming on a global scale, others encouraged local teams to develop more localized programming. The possibility for each programming strategy is contingent on various factors. Given the fact that viewers generally prefer products more relevant to them, the significance of programming products adapted to individual local markets was emphasized by networks. Yet, the degree to which local viewers prefer locally adapted programming to standardized programming seemed dependent on the national cultural characteristic. Meanwhile, programming products tended to be distributed on a global basis, if they were perceived to have universal appeal, and networks pursued the economies of scale and scope and cost savings. It was also believed that by offering the same programming product worldwide, networks could maintain and reinforce their global brands. Ultimately, characteristics inside the network, such as orientations and philosophies with respect to international operations, resources possessed by them, and the centralization or decentralization of authority, affected the direction of their programming strategies.
General Note: In the series University of Florida Digital Collections.
General Note: Includes vita.
Bibliography: Includes bibliographical references.
Source of Description: Description based on online resource; title from PDF title page.
Source of Description: This bibliographic record is available under the Creative Commons CC0 public domain dedication. The University of Florida Libraries, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Statement of Responsibility: by Goro Oba.
Thesis: Thesis (Ph.D.)--University of Florida, 2007.
Local: Adviser: Chan-Olmsted, Sylvia M.
Electronic Access: RESTRICTED TO UF STUDENTS, STAFF, FACULTY, AND ON-CAMPUS USE UNTIL 2009-08-31

Record Information

Source Institution: UFRGP
Rights Management: Applicable rights reserved.
Classification: lcc - LD1780 2007
System ID: UFE0020260:00001


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PROGRAMMING STRATEGIES OF U.S.-ORIGINATED CABLE NETWORKS IN ASIAN MARKETS: DESCRIPTIVE STUDY BASED ON THE PRODUCT STANDARDIZATION/ADAPTATION THEORY By GORO OBA A DISSERTATION PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLOR IDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY UNIVERSITY OF FLORIDA 2007 1

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2007 Goro Oba 2

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To Mitsuko Oba and Marin Oba. 3

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ACKNOWLEDGMENTS Whenever I am almost daunted by some di fficulties, I always bring to mind my favorite words once spoken by Robert Kennedy: Only those who dare to fail greatly can ever achieve greatly. I am still unsure if I have achieved something greatly, as I have just completed a dissertation and my doctoral degree. However, I am sure that I would never have been one step closer to my dream if I had feared failure. It wa s actually a decision involving many risks for me to study in the United States, but I have embarked on an academic journey for intellectual fulfillment. This dissertation is the culm ination of my study from 2001 to the present. I could not have survived the years wit hout the encouragement from the following people who helped me to pursue academic challenges. First of all, I would like to give my sincerest gratitude and appreciation to my supervising committee memb ers at University of Florida. I wish to thank Dr. Sylvia Chan-Olmsted, the chair of the committee and my academic advisor and mentor, for her wisdom, honesty, encouragemen t, and guidance I always hold valuable. I feel truly blessed to work as an assistant of he r and indebt to her in my life. When I give a lecture to my students or conduct research, I often ponder what she is likely to do if she were in my position. I enjoyed talking with Dr. Marilyn Roberts be cause of her witty remarks and jokes. It should be noted that the original idea of this di ssertation initially arose during I took the Internationa l Advertising course offered by her. I also appreciate Dr. Juan-Carlos Molledas advices, which are based on his rich k nowledge of the international public relation arena. I am grateful to Dr Jinhong Xie for comments and suggestions. Her wealth of knowledge regarding in ternational marketing study was invaluable at all phases of this project. I like the committee very much b ecause it is really an international team. I would also like to thank some faculty members at Michigan State University. Dr. Steve Wildman, Dr. Johannes Bauer, Dr. Barry Litm an, and Dr. Thomas Baldwin taught me how exciting to research media economics and industries. 4

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I also owe a special debt of gratitude to many friends and organizations for their continued support and encouragement. I appr eciate my old friends Hiromichi Sakai and Leon Liu, who have extensive business networks, for their support to set up interviews. I would like to thank executives and mana gers of MTV, Cartoon Network, ESPN, and Discovery Channel, who participated in in terviews, for their precious time, data, and comments. My officemates at University of Florida, in particular Changhyun Jin, Al Tritico, and Roxanne Watson, shared with me ideas, information, and laughter. Daphne Landers and Byenghee Chang, advisees of Dr. Chan-Olmsted as well as myself, helped me when I was in trouble with research. I also thank the Japanese Society of Gainesville for regularly having parties to relax. My ten year s of experience in Nippon Television Network became the cornerstone for my academic career, and colleag ues at the network still give me a boost. The dissertation research was supported by the grant from Hoso Bunka Foundation established by NHK and th e research fund of Ky oto Gakuen University. Last but not least, I wish to thank my parents for realizing and understanding the importance of study to me since I was a kid and for being brave enough to set me free to pursue my dreams. I adore the Suzukis, the Shimokawas, and the Hirabayashis for being patient with me and seeing me through tough times. My grandmothers passed away in the year I returned to Japan and the following year. They were ob viously sad events, but I was fortune to be able to say last goodbyes to them who always looked forward seeing my growth. Finally, my deepest appr eciation goes to my wife Mitsuko for her love and patience. I would never forget that she accepted my dream with an open mind and compassionate heart when I left a television network. Neith er my study in the United States nor this dissertation could have been completed without her continuing support and encouragement. One of our best experiences in the United Stat es was the birth of our daughter Marin, who provided a joyful dimension to our lives. Mitsuko and Marin are always a positive motivating force within my life. I have the best family in the world. 5

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TABLE OF CONTENTS ACKNOWLEDGMENTS ...............................................................................................................4 LIST OF TABLES .........................................................................................................................12 LIST OF FIGURES .......................................................................................................................13 LIST OF ABBREVIATIONS ........................................................................................................14 ABSTRACT ...................................................................................................................................15 CHAPTER 1 INTRODUCTION............................................................................................................... ...17 Media Globalization and Global Television Networks ...........................................................17 Gaps in Current Literature ......................................................................................................23 Purpose of the Study ...............................................................................................................27 2 LITERATURE REVIEW........................................................................................................35 Theoretical Backgrounds for Product Standardization/Adaptation ........................................35 Determinants of the Degree of Product Standardization/Adaptation .....................................41 Product Characteristics ....................................................................................................43 Target Market Segment ...................................................................................................44 Countrys Cultural Characteristics ..................................................................................47 Countrys Environmental Characteristics ........................................................................50 Economic condition ..................................................................................................50 Physical/geographic condition .................................................................................51 Legal environment ....................................................................................................52 Infrastructure/supporting sector...............................................................................53 Industry Competition .......................................................................................................54 Brand and Country of Origin ...........................................................................................55 Firm Characteristics .........................................................................................................59 Philosophy/orientation .............................................................................................59 Resource ...................................................................................................................62 Degree of centraliza tion/decentralization .................................................................64 Market entry mode ...................................................................................................65 3 APPLICATION OF INTERNATIONAL MARKETING THEORIES..................................74 Standardization/Adaptation of Television Programming ........................................................74 Determinants of the Degree of Programming Standardization/Adaptation ............................75 Product Characteristics ....................................................................................................75 Target Market Segment ...................................................................................................79 Countrys Cultural Characteristics ..................................................................................81 Countrys Environmental Characteristics ........................................................................84 Economic condition ..................................................................................................84 Physical/geographic condition .................................................................................86 6

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Legal environment ....................................................................................................87 Infrastructure/supporting sector...............................................................................89 Industry Competition .......................................................................................................93 Brand and Country of Origin ...........................................................................................95 Firm Characteristics .........................................................................................................98 Philosophy/orientation .............................................................................................98 Resource ...................................................................................................................99 Degree of centraliza tion/decentralization ...............................................................101 Market entry mode .................................................................................................102 Research Questions ...............................................................................................................103 4 METHODOLOGY...............................................................................................................1 06 Qualitative Research .............................................................................................................106 Case Study ............................................................................................................................108 Selection and Number of Cases ............................................................................................110 Sample Networks ...........................................................................................................111 Sample Markets .............................................................................................................113 Selection .................................................................................................................113 Characteristics ........................................................................................................116 Data Sources and Collection .................................................................................................117 Personal Interview .........................................................................................................117 Interview Design ...........................................................................................................118 Interview Instruments ....................................................................................................119 Interview Procedures .....................................................................................................120 Existing Documents .......................................................................................................121 Analytical Method ................................................................................................................123 5 RESULTS.................................................................................................................... .........126 General Overview .................................................................................................................126 MTV.......................................................................................................................126 Cartoon Network....................................................................................................127 ESPN ......................................................................................................................128 Discovery Channel .................................................................................................129 Programming Products .........................................................................................................130 MTV.......................................................................................................................131 Cartoon Network....................................................................................................131 ESPN ......................................................................................................................132 Discovery Channel .................................................................................................133 Cross case analysis .................................................................................................134 Localization ..........................................................................................................................134 MTV.......................................................................................................................135 Cartoon Network....................................................................................................137 ESPN ......................................................................................................................139 Discovery Channel .................................................................................................141 Cross case analysis .................................................................................................142 Product Characteristics .........................................................................................................144 Cultural Sensitivity/Universal Appeal ...........................................................................144 MTV.......................................................................................................................144 7

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Cartoon Network....................................................................................................145 ESPN ......................................................................................................................147 Discovery Channel .................................................................................................148 Cross case analysis .................................................................................................149 Production Cost and Format ..........................................................................................150 Target Market Segment .........................................................................................................152 MTV.......................................................................................................................152 Cartoon Network....................................................................................................153 ESPN ......................................................................................................................153 Discovery Channel .................................................................................................154 Cross case analysis .................................................................................................154 Countrys Cultural Characteristics ........................................................................................155 MTV.......................................................................................................................155 Cartoon Network....................................................................................................157 ESPN ......................................................................................................................159 Discovery Channel .................................................................................................161 Cross case analysis .................................................................................................162 Countrys Environmental Characteristics .............................................................................164 Economic Condition ......................................................................................................164 MTV.......................................................................................................................165 Cartoon Network....................................................................................................165 Discovery Channel .................................................................................................165 Cross case analysis .................................................................................................165 Physical/Geographic Condition .....................................................................................166 MTV.......................................................................................................................167 Cartoon Network....................................................................................................167 ESPN ......................................................................................................................167 Discovery Channel .................................................................................................168 Cross case analysis .................................................................................................168 Legal Environment ........................................................................................................169 MTV.......................................................................................................................169 Cartoon Network....................................................................................................169 ESPN ......................................................................................................................170 Discovery Channel .................................................................................................170 Cross case analysis .................................................................................................170 Infrastructure/Supporting Sector...................................................................................171 MTV.......................................................................................................................171 Cartoon Network....................................................................................................172 ESPN ......................................................................................................................172 Discovery Channel .................................................................................................173 Cross case analysis .................................................................................................173 Industry Competition ............................................................................................................175 MTV.......................................................................................................................176 Cartoon Network....................................................................................................176 ESPN ......................................................................................................................177 Discovery Channel .................................................................................................178 Cross case analysis .................................................................................................178 Brand and Country of Origin ................................................................................................179 Brand .............................................................................................................................179 8

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MTV.......................................................................................................................179 Cartoon Network....................................................................................................181 ESPN ......................................................................................................................181 Discovery Channel .................................................................................................182 Cross case analysis .................................................................................................182 Country of Origin ..........................................................................................................183 MTV.......................................................................................................................184 Cartoon Network....................................................................................................184 ESPN ......................................................................................................................185 Discovery Channel .................................................................................................185 Cross case analysis .................................................................................................185 Firm Characteristics ..............................................................................................................186 Philosophy/Orientation ..................................................................................................186 MTV.......................................................................................................................186 Cartoon Network....................................................................................................187 ESPN ......................................................................................................................188 Discovery Channel .................................................................................................189 Cross case analysis .................................................................................................189 Cost-Benefit Consideration...........................................................................................190 MTV.......................................................................................................................191 Cartoon Network....................................................................................................192 ESPN ......................................................................................................................193 Discovery Channel .................................................................................................195 Cross case analysis .................................................................................................196 Property-Based Resource ..............................................................................................197 MTV.......................................................................................................................198 Cartoon Network....................................................................................................198 ESPN ......................................................................................................................199 Discovery Channel .................................................................................................199 Cross case analysis .................................................................................................199 Knowledge-Based Resource ..........................................................................................200 MTV.......................................................................................................................201 Cartoon Network....................................................................................................202 ESPN ......................................................................................................................202 Discovery Channel .................................................................................................202 Cross case analysis .................................................................................................203 Degree of Centralizat ion/Decentralization ....................................................................203 MTV.......................................................................................................................204 Cartoon Network....................................................................................................205 ESPN ......................................................................................................................206 Discovery Channel .................................................................................................207 Cross case analysis .................................................................................................208 Market Entry Mode .......................................................................................................210 MTV.......................................................................................................................210 Cartoon Network....................................................................................................210 ESPN ......................................................................................................................211 Discovery Channel .................................................................................................211 Cross case analysis .................................................................................................211 Overall Results ......................................................................................................................213 9

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MTV.......................................................................................................................213 Cartoon Network....................................................................................................214 ESPN ......................................................................................................................215 Discovery Channel .................................................................................................216 6 CONCLUSIONS AND DISCUSSION................................................................................222 Findings ................................................................................................................................222 Product Characteristics ..................................................................................................223 Target Market Segment .................................................................................................224 Countrys Cultural Characteristics ................................................................................225 Countrys Environmental Characteristics ......................................................................226 Industry Competition .....................................................................................................226 Brand and Country of Origin .........................................................................................227 Firm Characteristics .......................................................................................................228 Final Thoughts ...............................................................................................................229 Managerial Implications .......................................................................................................231 Contributions of the Present Study .......................................................................................235 Limitations and Future Research Directions ........................................................................236 APPENDIX A LIST OF INTERVIEWEES..................................................................................................242 B SUBJECT RECRUITMENT................................................................................................243 C INTERVIEW QUESTIONNAIRE.......................................................................................245 D COPY OF INFORMED CONSENT SHEET.......................................................................246 E INTERVIEW WITH MTV JAPAN-1...................................................................................247 F INTERVIEW WITH MTV JAPAN-2...................................................................................252 G INTERVIEW WITH MTV TAIWAN...................................................................................257 H INTERVIEW WITH MTV ASIA.........................................................................................267 I INTERVIEW WITH CARTOON NETWORK JAPAN.......................................................283 J INTERVIEW WITH CARTOON NETWORK TAIWAN....................................................290 K INTERVIEW WITH CARTOON NETWORK ASIA/PACIFIC..........................................301 L INTERVIEW WITH SPORTS-I ESPN................................................................................312 N INTERVIEW WITH ESPN TAIWAN..................................................................................320 O INTERVIEW WITH ESPN ASIA........................................................................................330 P INTERVIEW WITH DISCOVERY CHANNEL JAPAN.....................................................340 10

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Q INTERVIEW WITH DISCOVERY CHANNEL ASIA........................................................353 LIST OF REFERENCES .............................................................................................................363 BIOGRAPHICAL SKETCH .......................................................................................................389 11

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LIST OF TABLES Table Page 1-1 Shares of revenues by countri es/regions in the top three TNMCs. ....................................33 1-2 Global reach by U.S.-o riginated cable networks. ..............................................................33 1-3 MTVs country/region-specific channels and ownership patterns. ....................................34 2-1 Determinants of the degree of product standardization/adaptation...................................67 4-1 Sample matrix based on two dimensions. ........................................................................124 4-2 Sample networks offices in Asia. ....................................................................................124 4-3 Characteristics of sample markets ...................................................................................125 5-1 Ratio of network programming on each local channels schedule. .................................217 5-2 Direction of networks programming product by determinants. ......................................217 12

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LIST OF FIGURES Figure Page 2-1 Direction of product standardization/adaptation and determinants. ..................................72 5-1 Continuum of televi sion programming localization. .......................................................219 5-2 Ownership structure of MTV. ..........................................................................................219 5-3 Ownership structure of Cartoon Network. .......................................................................220 5-4 Ownership structure of ESPN. .........................................................................................220 5-5 Ownership structure of Discovery Channel. ....................................................................221 6-1 Framework determining networks programming standardization ..................................241 13

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LIST OF ABBREVIATIONS CEO chief executive officer CNNI Cable News Network International CNO Cartoon Network original ESPN Entertainment and S ports Programming Network MGM Metro-Goldwyn-Mayer Inc. MLB Major League Baseball MTV Music Television MVPD multichannel video programming distribution NBA National Basketball Association NFL National Football League RBV resource-based view RQ research question TNMC transnational media corporation UEFA Union of European Football Associations VMA Video Music Awards 14

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Abstract of Dissertation pres ented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy PROGRAMMING STRATEGIES OF U.S.-ORIGINATED CABLE NETWORKS IN ASIAN MARKETS: DESCRIPTIVE STUDY BASED ON THE PRODUCT STANDARDIZATION/ADAPTATION THEORY By Goro Oba August 2007 Chair: Sylvia M. Chan-Olmsted Major: Mass Communication Transnational media corporations dominate cable television network ownership in the United States and have aggressively establ ished many foreign subsidiaries and affiliates for their cable networks, expanding their worldwide audiences. This multiple-case study explored television programming products of U.S.-originated cable networks, namely, MTV, Cartoon Network, ESPN, and Discovery Channel, in Asian markets and what factors are perceived as determinants of programming decisions by the networks. On the basis of theoretical foundations concer ning product standardization/ad aptation in international marketing research, the present study wa s intended to provide a framework for understanding how various exte rnal as well as intra-firm factors could affect the programming product offerings of global televi sion networks. Primary data for analysis were gathered through personal interviews with executive and managers of the aforementioned networks in such Asian markets as Japan, Taiwan, and Singapore. In light of actual programming product offerings, each of U.S.-originated cable networks employed unique programming strategy in Asian markets. While some networks attempted to distribute the same programming on a global scale, othe rs encouraged local teams to develop more localized programming. The possibility for each programming strategy is contingent on various factors. Gi ven the fact that view ers generally prefer 15

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products more relevant to them, the signi ficance of programming products adapted to individual local markets was emphasized by networks. Yet, the de gree to which local viewers prefer locally adapted programming to standardized programming seemed dependent on the national cultural charac teristic. Meanwhile, programming products tended to be distributed on a global basis, if they were perceived to have universal appeal, and networks pursued the economies of scale and scope and cost savings. It was also believed that by offering the same programming product worldwide, networks could maintain and reinforce their global brands. Ultimately, ch aracteristics inside the network, such as orientations and philosophies w ith respect to international operations, resources possessed by them, and the centralization or decentralization of authority, affected the direction of their programming strategies. 16

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CHAPTER 1 INTRODUCTION Media Globalization and Global Television Networks International business related to tele vision programming has undergone a radical transformation since the late 1980 s, mainly as a result of th e privatization of media firms and the deregulation of industries, which on ce were under strong stat e-controls in many countries, and the development of new video distribution technologies, which multiplied the number of channels to be filled. In the l ong-standing business of international trade, individual television programs have been sold basically either on a pe r-series basis (e.g., a drama series) or as a single product (e .g., a documentary program) by broadcasters, producers, or intermediary agents in a country to their trading partners in overseas markets. As far back as the 1950s, motion picture comp anies in the United States envisaged the overseas syndication of television programs produced in their own studios (Renaud & Litman, 1985). Since then, vendors have expor ted television programs while committing a relatively small amount of investment in human and financial resources. As this traditional, stand-alone trade pattern for television programming remains unchanged, another pattern relevant to media globalization, which nece ssitates more elaborate strategic decisions by media firms, has come to the forefront in international television business. Instead of obtaining syndication revenue by using pr ogramming stockpile, media firms have developed their own televisi on networks around the world. Although the term globalization has been discussed everywhere often as a buzzword, it is generally defined as the pro cess in which firms link and coordinate their activities on a worldwide basis, integrating technology, labor, a nd financial and capital resources based on interdependence among c ountries (Hitt, Ireland, & Hoskisson, 2003). Globalization has also been centr al to discourse in the media industry. In particular, media globalization has been driven by the worldwide e xpansion of activities by large media firms, which are often referred to as transnationa l media corporations (TNMCs) (Gershon, 1997; 17

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Hollifield, 2001) or global media conglomer ates (Chan-Olmsted, 2006). Media firms are economic institutions engaged in the production and distribution of media products targeted toward consumers (Albarran & Chan-Olmsted, 1998). TNMCs, which are regarded as the most powerful economic forces within globa l media activities (Gershon, 1993), have a diverse range of operations and media sectors in multiple countries of the world, striving to use the corporative strategy of diversification to achieve the advantageous economies of scale and scope. Among others, the United States is by far the home country to most TNMCs. As shown in Table 1-1, the three TNMCs originated and still based in the United States with the largest activities worldwide (Time Warner, Disney, and Viacom) have increasingly relied on the markets outside the United States for a su bstantial portion of th eir revenues. It is anticipated that the significance of non-U.S. markets would further increase as the key to future growth because of saturating demand for many media products in the United States, which has traditionally been the worlds most important market for many TNMCs in terms of revenues (Chan-Olmsted & Albarran, 1998; Croteau & Hoynes, 2001). If U.S. media firms can no longer rely on the domestic market for growth, it makes se nse that they would eagerly seek higher out-of-home revenues. In addition, due to the possibility of economic decline in a particular foreign market, coupled with the uncertainty pertaining to consumers acceptance of media products, TNMCs may dive rsify overseas operations, hoping that loss in the market could be offset by virtue of profit in some other markets, i.e., cross-subsidization across markets. Given these drivers for global expansion, TNMCs would attempt to enter overseas media markets via the most profitable means whenever feasible. In order to establish far-reaching operations it is imperative for TNMCs to develop more elaborate business strategi es in a global context. Globa l expansion has fundamentally changed the management of media firms (Hollif ield, 2003). This is seen in a variation on 18

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the market entry approach taken by TNMCs. For instance, rather than being mere exporters engaged in the conventional international trade in television programming, they tend to seek more complex forms of involvement when ente ring new markets, such as foreign direct investments, for better control ov er operations. Foreign direct i nvestment (FDI) refers to the purchase of sufficient stock in a foreign fi rm to obtain significant management control through forms of wholly-owned subsidiaries or joint ventures, while usually requiring the commitment of resources to operations in unf amiliar environments and thus entailing higher risks (Agarwal & Ramaswami, 1992; Ball, Mc Culloch, Frantz, Geringer, & Minor, 2002; Terpstra & Yu, 1988). Hollifield (2003) points out a dynamic increas e in foreign expansion by media firms, finding that all the top 10 medi a firms and at least 64% of the top 25 media firms had some form of overseas operations or investment by 2002. Media firms also have expanded their foreign operations with more countries, as Jung and Chan-Olmsted (2005) found that the total average number of countries in which the top 26 medi a firms had foreign subsidiaries increased from 5 to 12 between 1991 and 2002. Further commitment of resources by TNMCs has been spurred, as governments in em erging economies (e.g., Asia or Eastern and Central Europe) loosened up media-related regulations and encouraged FDI in media industries (Li & Dimmick, 2004). As a result of political regime/climate changes and technological leapfrogs, the recent economic development in many parts of th e world has stimulated the growth of video markets internationally (Chan-Olmsted & Oba, 2006). In fact, the primary and common activities that make the aforementioned, three U.S.-based large media firms (Time Warner, Disney, and Viacom) important global player s is television programming, along with motion picture production and film and television pr ogram libraries (Picar d, 2002). These TNMCs dominate cable television network ownership in the United States and have aggressively 19

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established many foreign subsidiaries and affiliates for their cable networks, 1 expanding their worldwide audiences. It is quite likely that only TNMCs that posse ss sufficient financial resources can bear risks and low returns in the short-term, which often occur in FDI, and eventually develop networks on a global scale. 2 Indeed, in the early 1990s when U.S. cable networks began expanding their business overseas, it was expe cted that it would take many years before they evolve into profitable business (Am dur, 1994; Fahey, 1991; Hughes, 1997b). Although it required considerable start-up investment that may not pay of f in a short period of time, TNMCs believed that controlli ng their own cable networks worldwide would eventually result in better dividends. For about 15 y ears since then, the TNMCs have continuously exploited new markets around the world and grown steadily. For example, within the period from 1996 to 2001, MTV Networks International s revenue rose sharply from U.S. $231 million to 600 million (Capell, Belton, Lowry, Kripalani, Bremner, & Roberts, 2002). U.S.-originated cable networks now occ upy important places in multichannel video programming distribution (MVPD) services, such as cable television or satellite broadcasting, in many countries. Cable News Network International (CNNI) owned by Time Warner can be watched in more than 200 countries and territori es. CNNIs tremendous 1 Cable networks are programming services that deliver packages of information or entertainment by satellite to local cable tele vision system operators. The term cable networks, which means cable programmers, is often used interchangeably with cable channels or cable programming services. Cable programmers provide programming simultaneously to local outlets from a single sour ce, and this is the primary characteristic of networks (Picard, 1993). Subsidiaries refer to entities controlled by other firms through ownership of a majority of the voting stoc k (e.g., wholly-owned subsidiaries), while affiliates, which are often used interchangeab ly with subsidiaries, include more forms than just stock ownership (e.g., license agreement) (Ball et al., 2002). In the present study, affiliates are defined as all business entities located in overseas markets and operating as part of the global alliance of a medi a firm owning cable television networks. 2 Bob Ross, Turner Broadcasting Systems form er vice president of international business and network development, acknowledged, We w ill all deficit-finan ce these projects for now, but a company like ours, which will do $2.7 billion this year, can afford to spend $25 million on a long-term investment. At the end of the day, it will be very difficult for small guys to make moves into the gl obal market (Amdur & Bell, 1994). 20

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global reach can be easily reali zed, given a fact that there we re 192 independent states and 73 dependencies, special sovereignt y areas, and miscellaneous entities 3 in the world as of August 2005 (Central Intelligence Agency, 2005). Meanwhile, Music Television (MTV) owned by Viacom reaches more than 340 million households on the globe as the worlds largest television network. Eight out of ten MTV viewers live outside the United States, and even CNNI reaches an interna tional audience less than half the size of MTVs international audience (Capell et al., 2002). Following CNNI and MTV, many U.S. cable networks have made inroads into foreign ma rkets and become programmers justly termed as global television networks, which are distinguished from networks that re main within national boundaries (Chalaby, 2003). Table 1-2 summarizes the number of countries/territories and households reached by the major cable networks originated in the United States. The worldwide expansion of U.S. cable netw orks can be viewed as an epitome of media globalization, not only because they can be watched in many countries on the globe, but also because they usually have many count ryor region-specific programming channels offered by affiliates established through various market entry approaches. For instance, MTV Networks had 27 country/region-specifi c channels offered by 15 affiliates with several different ownership patt erns outside the United States as of 2004 (see Table 1-3). The extensive geographic operations of global television networks allow programming developed for a particular market, notably the United States, to be distributed to as many markets as possible within the reach. Furthermore, some programs might be produced on the premise of the global-scal e audience. Given a pr operty of television programming as a public good whose cost is la rgely invariant to the number of viewers, global television networks can enjoy great econo mies of scale in the worldwide distribution of television programming. 3 Ethnicity, culture, race, religi on, and language divide states in to separate political entities as much as history, physical terrain, political fiat, or c onquest, resulting in sometimes arbitrary and imposed boundaries (C entral Intelligence Agency, 2005). 21

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Some scholar have associated the worldwide distributi on of media products with cultural imperialism, in which Western countr ies, notably the United States, are supposed to dominate other countries with an outward flow of cultural products. As a major advocate for the cultural imperialism theory, Schiller (1976, 1991) argued that the foreign expansion of U.S. media firms would impose U.S. values onto people in the Third World or periphery countries, whereby threatening national cultural and communi cation sovereignty. 4 More recently, however, the totalistic cultural impe rialism theory has fallen under critique as overly simplistic, since it does not adequately ta ke into consideration local patterns of media consumption (Sinclair, Jacka, & Cunni ngham, 1996; Straubhaar, 1997; Thussu, 2000). Theory and evidence support that audiences are more nationa listic, usually showing more preference to cultural products lo cally produced and suited to th eir tastes than was thought of according to the cultural imperialism theory (Straubhaar, 1991). Although it is not the objectiv e of this study to argue the validity of the cultural imperialism theory, it is noteworthy that the theory is constructed under the premise that TNMCs would offer the same media products on a global scale, as argued by Schiller (1991). To be sure, global tele vision networks could distribu te the same programs to all markets. Nonetheless, the fact that a televi sion program is available everywhere does not necessarily guarantee that it achieves the same level of popul arity, let alone acquiring the same significance, meaning, or response (Stree t, 1997). Given viewers preferences for local programs, global television networks could al so develop and offer local programming in each market as an alternative programming op tion so as to meet local demands more responsively. Straubhaar and Duarte (2004, p.247) articulate that audiences want networks to talk in their languages, focus on the genres they prefer, show known names (local stars), 4 Whether the exposure to foreign media conten t has a significant imp act on the change in values is open to discussion. Supporting the theory, Salwen (1991) conceded that repeated exposure to Western media messages over long pe riods of time might alter cultural values subtly. Meanwhile, Elasmar and Hunter (1997 ) found with their meta -analysis that the impact of foreign televisi on programming on viewers values was extremely weak. 22

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and demonstrate interest in their markets id iosyncrasies. Hong (1998) simply states that people ultimately like to see something close to their lives. What really matters to people and what is really special to them might be programs that re spect and respond to their local tastes. Meanwhile, Sanchez-Tabernero (2006) assume s that some European or Asian people might be more familiar with the songs of American artists including Madonna, Eminem, and so forth than those of artists native to th eir own countries. In a nutshell, people show a clear preference for what is closer in many cases but, on ot her occasion, might be more familiar with and more likely to consume the fa r as opposed to the near (Sanchez-Tabernero, 2006). These somewhat contradictory viewpoint s would highlight the raison detre of programming services dedicated to specific c ountries, whereby global television networks could provide both programming standardized on a worldwide basis and programming adapted for local tastes in an eclectic way. As international communication scholars claim, what clearly distinguishes media globalization from cultural imperialism is that the former often requires exchanges of power between global and local actors in a two-way process, invo lving seemingly antithetical concepts, such as universalism versus particularlism or ho mogenization versus heterogenization (Robertson, 1995; Tomlinson, 1997). Based on these viewpoints, it is quite probable that global television networks confront differentia l local market preferences, while seeking a globally comm on cultural landscape and opportunities to achieve scale economies and efficiencies in their global operations. Gaps in Current Literature Early research on media globalization main ly focused on policy and macroeconomic issues, such as its threat to a nations ident ity and cultural traditions as well as to its domestic media industries. Foreign television programmers attempts to transmit on national territory used to be seen as breaches of sovereignty (Cha laby, 2004a). Meanwhile, a body of 23

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research has recently begun to focus on the trend in programming of global television networks. Studies claim that many of the U.S. cable networks that in itially entered foreign markets with little customized, U.S.-made progr ams have shifted to offering more locally adapted programming in the markets of Europe (Chalaby, 2002, 2003), Asia (Chan, 2004; Chang, 2003; Chen, 2004), and Latin America (S inclair, 2004; Straubhaar & Duarte, 2004). It now appears that locali zation is the mantra for ma ny global television networks. Scholars in those studies consider that loca l adaptation reflects the difference in cultural values, which are inherent in each market and hence expected to influence the acceptance of the U.S. television programming. Some also mention the increasing competition in local markets as an accelerator of programming adaptation. According to the authors, in order to survive in the competition with local programmers who attrac t local viewers with greater local cultural appeal based in domestic productio n, global television networks have to offer more locally adapted programming. Yet, it is sti ll true that in spite of possible disadvantages resulting from cultural barriers, many global television networks, to greater or lesser degrees, distribute the same programming on a gl obal scale. The previous studies usually credit such a trend based on the reason that certain types of program ming are less-culturally sensitive or universally appeali ng (e.g., HBOs Hollywood blockbusters). 5 In short, those studies assume that programming by global television networks is in large part determined based on the cultural framework and the nature of the product. It is understandable that the impact of culture on the transferability of media products across markets should be emphasized on the grounds that media products are often viewed as cultural products. According to Hofs tede (2001), culture can be interpreted as the collective programming of the mind that provides a guide for humans on how to think and behave and distinguishes the members of one group or category of people from another. 5 It is commonly believed that there is de finitely a demand for Western movies in Asia (Osborne, 2000). 24

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Given the value inherent in members of a cu lture, a product accepted by them might not be accepted by the members of a different culture. Craig, Greene, and Douglas (2005) suggest that theatrical films are very much a creation of the culture in which they are developed, since they reflect the writers view, the directors vision, a nd the performers interpretation of the script, all of which are influenced by cultural context. Understanding cultural boundaries is especially important for products that are culture-bound, and this would also be the case with television programs. The value of television programming then is dependent on how audiences appreciate the meani ng it expresses. Nonethel ess, still open to discussion is whether the inte rnational market of televisi on programming operates largely on the cultural factor alone. In a rapidly changing global economy, the in ternational business might need to be understood in the context of external environmenta l factors as well as in ternal factors at the firm level. What type of programming is offered in overseas markets is determined in a framework of programming strategy employed by a global television network, as a course of action to pursue profitability. More importa ntly, a strategy is developed through a firms deliberate response to its industry and market im peratives as well as th e utilization of its internal strengths (Bartlett & Ghoshal, 1991; Zou & Cavusgil, 1996). Dess, Lumpkin, and Taylor (2004) suggest that th e existence of a glob al product, along with the potential for economies of scale/learning/scop e and limited availability of an essential resource, would likely tip the scale toward a global strategic ap proach, whereas differences in local market preferences, regulations, and wi dely available resources woul d encourage a more localized strategy. According to Usunier (1993), whether consumers from similar or different cultures facilitate the introduction of certain strategi es or whether managers are the driving force behind the implementation of the strategies remain unclear. In terms of television programming strategies, Domeni ck Fioravanti, former senior vice president of Discovery Communications, stated that the success in programming internationa lly requires not only 25

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sensitivity to local markets and a good product but also organizational strengths, long-term vision, and financial commitment (Walley, 1995). Yet, relatively little attention in the literature concerning pr ogramming of global television networks is devoted to othe r external factors besides cultural similarities/differences across markets. In addition, how intra-firm factors, including organization structures, corpor ate climates, or resources, could shape the programming offered in overseas markets has rarely b een discussed. Given the simple fact that programming is the product of media firms, programming strategy should also be studied with the exploration of the rationale underl ying the offering from business perspectives. Otherwise, the following phenomenon could not be fully explained: Nickelodeon tried to create new shows with partners in other countries, while Cartoon Network relied more on its enormous library (Mifflin, 1995). Both networks are exclusively dedicated to animation programming but are owned by different TNMCs (Viacom and Time Warner, respectively) and employ contrasting programming strategi es in the overseas market. It may be reasonable to assume that the difference in in tra-firm factors (e.g., bus iness perspectives or management resources) resulted in the difference in programming. It should be noted that a fe w studies view programming in overseas markets more as a management issue. A series of research by Shrikhande (2001, 2004) discussed competitive advantage, resource allocation, and alliances by global news networks from strategic viewpoints, focusing on their programming st rategies in the Asian market. Another important research is conducted by Pathan ia-Jain (1998, 2001). Pathania-Jain analyzed strategic partnerships between TNMCs and local media firms in India, which significantly contributed to the developmen t of localized television programming in the market. Yet, what seems to be still lacking in their studies is the appli cability of findings to non-news networks in the former and to other na tional markets than India in the latter. 26

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Purpose of the Study The implementation of any given strategy is finally decided by firms. No matter how sensible or feasible a certain strategy appears to be, it would not be put into practice unless the decision maker in firms gives it a green light. It is likely that programming could only be decided after an internal and external analysis has been conducted. This study explores programming products of global television netw orks and what factors are perceived as determinants of programming decisions by execu tives and managers who are in charge of the programming of global televisi on networks, assuming that exte rnal as well as intra-firm factors could influence the decisions. The current study is a descriptive behavior al study to answer questions of how global television networks behave, i.e., the exec ution of a certain type of programming, and why they behave that way rather than a normative behavioral study to answer the question of how they should behave. The goal, therefore, is to describe the practitioners mental models of how certain televi sion programming strategies are employed in the real world. Comprehensively and comparably assessing television programming actually offered by global television networks, the present study would provide a framework for understanding how various factors could affect th e decision on television programming. Compared to many previous studies that discussed the issue of programming, the present study is different in that it takes in to account how external and intra-firm factors would influence the programming strategy of global television networks. The challenge is, as Hollifield (2001) claims, to develop mode ls of organizational/managerial decision and behavior that are grounded in th eory and can be applied to ex plain those of global television networks. In this regard, rese archers on global media manageme nt issues have often sought their theoretical bases in the general strategi c management discipline (e.g., Chan-Olmsted & Chang, 2003; Gershon, 2000; Jung & Chan-Olmsted, 2005). Strategic management usually includes a wide range of issues For instance, Yip (1995) sugges ts that a firm in the global 27

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arena makes strategic choices along five st rategy levers: market participation, product offerings, location of value-added activities, marketing approach, and competitive moves. In this study, the issue of product offe rings, i.e., television programming, by global television networks is discussed in the c ontext of marketing approach, since product constitutes basic components of a marketing plan as part of the so-called 4Ps (product, price, promotion, and place). Marketing certainly pl ays an important role in the process of developing and offering products to meet the needs of target markets. According to Kotler and Armstrong (2003), the marketing concept holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering satisfactions more effectively and efficiently than do compe titors. At the same time, products also have to be developed so as to meet the legal a nd economic requirements of the marketplace. Both practitioners and researchers in the international marketing aren a have been confronted with the issue of product offerings, specifically product standardization or adaptation, for decades. The key to developing a successful interna tional product lies on the applicability or compatibility of the product category to foreign environments and the firms ability to incorporate market differences in the product design (Medina & Duffy, 1998). In fact, cable and satellite executives commonly agree that their future success depends on matching the right content with the right market (Bow man, 2003/2004). It, therefore, appears that theoretical frameworks of international marketing strategy con cerning product could contribute to building an an alytical framework for the programming strategy of global television networks in the present study. In part icular, product characteristics, target market segment, countrys cultural ch aracteristics, countrys enviro nmental characteristics, brand and country of origin, industry competition, a nd firm characteristics are potential factors relevant to the decision of pr ogramming strategy in overseas markets, as seen in the next chapter in detail. 28

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Although a wide range of goods and services ha ve been investigated as subjects for the feasibility of standardization or adaptation in the international mark eting literature, little research has been conducted on media products so far. It is noteworthy he re that all theories derived from the international marketing literat ure might not necessarily be applicable to television programs with certain unique characte ristics, which distinguish them from other products. For instance, as mentioned earlier, te levision programs are by nature public goods and intangible, information goods, which should be distinguished from private goods and tangible, material goods. As public goods, they assume nonrival and nonexcludable consumption. 6 They are also nondepletable goods, which are reused in numerous media outlets (Reca, 2006). Millions of viewers could simultaneously or sequentially enjoy watching the same program. In essence, tele vision programs are watched by an additional viewer with negligible or no a dditional cost, and large economies of scale can be sustained. Additionally, most television products are dual goods, which rely on two different revenue sources: consumers (audiences) and advertisers (Picard, 1989) 7 and hence audiences as well as advertisers could have an impact on media content products. Meanwhile, the quality of a television pr ogram, an experience good, is uncertain and difficult to assess prior to act ual viewing in contrast to a search good (e.g., clothing or furniture) whose quality is verified by cons umers before purchasing. Television programs also have larger social and political impacts th an do other types of products, as they play a significant role in the flow of information in society. Indeed, because of possible social and political influences, the activities of media firms (e.g., owne rship) are often subject to more regulation. Finally, television programs are ve ry sensitive to cultu ral specificity and 6 While people are usually rivals when cons uming products, this is not the case for television programming. One persons consumpti on of a television program does not reduce the quantity available to othe r people, and any person who values the program is not excluded to consume it (Owen & Wildman, 1992). However, the exclusion of consumers is found in cable programming because of the different forms of payment (Reca, 2006). 7 More precisely, the time dedicated by the audience is sold to advertisers. 29

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preference in individual markets. Those dist inctions between television programs and other products should be borne in mind when theori es derived from the international marketing literature discussing other general consumer products are applied to television programs. In particular, this study focuses on actual programming strategies employed by U.S.-originated cable networks in overseas markets. As seen earlier, many U.S. cable networks have become global television networ ks with extensive expansion in the past 15 years. Although the existence of global television networks or iginated in other countries should not be neglected, most of them mainly offer region-specific services and hence are not as extensive as their Amer ican counterparts at present. 8 Specifically, it is interesting to investigate how U.S.-originated cable networ ks develop programming in Asian markets. Not only are Asian markets located geographi cally opposite to the United States on the globe but also are believed to have envir onment and cultural characteristics markedly different from those in the United States. Meanwhile, Asias large and growing population, rising disposable incomes, the emergence of middle class at large, massive industrial restructuring, and infrastructure development needs have created huge markets for all types of goods and services. It is broadly believed th at a failure to partic ipate in the regions economic growth would result in reduced export growth, lost sa les, and decreased profitability (Striz zi & Kindra, 1998). Rising living standards in Asia, leading to more leisure time, also support the values in entertainment. Asia is the fastest growing commercial media market. In fact, the worlds most rapid growth of MVPD services is obser ved in the Asia Pacific region, as the average penetration rate in 14 major countries increased from 5.1% in 1991 to 29.7% in 2000 (Zenith Optimedia, 2002). 9 Pay TV in Asia has gone from non-existent in the late 1980s to a 8 Perhaps, the most remarkable exception is BBC World, which is originated in the United Kingdom and covers 258 million households in more than 200 countries and territories (BBC World, 2005). 9 Countries included are Australia, Peoples Republic of China (China), Hong Kong Special 30

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U.S. $15 billion industry as of 2003 (Bowman, 20 03). Yet, the growth of MVPD services has been so rapid that demand for program ming may still be high and outstripping the supply of content in many Asian markets. In essence, the Asian markets for cable and satellite services are relatively untapped compared with their American and European counterparts and hence are viewed as the engine for further growth for U.S.-originated cable networks as well. It is probably true that Asian countries ha ve a lot more in common among them than with the West. For example, they may share si milar moral values and the concept of family unit. However, seen at the micro level, the regi on is also a complex mosaic of a large variety of cultures and languages. Due to the cultural and language diversity within the region, U.S.-originated cable networks might hesitate to distribute programming on a regional base for Asian countries, unlike for Latin Ameri can countries where pan-regional programming is successful. Moreover, the ma rkets actually vary widely in economic development and infrastructure, ranging from esta blished and highly developed markets such as Japan to emerging and less developed markets such as Vietnam. Some have excellent infrastructures, whereas others have poor infrastructures. In fact, the degree to which cable television industries and advertising mark ets have developed varies greatly across Asian countries (Oba & Chan-Olmsted, 2005). According to Tai ( 1997), Asia is really a series of localized markets with their own characteristics rather than a region. There might be no single Asian model for global television ne tworks in the region stre tching from India to Japan. Additionally, U.S.-originated cable networks ac tivities in Asia are also likely to be restricted by national gate-keeping policies, the forces of increasing local competition, and the dynamics of audience preference (Chadha & Kavoori, 2000). In most Asian markets, the Administration Region of China (Hong Kong), India, Republic of Indonesia, Japan, Republic of Korea (South Korea), Malaysia, New Zealand, Islamic Republic of Pakistan, Republic of the Philippines, Republic of Singapore, Republic of China (Taiwan), and Kingdom of Thailand. Although Hong Kong is consid ered a part of China officially, it is treated as a separate national entity in the study. 31

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U.S. programming, which accounts for at least 75% of all television exports (Hoskins, McFadyen, & Finn, 1997), is hardly aired in pr imetime on the leading broadcast stations with the only exception of feature films (Godard, 1994; Waterman & Rogers, 1994). Taken together, it can be safely said that the Asia region provides the most attractive but toughest markets for U.S.-originated cable networks to approach. The present study will examine how U.S.-o riginated cable networks develop and decide their television programming products in Asian markets, along with the magnitude of various factors affecting the decision, in order to understand a realisti c picture of the media firms global activities. The rest of the dissert ation is organized as follows. The next chapter reviews the international marketing literature to understand the c onceptual framework on product standardization and adapta tion. In particular, special con cerns are given to external and intra-firm determinants, which may influence the decision on product standardization/adaptation in the context of international marketi ng. Chapter 3 discusses how those factors might be applicable to te levision programming products on the basis of the fundamental theories found by media economics, management, and globalization research. Additionally, research questions for th e study are presented in the chapter. Chapter 4 describes the research design, focused on da ta collection and analysis method and the selection of individual networks and markets for this study. Chapter 5 presents the findings of the study. Finally, the study is concluded in Chapter 6, proposing a summary of findings and implications, some limitations of the study and directions and suggestions for future research. 32

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Table 1-1. Shares of revenues by countri es/regions in the top three TNMCs. (In U.S. million dollars; % in Total) Time Warner Year 2002 Year 2003 Year 2004 United States United Kingdom Germany Japan France Canada Others (International Subtotal) 30,516 (82.3) 2,059 919 562 572 345 2,087 6,544 (17.7) 32,123 (81.2) 2,194 1,239 577 773 413 2,244 7,440 (18.8) 33,573 (79.8) 2,507 1,161 685 879 503 2,782 8,516 (20.2) Total 37,060 (100.0) 39,563 (100.0) 42,089 (100.0) Disney Year 2002 Year 2003 Year 2004 United States/Canada Europe Asia Pacific Latin America & Other (International Subtotal) 20,770 (82.0) 2,724 1,325 510 4,559 (18.0) 22,124 (81.8) 3,171 1,331 435 4.937 (18.2) 24,012 (78.1) 4,721 1,547 472 6,740 (21.9) Total 25,329 (100.0) 27,061 (100.0) 30,752 (100.0) Viacom Year 2002 Year 2003 Year 2004 United States United Kingdom Other Europe Canada All Other (International Subtotal) 16,330 (85.1) 647 972 659 578 2,857 (14.9) 17,488 (84.0) 706 1,182 771 681 3,340 (16.0) 18,812 (83.5) 910 1,324 853 627 3,714 (16.5) Total 19,187 (100.0) 20,828 (100.0) 22,526 (100.0) Source: Time Warner Inc. (2005a); Viacom Inc. (2005a); Walt Disney Co. (2005). Table 1-2. Global reach by U.S.-originated cable networks. Number of countries/territories Number of households Year Cartoon Network CNBC CNN International Discovery Channel Disney Channel ESPN Hallmark Channel HBO History Channel MTV Nickelodeon 160 101 200+ 160+ N/A 192 122 50 130+ 140 149 N/A 210 million 170 million+ N/A 116 million N/A 125 million N/A 230 million+ 340 million+ 300 million+ 2005 2005 2005 2004 2004 2005 2005 2004 2005 2005 2005 Source: Discovery Communications Inc. ( 2004); National Cable & Telecommunications Association (2005); Time Warner Inc. ( 2005b); Viacom Inc. (2005b, c); Walt Disney Co. (2004a). 33

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Table 1-3. MTVs country/region-specifi c channels and ownership patterns. Affiliate Ownership pattern Channel Main markets MTV Europe MTV Italia MTV Poland MTV Romania MTV Russia MTV Latin America MTV Brazil MTV Asia MTV Indonesia MTV Japan MTV Korea MTV Philippines MTV Thailand MTV Australia MTV Canada Wholly-owned subsidiary Joint venture Joint venture Licensing agreement Joint venture Wholly-owned subsidiary Joint venture Wholly-owned subsidiary Joint venture Joint venture Joint venture Joint venture Joint venture Licensing agreement Licensing agreement MTV UK/Ireland MTV Netherlands MTV Spain MTV France MTV Central MTV Portugal MTV Nordic MTV European MTV Italia MTV Poland MTV Romania MTV Russia MTV North MTV Central MTV South MTV Brazil MTV Taiwan MTV SAM MTV India MTV China MTV Indonesia MTV Japan MTV Korea MTV Philippines MTV Thailand MTV Australia MTV Canada U.K., Ireland Netherlands Spain France, Switzerland Germany, Austria Portugal Nordic Countries Hungary, Czech Italy Poland Romania Russia, Belarus Mexico Chile, Venezuela Argentina Brazil Taiwan Singapore, Malaysia India, Pakistan China, Hong Kong Indonesia Japan South Korea Philippines Thailand Australia Canada Source: Viacom Inc. (2004). 34

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CHAPTER 2 LITERATURE REVIEW Theoretical Backgrounds for Product Standardization/Adaptation The theoretical frameworks underlying the foundation for international marketing of products are presented in this chapter. The ma in purpose of any business is to create and retain profitable customers. It does so by of fering goods and services for which there is a demand or potential demand. A market consists of all the potential consumers sharing particular needs or wants and being willing and able to engage in exchange to satisfy those needs or wants (Kotler, 1994). 10 According to Drucker (1977), in order to create a customer, the business enterprise has two basic functi ons: marketing and innovation. Marketing is defined as a commercial process, involving developing, promoting, distributing, and selling products, undertaken by a firm in an attemp t to satisfy the consumers while attaining organizational objectives as to rela te profitability to the market. The basic nature of marketing might not change when it extends beyond national boundaries, but international marketing, unlik e domestic marketing, requires operating simultaneously in more than one environment. Although marketing decisions must be made no matter where business is conducted, the envi ronment within which these decisions are made might be unique to each country. Markets served often differ widely because of the great variations in the uncontrollable environmental forces, such as culture, competition, legal requirements, government controls, and cl imate, and the differential of environment distinguishes international marketing from domestic marketing (Cateora & Graham, 2001). International marketing, therefore, requires operating across forei gn country markets in which uncontrollable elements ma y significantly differ from one country to another, even though marketing principles and concepts are universally applicable. It is, nonetheless, noteworthy that all inte rnational marketers should not only focus on differences to adjust 10 In economics, the market typically refers to a collection of se llers and buyers who transact over a particular product. 35

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marketing programs to make them accepted by the consumers in various markets but also seek out similarities in order to identify opportunities to implement the same marketing strategy. A substantial body of international marketi ng literature, abound in studies focusing on numerous differences and similarities across national boundaries and firm characteristics, may ground our understanding of the issue as to what products are developed and offered by firms in overseas markets and the rationale und erlying the decision. In particular, in the sense that television programming can be defined as a product offered in a market to satisfy the consumers wants and needs, it is the prem ise of the present study that the international marketing theory is fundamentally applicable to television programming as well as to other types of consumer products, although not entire ly, due to unique char acteristics pertaining to television programming products, di scussed in the previous chapter. For the marketing mix consisting of a set of strategic decisions made in the areas of product, promotion, pricing, and distribution, ro ughly two contrasting approaches would be selectable when a firm makes inroads into the international marketplace. One is standardization, which means in a literal sense that the same products are sold in the same way on a global scale as if the entire world were a single entity rather than a collection of national markets (Levitt, 1983). Full standardization of marketing strategy, aside from the feasibility, refers to the worldwide offering of identical products lines and features at identical prices through identi cal distribution services supported by identical promotion programs (Baalbali & Malhotra, 1993; Buzzel l, 1968). In other words, marketing standardization is the standardization of the pattern of resource a llocation among marketing mix variables across national markets (Szymanski, Bharadwaj, & Varadarajan, 1993). Another is adaptation or customization, with a distinct strategy being tailored to local customs and market conditions, pointing to culturally, economically, and politically distinctive differences among nations (Hill & Still, 1984; Quelch & Hoff, 1986; Wind, 36

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1986). The term adaptation is often used in conjunction with or in lieu of the term customization. 11 The decision to whether standardiz ing or adapting marketing strategy has actually been a vexing question with whic h academicians as well as practitioners have wrestled since the 1960s, given the fact that the choice of either of the two approaches has an impact on the competitiveness of firms engaged in international markets (Buzzell, 1968; Jain, 1989). Specifically, the main issue in international marketing centers on the different effectiveness of product sta ndardization versus adaptation. In fact, aside from a large body of research in the advertising arena, wh ich is organized comprehensively by various scholars (e.g., Agrawal, 1995; Onkvisit & Shaw, 1987; Papavassiliou & Stathakopoulous, 1997), product has drawn more a ttention in the standardizatio n/adaptation literature than other elements of the marketing mix (Baalba ki & Malhotra, 1993; Shoham, 1995; Terpstra & Sarathy, 2000; Waheeduzzaman & Dube, 2004) Marketing is a major functional area when firms attempt to translate market information effectively and efficiently into product concepts and position the product offerings in the target market (Song, Montoya-Weiss, & Schmidt, 1997; Xie, Song, & Stringfellow, 2003). The product program of marketing mix is fundamental in strategy development on the grounds that product possesses inherent attributes that consumers value and, if the produc t fails to satisfy the needs of consumers, no amount of promotion, price cutting, or distribu tion would persuade them to purchase (Ball et al., 2002; Medina & Duffy, 1998). When a firm selects a business-level stra tegy, competitive advantage is viewed as a position of superior performance that th e firm attains through offering either undifferentiated products at low prices or di fferentiated products for which customers are 11 Medina and Duffy (1998), how ever, point out a difference. Adaptation relates to changes attributed to mandatory requirements, whereas changes in customization are optional to the firm. In this dissertation, the term adaptation is mainly used, since it is generally perceived as the opposite of standardization in the international marketing literature. 37

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willing to pay a premium price (Porter, 1980, 1985). This perspective is likely to apply to the choice of product standardization or adap tation, as the challenge for international marketers is, roughly speaking, the trade-of f between scale economies resulting from standardization and the exogenous prerequisites of local adaptation. It makes business sense that a firm would prefer pr oduct standardization if possibl e, due to the obvious scale economies and operational efficiencies gained by sharing of resources and coordination and cooperation across national boundaries. The standardization/adaptation issue in international marketing came to the forefront with Levitts controversial article (1983). Levi tt claimed that a firm should operate and sell the same things in the same way everywhere emphasizing the scale effects that transcend national boundaries and provide co st advantages to firms. In terms of cost reduction and operational efficiency, it is likely that firms, which sell standardized products everywhere in the world, would have advantage over the competitors, which treat individual national markets separately and sell different products for each market. According to Usunier (1993), standardization is undertaken to accommodate cost pressure at the expense of respecting the distinct characteristics of each market. Furthermore, a firm could project a un iform image of the brand by developing a product worldwide, seeking to establish its international image. Sorenson and Wiechmann (1975) discovered that brands were usually highly standardized, both because of trademark considerations and because of th e apparent desire of most ma nagers to have recognizable worldwide brand franchises, which could be an intangible resource. If a tourist from a country, for example, finds his or her accustomed brands at a store abroad, he or she is likely to buy them during his or her vis it (Alashban, Hayes, Zinkhan, & Balazs, 2002; Buzzell, 1968; de Chernatony, Halliburt on, & Bernath, 1995). Buzzell (1986) further assumes that the tourists re-exposure to the pr oducts may strengthen his or her loyalty back home and protect him or her from the temptation to change his or her allegiance to a 38

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competitor. Moreover, Quelch and Hoff (1986) claimed that high quality products and good ideas tend to have a universal a ppeal and, therefore, should be so ld or used as standardized products as widely as possible. It is inferred from these pe rspectives that firms would actively employ product standardiz ation as the global strategy in the case where it is feasible. Yet, full standardization appears nave and oversimplis tic, since it ignores the inherent complexity of international operations and the formulation of an effective strategy to penetrate foreign markets, which are culturally, economically, or institutionally diverse (Douglas & Wind, 1987). Even if a product is ava ilable everywhere, it does not imply that the product achieves the same level of acceptanc e in every market. In fact, even products that look similar worldwide actuall y have at least subtle countr y-by-country variations that can make a difference in their success (Kotler, 1986). It is noteworthy that even Levitt (1983), a powerful proponent of global sta ndardization, acknowledged that a firm, though reluctantly, might sometimes need to consid er product adaptation for the requirements of individual markets. In the effort to satisfy local consumer needs and wants, product modification might need to be implemented along with separate product lines. Nonetheless, full adaptation, another extrem e approach, may not be desirable, since it eliminates all the possibl e synergies among various country operations (Wind, 1986). Bartlett and Ghoshal (1991, 2000) contend the necessity to converge globalizing and localizing forces together so that a firm can achieve global integration efficiently and national flexibility simultaneously. The c onvergence is oftentimes referred to as glocalization, in which certain elements are st andardized, and other elements are localized. In essence, the best strategy can be think globally, act locally (Kotler, 1986; Wind, 1986). It is, however, not an easy ta sk to balance the gains of pr oduct standardization strategy against the needs of heterogeneous national markets (Buzzell, 1968). 39

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Furthermore, still controversial is the relationship between product standardization and financial performance. Advantages of produc t standardization are seen in cost savings among others, as discussed previously. Yet, Walters (1986) and Whitelock and Pimblett (1997) assume that the critical issue, whic h should be considered by marketers, is not whether standardization can lead to cost savings but whether it can lead to improvements in profitability or other long-ter m outcomes. Obviously, profitability depends not only on costs but also on sales. In this rega rd, Buzzell (1968) speculated that even if cost savings accruing from product standardization were attained at the expense of lower sales in some overseas markets, the net effect on profits might be pos itive. To the contrary, some scholars assumed that local adaptation would result in pr ofit maximization (e.g., Douglas & Wind, 1987; Kotler, 1986; Quelch & Hoff, 1986; Rau & Preble, 1987). According to them, product adaptation, whether mandatory or discretiona ry, can strengthen the products competitive position in the marketplace, lead to higher sales, and hence is worth the additional costs. The issue is how a firm can balance cost saving from standardizing products against the potential loss of sales that may result from not adapting them to local tastes or from failing to fully exploit significant differences among markets. In essence, the ultimate relevance of standardization/adaptation shoul d be determined based on its economic payoff (Jain, 1989; Samiee & Roth, 1992). If a standardi zation strategy does not provide value to the market, it is less likely to increase sales, and if the standardizati on strategy is unable to increase sales or to achieve its desirabl e response, the invest ment in the strategy inefficiently employs a firms valuable resour ces (Ryans, Griffith, & White, 2003). Yet, only a few marketing studies have actually explor ed the effect of pr oduct standardization on economic performance. Douglas and Craig ( 1992) attributed the lack of convergence on global standardization to the la ck of empirical support for the fundamental propositions that global marketing strategy affects a firms financial performance. 40

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Even among a few empirical studies, the re lation between standardization/adaptation and financial performance is inconsistent Samiee and Roth (1992) investigated the relationship between product standardization and financial performance, which are indicated by return on inve stment, return on assets, and sales growth, and found no significant results. Cavusgil and Zou (1994), Sh oham (1996), and Szymanski et al. (1993) documented the performance enhanced substa ntially through product adaptation strategy. On the contrary, according to ODonnell a nd Jeongs empirical study (2000), global standardization leads to superior performa nce in the context of high-tech, industrial products. Likewise, Waheeduzzaman and Dube (2002) found that standardization positively contributed to firm performance both in terms of return on sales and sales growth. Determinants of the Degree of Pr oduct Standardization/Adaptation Provided neither full standardization nor full adaptation of products might be feasible or desirable, many firms presumably have to choose their product polic ies lying somewhere on a continuum from full standardization to full adaptation in their overseas operations. Significantly, many scholars (e .g., Baalbaki & Malhotra, 1995; Boddewyn, Soehl, & Picard, 1986; Buzzell, 1968; Cavusgil, Zou, & Naidu, 1993; Jain, 1989; Quelch & Hoff, 1986; Ryans et al., 2003; Samiee & Roth, 1992; Sorenson & Wiechmann, 1975; Walters, 1986) perceive the notion of standard ization and adaptation as two ends of the same continuum, claiming that the decision is not a dichotomous, eith er/or one but a matter of degree. The higher the degr ee of standardization, the lowe r the degree of adaptation, and, as Loyka and Powers (2003) suggest, standardization and adaptation are not always mutually exclusive. Furthermore, scholars (e.g., Agrawal, 1995; Boddewyn & Hansen, 1977; Cavusgil et al., 1993; Lemak & Arunthanes, 1997; Wang, 1996) advocate a contingency perspective in which the degree of standardiza tion or adaptation is contingent upon a variety of factors and the ability of a firm to choose the strategy th at matches the factors. Wang (1996) notes that 41

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the contingency theory is widely accepted in the research area of strategic management, assuming that there is no universal set of strategic choices that is optimal for all business of firms regardless of their respective infrastructures, positions, and environmental context. The framework premises that no strategy is the best across situations but each strategy might be the best in the particular situati on, supporting Walters suggestion (1986) that the possibility for and attractiven ess of standardization or ad aptation strategy is very situation-specific. Firms, therefore, need to c onsider various factors at the country, industry, and company level when making any decision on product standardizati on or adaptation in foreign markets (Waheeduzzaman & Dube, 2004). The degree of product standard ization/adaptation can be affected by a variety of external and intra-firm factors (Baalbaki & Malhotra, 1993; Cavusgil & Zou, 1994; Jain, 1989; Johnson & Aruthanes, 1995; Waheeduzzaman & Dube, 2004; Walters, 1986). Table 2-1 summarizes a list of representative academ ic studies that discussed the product-related factors. In spite of the subtle differences among the studies cited in terms of definition, measurement, or context of research (e .g., the export marketing research or the standardization/adaptation rese arch), the factors can be r oughly grouped into the followings: product characteristics, target ma rket segment, countrys cultur al characteristics, countrys environmental characteristics, industry compe tition, brand and country of origin, and firm characteristics. Whenever a manager undertakes the responsibility of ma rketing a product in the international market, he or she should be aw are of these factors a nd their implications on marketing strategy (Baalbaki & Malhotra, 1995). Firms may have to relinquish full standardization and alternatively pursue produc t adaptation to some degree if any factors militate against standardization. Given the degree of standardization versus adaptation being a function of the factors above, wh at approach is more realistic and feasible for a firm in the global marketplace needs to be discussed in light of the influe nce of each factor. 42

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Product Characteristics It is possible that the feasibility of produc t standardization actually varies with the nature of the product, in part icular its cultural specificity. Many studies (e.g., Ballbaki & Malhotra, 1993; Boddewyn et al., 1986; Cavusgil et al., 1993; Hill & Still, 1984; Jain, 1989; Quelch & Hoff, 1986; Samiee & Roth, 1992) suggest that standardization would be more feasible for industrial goods, which are less culturally sensitive, than for consumer goods, which are oftentimes culture-bound. This is partly because industrialization has been accompanied by trends to disguise or screen out cultural odors, leading to a relatively homogeneous demand for industrial goods acros s markets, and partly because business buyers are more rational and objective in th eir seeking of the be st value for money (Boddewyn et al., 1986; Cavusgil et al., 1993; Samiee & Roth, 1992). Johnson and Arunthanes (1995) actually found that levels of product adaptation were significantly higher for consumer goods than for industrial goods. Furthermore, among consumer goods, durable goods, such as automobiles or high-tech products, which symbolize the esse nce of modernism a nd meet a relatively universal need, are considered more appropriate for standardization than nondurable goods, such as food products, which are more appeal ing to attributes uni que to local cultures (Baalbaki & Malhotra, 1993; Boddewyn et al., 1986; Jain, 1989). In Boddewyn and Hansens study (1977), it was discovered that important obstacles to standardization of marketing strategies were differences in consumer tastes and habits for nondurable goods. Baalbaki and Malhotra (1995) found that nondurable goods were affected by a wide array of market-specific forces influencing the marketing environment. Overall, when a culture-specific product is introduced to a foreign market, the cultural base on which the pr oduct was originally develope d may not match the cultural base in the foreign market, and therefore the product needs to be adapted to the cultural idiosyncrasies of the foreign market (C avusgil & Zou, 1994; Douglas & Wind, 1987). As 43

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Cavusgil et al. (1993) and Cavusgil and Z ou (1994) discovered, product adaptation is influenced significantly and positively by cultur al specificity of produc t. Products that are highly culture-bound are more difficult to ma rket globally and do not enjoy high-scale economies and efficiencies. Meanwhile, Hus zagh, Fox, and Day (1985) had a somewhat different perspective, claiming that products which were perceived as having no close substitutes and as being essentia l by consumers, irrespective of their cultural specificity, can be potential candidates for standardization. A product that meets a univ ersal need requires little adaptation across markets, and sta ndardization is facilitated (Levitt, 1988). Target Market Segment Marketers should identify and select a targ et market (a group of consumers), which shares common characteristics, and develop a product that will satisfy it. As a ground for the feasibility of globally standardized pr oducts, Levitt (1983) placed an emphasis on the convergence of consumer markets worldwide or the emergence of global consumer markets for standardized products, which was triggere d by the homogenization of the worlds needs and desires for world-standard modernity in a ll things at aggressively low prices. As a consequence, a firm could view the world as a distinctive product mark et rather than as a collection of diverse markets. Many studies (e.g., Agrawal, 1995; Boddewyn et al., 1986; Buzzell, 1968; de Chernatony et al., 1995; Douglas & Wind, 1987; Eger, 1987; Levitt, 1983; Rau & Preble, 1987; Simon-Miller, 1986; Whitelock & Pimb lett, 1997) identify the development of communication technologies, coup led with expanded overseas trav el, as a key factor for the homogenization of the world population. This is largely because what people see, hear, and access via media content, flowing primarily from the United States, could positively shape their needs and attitudes toward the consumption of products increasing expectation about the good life and establishing new models of consumption, which may be alluringly depicted in the content (Alden, Steenkamp, & Batra, 1999; Jain, 1989; Roth, 1995; Walker, 44

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1996). 12 Even highly isolated tribal cultures may find it increasingly difficult to insulate themselves from Western materialism (Demers, 2001). In essence, the media content could promote consumerism by emphasizing what is considered to be a modern lifestyle. Those assumptions are based on the premise that standardized media products are offered worldwide, appealing to human funda mental needs, desires, and motivations, bringing on consumer convergence, and also facilitating the permeation of other standardized consumer products. Walker (1996) concludes that worldwide access to television creates a global cultur e of consumption, what he refers to as a global mall. The emergence of homogeneous consumer markets is also likely to further provide media firms with an opportunity to presen t standardized media products. In short, standardized media content could play a dual role in global cons umer markets: leading to global consumption homogenization and consumer culture and th en being demanded by global consumers. Levitt (1983) advocated the possibility to identify target consumer segments across national boundaries that were si milar and represented a homogeneous market and to search sales opportunities in th e segments to achieve the economies of scales. It is possible that countries, in particular developed ones, are layered with a large number of economic and social segments, which may cause an incr easing diversity of social norms, personal lifestyles, and purchasing beha viors within a country. Thus, as Wind and Douglas (1972) suggested, collective national characteristic s alone might not be enough to provide an adequate base for segmentation. Selling products to urban and rural consumers within the 12 This viewpoint can be associated with m odernization theory, advocated actively by communications scholars in the 1960s. They cl aimed that international mass communication could be used to spread the message of modernity and transfer the economic and politic models of the West to the newly independent countries of the East or South (Thussu, 2000). According to Lerner (1958) and Schramm (1964) early exponents of the theory, exposure to international media was expected to make societies less bound by tradition and make people aspire to a new and modern way of life. Although it is possible that the media presentation plays a role as guidelines for the affluent nation, it is unpr oven if this leads to the disintegration of traditional sectors, as modernizers asserted. 45

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same borders might be more difficult than doing so in cities across country borders. In fact, Hill and Still (1984) found that less product adap tation was required in urban areas than in semi-urban and rural areas, though in less developed countries. Baalbaki and Malhotra (1993) articulate that the standa rdization versus adaptation debate can be resolved only by determining whether or not intermarket consumer segments exist. Samiee and Roth (1992) define the concept of intermarket segments as the presence of well-defined and similar clusters across national boundaries that have the same characteristics and are identified by similar crit eria. It is assumed that a market segment might be more similar to the same segment in other countries with respect to economic status, purchasing behavior, tastes, preferences, or lifestyle than it is to the rest of the segments on the same country. Such segments include the information seekers (Thorelli, Becker, & Engledow, 1975), the urban dwellers (Hill & Still, 1984), th e global elite lifestyle segment (Hassan & Katsanis, 1991), the global teenage segment (Hassan & Katsanis, 1991), the working women (Douglas & Urban, 1977), the pro trade consumer segment (Crawford, Garland, & Ganesh, 1988), the pro energy conservation segment (Verhage Dahringer, & Cundiff, 1989), to name a few. For instance, products with a modern lifestyle image would penetrate faster in the urban consumer segment than in rural residents across countries (Hill & Still, 1984). Teenage products can be targeted globally in response to homogeneous teenage consumer desire for novel, trendy designs and image but not to other generations (Hassan & Katsanis, 1991). In essence, the success of product standardization may in part premise the presence of intermarket segments across countries at wh ich a firm can target its products and in particular, as Douglas and Wind (1987) and Sh eth (1986) suggest, the size and economic 46

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viability of the segments and the strength of the segments preference for the global brand and product. 13 Countrys Cultural Characteristics In contrast to the intermarket segments in isolation of country-specific contexts, which ignore national differences (Levitt, 1983) country characteristic s are in large part attributed to differences inhere nt in each country. In other wo rds, they are characteristics, which might be shared commonly by all customers of a given country and could eventually affect general preference and demand in the co untry. Actually, countri es are often used as the level of segmentation in the internationa l marketing (van den Berg-Weitzel & van de Laar, 2001). Given the possibility to group th e world market into some smaller but relatively homogeneous country-clusters, the ability of firms to pursue global standardization may hinge on the degree to which markets of countries have similar characteristics (Boddewyn & Hansen, 1977; Buzzell, 1968; Hill & Still, 1984; Jain, 1989; Wang, 1996). The smaller market heterogeneity among countries, the more attractive and feasible product standardization can be. Specifically, scholars (e.g., Boddewyn & Ha nsen, 1977; Hill & Still, 1984; Jain, 1989; Walters, 1986; Wind & Douglas, 1972) suggest that differences in culture can affect acceptance of marketing standardization. As me ntioned in the association with product characteristics, differences between nationa l cultures possibly influence product adaptation decisions, in particular for consumer products, since culture, encompa ssing all the activities of social heritages (Cateora & Graham, 2001), is the basis on which people think and behave in a similar or different way. Accord ing to Harris and Moran (2000), culture gives people a sense of who they are, of belonging, of how they should behave, and of what they 13 Wang (1996), however, argues that the mere ex istence of global consumer segments does not always indicate the identical behavior pattern across the c ountries. Although their identifiable characteristics ar e distinctive enough to transcend national b oundaries, they also show some different and even opposite att itudinal and behavioral patterns due to intercultural variances (Thorelli et al., 1975). 47

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should be doing, providing a learned, shared, an d interrelated set of symbols, codes, and values that direct and justify human behavi or. Culture would eventually have important impacts on consumers needs, motivations, th e attributes they value, preferences, the principals whose opinions the consumers accept, product choices, and purchasing and consumption patterns (Jain, 1989; Wind & Dougl as, 1972). Cultural bounda ries, therefore, can act as barriers to one global market and impede the flow of ideas, communication, and product from one culture to another (Craig et al., 2005; Kale, 1995). Cross-cultural marketing is defined as the strategic proce ss of marketing among consumers whose culture differs from that of th e marketers own culture at least in one of the fundamental cultural aspect s, such as language, religi on, social norms and values, education, aesthetics, and the living style. In order to ma tch the product with consumer preferences, purchasing behavior and product-use patt erns in a potential market, marketers must understand and take into account thorough ly the heterogeneous characteristics and cultural differences in countries (Whitelock & Pimblett, 1997; Wind, 1986). To put it in the other way around, cultural similarity and compatib ility between countries can be associated with the high feasibility of product standardization. Wind and Douglas (1972) also argued that different cultures were characterized by different degrees of receptivity toward cha nge, influencing the w illingness to accept new products and ideas. In fact, a new product might enjoy rapid acceptance in one country but not in another country. Then, it is important to consider how consumers in different cultures may respond to new product introductions. The elements of culture that may inhibit such change include belief systems, stemming mainly from traditional sectors, such as religion or superstition, and affecting an individuals outlook upon life (Whitelock & Pimblett, 1997). Any idea perceived as new by a group of people is innovation, and the process by which a product innovation is accepted among the members of a social system over time is product diffusion (Rogers, 1983). Diffusion is facilitated not only by such product-related 48

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characteristics as relative advantage, compatibility, complexity, trialability, and observability, but also by mark et-related characteristics. Given the countrys values that have long been identified as a factor that in fluences consumer behavior, it is reasonable to speculate that these values in fluence the diffusion of innovations in a society as a whole (Dwyer, Mesak, & Hsu, 2005). The more consistent that product perceptions would be with current cultural values, the less resistance ther e would be and the more rapid diffusion or acceptance could be. Consumers in some countries may be on average higher in innovativeness than consumers in other countries. Wherever consumers are open to accepting new products due to their social and cultural traits, diffusion becomes faster. Then, an important first step in adapting a product to a foreign market is to determine the degree of newness as perceived by the target market. In order to explor e how innovation spreads throughout national cultures and to identify cultural characteristic s that affect countries receptiveness to the innovation, Dwyer et al. (2005) use Hofstedes multidimensional cultural index scores (2001) as an insightful means. Although Hofstedes research was conducted in organizational settings, an index of scores for each dimension that he identifies has been associated with consumer behavior in many c ountries. Dwyer et al. ( 2005) assume that the diffusion rate of product innovations would be higher in low-uncertainty-avoidance, 14 collectivistic, 15 masculine, 16 high-power-distance, 17 and short-term-orientated cultures. 18 14 Uncertainty avoidance is the extent to which the members of a culture feel threatened by uncertain or unknown situations Uncertain avoidance describes the cultural pattern of seeking stability, predictabil ity, and low stress rather than change and new experiences (Hofstede, 2001). Strong uncertainty avoidan ce, therefore, might be associated with resistance to innovation whose functional attributes can be considered as unknown entities (Dwyer et al., 2005). 15 Cultures that emphasize collectivism exhibit patterns of group or collective thinking and acting while individualism is an aspect of cultu re that pertains to pe oples tendency to value personal and individual time, freedom, and e xperiences (Hofstede, 2001). The nature of collectivist cultures where the social network serves as the main source of information could provide more opportuni ties for communication among their members regarding new 49

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Countrys Environmental Characteristics Some scholars (e.g., Hill & Still, 1984; Jain, 1989; Wind & Douglas, 1972) suggest that differences in economic development levels, as well as those in cultures, can affect acceptance of marketing. In addition to the ec onomic difference between countries, Jain (1989) identifies several types of environmenta l differences as important concerns affecting the direction for standardizat ion or adaptation decision of firms: physical, legal, and infrastructure and supporting environments. St andardization appears feasible where those environments are most alike (Boddewyn & Hansen, 1977; Jain, 1989; Keegan, 1969; Sorenson & Wiechmann, 1975). Economic condition It is likely that the demand for products can vary according to the level of economic development indicated by gross national product (GNP) per capita, disposable income, purchasing power, and the like (Jain, 1989; Loyka & Powers, 2003; Wind & Douglas, 1972). Product standardization may be more feasible among countries that are economically alike. product introductions, increasing th e efficiency of the communicat ion process (Dwyer et al., 2005). 16 The dominant values of a masculine societ y are achievement and su ccess, while those of a feminine society are caring for others a nd quality of life (Hofstede, 2001). Masculine societies tend to have high status positions reserved for men, while feminine societies have more equal distribution of gender roles. The materialistic, possession -oriented nature of masculine cultures suggests that the acquisition of goods and, in particular, new products is valued in these societies (Dwyer et al., 2005). 17 Power distance refers to the extent to wh ich less powerful members of a society accept and expect that power is di stributed unequally (Hofstede, 2001). In high power distance cultures, people have their right places in a social hierarchy, accept authority naturally, and emphasize the importance of prestige and wealth in vertical relationships between social and economic classes. In low power distance cultures, people stress equality in rights and opportunities. The acquisition of new product innovations by the powerful (and typically more wealthy) members in a high-power-distance society influences the less powerful members purchase decisions (Dwyer et al., 2005). 18 Long-term orientation is rela ted to the extent to which a society exhibits a pragmatic future oriented perspective Whereas cultures with short-te rm orientations expect quick results, those with long-ter m orientations prefer a stea dy progression toward long-term goals (Hofstede, 2001). Short-term-oriented culture s show sensitivity to social trends in consumption in contrast to long-term-oriente d cultures emphasizing savings and the frugal use of resources (Dwyer et al., 2005). 50

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Poor economics in less developed countries ma y make physically impossible for a majority to buy products that U.S. consumers consider essential (Jain, 1989; Whitelock & Pimblett, 1997). Ohmae (1985) pointed out that consumers in the Triad countries (the United States, Western Europe, and Japan), which constituted the major world markets accounting for the bulk of product, possibly became fairly homoge neous and fitted for globalization, thus making opportunities for product st andardization more likely. It is, however, still uncerta in whether or not people in economically similar countries are necessarily similar in product choice and consumption behavior. In spite of the convergence of economic systems, there is no evidence of the c onvergence of peoples value systems (de Mooij, 2000), in accordance with Barkers assumption (1993) that there perhaps exist divergen t attitudes toward consumption even among European countries. Huszagh et al. (1985) indeed found in an empirical study that even within a group of countries clustered on the basis of economic and social welfare variables, significant difference existed in product acceptance. Meanwhile, economic ability could be the market-related characteristics influencing th e speed and diffusion patterns of products across countries (Cateora & Graham, 2001). A new product may fail if the consumers cannot afford it. In contrast, high standard of living may be associated with faster adaptation rates (Rogers, 1983). Physical/geographic condition Buzzell (1968) paid attention to differen ces among countries arising from such physical conditions as climate, topography, a nd geography. Those physical conditions are, by nature, not subject to change, and firm s have no control over them. Therefore, differences in climate may require some additio nal features for cars or air conditioners, and those in the size and configur ation of homes may influence product design for appliances and home furnishing. For instance to illustrate the latter, as homes in many foreign countries 51

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are typically small by American standards, so me U.S. appliances or home furnishing could be scaled to sizes appropriate to different environments. Furthermore, geographic proximity is a drivi ng factor of the inte gration of markets, as the economies within regional trading bloc ks become more closely intertwined. Regional expansion of distribution networks at both the wholesale and reta il levels and service organizations all serve to reinforce market integration, which can facilitate marketing standardization (Craig & Douglas, 2000). Besi des, cultures of geogr aphically proximate countries are generally considered similar. Ru gman and Verbeke (2004) claim that most of so-called globalization in fact re flects regionalization, as the va st majority of international manufacturing and service activity is organized regionally rather than globally, showing very few of large multinational enterprises that dominate international business have a genuinely global presence. Legal environment Products also have to be modified so as to conform to the legal requirements of overseas markets. According to Leonidou (1996) government rules and regulations are one of the most frequent and influential reasons reported for adapting product strategy abroad. Cavusgil et al. (1993) discovere d that product adaptation was influenced significantly but negatively by similarity of legal regulations. In fact, a wide range of mandatory changes might be often required, includ ing modification in package si zes, aesthetics, labeling, and brand name, in addition to product performan ce and standard (Baalba ki & Malhotra, 1995; Hill & Still, 1984; Johnson & Arunthanes, 1995). Local content requirements may specify that products contain a certai n proportion of components manufactured locally (Douglas & Wind, 1987). Moreover, tariff barriers, such as import taxes, might remain as obstacles to product standardization, since they possibly affect production costs, make imported goods more expensive than their lo cal counterparts, and thus favor local production (Ekeledo & Sivakumar, 1998; Wind & Douglas, 1972). Meanwhile, as Jain (1989) argues, the 52

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perspectives of the political environment in a country may result in intervention in the business affairs of foreign firms as well, whic h may invalidate product standardization even in carefully chosen overseas markets. In fact state officials in ma ny developing countries may still be the crucial gatekeepers in obtaining a contract (Wind & Douglas, 1972). Infrastructure/supporting sector The marketing infrastructure can be regarded as a supporting sector necessary for the primary activities (e.g., a products physical creation or distribution) to take place (Hitt et al., 2003). Support sectors ar e not directly connected to the production function but may increase the efficiency or effectiveness of the process. Differences in marketing infrastructures between home and host count ries, including retailers, wholesalers, transportation, and mass media, possibly have some implications for standardizing marketing mix (Johnson & Arunthanes, 1995). Mo re sophisticated industries are more dependent on advanced infrastructures for success, and similar and favorable infrastructures would make standardization easie r for firms. On the other han d, in the absence of certain marketing infrastructures, product may be adapte d to local market conditions in order to sell and perform within the infrastructure constraint s. Market differences in media availability can constrain opportunities for international cam paign standardization. An advertiser must accept the shortage of advertising space and ti me in some markets as an environment constraint in doing business intern ationally. It is also likely th at the arrival of the Internet and digital media further deepens the gap betwee n countries with different levels of media and telecommunications infrastructures (Chan-Olmsted & Oba, 2004). Besides, not only domestic infrastructure in each market but also global marketing infrastructure, which shrinks space between mark ets, needs to be considered. As Douglas and Wind (1987) pointed out, improvements in logi stic systems have increased capacity to manage operations on a global s cale, facilitating global stan dardization strategies. The development of global telecommunication networ ks, such as satellite television and the 53

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Internet, enables firms to roll out campaigns fo r standardized products on a global basis. It is also likely that global marketing requires global television networks (Eger, 1987). This point is discussed in detail in the next chapter. Industry Competition As the degree of competition in a particular industry possibly influences response by consumers, only the products that satisfy consumer requirements better can eventually survive competition (Cavusgil et al., 1993; Porter, 1985; Wind & Douglas, 1972). According to Sheth (1986), because corporate competition has become global does not automatically mean that products should be global, too. Rather, the presence of intense competition would necessitate adaptation for a firm to gain an advantage over rivals by providing a product that ultimately matches loca l conditions more precisely and thus to broaden the local market base. Hence, intens e competition in the industry may compel the firm to engage in extensive product adaptation, whereas, to the contrary, product adaptation may be unnecessary in less competitive market s (Baalbaki & Malhotra, 1993; Cavusgil et al., 1993; Jain, 1989). In fact, Boddewyn et al. (1986) found that the le vel of intensity of industry competition was the most important variable affecting the degree of standardized marketing strategy across overseas markets. Like wise, Cavusgil et al. (1993) discovered that the most important consideration in speci fic adaptation decision (e.g., packaging and labeling) was the intensity of competition in the overseas markets. Meanwhile, the choice of strategy to match competition will also be affected by whether the firm competes with local rivals or other global rivals. Global firms, on one hand, may face disadvantages in overseas markets when local firms are well suited to adapt to the needs of local market (Alashban et al., 2002). It is possible that different competitors in different markets may require substantial modi fication of the firms competitive positioning in order to compete effectively (Craig & Douglas, 2000). On the other hand, competing against the same rivals with similar market sh are in different countries may lead to greater 54

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standardization rather than competing against purely local firms (Baalbaki & Malhotra, 1993; Sorenson & Wiechmann, 1975). A firm also needs to take into acco unt the strengths and weaknesses of its competitive position in each market. A firm might be able to succeed by leveraging its domestic positioning in international mark ets (Craig & Douglas, 2000). Jain (1989) and Porter (1986) suggest that if the competitive position of a firm does not vary among markets, a global standardization strate gy may be worthwhile. For exam ple, given a firm with a leadership position in both the United States and overseas markets, the firm can successfully standardize its marketing strategy in all those markets. Brand and Country of Origin Consumers in varying countries may view the same product differently. Differential attitudes toward the same product among them may in part be caused by differences in perceptions, that is, different levels of awareness, knowledge, and familiarity (Parameswaran & Yaprak, 1987). Unfamiliar products are likely to present a challenge and meet with resistance among consumers in fore ign markets, since consumers may not be willing to take the risk of purchasing products from firms they know less about. Presumably, a familiar product can engender more favorable attitudes and greater acceptance, allowing the firm greater freedom in standardizi ng product, while a lesser known product may require adaptation in order to enhance consumer reception (Buzzell, 1968; Cavusgil et al., 1993). If this is the case, branding can help firms overcome or minimize the barrier, offering identity and recognition and eventually al lowing more standardization (Whitelock & Pimblett, 1997). To the contrary, lack of brand awareness possibly requires a firm to adopt a very different strategy in a country. A brand is defined by the American Marketing Association (2006) as a name, term, sign, symbol, or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of 55

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competition. Branding is aimed at creating no t only high familiarity among consumers but also positive image for a product among them by adding certain rationa l, emotional, and intangible attributes to the product. Actual ly, brand names, which are defined by Aaker (1991) as one of the most important assets of a firm, are what consumers rely more heavily on than price or physical app earance in judging product quality (Dawar and Parker, 1994). As brand images go beyond mere awareness and deal with the thoughts and meanings of the brand to a consumer, they can be regarded as the collective set of be liefs and associations held by consumers for particular brands. Three types of brand images are functional, social, and sensory images. Roth (1995) suggests that those images are based on the fulfillment of basic consumer needs: problem solving and prevention (functional), group membership and affiliation (social and symbolic), and novelty, variety seeking, and sensory gratif ication (sensory). Br ands with a global image are often perceived to meet these needs. The appeal of global brands arises from highly perceived quality and cred ibility, higher prestige, and the psychological benefits of perceived brand globalness (Alden et al ., 1999; Hsieh, 2002; Schuiling & Kapferer, 2004; Steenkamp, Batra, & Alden, 2003). 19 In fact, consumers might pr efer brands with global image even when quality and valu e are not objectively superior. They tend to consider that global brands are superior in quality simply because they are accepted globally, and for this reason, many firms have concentrated their effo rts on the development of global brands and oftentimes emphasized their worldwide availa bility and acceptance (Alden et al., 1999; Keller, 1998). It seems logical that firms with global brands, which are perceived to give higher quality and prestige to consumers, can leverage a high level of product standardization. 19 Global brands are commonly defined as brands that consumers can find under the same name in multiple countries with generally similar or centrally coordinated marketing strategies (Steenkamp et al., 2003; Yip, 1995). 56

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Consumers are also sensitive to the country of origin of a product as well as to a brand, since the products country of origin and its associated image and stereotypes play an important role in formulating their percep tion and evaluation (Bilkey & Nes, 1982; de Mooij, 2004; Kotler & Gertner, 2002; Papadopoul os & Heslop, 1993; Phau & Prendergast, 2000). It is, therefore, assumed that consumer s who have positive or negative attitudes toward a particular country show favorable or unfavorable responses to country-related products. Country of origin is defined by J ohansson, Douglas, and Nonaka (1985) as the country where the corporate h eadquarters of the firm mark eting the product or brand is located and with which consumers identify the product or brand, although the product may not necessarily be manufactured in that c ountry. Many of the worlds leading firms are indeed associated with their sp ecific country of origin, which provides them a crucial part of their image and of their offering to c onsumers (Baker & Ballington, 2002; Phau & Prendergast, 2000). For instance, in spite of their vast global pr esence and worldwide manufacturing basis, Nike and Coca-Cola might be associated with the United States. Consumers tend to use country of origin information as an indicator of quality (Kotler & Gertner, 2002). Acco rdingly, a countrys image of tentimes operates as a halo construct to influence consumers evaluations of product attributes (H an, 1989; Johansson et al., 1985). In essence, a country itself can be a brand. Shimp, Samiee, and Madden (1993) applied the term country equity, referri ng to the emotional value resulting from consumers association of a brand with a country. Consumers are willing to buy products from industrialized countries as a result of country equity (Agbonifoh & Elimimiam, 1999; Cordell, 1993). For example, a German or Japa nese manufacturer, regardless of the actual quality of its products, may benefit from th e worldwide perception of high quality associated with German or Japanese products. What is profitable for firms may be a positive product-country match that occurs when a count ry (e.g., Germany or Japan) is perceived as very strong in an area (e.g., technology), which is also an important feature for a product 57

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category (e.g., cars) (Bilkey & Nes, 1982; Mooij, 2004; Klep pe, Iversen, & Stensaker, 2002). Unknown brands may be favored only if th ey are made in high reputation countries, but quality image for brand can diminish if it is identified with a less prestigious country (Han & Terpstra, 1988; Johan sson & Nebebzahi, 1986; Shimp et al., 1993). From this perspective, the country of or igin could have a greater effect on consumer evaluation than the brand name. Baker and Ballington (2002) suggest that the products country image can be used vividly in positioning strategies in the presence of an increasing in standardization of products as a re sult of globalization. Overall, both brand and country imag es influence product perceptions and evaluations and purchase decisions It is also noteworthy that just as consumers in varying countries may view the same product differently they also perceive brands differently. There are differences between countries in the meaning invested in brands, and it is likely that consumers consequently hold differ ent brand beliefs (Hsieh, 2002). Likewise, consumers of a certain country may have different attitudes regarding products from a given country than do those of other countries. Countries in which foreign brands and products are widely available and accepted perhaps provide a more favorable context for the introduction of standardized products. Mean while, the country of origin effect can be influenced by ethnocentrism, the belief that ones own group is central and superior (Kotler & Gertner, 2002). Variations in brand and country of origin effects across countries may in part be due to culture-specific factors. Hofstedes work on cross-cultural value systems (2001) identifies three aspects of culture that can be related to consum er needs and brand images: collectivism/individualism, uncertainty a voidance, and power distance. People of collectivistic and of high-uncertainty-avoidance cultures are exp ected to be more royal to brand than people of individualistic and of low-uncertainty-avoidance cultures (de Mooij, 2004). Meanwhile, Roth (1995) found that in high-power-distance cultures where people are 58

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highly motivated by social status and affiliation norms, the effects of social brand image is great. It is also discovered by Roth (1995) th at people in individualism cultures seem to seek sensory brand images that emphasize va riety, novelty, and indivi dual gratification, whereas cultures with collectivism are amenable to social brand images that reinforce group membership and affiliation benefits. As for the country of origin, Gurhan-C anli and Maheswaran (2000) found that in individualistic cultures a home country product is evaluated more favorably only when it is superior to competition, while in collectivisti c cultures, a home country product is evaluated more favorably regardless of its superiority. Th e inclination to favor home country products over foreign country products in collective cu ltures suggests a positive relationship between collectivism and ethnocentrism (Balabanis, Mueller, & Melewar, 2002). Firm Characteristics The implementation of product standardiza tion/adaptation is determined by forces found within the firm itself. Commitment to and emphasis on product standardization/adaptation vary from a firm to another, according to firms philosophy and orientation, resources, the relationship between headquarters and subsidiaries, the degree of centralization/decentralization, and the market entry mode (Akaah, 1991; Cavusgil et al., 1993; Cavusgil & Zou, 1994; Douglas & Craig, 1989; Jain, 1989; Quelch & Hoff, 1986; Samiee & Roth, 1992; Wind et al., 1973). Philosophy/orientation Chandler (1962) defined strate gy as the determination of the basic long-term goals of an enterprise, and the adoption of course s of action and the a llocation of resources necessary for carrying out these goals (p.13). A fi rms international marketing strategy first depends on its overall business orientation (Martenson, 1987; Quelch & Hoff, 1986). For instance, a firm with less ambitious sales goals but a greater emphasis on cost control will be likely to have a policy of a unified produc t image across markets, offering standardized 59

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products, while another firm with ambitious sa les and market share goals will be likely to adopt non-uniform marketi ng programs (Walters, 1986). Perlmutter (1969) identified th ree types of orientations top management has toward internationalization that reflect the goals and philosophies of the firms with respect to international operations and hence lead to di fferent management strategies: ethnocentrism (home country orientation); polycentrism (hos t country orientation); and geocentrism (a world orientation). 20 According to Perlmutter (1969), the ethnocentric firm projects domestic policy internationally, viewing ove rseas operations as secondary to domestic operation and as a means to dispose of surplus domestic production and commonly administering overseas marketing through its inte rnational division. In the polycentric firm, akin to a confederation of qua si-independent foreign subsidia ries, marketing activities are organized on a country-by-country basis, and home country products are modified to meet local needs (Perlmutter, 1969). Perlmutter (1969) further assumes that the geocentric firm views the entire world as a pot ential market, ignoring nati onal borders and seeking for uniformity within specific groups on a global basis. Unlike the ethnocen tric and polycentric firms, the geocentric approach involves a collaborative effort be tween headquarters and subsidiaries to establish unive rsal standards and permissible local variations and also encourages communication among subsidiaries. Meanwhile, Bartlett and Ghosha l (2000) classified firms operating abroad into the following four types, based on different strategi c approaches adopted by them: international, multinational, global, and transnational firms. According to Bartlett and Ghoshal (2000), an international firm, analogous with the ethnocen tric firm above, develops products for the domestic market and only subsequently sells them abroad. In contrast, a multinational firm, just as the polycentric firm above, flexibly modifies their products, strategies, and 20 Wind, Douglas, & Perlmutter (1973) late r extended this framework to include regiocentric orientation. The regiocentric firm recognizes regional commonalities and leads to the design of regional strategies. 60

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management practices country by country, responding to the unique differences and conditions in each country (Bartlett and Ghos hal, 2000). A global firm, which views the world as a market and produces a product for the global market (B artlett and Ghoshal, 2000), is equivalent to the geocentric firm described above. Finally, Bartlett and Ghoshal (2000) suppose that a transnational firm attempts to be more responsiv e to local needs while retaining their global efficien cy. In contrast to the global firm, the transnational firm recognizes the importance of flexible and responsive country-level operations. The transnational firm would be viewed as pol ycentric at the same time as geocentric. The classification described above might be somewhat arbitrary, as Bartlett and Ghoshal (2000) themselves acknowledged. In fact, academicians sometimes use the terms international, multinational, global, and transnational interchangeably. Nonetheless, a certain typology to sort out firms accordi ng to their strategic orientation appears significant, since it certainly sheds light on a different set of management motivations and attitudes, which would eventual ly be reflected in variant ma rketing executions among firms. Many U.S.-based firms have traditionally adopted the international strategy in Bartlett and Ghoshals typology (2000). In fact it became clear by 1990 that few U.S. firms had been successful at adopting global strategies (Malhotra, Agarwal, & Baalbaki, 1998). Despite corporate managements increased unde rstanding of its overseas markets, foreign operations were often viewed as appendages whose principal purpose was to leverage the resources and capabilities de veloped in the home market. In this approach, foreign subsidiaries are freer to adap t products to reflect market differences than in the global approach typically taken by Japanese firms, but their dependence in the parent firm for new products, process, and ideas dictate a grea t deal more coordination and control by headquarters than in the multinational appr oach typically employed by European firms (Bartlett & Ghoshal, 2000). 61

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Resource The resource-based view (RBV) (e.g., Ba rney, 1991; Grant, 1991) suggests that a firm can obtain sustainable competitive adva ntage by leveraging its unique resources. The basic idea of the RBV is that a firms stra tegy can be conceptualized and implemented by specifying a unique resource profile for the firm (Wernerfelt, 1984). At the business strategy level, resources refer to inputs that can be used to implement its strategies that improve its efficiency and effectiveness (Barney, 1991). Ex amples of the resources cover a wide range: capital, brand names, in-house knowledge of t echnology, employment of skilled personnel, trade contracts, patents, machinery, efficient procedures, to mention a few (Grant, 1991; Hit et al., 2003; Wernerfelt, 1984). Firms international business involvement is marked by increasing resource commitment (Leonidou, 1996). Specifically, the releva nt resources of a firm in international marketing include size advantages, internati onal experiences, extent of international business involvement, and resources availabl e for international development (Cavusgil & Zou, 1994). Size of firm might have influence on the degree of standardization/adaptation, as larger firms are more likely to have adequa te resources to investigate overseas markets and to find it economical to adopt adaptation approach (Wind et al., 1973). Likewise, Walters (1986) assumes that a firm with extensive financial and managerial resources will place more emphasis on adaptation strategies. An integrated set of resources is transforme d into capabilities, the source to perform some activity, through dynamic and interactiv e processes (Amit & Shoemaker, 1993; Collis & Montgomery, 1995; Grant, 1991). In essence, resources are what a firm has, while capabilities are what a firm can do. Resources and capabilities determin e core competencies, or strengths of its positions, which serve as the basis for sustainable competitive advantage for a firm over its rivals only when rivals cannot understand, purchase, imitate, or substitute 62

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for those resources. 21 A firm uses different core competen cies in efforts to produce products that can satisfy consumers needs (Prahalad and Hamel, 1990). In order to achieve sustainable competitive advantage on a global scale, a firm has to develop a complex matching of the firms util ization and deployment of resources and the configuration of its operations with the spat ial distribution of mark ets (Craig & Douglas, 2000; Dunning, 1998). The firms financial and managerial resources are configured through an intra-firm network, in which they li nk headquarters with foreign subsidiaries for making value chains at the global level (A nderson & Forsgren, 2000; Bartlett & Ghosal, 1991; Craig & Douglas, 2000; Porter, 1986, 1990). Porter (1986) claims that one of the key roles of marketing is to coordinate the transfer and application of business experience to new markets. Consider the transfer of skills for example. Marketing skills in dealing with a specific type of market environment can be transferred to support the firms operation in another market. Establishment of such mechanism to transfer skills or learning across diverse markets can provide a firm with a competitive advantage stemming fr om utilization of a broad and rich base of experiences, ideas, and know-how (Craig & Douglas, 2000). Th is mechanism can fac ilitate sharing of best practices among managers in different ma rkets throughout the globe. It is a process of organizational learning directing attention toward strate gies that have been successful in the past and away from those that have failed (Buckley & Brooke, 1992). 21 It is noteworthy that, despite of its insightful focus on the firms, the RBV also has to incorporate the external contex t within which different resources would be most productive. The value of resources can be determined not only by their characteristics but also by market forces. For example, unanticipated chan ges in the economic structure of an industry may make what was a source of sustainable co mpetitive advantage at one time obsolete and no longer valuable for a firm (Barney, 1991). The RBV, therefore, has to link a firms internal capabilities (what it does with a set of resources) and its external industry environment (what the market demands and what competitors offer) (Collis & Montgomery, 1995). A firm perhaps competes well in the contex t in which there is a fit between the firms resources and extern al opportunities. 63

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Douglas and Craig (1989) and Rau and Preble (1987) argue that strategy formation in international markets is an evolutionary pro cess. In the first phase, the firms key strength is likely to lie in its exis ting, domestic product line, and attention should be focused on acquiring experience in marketi ng that line overseas; emphasis then should shift to new product development geared to overseas ma rket needs; and once experience in both marketing and new product development for international markets has been acquired, the more complex issue of strategy integrati on and coordination across markets should be addressed. According to Cavsugil et al.s empirical study (1993), a firm that has accumulated more experience in international business has a greater appreciation of the differences between markets and, along with managements better understanding of the market idiosyncracies, is more likely to pursue discretionary product adaptation. Degree of centralization/decentralization The headquarters-subsidiaries relationship can be a factor that influences marketing standardization/adaptation. Standardization would be accomplished effectively through a tight linkage of subsidiaries with the headquarters, which hol d centralized authorities. The pressure to standardize products perhaps in creases when central management at the headquarter level, which may not take account of local differences, believes that it has identified a superior marketing idea and what works in one market should work in another, and, as a result, the subsidiaries have re latively little autonom y (Douglas & Wind, 1987; Jian, 1986; Kanso, 1992; Quelch & Hoff, 1986; Samiee, Jeong, Pae, & Tai, 2003; Solberg, 2000; Walters, 1986). It should be noted that a gl obal standardization view at headquarters is not always representative or even an accu rate reflection of what occurs at the local subsidiary level (Jain, 1989; Kanso, 1992; Sami ee et al., 2003), and, due to their different point of view, conflicts ma y arise between both sides. To the contrary, strong national subsidiary management might be required to sense and represent the changing needs of local consumers and the pressures from host 64

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governments (Bartlett & Ghoshal, 2000). If subsidia ries have strong positions in a firm, then it is much more likely that decision-mak ing is decentralized and delegated to the subsidiaries. Emphasis on local management autonomy stems from the advantages traditionally associated with decentraliza tion and a concern with encouraging local entrepreneurship (Douglas & Wi nd, 1987). In these circumstances each representative of local subsidiaries most likely develops his or her own market strategies independently of the corporate headquarters (Solberg, 2000). Market entry mode It is possible that the strength of linkage between headqua rters and subsidiaries or affiliates is greatly affected by the choice of entry mode for a foreign market, such as wholly-owned subsidiaries, joint ventures, lic ensing agreements, and exports. Hitt et al. (2003) suggest that a firms entry mode decision is likely to be influenced by the industrys competitive conditions; the firms unique se t of resources, capabilities, and core competencies; and the countrys situation a nd government policies. The decision on how to enter a market will also be likely to depend on such factors as speed, i.e., how quickly does the firm want to get into the market?; costs, i.e., how much is it going to cost to enter the market by each method?; flexibility, i.e., how much flexibility does the firm want to retain?; or risk factors, i.e., what is the competitiv e or political risk of en tering now? (Terpstra & Sarathy, 2000). Mode of entry, even though not being stri ctly a marketing variable, determines not only the commitment of resources and hence risk exposure in overseas markets but also the degree of control the headquart ers can exercise over operatio ns and strategies and the flexibility to adjust to differences in market conditions (Douglas & Craig, 1989; Rau & Preble, 1987). Higher operati onal control results from having a new wholly-owned subsidiary in the foreign venture, i.e., a green field venture. While control is desirable to improve firms competitive position and maximize the returns on its resources, 65

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wholly-owned subsidiaries are the most risky forms of overseas involvement because of the volatility of worldwide economic, social, and politic conditions (Aga rwal & Ramaswami, 1992; Kim & Hwang, 1992). To the contrary, exporting is the most common approach employed by firms taking first international steps, because it can be executed without committing any great amount of human or financial resources, and hence the risks of financial lo ss can be minimized. Licensing is a contractual agreem ent in which a firm grants access to its intangible assets such as patents, know-how, trademarks, and co mpany name to foreign firms in return for royalties or other forms of payment. The adva ntages of licensing are apparent when capital is scarce, import restrictions forbid other means of entry, or a country is sensitive to foreign ownership, although the license mode provide s less control to the licensing firm. A joint venture is a partnership of two or more participating firms that have joined forces to create a separate business entity, whic h is designed to take advantage of the strong functions of the partners and supplement th eir weak functions. Joint ventures can be attractive to international marketers when firms are unfamiliar with legal and cultural barriers in overseas markets. If greater adapta bility and control are more important for firms representing countries with a high cultural diff erence, equity-based joint ventures are the recommended mode of entry (Agarwal, 1994). Th ey also enable a firm to utilize the specialized skills of a local partner and to access a partners local distribution system. The extent of control in joint ve ntures lie between that of gr eenfield ventures and licensing agreements. Walter (1989) claims that a firm with significant joint-ve nture operations places more emphasis on adaptation strategies. To the c ontrary, if a firms foreign operation is fully owned rather than a joint venture, the fi rm is more likely to use a high level of standardization (Rau & Preble, 1987). Figure 2-1 illustrates how dete rmining factors, which have been discussed thus far, could exert effects upon a product on the contin uum between standardiz ation and adaptation. 66

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Each factor is presented in terms of what conditions favor product standardization versus adaptation. Table 2-1. Determinants of the degree of product standard ization/adaptation. Factor Study Method Finding/conclusion Boddewyn & Hansen (1977) Empirical Industrial goods marketers were the furthest advanced on the way to achieving complete standardization. Consumer durable firms achieved a greater degree of standardization than those for consumer nondurables. Hill & Still (1984) Empirical Consumer nondurables were extremely sensitive to cultural differences. Huszagh et al. (1985) Empirical Products perceived as having no substitutes or being essential were standardized. Quelch & Hoff (1986) Descriptive Products that are highly culture-bound do not enjoy high-scale economies or efficiencies and are more difficult to market globally. Samiee & Roth (1992) Empirical Firms producing industrial products emphasized global standardization more than consumer goods firms. Baalbaki & Malhotra (1993) Descriptive Industrial pr oducts are more suitable for standardization than are consumer products. Consumer nondurables require greater adaptation than consumer durables. Culture bound products require greater adaptation than culture free products. Product characteristics Cavusgil et al. (1993) Empirical As cultural specificity of products increases, the degree of product adaptation increases. Levitt (1983) Descriptive Success in a world with homogenized demand requires a search for sales opportunities in similar segments across the globe. Sheth (1986) Descriptive There is always a segment of a market ready to buy foreign product without extensive changes. The size of the segment determines success in the foreign market. Target market segment Douglas & Wind (1987) Descriptive The existe nce of a potential global segment is a key motivating factor for developing a global product strategy. 67

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Table 2-1. Continued Factor Study Method Finding/conclusion Hassan & Katsanis (1991) Descriptive The existence of global consumer segments that are measurable and reachable must be considered as a prerequisite for successful execution of any global marketing strategy. Wang (1996) Descriptive The de gree of standardization is contingent upon the commonality of the cross-national consumer segment on the basis of demographic and psychographic variables. Buzzell (1968) Descriptive Ther e are many examples of cultural differences that have affected marketing success or failure. Wind & Douglas (1972) Descriptive Each country is characterized by specific environmental conditions, such as certain cultural and social patterns, which affect buying patterns and response. Boddewyn & Hansen (1977) Empirical Differences based on culture (i.e., language, habits, tastes, way of life, personal priorities, beliefs, etc) remain as obstacles to achieving a full standardization of marketing strategies. Walters (1986) Descriptive Inso far as market heterogeneity at the cultural levels is seen to be either small or on the decline, standardization becomes more attractive and feasible. Jain (1989) Descriptive The greater the similarity in the markets in terms of consumer behavior and lifesty le and the higher the cultural compatibility of the product across the host countries, the greater the degree of standardization. Countrys cultural characteristics Wang (1996) Descriptive The degree of standardization is contingent upon the similarities or the psychic distance of the countries and country clusters. Keegan (1969) Descriptive There are many products that have been adjusted to perform the same function internationally under different environmental conditions. Countrys environmental characteristics Jain (1989) Descriptive The greater the difference in physical and legal environments between home and host countries, the lower the degree of standardization. 68

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Table 2-1. Continued Factor Study Method Finding/conclusion Wind & Douglas (1972) Descriptive Each country is characterized by specific environmental conditions, such as level of economic and technological development, which affect buying patterns and response. Hill & Still (1984) Empirical The degree of change introduced in consumer goods depends on economic differences between home country markets and less-developed countries. Economic condition Jain (1989) Descriptive Standard ization is more practical in markets that are economically alike. Buzzell (1968) Descriptive The physical environment (climate, topology, and resources) has an obvious effect on the sales potential for many products. Wind & Douglas (1972) Descriptive Unique national legal characteristics place certain constraints on marketing policies, necessitating a different approach or adaptation to different market conditions. Boddewyn & Hansen (1977) Empirical National government regulations and restrictions remained as obstacles to achieving full standardization. Hill & Still (1984) Empirical Changes were made first to product features not conforming to the legal and economic requirements of the local market. Cavusgil et al. (1993) Empirical As similarity of legal regulations increased, the degree of the various aspects of product adaptation decreased. Baalbaki & Malhotra (1995) Empirical Across-market differences in laws related to product st andards, features, performance, and safety necessitated a higher level of strategy adaptation. Physical/ geographic condition Johnson & Arunthanes (1995) Empirical Differences in government regulation between the domestic and export markets positively affected product adaptation. Douglas & Wind (1987) Descriptive The effectiveness of global standardization depends to a large degree on the availability of an international infrastructure of communications and distribution. Infrastructure/ supporting sector Johnson & Arunthanes (1995) Empirical Infrastructure differences resulted in greater adaptation for consumer products than for industrial products 69

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Table 2-1. Continued Factor Study Method Finding/conclusion Boddewyn et al. (1986) Empirical Firms perceive competition as the most important obstacle in standardizing marketing mix. Jain (1989) Descriptive The greater the degree of similarity in a firms competitive position in different markets, the higher the degree of standardization. Competing against the same rivals, with similar share positions, in different countries leads to greater st andardization than competing against purely local companies. Baalbaki & Malhotra (1993) Descriptive The stronger the competition, particularly local competition, the greater the need to adapt the product offering. Industry competition Cavusgil et al. (1993) Empirical As market competitiveness increased, the degree of product adaptation increased. Buzzell (1968) Descriptive Lack of brand awareness, coupled with suspicion of the quality of American products, requires the firm to adopt a different marketing strategy abroad. Hill & Still (1984) Empirical Creating brand names is the first step in standardizing products across markets. Baalbaki & Malhotra (1993) Descriptive Since attitudes toward the products country of origin influence the consumers perceptions and evaluations, variations in such perceptions between markets call for a greater strategy adaptation. Brand and country of origin Cavusgil et al. (1993) Empirical As product familiarity of consumers increases, the degree of product adaptation decreases. Firm characteristics Wind et al. (1973) Descriptive The de gree of internationalization to which management is committed affects the specific international strategies and decision rules of a firm. 70

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Table 2-1. Continued Factor Study Method Finding/conclusion Quelch & Hoff (1986) Descriptive A companys approach to global marketing depends on its overall business strategy. When headquarters believes it has identified a superior marketing idea, the pressure to standardize increases, while large markets with strong local managements are less willing to accept global programs. Walters (1986) Descriptive A firm with ambitious sales and market share goals, operations in many foreign markets, extensive financial and managerial resources, a global production network, and significant joint-ve nture operations are very likely to adopt non-uniform international marketing programs. Douglas & Craig (1989) Descriptive The decision with regard to the mode of operation determines the degree of control exercised ove r operations and strategy in overseas markets and the flexibility to adjust to changes in market conditions. Jain (1989) Descriptive The greater the strategic consensus among parent-subsidiary managers on key standardization issues and the greater the centraliz ation of authority for setting policies and allocating resources, the more effective the implementation of standardization strategy. Akaah (1991) Empirical Firms were inclined to utilize strategy standardization if they enjoyed ownership interest in host country operation and had geocentric/regiocentric orientation rather than ethnocentric/polycentric orientation. Samiee & Roth (1992) Empirical The ability of firms to pursue global standardization may hinge on their international business philosophies and organizational structures. Cavusgil et al. (1993) Empirical As a firms international experience increased, the degree of product adaptation increased. 71

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Table 2-1. Continued Factor Study Method Finding/Conclusion Cavusgil & Zou (1994) Empirical A high degree of product adaptation should be sought when a firm has substantial international competence. Product characteristics Industrial goods Essential products with no substitutes Products with universal appeal Standardization Adaptation Product characteristics Consumer goods (Particularly, non-durables) Culture-bound products Target market segment Global consumer segments across countries Target market segment Country-specific consumer segments Standardization Adaptation Countrys cultural characteristics Culturally similar countries Standardization Adaptation Countrys cultural characteristics Culturally different countries Industry competition Less intensive competition Rivals are global firms Same competitive position across markets Standardization Adaptation Industry competition More intensive competition Countrys environmental characteristics Economically similar countries Similar physical conditions Geographically proximate markets Fewer and similar legal requirements and government rules Similar marketing infrastructures Global infrastructures available Countrys environmental characteristics Standardization Adaptation Economically different countries Different physical conditions Geographically remote markets More and different legal requirements and government rules Different marketing infrastructures Global infrastructures unavailable Rivals are local firms Different competitive position across markets Figure 2-1. Direction of product standard ization/adaptation and determinants. 72

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Brand and country of origin Well-identified and recognized global brand Country of origin associated with high quality Brand and country of origin Little-identified and recognized global brand Country of origin associated with low quality Standardization Adaptation Firm characteristics Geocentrism (global approach) Firm characteristics Polycentrism (multinational approach) More ambitious sales goal More resources (size, capital, network, experience, knowledge etc.) Decentralized institution and decision-making Joint venture / licensin g Standardization Adaptation Greater emphasis on cost control Fewer resources (size, capital, network, experience, knowledge etc.) Centralized institution and decision-making Greenfield venture Figure 2-1. Continued 73

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CHAPTER 3 APPLICATION OF INTERNATIONAL MARKETING THEORIES Standardization/Adaptation of Television Programming Theoretical foundations in international ma rketing studies were reviewed in the previous chapter to establish an analytical framework for the programming strategy of global television networks. On the basis of pr evious research works in media economics, management, and globalization disciplines, this chapter discusses how factors, which are considered in the international marketing literature to possibly influence the decision on product strategy, could be applicable to the context of television programming products. In the context of this study, the global standardization of television programming refers to the marketing of a programming product aired in its original format and identical in various markets of the world, based on the one size fits all approach. In particular, the globally standardized programming of U.S. originated-cable ne tworks is basically produced in the United States, distributed by the networks to their affiliates around the world, and offered by local channels owned and operated by the affiliates. The desirability of programming standardization for U.S.-origina ted cable networks can be explicated from microeconomic perspective. As Waterman (1988, p.142) notes, The larger the potential audience base which a producer can reach, th e greater the amount of economic resources the producer can profitably invest in a program designed for that audience. Thus, producers whose programming products are distributed to a number of markets have an incentive to produce relatively high budget programs (H oskins & McFadyen, 1991; Waterman, 1988; Wildman & Siwek, 1988). In essence, the potenti al size of market ev entually determines production budgets and hence the quality and intrinsic audience appeal of television programming, which usually increases by spendi ng much expenditure for the creative inputs of production. 22 22 A larger budget makes it possible for a produc er to acquire more of the inputs, for example, to hire better writers, directors, and camera crews; to shoot from more camera 74

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Nonetheless, full standardization might of tentimes be an unrealistic approach for global television networks. In the similar way th at fashion designers often make smaller or larger sizes to fit a foreigners figure, the networks may have to adapt programming for various local needs. For instan ce, language difference is th e most common obstacle to full standardization. Unless all vi ewers in overseas markets have a lingua franca, full standardization of programming is difficult on a global scale. Suppose that U.S.-originated cable networks offer programs in English language without any language customization for non-English speaking markets of Asia. Yet, a population of Englishspeaking viewers in these markets is not so large relativ e to the entire population of Asia. 23 Then, to reach a wider range of audiences, U.S. -originated cable networks ha ve to subtitle or dub their programming into local languages in the mark ets. Indeed, many global television networks transmit programming via multiple feeds so that distributors in each country can pick it up, select the adequate set of subtitles or dubbing, and retransmit it to subscribers in their country. Such language customization is presumably the simplest but most prevalent way to local adaptation, similar to packaging and labeling modification necessary for general consumer goods. Determinants of the Degree of Progr amming Standardization/Adaptation Product Characteristics The feasibility of standardized or adap ted programming is greatly influenced by other factors than language. First, th e economies of scale arising from product standardization for television programming ar e great, and for this reason, Doyle (2002) claims that television programs are well suited to wide international distribution. As a consequence of a television program being a public good whose cost is independent of the angles and do more editing; to use more sophisticated special effects; to hire actors with greater name recognition and presumably the ability to deliver bigger audience; and so on (Owen & Wildman, 1992). Those inputs usually in crease a programs appeal to viewers. 23 It was estimated in 1995 that there were onl y about 70 million fluent English speakers in Asia (McGrath, 1995). 75

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number of persons who actually consume it, the program can be distributed to additional markets at minimal incremental cost, in spite of the high fixed costs initially necessary for its production (Hoskins et al., 1997; Owen & Wildman, 1992; Wildman & Siwek, 1988). Roughly speaking, a program shown in just one country could cost almost as the same as a program distributed globally, aside from neglig ible marginal costs required for copy or transmission. However, if programming is deve loped and produced by every local channel, global television networks can hardly sustain scale economies on a global scale. It possibly costs much more for a network to produce separate programs for each individual foreign market than to produce a single program for worldwide distribution (Owen & Wildman, 1992). To be sure, it is uncertain whether or not the profit accruing from standardized programming is enormous, because, as discussed earlier in the relationship between product standardization and financial performance, pr ofitability depends not only costs but also sales. It is, nonetheless, true that production costs are a majo r area to generate cost savings for television programming, sinc e the proportion of programming expense that goes toward production costs is generally large. From this pe rspective, global television networks might operate as business entities faced with cost forces that make global standardization attractive. If the initial costs are recoupe d, the revenue generated from the additional markets is largely profit, and hence media fi rms could obtain substantial financial returns from distributing their products to the largest number of audi ences in as many markets as possible. Major U.S.-originated cable networks with a number of foreign affiliates are clearly in the best pos ition to utilize their programming products across different geographic markets. According to Chan-Olmsted (2006), the fact that an existing product may be 76

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redistributed to and reused in diff erent outlets, via a windowing process, 24 reinforces the advantage of diversifying into multiple relate d distribution sectors in various geographical markets to increase the pr oducts revenue potential. For these reasons, foreign markets have b een traditionally considered as ancillary but important markets to the producers home mark et in the internationa l flow of television programming. According to Owen and Wild man (1992), U.S. television programs are released in foreign markets in a series of wi ndows that parallels the release sequence in the United States. Meanwhile, it has increasingl y become common that U.S. television producers take into consideration a programs global appeal and potential for success in foreign markets at the development stage of programming (Noam, 1993), in a similar way that motion picture producers in Hollywood of tentimes attempt to build their own global audience, offering theatrical films with universal appeal (Croteau & Hoynes, 2001). According to Hoskins and Mires (1988), the Hollywood producers and television networks become sensitive to what the American viewers like, while being aware of what the foreign viewers dislike. This perspective can be regard ed as the core princi ple of global television networks with standardized programming, whic h is targeted to worldwide audiences. Morley and Robins (1995, p.15) articulated about a decade ago, Satellite and cable channels are also making headway in ma rketing standardized product worldwide. Meanwhile, media content, often referred to as cultural product, is similar to consumer non-durables, whose appeal vari es by national taste (Shrikhande, 2001). As television viewers feel that it is difficult to identify with the styles, values, beliefs, institutions, and behavioral pa tterns of foreign programming, a pa rticular program rooted in one culture and thus a ttractive in that environment may di minish in appeal when exported, being subject to the cultural di scount, i.e., the reduction in va lue of a program (Hoskins et 24 Television producers try to maximize the ex ploitation of their programming assets by showing them through different windows (e.g., pay-per-view channel, video and DVD, premium channel, basic cable channel, over-the-air channel, etc.). 77

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al., 1997; Hoskins & McFayden, 1991; Hoskins & Mirus, 1988). To overcome cultural barriers, television programs might need to be revised in the pr ocess that entails more than translation but less than complete reshooting (Wentz, 1997). In light of this product nature, therefore, it may be plausible that many U. S.-originated cable ne tworks adjust their programming strategies from showing standardized programs in all markets to engaging in some form of local programming to su it each markets tastes and needs. Nonetheless, it should be noted that Ho skins and McFayden (1991) and Hoskins et al. (1997) also claim the level of cultural di scount being actually less for U.S. programs offered in foreign markets relative to programs from other countries, since the former often have more universally appealing content. HBO believes the universal appeal of their products attractive to most viewers, while re cognizing that cultural differences do exit between markets (Murrell, 1997). Then, HBO looks at the sim ilarities in the way people respond to made-in Hollywood entertainment acro ss all of their market s rather than to localize content. Previous research on U.S. theatrical film s in foreign markets demonstrated that genre affected a films performance in differen t countries (Craig et al., 2005). This may also hold true for television programs as well, si nce the cultural sensit ivity of each program could vary depending on program types and genres. The difference in cultural sensitivity among genres may have a significant impact on programming strategies by U.S.-originated cable networks in overseas markets, as they usually feature a specific program type, such as CNNIs news programming, MTVs music programming, 25 and ESPNs sports programming, targeted at specif ic audience rather than mass audience. Being less dependent on language and specific cultural traditions, such program types as popular music, 25 In recent years, the U.S. MTV has increasingly been putting more emphasis on non-music programming, including fashion, humor, drama, game shows, animation, wrestling, and advice to the lovelorn (Gundersen, 2001). Yet, MTV in other markets still relies on music material heavily. 90% of the programming in Asia was fundamentally about music, and 10% was about lifestyle in 2001 (Billboard, 2001). 78

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animation, international news, w ildlife documentaries, and major sporting events might be relatively easily understood in different cultural context (C han, 1994; Mifflin, 1995; Negrine & Papathanassopoulos, 1990; Oba, 2004; Thussu, 2000). Besides, programming featuring action and adventure or sexually explicit presentatio ns could travel well, because they have limited dialogue and simple plot s (Croteau & Hoynes, 2001; Straubhaar, 2003). In contrast, it is expected that situation come dies and dramas would not always be understood well across cultural boundaries. As for sitcoms, what considered funny in a culture might not be funny in another culture. Indeed, both U.S. programming sellers and foreign buyers have traditionally been skeptical about the U. S. comedies in different markets (Dupagne, 1992). Target Market Segment Chan-Olmsted & Albarran (1998) argue that the rise of information-based attitude groups that share similar consumption pattern s around the world provides incentives for globalization of media firms and me dia content. As discussed in the previous chapter, one of the advantages of targeting a global market segment is that while the segment in a single-country market might be small, even a narrow segment can be served profitably if it exists in several countries. It is likely that a strategic decisi on of global television networks to pursue standardized programming would be in large part dependent on whether or not intermarket audience segments across countries exist and the size of the segments. Global television networks might attempt to cater to the preferences of multiple audiences with the same content. The case of STAR TV provides a good lens through which to view the feasibility of such content. Based in Hong Kong, STAR TV launched its advertising-supported, satellite programming se rvices in October 1991, covering a potential audience of 2.7 billion living in 38 countries from Egypt to Japan and from Indonesia to Siberia. With the exception of a Chinese cha nnel, other four channels mainly carried English-language programs basically without translation. Although it could reach roughly 79

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half of the worlds population, STAR TV initially aimed to attract only the top 5% of this enormous audience: the well-educated, the well -traveled, the wealthy, the professional, and the English-speaking, which emerged with the fast economic growth in Asia since the late 1980s (Chan, 1994; Tanzer, 1991). Richard Li, deputy chairman of HutchVision, which owned STAR TV, said, There is a strong comm onality among these consumers in terms of lifestyle, tastes, and thirst for international information (Tanzer, 1991). While this Asian elite segment may be small as a proportion of the population, it was expected that the sheer size of the base population would make it hug e in absolute numbers, thus creating a lucrative market for STAR TV (Chan, 1994). Yet, it did not take long for STAR TV to r ealize that the elite segment was not large enough to sustain the costs of operation, let al one turn a profit (Curtin, 2005). Practically, many advertisers and agencies were suspicious of the target viewers acceptance of STAR TV and hence hesitate to support it (Dhar, 1994; Geddes, 1994; Ha, 1997). Critics viewed STAR TVs pan-Asian approach by beaming a one-size-fit-all set of English programming as badly flawed (Engardio, 1994). In 1994, STAR TV divided the services into the northern and the southern arenas, for Greater China as th e main target in the former and India as the main target in the latter, offering more cultu rally specific programming in local languages. In short, STAR TV had to segment the channe l appeal, though roughly, according to culture, ethnicity, and tastes. Global television networks us ually target subgroups of viewers who are assumed to share specific interests across borders. STAR TV initially targeted upscale Asian viewers or Asians who belonged to the gl obal elite lifestyle segment. Such segment would certainly exist and probably show similar consumption patterns, welcomed by some global brands, such as Visa Card or Rolex. Nonetheless, as not ed above, after the initial trial to establish a pan-Asian programming service faltered, STAR TV abandoned to offer programming with little local adaptation and drastically changed th eir programming strategies to cater to local 80

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preferences in the mid 1990s. Whether or not intermarket audience segments emerge today for the standardized programmi ng of a global television network is still open to discussion. Countrys Cultural Characteristics It has been discussed thus far that di fferences between national cultures could significantly influence product st rategies, in particular for consumer products including media content products. In terms of the role of culture as a significant factor to determine the acceptance of television programming, Kottak (1990), who researched the Brazilian television market, observed that the first requirement common to all mass culture success, no matter what the country, is that they must be pre-adopted to thei r culture by virtue of cultural appropriateness and fit the existing culture. Cultural similarity among markets may provide a favorable context for the introduction of culturally sensitive products. Te levision audiences in many countries clearly express preferences both for national production and, to a lesser degree, for intra-regional imports, seeking great cultural proximity (Straubhaar, 1991, 2003). Cultural proximity can be defined as a characteristic that is pr edominantly reflected in nationally or locally produced material that is closer to and more reinforcing of traditional identities, according to Straubhaars influential work (1991), whic h has often been cited by follow-on research. This theory leads to a proposition that the greater the cultural distance between the home country of a global television network and hos t countries is, the le ss likely standardized programming produced by the network is accepted. Cultural proximity theory is based to a la rger degree on language, which is defined as the most clearly recognizable part of culture by Hofstede (2001) and as a potential common base for sharing cultural products, incl uding television programs. However, given the present practice whereby a majority of im ported programs are subtitled with or dubbed into languages of host countries, it is unclear to what extent the language originally spoken in the programming matters to audiences. In re gard to this point, Wildman (1995) argues 81

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that viewers prefer television programs produced in their native language due to something of the essence of an artistic work always lost in translation. The question now arises: if language is so crucial, why do many programs made in specific languages actually become popular in markets where those languages are not publicly used? The most commonly cited exam ple illustrating this point is Brazilian telenovelas, serialized melodoramas, whic h are very popular among the Spanish-speaking populations of Latin America. Likewise, Japa nese television program s, such as variety shows or dramas, have been widely accepted in East and Southeast Asian countries, such as Taiwan, Hong Kong, or Singapore, where official languages are not Japanese. Indeed, in terms of the origins of programs frequently watched by Taiwanese viewers, Japanese programs (20.7%) were ranked second behi nd Taiwanese programs (56.2%) and much higher than those from Mainland China (3.5% ), which are produced in Mandarin Chinese and hence are watched by most Taiwanese peop le without subtitles or dubbing (Su & Chen, 2000). It might be true that the language fact or alone cannot indicate the degree to which viewers of host countries accept an imported program. Straubhaar (1997, 2003) also suggests other levels of cultura l proximity than language, based on such elements as shared identity, dress, gest ures and non-verbal communication, definitions of humor, ideas a bout story pacing, livi ng patterns, religious elements, etc. For example, in terms of the popularity of the Brazilian telenovela throughout most Latin American countries, Straubhaar (2 003) claims that although Brazilians speak Portuguese, they have a great deal in common with Spanish-speaking Latin Americans in terms of underlying culture inhe rited from the Iberia Penins ula and further developed and hybridized with other cultures in Latin America. A Brazilian program, therefore, probably looks far more familiar to a Venezuelan than a program from the United States. Cultural proximity is also cited as a justification for the popularity of Japanese television programs 82

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among Taiwanese viewers by a body of studies (e.g. Ishii, Su, & Watanabe, 1999; Iwabuchi, 2001; Liu & Chen, 2003; Oba, 2005; Su & Chen, 2000). Audiences are supposed to process and inte rpret media message actively on the basis of their cultural values Religious and social mores, for example, might make Asia a tricky market for the free movement of programm ing across borders by U.S.-originated cable networks. This can be indicated by the comple te failure of an American nighttime soap opera Dallas in Japan. 26 Tracey (1988) viewed as a main cause of the failure that the suspense in Dallas, which arose from greed, se lf-interest, lying, and manipulation, might be considered objectionable and shameful in th e Japanese culture that prizes royalty, self-sacrifice, and honoring ones obligation. The n, the flop of the show in Japan might be in part attributed to the gap of basic valu es between American and Japanese societies. Moreover, although it was suggested earlier that programming featuring action and adventure or sexually explicit pr esentations could transcend nationality relatively easily, attitudes toward violence and se x are in fact one of most ta lked-about differences between Asia and American cultures (Edmunds, 1994). Weber (2003) assumes that violence and sex would run counter to traditional family values and the spiritual civilization program as the definer of morals and ethics in China. U.S. programmers could possibly face some problems caused by cultural differences between the United States and Asia. Accord ing to Hofstedes multidimensional cultural index scores (2001), which has been employe d as one of the major frameworks for understanding culture, Asian cu ltures are commonly character ized by high power distance, collectivisim, and long-term orientation, relative to American cultures, which are characterized by low power distan ce, individualism, and short-term orientation. Some Asian 26 The show, aired weekly on prime time in 1981 by a Japanese commercial broadcast network, had an average rating of only 4.8 percen t, far short of the 15 percent needed for a respectable showing, and lasted only six months (Cooper-Chen, 1995; Liebes & Katz, 1990). 83

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countries are also feminine and high-uncerta inty-avoidance societies in contrast to the United States. Another cultural distinction is f ound in that Asian countri es are high-context cultures in comparison to the United States that is a low-context culture (Hall, 1976). 27 Insofar as U.S.-made television programs re flect U.S. values, they could be more successful in countries in which national cultural values are similar to those of the United States and, to the contrary, less successful in countries in which national cultural values are different from those in the United States. A ccording to the theory of cultural proximity, U.S.-made television programming is more likely to be understood and accepted in English-speaking countries, U.S. territories and ex-colonies, and member countries of British Commonwealth of Nations. Countrys Environmental Characteristics Economic condition It was assumed in the previous chapter that product standardization might be more feasible among countries that are economically al ike. This is because it would be physically impossible for many consumers in less devel oped countries to purchase products that consumers in developed countries consider essential. Yet, it seems still inconclusive whether or not people in economically similar countries are also similar in product choice and consumption behavior. 27 According to Edward Halls high/low-c ontext typology of culture (1976), much of communications information resides in the context of the communication or is internalized in the person in high-context cultures, as opposed to the expl icitly spoken or written words toward which low-context cultures demons trate high value and positive attitudes. In high-context cultures, who says it and when, how, and where it is said can be more important than what is said, and hence accurate communication can depend as much on long-standing personal relationships or other contextual factors (Money, Gilly, & Graham, 1998). Hofstede (2001) suggests that Halls high-/low-context typol ogy corresponds closely to the individualism/collectivism dimension of culture. Low-cont ext communication is typical of individualist society, while highcontext communication fits the collectivist society. 84

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It might be rather necessary here to argue what impact the economic condition of a country has on the television programming i ndustry of the country. In fact, economic development in a country oftentimes boosts the growth of the domestic television production industry, since the country becomes ab le to spend relatively large proportions of its national income on television producti on (Waterman & Rogers, 1994). When local economies are not yet large enough to finance local production, foreign programs, notably U.S. programs, are likely to rush in, and networks or stations acquire inexpensive imports to fill their programming schedules. Even with the expansion of the domestic television industry, demand is likely to outstrip the s upply of programming for a while. When some U.S.-originated cable networks announced the ex pansion of their servi ces in Asia in the early 1990s, the region was viewed as a ma rketplace that was starved for television programming and wanted even all-U.S. programming (Amdur, 1994; Kraar, 1994; Landler, Barnathan, Smith, & Edmondson, 1994; Tanzer, 1991). In the long run, however, the growing economy would lead to the development of dome stic commercial television infrastructures and benefit original production re latively more than they benefit the U.S. and other imported programming (Waterman, 1988). Actually, as the Japanese br oadcasting industry, launched in 1953, grew to increase the domestic production in the mid 1960s, imported programs, which were mainly from the United States, decreased. The main reason for these changes can probably be attributed to the development of domestic television infrastructures and commercial sources, which economically benefited Japans domestic pr oduction industries. The mid 1960s witnessed that the penetration of tele vision sets in Japanese house holds first exceeded 80 percent (NHK, 2001), and television advertising expend iture in Japan rapidly increased from 40 billion yen in 1960 to 100 billion yen in 1964 to 200 billion yen in 1969 (Dentsu, 1986). Many Asian countries sooner or later followed the same path as Japan did, as Waterman and Rogers (1994) found in the mid 1990s that a majority of television programs in Asian 85

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countries were domestically produced. Bene fiting from economic growth, the domestic television industry would begin producing domestic programs ra ther than allotting a share of the growth to foreign programs. In su ch markets, it may not be practical for U.S.-originated cable networks to offer standardized programming, even if economic conditions grow and become similar to those of the United States. To the contrary, given a market where a relatively fewer amount of programming is produced domestically, it is likely that globally standardized programs w ould be accepted as substitutes by audiences in the market. In spite of the possible cultura l discount in overseas market s, drama is in reality the most internationally traded type of programming (Hoskins et al., 1997). Large-scale drama is in general a typical example of prog ramming requiring high budgets, which may be beyond the financial capacity of local producer s in some countries. Foreign television programs do well when domestic television indu stries do not produce content of comparable value (Mills, 1985). Indeed, Oba (2004) found th at U.S.-made dramas drove the average percentage of imported programming on the Japanese cable programming service. This is partly because market size and production budg ets of cable networks are too small to produce original dramas and partly because the environment for reruns or multiuse of domestic dramas is yet to be developed well in Japan. Physical/geographic condition The geographic region also plays a pivotal role in the development of global television networks (Chalaby, 2004a), as they us ually regard each region as a unit for their overseas operations. Communica tions satellites remain orga nized on a regional basis (e.g., PanAmSat and AsiaSat). Meanwhile, Chan-Olm sted (2006) assumes that geographically clustered markets with similar stages of infrastructure development may lead to cost/resource-sharing benefits. 86

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Geographic proximity among countries, which is typically associated with cultural similarity, has caused a trend toward the regionalization of television programming (Sinclair et al., 1996; Straubhaar, 2003; Thussu, 2000). In this context, television programs increasingly flow within individual regions, which have their own internal dynamics. Furthermore, the entire region can be furthe r broken up into several smaller sub-regions consisting of several countries and territories. St raubhaar (1997) claims that a major trend of the last 20 years has been the regionalization of television into multi-country markets linked not only by language but also by other cult ural elements, which might be called geo-cultural markets. A good example to illust rate this in Asia is Greater China, the Chinese geo-cultural market, which is centere d in Mainland China and nations and regions around it, such as Taiwan, Hong Kong, and Maca u, but extends slightly further away to large Chinese communities in Southeast Asian countries, such as Si ngapore, Malaysia, or Thailand (Chan, 2004). Global television netw orks then might develop programming targeted at the whole of Greater China and its constituent part. Legal environment Media industries are among the most regulated industries, along with pharmaceutical and finance industries (Picard, 2005). According to Schudson (1994), states have always viewed broadcasting as a powerful mechanism of political and cultural control and have consequently developed extensive polic y frameworks to regulate both its internal as well as its external flows. On the one hand, the late1980s and ear ly 1990s witnessed the increasing liberalization of na tional policies, including deregulation and privatization, which resulted in more economic opportunitie s for TNMCs (Carveth, 1992; Gershon, 1993; Hollifield, 2001). On the other hand, the host countries often attempt to balance free market economies with the political and civic respon sibilities of preserving national sovereignty (Gershon, 2000). The regulatory framework of a country shapes the business practice of global television networks. 87

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As a matter of fact, regulatory agencies in many countries still impose quotas on broadcasters or cable networks in terms of their importation of foreign content, stipulating the minimum amount of domestically produ ced programs that they must abide by. Protection-oriented quota policies have been s een in many Asian countries. For instance, the Chinese government restricts foreign television dr amas to no more than 25% of total dramas on pay TV systems (Lin, 2004). In Taiwan, the Cable Television Act mandates that locally produced programs account for more than 20% of programming by domestic cable channels, while the Cable Television Law of South Korea restricts foreign programs from exceeding 30% of programming (Hong & Hsu, 1999). According to Hong and Hsu (1999), in Asian countries, the restriction comm only intends to protect both domestic production industry and national cultural identity, which coul d be infringed on by a flood of foreign programming imported at a low price. Despite the rapid economic growth and relatively stable political and social order, there remain concerns over issues of cultural autonomy in Asia. Those policies could play a certain ro le in controlling th e amount of globally standardized programs. In addition to quotas, governments occas ionally impose censorships on mediated content itself. HBO was banne d from providing Sex and th e City, a comedy about New York career women discussing and having a great deal of sex, in Singapore and had to edit the show heavily in Malaysia (Flagg, 2000). According to Flagg (2000), HBO has to edit every month as many as 18 new movies to conf orm to Asias conservative sensitivity. The Cable Network Regulation of I ndia contains a stringent progr amming code that allows the government to prohibit the transmission of fo reign programs, which are deemed violent, indecent, or otherwise objectionable (C hadha & Kavoori, 2000). Meanwhile, Chinese regulators are sensitive not only to forei gn television programming featuring sex and violence but also to foreign news reports on democracy, human rights, and religion (Weber, 2003). 88

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Infrastructure/supporting sector In the case of the cable television netw ork, supporting activities are carried out by cable-related industries that might play a role in the value chain to implement the primary activities, programming. Such supporting sectors as MVPD sy stems and advertisers are indispensable for cable networks, as most of them are structured so as to receive dual revenues from both parties. Revenues from MVPD firms, i.e., carriage fees, and advertisers can influence production budgets that cable networks capitalize on for programming. The ampler the budgets, the more likely U.S.-origina ted cable networks can afford to produce original local programs. The development of MVPD services, including cable and satellite television, made it possible to deliver a large number of televisi on channels in many parts of the world, which gave a foothold for U.S. cable networks to ma ke inroads into overseas markets. As noted in the first chapter, MVPD services have recently developed rapidly in the Asia Pacific region, as the average penetration rate, i.e., the proportion of households that can access those services through some fo rm of subscription, in 14 major c ountries increased from 5.1% in 1991 to 29.7% in 2000 (Zenith Optimedia, 2002). Cable networks usually send their programmi ng services via satellite to households with dish antennas or to cable system opera tors through which households receive services. Then, cable networks receive the carriage fees from cable system operators for programming. 28 The fees are in large part determined by the popularity of the networks and the number of subscribers that the operat ors have. Without carriage by the operators, networks reach to households is limited. Ther efore, the activity of cable networks in markets only makes sense when access to MV PD systems, notably major cable system operators, is guaranteed in the markets. With an increasing number of networks to choose 28 Taiwanese operators paid ESPN about 18 cents, the Discovery Channel about 90 cents, and CNNI about 40 cents per subscriber (Hughes, 1997a). 89

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from and a still limited amount of channel cap acity, cable system operators can exercise monosophy power, affecting the supply in th e market (Picard, 2002; Shrikhande, 2001). They do so, as retailers have a major imp act on deciding which brands are displayed on supermarket shelves. For instance, as of 2000, there were 150 channels vying for about 70 channel slots on most cable systems in Taiw an (Hughes, 2000b). In essence, the operators can be a bottleneck for cable networks to ente r the market. Meanwhile, they might seriously look at what programming their subscribers want. As Shrikhande (2001) assumes, the operators would show a preference for networks offering customized programming. In fact, Asian operators often complained that Western programmers did not figure out that Asian viewers wanted to see progr amming featuring people of th eir own ethnic background, and not just subtitled or dubbed versions of Western programming (Hughes, 1997b). Although carriage fees are stil l an important revenue source for cable networks, the popularity of cable advertising lessens the reliance on one singl e revenue source and allows for more investment in programming (Oba & Chan-Olmsted, 2005). In theory, cable networks compete with other communication medi a, particularly with broadcast networks, for advertising dollars. According to Picard (2002) and Warner and Buchman (1991), as audiences for broadcast television declined in the United States, much of the money formerly spent by advertisers on broadcast television went to cab le television. Cable television might still have a higher cost per thousand than broadcasting television. 29 However, cable networks with programming fo r relatively specific de mographics, such as gender, income groups, or psyc ographic groups, can attract adve rtisers who want to buy the demographics and get better value for mone y (Dimmick, 2003; Pars ons & Frieden, 1998). In spite of the remarkable growth in subs criber counts, MVPD services have yet to attract advertising dollars to a sufficient exte nt in many Asian market s with the exception of 29 Cost per thousand (CPM), which explains adver tising efficiency, refers to the cost to the advertiser to reach 1,000 households or persons (Wimmer & Dominick, 2000). 90

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Taiwan and India (Zenith Optimedia, 2002). Advertisers and agencies in many Asian markets, on the one hand, gradually take notice of the effectiveness of cable networks and get used to spending money on such specialized channels that allow them to target everyone from pan-regional elite audien ces to small, languageand cu lture-specific niches within individual countries. On the other hand, how ever, an unsolved problem in many Asian multichannel markets might be the lack of hard data advertisers want to know, such as how many viewers they are buying, who are watc hing, their age, income, occupation and hobbies, and when they watch with whom (Flagg, 1999; Hughes, 1997c). In the absence of those audience data, advertisers are possibly lo ath to spend heavily, and advertising revenue for cable and satellite television remain s low compared to broadcast television. The expansion of global television networks as well as that of global advertising agencies was in part a function of the expans ion of transnational corporations, since the former were supposed to provide the latter with ideal platfo rms to advertise products around the world, whereby further internationalizi ng their brands and expanding sales abroad (Demers, 2001; Hall, 1991; Herman & Mc Chesney, 1997; McChesney, 1998). It was expected in the early 1990s th at global television networks would allow global advertisers to make a single, most cost-efficient medi a buy on a global basis (Fahey, 1991). If a global television network has audience, who has sim ilar characteristics across countries and is viewed as an intermarket segment, it can be sold to global advertiser s seeking to reach the segment globally and to expand their share of the world market for specific consumer goods of interest of the segment. For instance, MTV created the global youth marketplace accessible to all advertisers who want to promote youth-oriented products worldwide. Capitalizing on this, Coca-Cola indeed signed an agreement in 1992 with MTV to place ads on its various programs reaching viewers in 100 countries (Banks, 1996). More recently, Discovery Channel pitched spots for a documen tary program, Cleopatras Palace, which was aired with 23 language versions on the same time at the same date worldwide, to such 91

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global advertisers as Visa and Merrill L ynch (Cauley, 1999). Now that many firms are global, the opportunity to be a ssociated with a global televise d event might be appealing to them. Presumably, global television networks provi de advertisers thr ee options: they can opt for a global campaign and advertise in all or selected countries covered by the networks; they can buy a whole pan -region campaign; and they can buy a local campaign and advertise in a specific country (Chalaby, 2002). To reach consumers around the world or in the entire region with just one media buy is cer tainly attractive to bi g-scale advertisers, since global and, to a lesser ex tent, regional reaches usually re quire a painstaking assembly of a number of media purchase (Cauley, 1999). Nonetheless, global advertisers have increasingly come to reali ze the effectiveness of country -specific programming channels (Advertising Age International, 1999). With t hose channels, advertis ers not only use more localized ads including local actors, music, and situations but also target specific audiences with a reach that is cost eff ective. The initial failure of STAR TV was, aside from low acceptance by potential viewers, attributed to the fact that few global and regional advertisers were interested in synchronous e xposure of the same message to 38 countries (Kraar, 1994). Advertisers felt that their message was dilute d, and products advertised was not available in every country the message reached. Global television networks with multiple local channels also attract local advertisers, who are not interested in pan-regional services. Actu ally, the development of market-specific feeds allowed STAR TV to acce ss local advertisers in addition to regional advertisers. Of the two, it was local advertiser s that proved more lucrative: STAR TV had around 600 advertisers split roughly 50-50 to local and regional in 1996 but had more than 900 advertisers with only 300 of these being regional in 1999 (Cooper, 2000). According to Cooper (2000), the size of regional advertisi ng in 1999 was estimated to be worth between U.S.$100 and 130 million in Asia, whereas the local television advertising budgets across 92

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Asian markets were worth between U.S.$8 and 9 billion. It is inferred from these data that relationships with local advertisers are critic al, and even U.S.-originated cable networks have to make an effort to attract local advertisers in Asian markets. It is plausible that advert isers have an impact on media content. Every advertiser wants television programming they sponsored more tailored to their own needs, based on their advertising campaign (Beatty, 1996). Not surp risingly, local advert isers prefer locally adapted programming. Additionally, it is also possible that even global and regional advertisers prefer locally adapted programm ing to globally or regionally standardized programming. Most of those advertisers are fu lly aware of the importance of advertising adaptation due to different consumer needs a nd wants, and the same logic might apply to television programming. Industry Competition Given the rapid increase in the number of media outlets worldwide, consumers are facing more media choices than ever. Unde r the multichannel environment, it is common that viewers have several channels of an iden tical type conformed to their tastes (e.g., news channels, sports channels, etc). For instance, there are about 100 different music channels competing around the world (Forrester, 1999). It was expected that U.S. media firms would not need to worry as much about local competition in Asia when they entered the region, since few Asian media firms can approach th e programming power of large U.S. media firms such as Time Warner or Viacom (Landler et al., 1994). In real ity, nonetheless, the more intense the competition in a market, the more likely U.S.-originated cable networks implement programming adaptation. As noted in the first chapter, scholars claim that in order to survive in the competition with loca l programmers who attract local viewers with greater local cultural ap peal based in domestic production, global television networks might have to offer more locally adapted programming. 93

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The advent of MTV Asia prompted local firms allied with local recording labels to launch their national versions of MTV one af ter another in many Asian markets (Burpee, 1996). Consequently, it was estimated that th ere were as many as 18 dedicated 24-hour music channels in Asia alone in the end of 1995 (Levin, 1995). While those channels, which understood the importance of MTV as a new progra mming concept, owed a stylistic debt to MTV in large part, they, unlike MTV at the time, mainly offered programming in local languages, including a high percenta ge of domestic artists ma terials (Banks, 1996; Santana, 2003). MTV Asia was confronted with the lim itations of the marketing model when local music channels, which provided the content in local languages and played music much closer to local tastes, became successful. Th e success of some latecomer channels then assured MTV Asia of the necessity to split it s feed according to markets to offer more locally adapted programming. Certainly, MTV c ould have avoided direct competition with local music channels if the network had pos itioned itself as an international network. According to Chang (2003), however, even thou gh MTV initially emphasized its niche as a foreign music programmer and denied its objectiv e of competing directly with local music channels, it finally had to adopt local adaptati on as their programming strategy to survive in more crowded markets of the world. With no intention to localize its program ming in Asia, CNNI had distributed the same news programs that were offered in the United States until the mid 1990s (Chang, 2003; Shrikhande, 2001). Meanwhile, the busin ess news programming market of Asia became competitive with the entrance of other global or regional news networks, such as BBC World in 1991, CNBC in 1995, Asia Business News (ABN) launched by Dow Jones in 1993 and merged with CNBC in 1998, and Bloo mberg News in 1998. Those news networks and CNNI were also in rival with each other in Europe, targeted at the business community and the top 5% of households by income (Chalaby, 2002). As seen previously, the international marketing literature suggests that competing against the same rivals in 94

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different countries would lead to greater st andardization rather th an competing against purely local firms. In reality, however, the impact of direct competition in the business news segment resulted in greater financial commitme nt in the form of more locally adapted programming (Shrikhande, 2004). CNNI opene d its Hong Kong production facility, moved into language customization for some Asian markets, and increased Asia-related news programming. The case of CNNI in Asian markets implies that a glob al television network eventually adopted programming adaptation even if they competed other global television networks. Brand and Country of Origin The past two decades witnessed the treme ndous proliferation of media outlets and the continuous fragmentation of audiences by which the old homogeneous mass audience became divided and subdivided into an ev er-changing array of new demographic and psychographic niche categories. In such an increasingly competitive media market, branding is essential for media firms to beco me successful, since it establishes an identity and creates an image that communicates what type of content is offered to a particular target audience (Bellamy & Chabin, 1999; Chan-Olm sted, 2006; Chan-Olmsted & Kim, 2001; Jacobs & Klein, 1999). In fact, more than ever, the criteria for audiences choosing media content are based on the perceived knowledge of a media brand ra ther than on availability and convenience (McDowell, 2006). On a practical level, c onsumers actually like brands because they package meaning, making choices and evaluations easier. Among various media firms, most proficient in branding strategies are perhaps ca ble networks whose goal is to attract highly defined niche audiences. Giving the target audiences reason to identify with the channel, branding is also vital in global television marketing on the grounds that well-known cable networks in the United States may barely be known in other countries and hence need more distinction from existing local se rvices (Bellamy & Chabin, 1999). 95

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Strong brands also reduce risk and uncer tainty for consumers. When consumers have limited prior experiences with a produc t category and the consequence of making a poor decision are significant, brand familia rity can reduce unwanted purchase anxiety. Media products are by nature experience goods, which can only be valued once they have been consumed. The uncertainty that arises from this characteristic could be diminished by building up a reputation through a strong br and (Reca, 2006). Although consumers depend on familiar brands to reduce the risk of bad purchases, McDowell (2006) suggests that advertising-supported brands (e.g., commercial broadcast networks) are not particularly price sensitive, 30 and consequences of a bad choice of those media brands are seldom significant to viewers. It is likely that the consequen ce of watching a disappointing television program are tiny compared to those of buying a defective automobile or even spoiled groceries. Low-risk media consumption is regarded as a low-involvement experiences in that audiences are not motivated to invest substantial cognitive efforts in brand decision making (McDowell, 2006). Nonetheless, this may not be the case with audience-supported media brands including cable networks, as th e audience is likely to rely on brand familiarity when purchasing or subscribing to media content products. For this reason, it is quite probable that cable system operators and sa tellite broadcasters would like to include networks with high brand equities in their lineups. Branding or brand management can enha nce a media consumers association, perception, and expectation of a media produc t with varying degrees (Chan-Olmsted, 2006). Brand strategies can help U.S.-originated cable networks minimize the barriers in foreign markets, offering identity, recognition, credib ility, and authority to audiences and, as 30 Within a business-to-business context in th e media industry, however, pricing can be a pivotal variable for managing brand equity For commercial broadcasters, this means capturing the attention of advertisers. Mc Dowell (2006) claims that communicating the niche attributes and benefits to advertisers as well as to au diences is the goal of brand management. The more added values a brand name can evokes to advertisers, the more likely they will pay a premium price fo r a commercial or advertisement. 96

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supposed in the previous chapter, eventual ly allowing more sta ndardized programming products. As seen in Table 1-2 in the first chapter, many U.S.-origi nated cable networks emphasize their worldwide reach and availability in an attempt to impress on audiences that they are global brands, whereby providing credibility and authority to themselves. Actually, such U.S.-originated cable ne tworks as MTV and CNNI have been successful in building strong brand images in many overseas markets. Both networks, along with the Economist, Time, Fortune, and G oogle, were named the most influential international media brand by Campaign Magazine (Pearson, 2003). MTV with its U.S.$6.6 billion brand valuation was also named the worlds most valuable media brand by Interbrand & Business Weeks 2005 Worlds Most Valuable Brands Report for the 6th consecutive year (Bell Global Media, 2005). Meanwhile, Discovery Channel was selected by Total Research Equitrend in 2003 as a t op 10 consumer brand among 1152 measurable brands (Adelphia Media Services, 2005) As Gershon (2006) points out, high brand recognition enjoyed by those networks gl obally can be their core competency. Given the inherent uncertainty about pr ogram quality viewers have until actual viewing, not only branding but also the image of country where the program was originally made could influence audience cognition. Gene ral evaluations or opi nions about countries may be related to attitudes toward programs from the countries. Su and Chen (2000) found a significant positive correlation between quality of the U.S. and Japanese programming perceived by Taiwanese viewers and their im pression of those countries. Audiences might rely on country-of-origin information, i.e., what country a program is originally made in, as an indicator of quality of the program. From this perspective, it appears that the country of origin of television progra mming functions as a brand. Havens (2003) takes notice of brand iden tities in international television coming from a combination of proven ability in a spec ific programming genre and a clear national image, as seen in spectacular Hollywood bl ockbusters, Brazilian telenoveras, Australian 97

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documentaries, or Japanese animations. Thes e countries might be synonymous with these genres. The countries can enjoy a favorable in ternational reputation that bestows prestige on producers of the genres (Havens, 2003). Due to the country equity of the United States, U.S.-originated cable networks, which are not always well known outside the United States, could be accepted in foreign markets with rela tive ease, if genres they specialize in are associated with areas for which their home country, i.e., the United States, is internationally renowned (e.g., entertainment or pop culture). Po pular culture has alwa ys been one of the great American exports. In this case, it is probable that those networks can offer standardized programming, capitalizing on the country of origin as a brand. Meanwhile, audiences in different market s could perceive a certain brand and country of origin differently, partly depending on culture-specific factor s. Overall, people in collectivistic cultures of high uncertainty avoidance, such as most Asian countries, are expected to be royal to known brands a nd unlikely to buy unknown brands. According to Tai and Tam (1996), Singaporeans and Hong Ko ng people are very brand-conscious and willing to pay a higher price for the prestige of owning branded products. Then, their needs could be satisfied by U.S.-originated cable networks, because those networks, unlike free over-the-air networks, are avai lable exclusively to subscrib ers paying monthly fees and, unlike domestic cable networks, are global brands In fact, CNNI, Discovery Channel, HBO, and ESPN are now established brands in many Asian markets, as acknowledged as most-watched channels among affluent and in fluential people by Pan Asia Pacific Cross Media Survey and Nielsen Media Researchs Asian Target Market Survey (Television Asia, 2003a, 2003b). Firm Characteristics Philosophy/orientation The business strategies and corporate culture of todays TN MCs often directly reflect visions of the person who is responsib le for developing the organization and its 98

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business mission (Gershon, 2000). As pointed out previously, STAR TV drastically changed their programming strategies to include loca l programming and language s after their initial slackness with the pan-Asian, English programmi ng service targeted at Asian elites. This policy change in programmi ng was prompted by the takeover of STAR TV by News Corporation, which bought a controlling 64% of interest in 1993 and purchased the remaining 36% in 1995. Rupert Murdoch, chairm an and chief executive officer (CEO) of News Corporation, underscored the necessity to commit STAR TVs new management to learning the nuance of Asias diverse cultu res (Curtin, 2005; Economist, 1994). Likewise, Viacom chairman and CEO Sumner Redstone articulates that the best broadcast would be culturally specific (Red stone & Knobler, 2001). Resource To incarnate the vision and implement it as a strategy, firms have to possess and capitalize on sufficient resources. It is possible that STAR TV initially did not have sufficient resources necessary to implem ent programming adaptation (e.g. funds or experiences) but accumulated or acquired them later. Media firms engaged in television business convert resources into televisi on programming and are involved in their dissemination to viewers (Doyle, 2002). The funds to develop or acquire media content and the ownership of the content are regarded as property-based resource s, which are legally protected through property righ ts, but the content also re lies on knowledge-based resources (e.g., know-how and skills for innovation and management) (Chan-Olmsted, 2006). Chan-Olmsted (2006) suggests that the pr operty/knowledge-based typology presents a meaningful system for classifying and anal yzing media firms resources, particularly highlighting the importance of knowledge-based resources in the media industry. Media products, as talent goods, depend on peoples ta lent to a large exte nt (Reca, 2006). Wolf (1999) shows a similar view, suggesting that the entertainment economy will place 99

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enormous demands on creativity. Landers and Chan-Olmsted (2004) listed five types of expert as knowledge-based re sources necessary for U.S. te levision broadcast networks: management expertise, multi-purposing expert ise, audience expertise, new technology expertise, and international e xpertise. It is noteworthy that such knowledge-based resources as creativity and industry knowledge remain th e essential elements in the production and marketing of the content. In reality, however, it is unlikely for a TNMC to possess all e ssential resources to compete successfully in a global media market place. Global television networks, even with attractive property-based resources such as funds or the ownership of media content, as well as knowledge-based resources including general expertise in production and marketing, may lack international expertise to benefit from the resources in overseas markets, to leverage their foreign affiliates, and to mana ge their global operati on. In the early 1990s when U.S. cable networks began expanding in Asia, many of them simply tried to provide all-U.S. programming unmodified to keep cost s down (Jensen, 1994). It is hard for media firms to develop products that differ from th eir current lines for new geographical markets in which they lack experience (Chan-Olmste d, 2004). The international expertise could be something learned in an evolutionary process. Along with experience being accumulated, the networks would become more skilled in international operation, master how to better market products, understand governments, protect it s intellectual property, and fight piracy in local markets. As global television netw orks have matured in Asia, locally adapted content has typically become an increasingl y prominent feature in programming (Bowman, 2003). A firm can achieve competitive advantage in the global arena by allocating resources and coordinating activities of relationships eff ectively. In theory, it is supposed that the operational dynamic of a global tele vision network with many local affiliates lies in that it can obtain both global efficacy and local res ponsiveness through flexible coordination and 100

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integration of resources, due to their unique structures c onfigured by both the global and local dimensions. On the one hand, each affiliate in local markets can benefit from sharing resources at a network level (P athania-Jain, 2001). For example, local affiliates may rely on the network for an assured supply of resour ces (e.g., programming, ma terial, or footage). On the other hand, the network can gain knowle dge from local affiliates through creative sharing and information exchange, whereby combining global leverage with sensitivity to local specificity. The affiliates are transforme d into strategic partners whose skills and know-how help providing firms with worldw ide competitive advantages (Chalaby, 2004b; Sanchez-Tabernero, 2006). As a result, the enti re firm functions in the same way as a coordinated, integrated network and seeks to facilitate the exch ange of expertise. Degree of centralization/decentralization Control is associated with the capacity to exert a decisive influence on management (Sanchez-Tabernero, 2006). A greenfield venture usually allows headquarters to control the new unit completely. For example, the Disn ey Channel has long tried to micromanage foreign operations out of Burbank, California, the headquarter city of Walt Disney, instead of letting local managers operate autonomous ly (Lacter, 2000). The local subsidiary is allowed to make only marginal alternations to a finished product to enhance its local acceptability and has only little, if any, autonom y in how material is chosen for dubbing, as every voice dubbed has to be approved by Disn eys headquarters (Pathania-Jain, 1998). Disney is worried that a locally produced service would tarnish their vaunted brand (Waldman, 2002). Meanwhile, a firm that has alr eady established other overseas operations and accumulated more international experien ce may have a greater appreciation of the differences between markets. Then, programming strategy could be determined by a high degree of autonomy of local aff iliates in view of sp ecific local market characteristics, not being merely imposed by the corporate hea dquarters of the netw ork. For instance, the highly decentralized management of MTV Ne tworks internationa l operations provides 101

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local managers the ability to developing programming strategies to fit the needs of each individual market (Gershon & Suri, 2004). Market entry mode Media firms have traditionally followed the option continuum sequentially from exporting to strategic allian ces in international expans ion (Chan-Olmsted, 2006; Gershon, 2006). It is likely that estab lishing strong local management might be the most difficult aspect of the firms pioneering settlement of local television markets. In a situation where a TNMC enters a market without the sufficient resources, they would have to rely on local partners that have the res ources complementary to their own resources to garner the otherwise unavailable competitive advantage (D as & Teng, 2000). In particular, strategic alliances reduce uncertainty in local market s, in technology, or in product standards, facilitating knowledge shar ing and learning (Chan-Olmsted, 2006). According to Pathania-Jain (2001), the most significant contri bution made by the local partners is to act as a knowledgeable and well-conn ected tour guide in the process of creating programming that would be more appealing to local audiences and more relevant to individual local markets. Indeed, many global television netw orks are putting huge resources behind local original productions, while fo rming strategic alliances with local partners to give themselves greater relevance to individua l Asian market (Bowma n, 2003/2004). Alliance and joint ventures have increasingly been common between TNMCs and local firms, dovetailing the benefits of knowledge of local market conditions with the advantages of scale economies (Oba & Chan-Olmsted, 2006; Sanchez-Tabernero, 2006). Based on the international marketing literat ure, more emphasis will be placed on programming adaptation strategies in the cas e of joint-venture ope rations or significant license agreements with local partners than in establishing new wholly-owned subsidiaries, i.e., greenfield ventures. In re ality, however, TNMCs tend to seek more equity ownership in an international market, shifting from li censing or joint ventures to establishing 102

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wholly-owned subsidiaries, as their knowledge and experience about the market develops through internal transfer of knowledge (Li & Dimmick, 2004). Research Questions The present study examines what factors ar e perceived by executives or managers, who are in charge of programming at U.S.-origi nated cable networks in Asian markets, as determinants of their programming products, assu ming that external as well as intra-firm factors could influence the decision, as indicat ed by the international marketing literature. To explore the relationship between factor s identified in the preceding theoretical considerations and programming strategies actually implemented by those networks, research questions (RQs) are pr esented. All research questions are analyzed based on data obtained through interviews with executives/manag ers at Asian affiliates of U.S.-originated cable networks, along with data obtained from se condary sources such as trade journals and newspaper articles and statements on company Web sites. First of all, to grasp the big picture, RQ1 asks what programming product strategies U.S.-originated cable networks actually employ in Asian markets. RQ1: What programming strategies are emplo yed by U.S.-originated cable networks in Asian markets? Local adaptation of televisi on programming could include several means other than language customization. RQ2 addresses the way U.S.-originated cable networks adapt programming to Asian markets. RQ2: In what way do U.S.-originated cabl e networks adapt programming to individual Asian markets? It was discussed in the literature re view that the feas ibility of product standardization/adaptation might vary with the nature of th e product. Then, RQ3 asks how the programming strategy by the U.S.-originated cable networks is perceived as a function of the nature of the programming product. 103

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RQ3: How are product characteristics perceived to influence the programming strategy of U.S.-originated cable networks? The success of product standardi zation may in part premise the presence of intermarket target segments across national markets at which a firm can target its products. RQ4 addresses if such segments really exist, and, if any, how the existence is perceived to influence the programming strategy. RQ4: How is the existence of intermarket audience segments perceived to influence the programming strategy of U.S.-originated cable networks? It was suggested that similari ties and differences in culture between markets could affect acceptance of standardized products. With the following research question, how this assumption applies for the television progr amming products of U.S.-originated cable networks in Asian markets is examined. RQ5: How are cultural similarities/differenc es between markets perceived to influence the programming strategy of U.S.-originated cable networks? Several types of environmental similarities/diff erences may affect the direction for product standardization or adaptation. RQ6 asks how economic, geographic, legal, and supporting environments including MVPD systems and adve rtisers in Asian markets are perceived to influence the programming strategy of U.S.-originated cable networks. RQ6: How are environmental factors (e .g., economic condition, geographic condition, regulation, and supporting sector) percei ved to influence the programming strategy of U.S.-originated cable networks? It was proposed that the competitive intensity in a market and the differences in position among markets might drive U.S.-originated cab le networks to implement programming adaptation. RQ7: How are the competitive situation and their market positions perceived to influence the programming strategy of U.S.-originated cable networks? 104

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The brand and country of origin associated with high quality may allow firms to pursue product standardization more easily. RQ 8 assesses how the brand image of a U.S.-originated cable network and the image of the country of origin of a product are perceived to affect the pr ogramming strategies of U.S. -originated cable networks. RQ8a: How are the brand image of a U.S.-or iginated cable networks perceived to influence the programming stra tegy of the networks? RQ8b: How are the image of th e country of origin of a pr oduct perceived to influence the programming strategy of U.S.-originated cable networks? Finally, RQ9 assesses how intra-firm character istics of U.S. cable networks (e.g., business philosophies, the presence or absence of managerial resources, centralization/ decentralization of authority, market entry mode, etc.) are perceived to influence the decision on programming strategy. RQ9: How are intrafirm characteristic s perceived to influence the programming strategy of U.S.-originated cable networks? 105

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CHAPTER 4 METHODOLOGY Qualitative Research The present study subscribes to qualitat ive research method for the purpose of exploring how the aforementione d factors are actually percei ved by U.S.-originated cable networks to influence their te levision programming strategies in Asian markets. Qualitative research covers a wide range of approaches and methods found within different research disciplines, including field observations, in -depth interviews, focus groups, and so on. Meanwhile, according to Snape and Spencer (2003), there is a fairly wide consensus that the research method is a naturalist ic, interpretative approach conc erned with understanding the meanings, which people attach to specific phenomena (e.g., actions, decisions, beliefs, values etc.) within their social worlds. Th e qualitative research method is suitable for addressing questions of how, why, and in wh at context specific phenomena occur and what impacts upon or influences such phenomena (Carson, Gilmore, Perry, & Gronhaug, 2001). It is critical for quantitativ e researchers to draw broader and more generalizable conclusions about a relatively large numbers of things. In contrast, for qualitative researchers, the aim is not to infer and genera lize the findings from a sample to a population but to generate patterns and linkages of theore tical importance. It is then necessary for qualitative research to get rich and detailed understanding about a few things. To put it simply, whereas the former strive for breadt h, the latter strive for depth (Beam, 2006). The great strength of qualitativ e research lies in the valid ity of the data obtained. For example, individuals are interviewed in sufficie nt detail for the results to be taken as true, correct, complete, and believable reports of their views and experiences (Hakim, 2000). Strauss and Corbin (1998) define qualitative research as any research not primarily based on counting or quantifying empirical materials. Qualitative research methods provide a means of accessing unquantifiable facts about the actu al people researchers observe or talk to, which cannot readily be convert ed to numerical values but are represented by categorical 106

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data, by perceptual and attitudinal dimensi ons, and by real-life events (Berg, 2001; Yin, 2003). While the quantitative rese archer tries to limit contaminating variables by conducting investigations in controlled setting, the qualitative researcher tries to capture the normal flow of events without controlling extraneous variables. In other words, quantitative research requires highly contro lled setting, but qualitative re search takes flexibility in natural setting. Samples that are relatively small in scale and purposively select ed on the basis of salient criteria help identifying patterns of causations between factors on the ground, as compared with abstract correlations between vari ables in the analysis of large-scale surveys and aggregate data. Note that correlation does not in itself imply causation. For example, newspaper reading and income might be str ongly related, but this does not necessarily denote that gaining a high salary causes people to read the newspaper (Wimmer & Dominick, 2000). Causal inference is concer ned with establishing causality and causal process, as distinct from the st atistical correlations identified by most multivariate analysis (Hakim, 2000). The interpretation of phenomena in qualita tive research is greatly influenced by researchers view and value. This may lead to equivocal explanations and researchers biases easily, and the subjectivity of the research makes it difficult to establish the reliability and validity of the approaches and data analyses. Whereas quan titative methods use distinct and precise ways to calculate reliability and se veral techniques that help establish validity, these concepts may not translate well into the qualitative paradigm (Wimmer & Dominick, 2000). As for reliability, qualitative methods should be extremely systematic and have the ability to be reproduced by subsequent rese archers (Berg, 2001). One prerequisite for allowing other researchers to repeat an earlier study is the need to document the procedures followed in the early study. In the past, qua litative research pr ocedures were poorly documented, making reviewers suspicious of the reliability of the study. How subjects were 107

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selected, how data were gathered, and how they were interpreted should be described in detail (Berg, 2001). With the description, othe r researchers can repeat the procedures and arrive at the same results. Meanwhile, the concern over validity for qua litative research may be extended to the broader problem of making inferences. A research er infers that a particular event resulted from some causes based on interview and docum entary evidence collected as part of the study. Yet, errors of interpretation are diffic ult to gauge and impossible to avoid, because each researcher has his or her own unique interpretation so that no single interpretation is correct (Hollifield & Coffey, 2006). Nonetheless, a researchers interpretation frame should be transparent. One solution might be to allow readers to access the data itself to assess the researchers interpretation. In essence, qualitative research should specify explicit statements about research design and methods of data collection, analysis, and interpretation (Hollifield & Coffey, 2006). Case Study Among the qualitative research methods, th is study adopted the case study approach. The term case study is strongly associated with qualitative research, as sometimes used as a synonym for qualitative research (Lewis, 2003). Indeed, case study seeks why something has occurred, as is the case of qualitative research. Yin (1994, 2003) defines a case study as an empirical inquiry that uses multiple sour ces of evidence to investigate a contemporary phenomenon within its real-life context, in which the boundaries between the phenomenon and its context are not clearly evident. This definition highl ights how a case study differs from other research methods. For example, the survey technique tries to define the phenomenon under study narrowly enough to limit th e number of variables to be examined (Wimmer & Dominick, 2000). In contrast, case st udies can explain the causal links in the real-life context that are too complex for surveys or experiments, which cannot reveal all the possible reasons behind a phenomenon. 108

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Four essential characteristics of case study approach listed by Merriam (1988) are particularistic, descriptive, he uristic, and inductive. The case study is focused on a particular situation, event, or phenomenon, making it a good method for studying practical, real-life problem. The final product of a case study is a detailed description of the topic under study. A case study should be heuristic, as new inte rpretations, perspectives, and meanings and fresh insights are all goals of the study (Wimmer & Dominick, 2000). In terms of the inductive characteristic, a case study usually attempts to disc over new relationships rather than verify existing hypothesis, trying to build theories. Those theories are data driven, and valid, in-depth, and detailed data contribut e to understanding of phenomena. Inductive reasoning then looks for pattern s and associations derived fr om observations of the world and data themselves (Snape & Spencer, 2003). The case study method allows researchers the ability to deal with a wide variety of evidence to systematically investigate individua ls, groups, organizations, or events. For this purpose, documents, field observations, interv iews, and physical artifacts necessary for the investigation can be all incorporated into a case study. The variety and thoroughness of the data would become much deeper, providing in sights into complex relationship. What data collection methods are actually employed is pr imarily based on the aim of research and what can best illuminate what are studied. However, it is common to use more than one data collection method by triangulation to i nvestigate the same phenomenon. This is interpreted as a means of mutual confirmation of measures and validation of findings (Berg, 2001). As Wimmer and Dominick (2000) sugge st, multiple sources help the case study researcher improve the reliability and validity of the study. Case studies are in fact a useful design for research on business management, helping researchers bridge the gap between foundational studies and practice. Many of the insights of the resource-based view, in pa rticular where less tangible, unobservable resources were involved, could only be expl ored using a case study approach (Godfrey & 109

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Hill, 1995; Lockett & Thompson, 2001). Likewise the understanding of issues concerned with marketing in a specific context or situat ion requires in-depth an alysis of a single or specific case (e.g., group of people, firm, or i ndustry) and the context in which that firm operates (Carson et al., 2001). Selection and Number of Cases Selecting the cases to be studied is one of the most difficult steps in case study approach (Yin, 2003). The selection process mu st incorporate the specific reasons why a particular group of cases is selected for incl usion in the study and an alysis (Hakim, 2000). Considerations for the case sele ction include which cases are most typical or representative, which contain elements that address the domin ant theme of research and include variables central to research questions, and which wi ll provide the best access to information (Hollifield & Coffey, 2006). The current st udy subscribes a purposive sample of U.S.-originated cable networks in Asia n countries. Unlike random or convenient sampling, 31 purposive sampling is the se lective study of persons, gr oups, or institutions that have particular features or characteristics, which would enable de tailed exploration and understanding of the central them es that the researcher wishes to study (Ritchie, Lewis, & Elam, 2003). Samples are selected on the basis of certain criteria, and those who fail to meet the criteria are eliminated. There are a range of different approaches to purposive sampling and different types of sample composition depending on the studys aims and coverage. Ritchie et al. (2003) suggest that samples are chosen to repr esent and symbolize prescribed groups or characteristics (symbolic representation) and to reflect the diversity of the study population as fully as possible. Unlike statistic repres entation in probability sampling required for 31 In random sampling, subjects are sampled rando mly so that every member in the full population must have precisely the equal chance to be included in the eventual sample to be studied. Convenience sampling is a collecti on of readily accessible subjects for study (Wimmer & Dominick, 2000). 110

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quantitative research, symbolic representation de liberately selected to reflect particular features is associated with the purposive sampling method. Diversity optimizes the chances of identifying the full range of factors or feat ures associated with a phenomenon (Ritchie et al., 2003). Diversity is especially important, si nce it is possible that containing too little diversity prevents the study fr om exploring the varying influe nces of different factors. Yet, there might be no ideal number of cases. The key requirement would be to include cases until understanding is reached, and the researcher reaches data saturation to analyze in appropriate depth (Carson et al., 2001; Ritchi e et al., 2003). Having only one case, therefore, is justif ied when the case meets all the conditio ns of the theory or is rare or extreme, and finding other cases is so unlikely that research about th e situation could be never done if the single case was not investig ated (Yin, 1994). However, those situations may be somewhat unusual. Eisenh ardt (1989) suggests that with fewer than four cases, it is often difficult to generate theory with mu ch complexity, and its empirical grounding is likely to be unconvincing. For the maximum, Mi les and Huberman (1994) claim that more than 15 cases makes a study unwieldy. Given the real constraints of time and cost in most research, Hedges (1985) sets an upper limit of 12 cases. At the initial stage, the present multip le-case study designed two dimensions, consisting of four types of U.S.-originated cab le networks and three Asian markets. They should be arranged to cover a range of types, re flecting the diversity of the networks and the markets (see Table 4-1). It was likely that four types of networks were necessary at the very least, given a variety of program types cable networks offer. Likewise, given the cultural and environmental diversity within the regi on, the present study re quired minimum amounts of three Asian markets. Sample Networks The selection of U.S.-originated cable networks was justified on three accounts in association with symbolic representation and diversity. First, each sample network should 111

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operate on a global scale and also actively part icipate in Asian markets to ensure symbolic representation. Second, each sample network shoul d specialize different program types. As mentioned previously, the program type could influence the extent to which a program is understood in different cultural contex t and hence the degree of programming standardization/adaptation. Third, each sample network should be owned by different parent firms. This is because commitment to and emphasis on product standardization/adaptation might vary, depending on parent firms busine ss orientation. The second and third criteria were intended to reflect the diversity of networks. Following these three criteria, the present study selected the U.S.-originated cable networks of Music Television (MTV), Ca rtoon Network, Entertainment and Sports Programming Network (ESPN), and Discovery Channel as samples. As seen in Table 1-2 in Chapter 1, they all expand internationally. Each of these networks principally dedicates itself to a specific program-type, as MTV to music programming, Cartoon Network to animated programming, ESPN to sports progra mming, and Discovery Channel to factual, informative programming typified by documen taries. Those networks are also owned by different parent firms, as MTV Networks by Viacom, Cartoon Network by Turner Broadcasting acquired by Time Warner in 1996, ESPN by Disney (80%) and Hearst (20%), and Discovery Channel by Liberty Media Corp oration (50%) with the remaining by Cox Communications, Advance/Newhouse Communications, and John Hendricks, Founder, chairman and CEO of Discovery Communications. Global news networks, such as CNN International, were excluded from the sample so that the present study can focus on and co mpare programming strategies of networks mainly providing entertainment programming, whet her fictional or non-fictional. According to viewers basic aim to consume media conten t products, a certain dis tinction can be made between news and entertainment programs. Moreover, news is generally supposed to travel more easily across borders than entertainment pr ograms, since it is less deeply rooted in one 112

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culture (Morley & Robins, 1995). To the contra ry, entertainment perhaps loses more from one country to another, due to its cultura l specificity, and hence necessitates more adaptation than news to remain relevant to local audiences (Cha laby, 2002; Shrikhande, 2001). Some may wonder if Discovery Channel falls into a category of entertainment networks. Yet, the network defines itself as a leading provider of real -world entertainment (Discovery Communications Inc ., 2006a). In fact, Discovery Channel often prefers factual entertainment programming to documentary programming when referring to their own programming, Sample Markets Selection For the selection of markets, in what As ian markets sample networks have regional and local offices was examined first (see Table 4-2). Obviously, because a network is watched in 100 national markets does not mean that the network has 100 different feeds. In reality, the same feed is offered in many parts of Asia with some lo cal languages provided as an option available through se parate tracks for dubbing or sub titles. For example, viewers in Hong Kong, Malaysia, Thailand, Indonesia, a nd many other countries in the region get the same Cartoon Network programming at the same time as those in Singapore. MTV India is delivered not only to India but also to Bangladesh, Nepal, Pakistan, Sri Lanka, and the Middle East. Given a programmi ng feed available in a mark et where a network does not have a local office, the feed is usually shar ed with some other markets. Then, it seemed reasonable to exclude markets where sample ne tworks do not have their local offices, since networks seldom develop programming strategies specific to those local markets. As shown in Table 4-2, there are substantially ten mark ets in Asia in which sample networks have local offices. U.S.-originated cable networks often subdi vide the Asian region into three parts from a strategic viewpoint: Greater China including Taiwan and Hong Kong, Japan, and 113

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India. Sample networks actually put importan ce on and intensively establish affiliates in those three parts. Comparing similar countries might miss the bigger picture of transnational differences (Livingstone, 2003), but three parts above have different cultures with each other, probably allowing the researcher to comparatively examine the cultural impact on programming strategies. It, therefore, seemed valid to sel ect a country in each of Greater China, Japan, and India, respectively, as sample markets so that the present study could reach more universal conclusions about Asian countries. It is no doubt that Peoples Republic of China (China), which has increasingly opened its television market, draws the interest of most TNMCs. Yet, the current study excluded China from the sample. Although the ma rket potential of China is understandable, as Chan (2004) claims, what attracts TNMCs is not necessarily the current value of the Chinese market but its potential. Indeed, it is s till in the early days for most U.S.-originated cable networks to explore limited markets in China, 32 and hence it seemed too premature to discuss their programming strategies in the country. Instea d, Republic of China (Taiwan) was chosen for the study as the Asias mo st mature cable television market with a penetration of over 80%. Oba and Chan-Olmst ed (2005) found that Taiwan exhibited a market condition that seemed perfect for the gr owth of cable including abundant channels in a typical cable programming package and ma ture cable advertising market. Global television networks have actually given im portance to the Taiwanese market as a springboard for entry into the rest of Asia and particularly into China (Chen, 2004; Tan, 1997). 32 MTV was allowed to land its 24-hour feed, MTV China, only in the Southern Chinese province of Guangdong in 2003 and reached 10 million households as of April 2005. ESPN STAR Sports does not have dedicated channe ls in China but two syndicated programming blocks with China Central Television and Hunan Broadcasting Group. The Discovery Channel programs were distributed in a ni ghtly two-hours prime time block to 20 cable systems in China as of May 2002. 114

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Japan was chosen as the worlds second largest and Asias largest television market based on advertising expenditure, although Japan, unlike Taiwan, does not have a vastly successful cable television indus try. Many cable networks in Japan do not currently benefit from the huge advertising market, as the to tal revenue of the cab le industry, 281.5 billion yen, was approximately 10 percent of that of the commercial broadcas t industry, 2.7 trillion yen, as of 2004 (Information and Communicatio ns Policy Bureau, 2006). Meanwhile, Japan is also famous for its willingness to adopt Western pop culture aggressively. In the international market, the country has been one of the most important countries for the U.S. entertainment industry as the largest importer of U.S. films (Hasegawa, 1998; Wildman, 1995). India is another important market with high potentiality for U.S.-originated cable networks, often seen as comparable as China in terms of size. However, the current study did not take up India as a sa mple, since relatively fewer fresh insights seemed to be obtained from the further research on the pr ogramming of global televi sion networks in the Indian market. Previous scholarly works have already discussed the programming issue in the Indian market to some degree through th e interpretation of texts (e.g., Cullity, 2002; Page & Crawley, 2004; Thussu, 2004) or from the perspective of strategic management (Pathania-Jain, 2001). The present study instead selected Singapore as another sample market. It seemed interesting to investigate programming stra tegy in the multiethnic country, such as Singapore. It is pointed out that American programs are more accepted in Singapore where English is more widely spoken, and yout h embrace Western pop culture (Godard, 1994). More important, Singapore shapes itself to become Asias media hub. Singapores geographical location in Asia, political stability, financial and legal infrastructure, and technological advancements all make it a strategically attractiv e location for global television networks (Daswani, 2005). In fact, many U.S.-originated cable networks have 115

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established their Asian regional headquarters in Singapore. It s eemed significant to delineate opposing views, if any, on programming strate gy between regional headquarters and local offices. Among four sample networks, thr ee but Cartoon Network have their regional headquarters in Singapore, such as MTV Networks Asia, ESPN STAR Sports, and Discovery Asia. In terms of Cartoon Network, Cartoon Network Asia/Pacific, their regional headquarters in Hong Kong, is responsible for their operation in the Asian markets except for Japan. Characteristics Table 4-3 summarizes size, economic, advertising, multichannel, language, and cultural data of the sampled markets as well as those of the United States for reference. In large pat because of the difference in land areas, the population in sample national markets varies tremendously, ranging from 4.5 million in Singapore to 127 million in Japan. Yet, even the population of Japan is about two fifth as large as that of the United States. In terms of the economic environment, Japan is the s econd largest economic power after the United States. Meanwhile, Singapore and Taiwan are often referred to as Asian NIEs (Newly Industrializing Economies), rapidly expanding economies that depend heavily on foreign exchange. Along with the rising purchasing power, many consumers in both countries are perhaps more willing to pay a higher price for brand name products. In terms of the penetration of multichannel media, Taiwan, with a penetration rate as high as 80%, has a multichannel market as matured as the United States has, while Japan and Singapore might be regarded as moderately developed mu ltichannel countries. The positive relationship between multichannel penetrati on and advertising revenues is logical as a medium might start attracting advertising dollars only wh en it has accumulated a substantial amount of audience. In terms of language, Singapore is on e of a few Asian countri es where English is spoken as the official language. Many young Si ngaporean audiences whose first language is English enjoy watching American televisi on programs without dubbing or subtitles. 116

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Learning English is compulsory for most second ary and high school students in both Japan and Taiwan, but the proportion of population who speak English fl uently is not high in both countries. Asian cultures are commonly characterized by high power distance, collectivisim, and long-term orientation, rela tive to American cultures, wh ich are characterized by low power distance, individualism, and short-term orientation. These characteristics are clearly shown in Figure 4-1 that illustrates Hofstedes multidimensional cultural index scores for three Asian countries sampled for the curren t study and the United States. It is also noteworthy that some dimensions show va riations among those three Asian cultures. Although Japan is a masculine c ountry, this does not hold true for other two countries. In terms of uncertainty avoidance, Japan and, to a lesser degree, Taiwan have high scores, whereas Singapore has a low scor e. Differences in product evalua tion could be attributed to differing score in uncertainty avoidance Data Sources and Collection As noted previously, multiple data sources can be incorporated into a case study to view a phenomenon from various angles and to complement with each other sources. Two data sources of evidence were used in the present study: personal in terviews as a primary source and existing documents as a secondary source. Personal interviews form the foundation for the current research, while sec ondary sources provide additional support for the research. Personal Interview Data for the present study were mainly gathered through persona l interviews with firm decision-makers, such as executives or managers, who are responsible for programming or marketing of sample U.S.-origi nated cable networks in Asian markets. The interviews were intended to obtain descriptive data related to their programming practices. It appeared that in-person in terviews would provide a great depth of information about a 117

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research topic that other re searchers had hardly collected before. The present study is focused on what factors are perceived by executives and managers with decision-making authority as determinants for the product stra tegy of U.S.-originated cable networks in Asian markets. To gather data for the topic, there might be no better way than personal interviews, since information necessary fo r the research are thoughts, opinions, and motivations of officials responsible for the marketing of programming products, and those types of information can be fully drawn only through in-person interv iews. As Taylor and Bogdan (1998) claim, interviewing provides a useful means of access particularly when researchers are interested in understanding the perceptions of participants. Hollifield and Coffey (2006) suggest that almost any research projects that required data from senior media executives would have to employ interviews. Nonetheless, gaining access to busy executives and managers is generally difficult. The author made the fullest possible use of pe rsonal and professional networks to generate interview subjects. It is assumed that achie ving access to those offi cials would not have been possible without a network of personal contacts and snowball effect. 33 Appendix A lists the name and title of interviewees. How they were recruited is described in detail in Appendix B. After the meetings were arrange d, the four Japanese, three Taiwanese, three Singaporean, and one Hong Kong offices were visited to conduct the interviews. Interview Design Interview methods typically include the follo wing three types: structured interview, semi-structured interview, and non-structured interview. A stru ctured interview has a list of predetermined questions, and interviewers do not deviate from the list; a semi-structured interview has some predetermined questions bu t can follow interesting inquiry introduced by interviewees in a flexible manner; and a non-structured interview is free-flowing with no 33 The basic strategy of snowba lling involves first identifying several people with relevant characteristics and interviewing them. These subjects are then asked for the names of other people who posses the same attributes as they do (Berg, 2001). 118

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predetermined questions (Hollif ield & Coffey, 2006). The non-stru ctured type is typically used in intensive, in-depth interviews. According to Wimmer and Dominick (2000), intensive interviews are customized to i ndividual respondents, whereas in personal interviews, respondents are usually asked the same questions. The present study employs semi-structured interviews, which are located somewhere between completely structured and complete ly non-structured inte rviews. Although most interesting, unexpected responses are often obtained through non-stru ctured interviews, multiple-case methods require structured or, at l east, semi-structured interview styles to find similarities or differences (Hollifield & Coffey, 2006). Structured questions offer respondents approximately the same stimul us and provide researchers comparable responses across cases. Unless the same things are asked, it might be hard to compare the responses. Meanwhile, executives tend to respo nd more positively to a conversational style that allows them some control of the direction of the interview, while being less likely to commit the time and patience required for unstructured interviews (Hollifield & Coffey, 2006). Interview Instruments Questions asked in interviews were pred etermined to explore research questions presented in Chapter 3. Questionnaire design should reflect the basic purpose of the research. Again, the present study examines wh at factors are percei ved by networks as determinants of their programming products, assu ming that external as well as intra-firm factors could influence the decision. A questi onnaire survey, theref ore, was designed to investigate their practices and perceptions. By request, respondents were sent in advance a list of questions, which might be asked in the interview (see Appendix C). A series of those scripted questions was used as a major guide line in interviewing to keep respondents on the right track. 119

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Although the same questions were asked during actual interviews for the current study, the question order was not strictly contro lled. Moreover, as interviews took a form of semi-structured interviews, some questions were added or skipped ad hoc, if they seemed necessary or unnecessary, and deviations from the predetermined questionnaire were freely accommodated. These were partly because the duration given for each interview greatly varied depending on respondents schedule, actu ally ranging from 45 minutes to two hours; partly because respondents might not remain inte rested in very formulaic interview process; and partly because the interviewer needed to generate additional questions arising from interactions during th e interview. In add ition, it was common that further inquiries for subsequent interviews were conceived from the information obtained in preceding interviews. Interviews were conducted at res pondents offices or conference rooms without any intervention by third parties. Interview Procedures It has often been pointed out that cross-na tional management is a very difficult topic to deal with (Adler, 1983; Tayeb, 2001). Among others, linguistic differences are typical difficulties in such research. In the presen t study, all interviews were conducted by the author in either Japanese or English, depending on the native tongue or preference of the respondent. The only exception was the interv iew with a programming manager of MTV Taiwan, who preferred an interview in Mandarin Chinese. The interview coordinator was present to serve as an interpreter between Mandarin Chinese and English. Burg (2001) suggests that ideally interviews must be conducted at the level of language of the respondents. Otherwise, the at tention of the respondent is lessened, and communication problems could become severe in the wors t case scenario. Meanwh ile, Broadfoot (2000) notes that interviews must be conducted by interviewe rs who are fluent in the language in question. It might be difficult for the interviewe r to immediately react in foreign language to certain statements made by interviewees, wh ich rise unexpectedly during the conversation. 120

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In those lights, the interviews in English for the present study had certain limitation, as neither some respondents nor the author was na tive in English. However, as Beuselinck (2000) suggests, it is difficult to el iminate language barriers completely. The interview procedures obviously involve human subjects as respondents. All research designs and instruments used in the research were reviewed by the University of Florida Institutional Review Boards (IRB) Subjects were fully informed about the processes in the research so that they voluntarily consented to participate in the present study (see Appendix D for a copy of the informed consent sheet). The author obtained informed consent from respondents before including them in the research. With the permission of the involved subjects, the interv iews were tape-recorded. The tape recording might lead to the disadvantage of being highly obtrusive, causing respondents to be needlessly careful about their choice of wo rds (Singleton, Straits, Straits, & McAllister, 1988). To avoid increasing evasiveness and reducing reliability of interviews, it was stated prior to the actual interviews that respondents were expected to answer questions to the extent that they can do. No answer app eared better than any prevarications. All interviews tape-recorded were transf ormed into English written text. Some inaudible comments were inquired to responde nts later by emails. When interviews in Japanese were translated into English, back translation was adopted to keep linguistic equivalence in the two languages. In this pr ocedure, interview mate rials transcribed in Japanese were first translated to English by a bilingual speaker of both languages and then from English to Japanese by another bilingual sp eaker to clarify or remove discrepancies in meaning as much as possible. See Appendices E-P for complete transcripts of all interviews. Existing Documents In-person, semi-structured interviews cer tainly provide an ideal vehicle for exploring each respondents pe rceptions. However, qualitative researchers rarely rely on a single method of gathering data, because each method could bring its own biases. For this 121

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reason, primary data obtained through interviews for the present study were supported by secondary data found in existing documents, including articles in trade journals and newspapers and statements on company Web sites. These articles were easily accessible and relatively inexpensive. The purpose of the secondary data was twof old. First, as a prerequisite to the collection of primary data through interviews information about sample networks was collected in advance. The more details relevant to the subject of the i nvestigation that can be gathered in advance, the less time has to be wasted during the intervie w, and the clearer the researchers focus on what information is needed from the interviewee (Doyle & Frith, 2006). Second, those data provided a wealth of evidence, complementing data obtained from interviews, such as ideas and opini ons concerning programming strategies, which were previously made by other executives of sample networ ks. Convergence of multiple sources of evidence can eventually address th e potential of constr uct validity, providing multiple measures of the same phenomenon and helping build confidence in the findings. By using multiple sources of evidence, the present study attempted to systematically investigate the product aspect of U.S.-origi nated cable networks marketing strategy. The trade journal is defi ned as a periodical publication focusing on issues and information concerning a particular business or industry. Executives statements concerning programming strategies were gleaned from articles in such trade journals as Ad Age Global, Advertising Age International, Bi llboard, Broadcasting & Cable, Cable & Satellite Asia, Multichannel News International, Television Asia, Television Business International, and Variety, as well as in such newspapers as The New York Times and The Wall Street Journal. Company Web sites provided basic data on the firm including its philosophy and activity. 122

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Analytical Method Unlike quantitative research, there are no sp ecific formulas to guide the qualitative researchers to analyze data (Yin, 1994). In th e analytical strategy of explanation building, the researcher tries to identify patterns, simila rities, and differences within and across cases and to construct a theoretically relevant explanation about the causes of the phenomenon under study. A single-case study design has the primary w eakness in that it is not grounded in comparison, and therefore it is difficult to know whether the phenomenon observed in a single case is unique to that cas e and condition or whether it is commonly occurs in other circumstances (Hollifield & Coffey, 2006). Multiple-case designs to compare and contrast different cases is preferred over single-case designs, since the former allow studies to present more rounded, compelling, and complete accounts of social issues and processes, increasing chances of producing robust results a nd leading to richer theory building (Carson et al., 2001; Hakim, 2000; Yin, 2003). To provide a more complete analysis of data, a multiple-case study usually necessitates two stages of analysis: within -case analysis and cross-case analysis. The within-case analysis treats each case as a single case. Furtherm ore, it is customary for case analysis to provide cross-case analysis, which emphasizes reasons why differences occur, with an explanation of why the differences were found (Carson et al., 2001; Yin, 2003). According to Eisenhardt (1989), the overall idea of cross-case analysis is to improve the likelihood of achieving an accurate and reliable theory. Cross-case analysis is the most critical part of a multiple-case study (Yin, 2003). The present study is a multiple-case study, employing the constant comparable analysis method, which has originally developed from grand theory method (Glaser and Stra uss, 1967). This induction method, which emphasizes the observation and theory building, involves first taking a piece of information 123

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(e.g., a statement in an interview) and then comp aring it with all others that are similar or different to find patterns until all are compared with each other. The present study first analy zed a single case of a networ k, examining data within each network. Suppose that a comment was made by an interviewee of MTV Japan with regard to a certain factor, which is percei ved to influence their programming decisions. Then, the comment was compared with comments in regard to the same factor by interviewees of MTV in other markets. Those comments were also confirmed with existing documents, if available. With these proce dures, some patterns w ithin a case of MTV Networks about the relationship between the factor and programming strategies might be found. Next, at the cross-case phase, findings from the examination of a network were compared with those of other sample networ ks. Some patterns across networks about the relationship between the factor and programming strategies might be highlighted. These procedures continued until a ll networks were compared to answer research questions. Table 4-1. Sample matrix based on two dimensions. Dimension 1: U.S.-originated cable network Dimension 2: Market Network A Network B Network C Network D Country X Country Y Country Z Table 4-2. Sample networks offices in Asia. MTV Cartoon Network ESPN Discovery Channel China Hong Kong India Indonesia Japan Korea Philippines Singapore Taiwan Thailand Hong Kong India Japan Taiwan China Hong Kong India Japan (Sports-i ESPN) Korea (MBC-ESPN) Singapore Taiwan China Hong Kong India Japan Singapore Taiwan Source: Discovery Communications Inc. ( 2004); ESPN STAR Sports (2005); LyngSat Address (2005); Time Warner Inc. (2005c); Viacom Inc. (2005b); Walt Disney Co. (2004a). 124

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Table 4-3. Characteristics of sample markets Japan Singapore Taiwan United States Area (square kilometer) Population (millions, 2006) GDP (US$ billions, 2005) GDP per capita (US$, 2005) Multichannel penetration (% of homes, 2002) Multichannel advertising (US$ millions, 2000) Major languages 377,835 127.5 4,018 31,500 55.3 245.2 Japanese 693 4.5 124 28,100 33.0 15.1 English, Mandarin, Malay, Tamil 35,980 23.0 631 27,600 83.6 483.2 Mandarin, Taiwanese 9,826,630 298.4 12,360 41,800 86.3 9,548 English, Spanish Index for cultural dimensions Power distance (PDI) Individualism (IND) Masculinity (MAS) Uncertain avoidance (UAI) Long-term orientation (LTO) 54 46 95 92 80 74 20 48 8 48 58 17 45 69 87 40 91 62 46 29 Source: Central Intelligence Agency (2005), Ho fstede (2001); World Screen (2005); Zenith Optimedia (2002). 0 20 40 60 80 100Power Distance Individualism Masculinity Uncertain Avoidance Long-Term Orientation Japan Singapore Taiwan United States Source: Hofstede (2001) igure 4-1. Cultural dimensions for sa mpled markets and the United States. F 125

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CHAPTER 5 RESULTS General Overview Preceding the analysis in regard to each RQ the present study takes as a first step a general view of how sample networks have ex panded into overseas markets, in particular into Asian markets. MTV MTV has grown as the leading authority on music for generations of music fans and a worldwide pop culture phenomenon (Viacom Inc., 2005b). The network was launched in 1981 as a joint venture between Warner Co mmunications and American Express and became available in most regions of the United States in the mid-1980s with the nationwide spread of cable television. In 1986, MTV, along with VH1 and Nickelodeon, was sold to Viacom. MTV is among the first U.S. cable ne tworks to establish their programming in Europe in the late 1980s (Banks, 1996). Since then, the network has aggressively pursued international expansion. MTV now reaches more than 340 million households worldwide as the worlds most widely dist ributed television network, and eight out of ten MTV viewers live outside the United States (Capell et al., 2002; Viacom Inc., 2005b). MTV Asia was originally launched in 1991 as one of STAR TVs five channels, targeted at a pan-Asian market. In 1994, howev er, MTV Asia broke with STAR TV after conflicts over programming and licensing income (Goll, 1994; Levin, 1994). MTV Networks Asia, which was re-launched in 1995 as a joint venture between MTV Networks and PolyGram and later became a wholly-owned subsidiary of the former, has established four national/regional cha nnels: MTV Mandarin (now known as MTV Taiwan) and MTV Southeast Asia (now known as MTV Singapore and Malaysia or MTV SAM) in 1995, 34 MTV India in 1996, and MTV China in 2003. MTV also has independently-operating 34 MTV Southeast Asia had covered a region including Singapore, Malaysia, Indonesia, Thailand, and the Philippines until it was sp lit into several country-specific feeds. 126

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business units from MTV Asia for some other Asian markets: MTV Japan, MTV Korea, MTV Philippines, and MTV Thailand, all launc hed in 2001, and MTV Indonesia, launched in 2002. These are all joint ventures between MT V Networks and local partners to ease the transition into new markets (see Table 1-3 in Chapter 1). 35 MTV reaches over 150 million households across the region, including 124 million households in 21 countries and territories served by MTV Asia alone (Viacom Inc., 2005b). Cartoon Network Cartoon Network, which is specialized in animated entertainment, was created in 1992 by Turner Broadcasting as an outlet for their vast library of animation (Turner Enterprises, 2005). Turner Broadcasting began expanding the networ k into Europe and Latin America in the following year. After th e purchase of Turner Broadcasting by Time Warner in 1996, the network came under Time Warn ers umbrella and currently offers more cartoons and characters than any othe r television network (National Cable & Telecommunications Association, 2005). Cartoon Network entered the Asian market in 1994, combined with Turner Network Television (TNT), which was later renamed Tu rner Classic Movies (TCM). TNT & Cartoon Network reached 2 million households in Asia as of 1995, airing such animated series as The Fred Flintstones, Tom and Jerry, a nd The Yogi Bear Show for 14 hours in the daytime and TNTs movies for 10 hours at night. At that time, the Disney Channel, Nickelodeon, and the Fox Kids Network had not even entered the Asian market (Mifflin, 1995). Following the purchase of Turner Br oadcasting by Time Warner in 1996, TNT & Cartoon Network Asia/Pacific began providing three separate, c ountry/region-specific feeds for India, Southeast Asia, and Australia in 1997. In 2001, Cartoon Network was converted into a full-fledged 24-hour network in the region. Cartoon Network Asia/Pacific now has 35 MTV Networks has agreed to acquire the re maining interest in MTV Japan from a joint venture partner to give themselves 100% owne rship. The local partner was instrumental in bridging the MTV brand to Japan in 2001 (World Screen, 2006). 127

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five regional programming feeds (Australia and New Zealand, I ndia and the sub-continent, the Philippines, Taiwan, and Southeast Asia 36 ), offered in six languages including English, Mandarin, Thai, Hindi, Tamil, and Korean, a nd reaches over 32 million households in 23 countries (Television Asia, 2004). In addition, the network also launched Cartoon Network Japan in 1997 as an independent entity from Cartoon Network Asia/Pac ific. The channel is managed by Japan Entertainment Network, a jo int venture between Turner Broadcasting (80%) and a major trading firm Itochu Corporation (20%). ESPN A year after their launch in 1978, ESPN wa s purchased by a joint venture between Getty Oil Co. and Nabisco and in 1984 by ABC, which later became part of The Walt Disney Co., and the Hearst Corp. By 1991, th e network had become the most widely viewed cable network, especially among men, and the most widely distributed cable network in the United States (Warner & Wirth, 19 93). As the world wide leader in sports, ESPN continues to grow and expand internationa lly as well, reaching sports fans around the globe (Walt Disney, 2004b). 37 ESPN entered the Asian market in 1990 with their ownership of 20% of Japan Sports Channel, which later became Sports-i ESPN. 38 While ESPN has launched ESPN Asia in 1992 39 and ESPN India in 1995, the network al so has eagerly sought joint ventures 36 Cartoon Network Southeast Asia covers a wi de range of Asian c ountries, including Hong Kong, Singapore, Malaysia, Thailand, South Korea, Vietnam, Cambodia, Macao, Brunei, Fiji, and so on. Viewers in those countries get the same Cartoon Network programming at the same time. 37 A key reason behind Disneys acquisition of ABC was the worldwide value of the ESPN brand name (Bellamy, 1998). 38 Sports-i ESPN was taken over by J Sports in November 2005. Consequently, Sports-i ESPN was renamed J Sports ESPN in April 2006, a month after the interview for this research. J Sports is owned by Jupiter Sports Inc. (33%), a 50:50 jo int venture between the Sumitomo Group and the Liberty Media Grou p, Itochu Corporation (15%), Sky Perfect Communications Inc. (15%) etc. E SPNs share is no more than 3%. 39 ESPN Asia currently covers various As ian markets including Singapore, Malaysia, Thailand, Indonesia, Vietnam, Laos, and Cambod ia. The feed is offered exclusively in English. 128

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in Asia. In 1996, the network entered into E SPN STAR Sports, a 50:50 joint venture with STAR TV, which owned and operated two sports channels, STAR Sports Asia and STAR Sports India. This venture was created in order to avoid intense a nd expensive competition for sports programming rights in Asian market s (Cable & Satellite Asia, 1996b). Indeed, ESPN STAR Sports integrated resources, whic h had been held separately by both networks until then, such as all cricket broadcasting rights in India held by ESPN and the all rights for soccer and hockey events in India held by STAR Sports (Hughes, 1996). ESPN STAR Sports later launched ESPN Taiwan in 1998, STAR Sports Southeast Asia in 2001, and ESPN Hong Kong and STAR Sports Hong K ong in 2004. Meanwhile, ESPN STAR Sports also set up a joint venture with South Korea s broadcaster MBC to start MBC-ESPN Sports in 2001. In 1993, ESPN reached only 600,000 As ian households; in 2005, it reached 128 million households, in addition to the 57 million households reached by STAR Sports (Goll, 1993; Media Partners Asia, 2005). ESPN STAR S ports has 60,000 square-feet of state-of-art production facilities and ear th station in their headquarters in Singapore. Discovery Channel Discovery Channel primarily offers documen tary programs featuring various themes, such as science and technology, nature and wildlife, adventur e, history, world cultures, travel, and health. John Hendr icks, a former University of Maryland fundraiser and media-relations consultant, established Disc overy Communications in 1985 to launch the network with U.S. $5 million of start-up funds. Ye t, the concept of an all-documentary cable network was hard sell, as few people believed that that sort of network would find an audience even in the rapidly growing U.S. cable markets (Westcott, 1999). When the network suffered from financial difficulties in 1986, the cable industr ys first joint equity venture between a network and cable operators including Tele-Communications Inc., Cox Communications, Newhouse Broadcasting Corp., and United Cable Television Corp., was made to invest U.S.$20 million to Discovery Channel (Strohm, 1993). The network began 129

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expanding into international markets in 1989 with the start-up of Discovery Channel Europe (Walley, 1995). Discovery Asia, launched in 1994, had esta blished by the end of 1996 six feeds for Australia and New Zealand, Taiwan, Southeast Asia, the Philippines, Malaysia, and Japan, which are transmitted from the companys 85,000 square-foot regional headquarters in Singapore (Dickson, 1996). At present, Discove ry Channel has 16 feeds and reaches over 325 million households in 23 countries and te rritories across the Asia Pacific region (Discovery Communications Inc., 2006a). 40 The network holds the distinction of being the most watched channel in Asia, according to 2003 Pan Asia Pacific Cross Media Survey, which complied data from 11 Asia Pacific countries (Television Asia, 2003a). Programming Products RQ1 addresses what programming product stra tegies U.S.-originated cable networks actually employ in Asian markets. In order to present a comprehensive vision of their programming strategies, the present study first examined the extent to which their programming is indeed accounted for by pr ograms supplied from the network and by those originally produced or acquired at the local level, respectively, and how these practices vary between markets. Note that network progr ams might be analogous to standardized programming products but are not exactly the same, because network programs are oftentimes offered with subtitles or dubbing in local languages, if necessary. Executives and managers interviewed were commonly more conscious of the classification of their programming products into network programs or their originally produced or acquired programs rather than a concept of product standardization/adaptation. 40 Aside form this, Discovery Channel India, which is managed by Discovery Networks India based in New Delhi, now reaches more than 28 million households (Discovery Communications Inc., 2006b). 130

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MTV At present, only 10-20% of MTV Japan s programming is devoted to programs supplied from MTV Networks. The situation is almost the same in Taiwan. In sum, approximately 80-90% of the programming sc hedule of both MTV Japan and MTV Taiwan is taken up with locally produced, music-base d entertainment shows, with only a limited portion actually filled up with programs supplied by the network and subtitled with local languages. However, this is not the case in MTV SAM. Approximately 60% of MTV SAMs programming is content originally pr oduced and supplied by foreign MTV channels, including many shows from MTV U.S. Programs distributed within MTV Networks are mainly reality or make-over shows originally produced by MTV U.S., such as T he Osbournes or Pimp My Ride. Scott (2005) suggests that such in-house shows have helped MTVs international success. Yet, MTV Japans vice president of research and planning Tetsuya Togawa (personal communication, March 15, 2006) assumes that th e amount of content supplied by MTV U.S. for overseas MTV channels is quite small. Unlike MTV U.S., which has increasingly put more emphasis on non-music programming in recent years, Asian MTV channels still rely on music material heavily for their programmi ng, as 90% of the programming in Asia is fundamentally about music (Billboard, 2001) Along with the reality shows mentioned above, MTV U.S. also supplies to Asian MTV channels the telecasts of music events, including The MTV Video Music Awards (VMA) or live concerts of some famous artists. Yet, a majority of music programs are originally produced by local MTV channels. Cartoon Network Animated programs currently offered by Asian Cartoon Network channels are roughly categorized by suppliers into the following three type s: Cartoon Network Originals (CNOs), which are usually produced at the initiative of Cartoon Network U.S. and distributed to their worldwide affiliates; animated programs from productions related to 131

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Time Warner, such as Warner Brothers or Hanna-Barbera 41 ; and third party content purchased from production companies unrelated to Time Warner. While most CNOs and Warner animation series are American-made, third party content includes those from various countries around the world. As noted earlier, Cartoon Network was orig inally created as an outlet for Turner Broadcastings animation library. In this context, it made sense that the networks programming lineup consisted primarily of titl es from its own library. Nonetheless, Cartoon Network today is not merely an outlet for their original animations. 18% of the programming for Cartoon Network Japan is made up of CNOs, while 12% is Time Warner content and 70% third party content. For Ca rtoon Network Taiwan, 30% is CNOs, 43% is from Time Warners library including 34% fr om Hanna-Barbera, and the remaining 27% is from third party. Of Cartoon Network Southeast Asias programming available in Singapore, CNOs account for 60%; content from Warner Br others and Hanna-Barbera constitutes 30%; and third party content makes up the rema ining 10%. Cartoon Network Southeast Asia, largely made up of CNOs, plays a more important role as an outlet for CNOs in comparison with Cartoon Network Japan or Taiwan. ESPN As was the case with Cartoon Network, when ESPN was launched in Asia, most of the programming originated from the Unite d States, and the network was accused by viewers of being more American than Asia n (Koranteng, 1995). About 50% of Sports-i ESPNs programming today is accounted for by foreign sports programming. However, this does not mean that they offer a number of ne twork programs. In reality, programs from ESPN occupy a very small part of their programming. J Sports ma nager of planning and control group Ichiro Hase (personal communi cation, March 14, 2006) claims that Sports-i 41 Hanna-Barbera is an American animat ed cartoon production company, which was purchased by Turner Broadcasting in 1991. It was absorbed into Warner Brothers Animation in 2001. 132

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ESPN do not rely heavily on ESPN content to get by under the present circumstances, since they cannot get much of the so-called kille r content from ESPN due to rights issues. ESPN does not have the broadcast rights in Japan for many popular programs on ESPN U.S., including Major League Baseball (MLB) or National Football League (NFL), and Sports-i ESPN ends up compiling their own programming (I. Hase, personal communication, March 14, 2006). 42 ESPN Taiwan and ESPN Asia are properties of ESPN STAR Sports, a joint venture between ESPN and STAR TV. About 80% of th e programming for ESPN Taiwan is taken up with telecasts of foreign s porting events. Yet, as in th e case of Sportsi ESPN, the majority of ESPN STAR Sports programming does not come from ESPN. Although soccer programming, for example, is often shown on ESPN Asia, ESPN STAR Sports usually negotiates for the purchase of popular soccer content with individual sporting event organizations such as the English Premier L eague or the Union of European Football Associations (UEFA). The broadcast rights to those events are us ually secured by ESPN STAR Sports so that the events can be televi sed on their channels in individual markets, including ESPN Taiwan and ESPN Asia. Discovery Channel According to Monica Mather, vice presid ent of internationa l advertising at Discovery Networks Europe, around 70% of programming is consistent around the world (Campaign, 2002). Similarly, Discovery Asias senior vice president of programming and creative services James Gibbons (personal communication, August 29, 2006) points out that probably 60% to 70% of the programming is sh ared across most regions. In particular, 42 As a general rule, a television network needs to acquire broadcast rights from an event organizer in order to telecast a sporting event. The broadcast rights are usually granted for a given national territory on an exclusive basi s. The exclusivity is considered necessary by networks to guarantee the value of a given sports program (Meltz, 1999). Consequently, the bargaining power of broadcast right holders increa ses, and the cost of rights to some special sporting events escalates. 133

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much of the programming on local Discovery channels is made in the United States. About 60% of the programs produced by Discovery U.S. are used abroad (Shin, 2005), and about 60% of the content on their As ian channels is shared with Discovery U.S. (J. Gibbons, personal communication, August 29, 2006). In essence, the programming of local Discovery channels is in large part accounted for by netw ork programs, in particular those produced by Discovery U.S. Cross case analysis Table 5-1 summarizes the pe rcentage of programs supp lied by networks on the schedules of each local channels sampled for th e current study. It a ppears that the ratio significantly differs among networks a nd among markets. MTV and Cartoon Network channels for the Japanese and Taiwanese markets offer a relatively small amount of network programs (10-30%) in comparison with their se rvices for the Singaporean market (60%). Much programming of Asian ESPN channels is acquired or produced themselves, since ESPN Networks cannot supply to their Asian affiliates every s porting events they offer in the United States due to broadcast rights issues In contrast, Discovery Channel distributes a number of programs worldwide, whereby the programming of their Asian channels is largely accounted for by network programs. Localization As described in the first chapter, many scholars suggest that localization is the prevailing strategy for many global television networ ks at this time of da y. It was actually found above that locally produced or acquired programs are offe red to a greater or lesser extent by U.S.-originated cable networks in sample Asian markets. The question in regard to RQ2 is how executives and ma nagers of U.S.-originated cable networks consider localization strategy, as well as in what way their programming products are actually adapted to individual local Asian markets. 134

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MTV MTV Networks has established local cha nnels as diverse as the major languages spoken in Asian markets. MTV Networks Asia s senior vice president of programming, music, and talent Mishal Varma (personal communication, August 28, 2006) claims that each Asian MTV channel provides content almo st exclusively in the local language, based on the premise that each local Asian market ha s a very unique music style basically coming from its own language. It has been believed that MTV plays the same music videos throughout the world, specifically with a focu s on popular American ones. In fact, when launched in 1991, MTV Asia devoted roughly 90% of the music presented to U.S. and U.K. artists, with scant attention given to indigenous artists (Ebe rt, 1991). However, it became clear that a music lineup too oriented toward international music di d not respond to what their target audience really wanted in many local markets. The network found that the programming just to put music tailored to th e American audience into different countries often did not work. A simple fact is that domestic music is generally preferred to foreign music in local markets. 43 Asian MTV channels have increasingly become to favor the music videos of domestic artists (Hau, 2001; Kan, 2003). At present, both MTV Japan and MTV Taiwan maintain their play-lists consisting of 70% do mestic music, with the remainder made up of foreign music. MTV Japans CEO Yu Sasamo to (personal communi cation, March 15, 2006) claims that it would make no sense to air only foreign music in the Japanese market where 80% of CDs sold are Japanese music. The music selection by MTV SAM, however, is different from MTV Japan and MTV Taiwan. The ratio of local music is relatively low, accounting for about 30%, and this is mainly Malaysian music rather than Singaporean 43 For instance, in Thailand, a survey showed that 95% of Thai teenagers preferred local music to foreign music (Santana, 2003). 135

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music. Varma (personal communication, A ugust 28, 2006) points out a huge demand for international music in Singapore. It is noteworthy that for MTVs music programming, localization is not necessarily synonymous with offering local music. For example, MTV Taiwans programmer Sharon Chang (personal communication, July 26, 2006) st ates that MTV Taiwan rarely plays songs sung in Taiwanese language, not by Mandarin Chinese, 44 because they are too local (S. Chang, personal communication, July 26, 2006) By the same token, MTV Japan would never play Japanese enka songs, which are especially popular among the older generations. Those music genres are generally not supported by their target audience. Togawa (personal communication, March 15, 2006) asse rts that MTV Japan is always conscious of music genre as well as whether it is local or foreign music. Varma (personal communication, August 28, 2006) concludes that localization has to reflect the tastes the likes, and the trends of target audience in a particular market. According to Varma (personal communication, August 28, 2006), international music that local audiences like is played in a local context in MTV s localization process. As a result, a recent approach commonly seen on MTV channels in Asia is a mix of international and local music, depending on the demands of the individual market (Television Asia, 2000). In essence, localizati on for MTVs music programming is to feature music, regardless of whether domestic or inte rnational, demanded by their target audience in local markets. Certainly, as Varma (personal communication, August 28, 2006) claims, offering a program made by MTV Networks might not go against localiz ation strategy, as long as the right program is identified and aired to a particular local market. Given a show produced by foreign MTV cha nnels on the basis of a certain creative idea, Varma (personal comm unication, August 28, 2006) also emphasizes the need to 44 Local pop music in Mandarin Chinese is the most popular genre in the Taiwanese market (S. Chang, personal communication, July 26, 2006). 136

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remake the same show locally, featuring local hosts and talents, so as to make it more relevant to local viewers. There are some ideas or formats, which work in multiple markets, and each of local MTV channels is encourag ed to apply those fundamental ideas or concepts into their local contexts. For ex ample, MTV Taiwan utilizes international resources to make local content, as seen in programs that inform Taiwanese viewers about hip-hop or international music trends (S. Chang, personal communi cation, July 26, 2006). Chang (personal communication, July 26, 2006) says that they do not just offer foreign programming on its own but have to add something to it. Another good example is a program titled MTV Jammed, which features artists turning up in various places to perform unannounced live shows and surprise audiences. This program, originally developed by MTV Korea, is remade in vari ous markets under the same format, featuring different famous local artists in each market Now as embodied in its slogan of think globally, act locally, the popularity of MTV Networks around the world is attributed to the market-driven strategy to differentiate it s content around the worl d, localize its global product, and incorporate local music and hos ts (Philo, 1999; Price, 2002; Sutton, 2003). Cartoon Network Cartoon Network was once called the excep tion to the localization rule (Johnston, 1996). Early on, programming packaged for distribut ion to Asian audience principally came from Turner Broadcastings vast animation library of more than 8,500 cartoons, including those produced under the name s of Hanna-Barbera and Metro-Goldwyn-Mayer (MGM), and only about 30% was dubbed into local langua ges, such as Mandarin Chinese and Thai (Johnson, 1996; McGrath, 1995; Wall Street Jour nal, 1994). At present, however, language customization is commonly employed by thei r local channels in Asia. Cartoon Network Japan and Cartoon Network Taiwan use dubbing into Japanese and Mandarin Chinese, respectively. Cartoon Network Southeast Asia, which covers a number of Asian countries including Singapore, is offered in English but also provides dubbing for Thai and subtitles 137

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for Korean. According to chief of program ming and acquisitions at Cartoon Network Asia/Pacific Michele Schofields definiti on (personal communication, August 25, 2006), localization is to make the audience real ize that the channel is made for them. The localization for Asian Cartoon Networ k channels is not always to show animation produced in their home countries. For example, Cartoon Network Japan does not especially focus content from their domestic market, Japan, which has a strong animation production industry. Cartoon Network Japan s programming director Shinji Suetsugu (personal communication, March 16, 2006) claims that the cha nnel has a wide variety of animation fans, and Japanese animation is nothing but one option of many choices. Likewise, hardly does Cartoon Network Southeast Asia show Singapore-made animations, although the country today places an em phasis on animation production. Schofield (personal communication, August 25, 2006) men tions that no Singapore-made animation has taken her interest to acquire. Instead, th e channel mainly offers animation programs made in Europe, Canada, and the United States. Of the many animated titles Cartoon Network Taiwan currently offers, only one title is Taiwan-made. Cartoon Network Taiwans programming manager Gary Chou (personal communication, July 25, 2006) claims that localization for Cartoon Network Taiwan means showing animated programs Taiwanese audiences like. The most important cons ideration for Cartoon Network Taiwans programming decision is whether or not a progr am is accepted by the main target and posts high ratings (G. Chou, personal communication, July 25, 2006). For the present, Cartoon Network Taiwan places a high value on Japanese animation in their programming. In fact, among top twenty programs by audience ratings on Cartoon Network Taiwan in June 2006, all but three were Japanese animation programs. Meanwhile, Cartoon Network has also contri buted to international co-productions, giving more opportunities to develop and pr esent new projects to local producers (Television Business Internati onal, 2003). For example, Cartoon Network U.S. has some 138

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plans to collaborate with Japane se partners. The Powerpuff Gi rls Z is another version of the popular animated series Powerpuff Girl s, which was co-produced with Japanese production houses. 45 Chou (personal communication, July 25, 2006) states, I think [modified] characters are really better than originals for Asian people and kids. This example shows that even though CNOs were ma de primarily under the initiative of Cartoon Network U.S., characters can be modified to appeal to some other markets. The networks success worldwide might in part depend on how successfully they can modify existing characters for local viewers. ESPN Sports-i ESPN does not show a great deal of live sports from foreign countries but, if any, they are always accompanied with play -by-play commentary in Japanese. In a lot of cases, the channel edits a reco rded version, add Japanese commentary, and offer it at a different time. Meanwhile, ESPN Taiwan cu rrently provides their original programming basically only during primetime. Other timeslots, such as morning and midnight, are filled with programs, which are shared with other ESPN STAR Sports-owned ESPN channels and offered exclusively in English. Such programs s hould be viewed as regional programs rather than local programs on the basis of ESPN STAR Sports vice president of programming at Southeast Asia Nick Wilkinsons definition (personal communication, August 29, 2006) that localization of programming requi res local language commentary. From a local perspective, ESPN STAR Sports senior manager of mark eting in Taiwan Jammie Chen (personal communication, July 24, 2006) claims that language customization, including dubbing and adding subtitles and commentary, should be done fo r all programs for loca l viewers, but it is yet to be realized. 45 The Powerpuff Girls Z debuted in Japan on July 1, 2006 on the Japanese broadcasting network TV Tokyo. It is not yet available on Cartoon Network Japan as of October 2006. 139

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Sports Center, a popular sports news s how produced by ESPN in the United States, is a good example of the remake of content by Asian ESPN channels. Lo calized versions of Sports Center have been crea ted for four Asian ESPN channels operated by ESPN STAR Sports to make the show more relevant to local viewers (ESPN International, 2005). 46 Sports Center Taiwans set, graphics, and mu sic are part of global carbon copy used by ESPN, but the sports clips and coverage are cu stomized to fit local interests (Petrecca, 2002). Meanwhile, Sports-i ESPN still offers U.S. Sports Center with sportscasters comments dubbed into Japanese. Although the show is currently one of the few attractive programs supplied by ESPN, Hase (persona l communication, March 14, 2006) hopes that Sports-i ESPN will launch their own version of Sports Center, which features more footage of Japanese athletes a nd Japanese commentary. Thanks to the purchasing power of E SPN STAR Sports, ESPN Taiwan, unlike Sports-i ESPN in Japan, offers major U.S. professional sports, such as MLB, which are quite popular among Taiwanese audience. To de scribe the acceptance of MLB in Taiwan more precisely, however, audiences would rather watch a New York Yankees game featuring a Taiwanese pitcher than a random MLB game. Many Asian athletes have moved from their home countries to European or U.S. sports leagues in the past 10 years, and Taiwanese players are no exception. Chen (personal co mmunication, July 24, 2006) considers that the most important thing for localization is to choose relevant games, claiming, If a Taiwanese player plays for some foreign team, we will tr y to purchase the teams games. Chen admits that the international telecasts of those games would meet local viewers demands. 46 Yet, this statement disagrees with Wilk insons viewpoint (personal communication, August 29, 2006) that local versions are made b ecause of rights issues rather than local viewers demand for them. According to him, ESPNs domestic Sports Center isnt available for us in Asia. 140

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Discovery Channel Discovery Asias programming is transmitte d in English, Japanese, Bahasa Melayu, Cantonese, Mandarin, Putonghua, Thai, and Korean (Discovery Communications Inc., 2006a). According to Gibbons (personal comm unication, August 29, 200 6), localization for Discovery Channel means speaking to people in their own languages w ith content relevant to their cultural society. Gibbons further stat es, Localization of content means that you source or create content that is immediately relevant to their marketplaces. Relevant is a word, which was emphasized by Discovery Channels executives during interviews. According to Discovery Japans president and re presentative director Philip Luff (personal communication, March 17, 2006), when a production has been made originally for a U.S. audience or European audience, Discovery Japan looks at that program and decides if it is relevant to Japanese audiences. Luff (per sonal communication, Marc h 17, 2006) believes that all of their programming offerings are re levant to Japanese audiences, even though none of them is currently produced locally. In essence, for Discovery Channel, a program relevant to audience is not necessarily synonymous with a locally produced program. Meanwhile, some of Discoverys document ary programs are remade in order to adhere to values or beliefs inhe rent in local markets so as to avoid alienating potential local viewers. An example is a special program titled Secrets of the Battleship Yamato, which was co-produced by Discovery Asia and a U.S. public broadcaster. The producer made two versions of that program for two different au diences, namely American audiences and Asian audiences, considering two different viewpoint s. Besides, some programs are reedited and repackaged to make them more relevant for particular local viewers. Given a program made by a foreign Discovery channel, this method a llows local Discovery channels to eliminate some parts, which are considered irrelevant to local viewers, and in turn add some materials, which are more relevant to them (P. Luff, personal communication, March 17, 2006). Furthermore, although around 70% of programming is common around the world, 141

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Discovery Channel is also working toward a situation in which the remaining 30% of the programming is regionally produced or acquired. According to Gibbons (personal communication, August 29, 2006), to cr eate or source regional cont ent is the ultimate form of localization for Discovery Channel, because it is the most expensive thing to accomplish. Cross case analysis Interviewees respond to th e question of how they de fine localization almost identically: to make the local audience realize that the channel is made for them by offering programming more relevant to them. In esse nce, the localization of television programming, a somewhat elusive concept, is commonly r ecognized as choosing and presenting right content for local viewers, and it does not alwa ys entail programming originally made or acquired for a local channel. In fact, it seems that the concept of localization tends to be interpreted broadly, as any programs can be view ed as being localized, if they are chosen for and preferred by local audiences. Even though local Asian channels of Cartoon Network and Discovery Channel do not produce their ow n original programs much, they regard much of their programming as being localized on the grounds that they usually choose programs by taking local preferences into cons ideration. The localizat ion of television programming, therefore, concep tually means an approach of reflecting the relevance to local markets as well as the needs of local targ et audiences. This persp ective is particularly important in the process of programming selection for individual markets. In practice, however, the lo cal adaptation of television programming actually takes several forms in the production process. Fi rst, it is usually acc ompanied by language customization or other linguist ic localization of television programs made in overseas countries. Asian MTV channels offer program ming basically in their local languages. Cartoon Network and Discovery Channel are cu stomized to local languages in Japan and Taiwan, whereas their Southeast Asia cha nnels are provided with multiple language soundtracks or subtitles. Yet, on local channe ls of ESPN STAR Sports, such as ESPN 142

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Taiwan and ESPN Asia, sport programming duri ng non-primetime is offered only in English, although more or less viewers in markets c overed by those channe ls do not understand English. Local adaptation of televisi on programming presupposes la nguage customization but might go far beyond it. Some local teams utilize content supplied by the network as part of a locally produced program through, for example, the partial insertion of network materials. For instance, local MTV cha nnels reedit music programs supplied by the network and incorporate them into locally produced progr ams. In a similar way, Discovery Asia occasionally repackages documentary programs originally made by foreign Discovery channels, removing anything that they did not co nsider appropriate for Asian audiences. At this level of local adaptation, networks do not need to change the whole network content but pick the right topics or adjust the perspective so as to be compatible with local cultural values. As discussed later in a ssociation with product characteris tics, the feasibility of this localization pattern might in part depend on the format of programming each network offers. Meanwhile, the full remake of netw ork programs is done quite actively. Programs originally produced by networks are modified to feature local hosts or characters for local audience, while the original idea and concep t are basically kept unchanged. MTVs reality shows and ESPNs sports news are good exam ples of how well an excellent programming idea can be shared within a network and revised at a local level. Similar approaches are also employed by Cartoon Network, which modified char acters of their animated series to cater more suitably to local tastes. Finally, the ultimate form of localization is to develop and produce a completely original program based on an original idea for the specific local market. At present, this is done by MTVs local teams and, to a lesser ex tent, by ESPNs local teams. Figure 5-1 143

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illustrates the continuum of localization ad aptation process for television programming, ranging from the conceptual phase to the practical phase. Product Characteristics The literature review suggested that the feasibility of product standardization or adaptation would vary with the nature of the product, in particular with its cultural sensitivity. In order to address RQ3, how characteristics inherent in the television programming could influence the progra mming strategy is analyzed below. Cultural Sensitivity/Universal Appeal The necessity for local adaptation of product could be influenced significantly and positively by cultural specificity of the pr oduct. Products that are highly culture-bound, including media content, are generally consider ed difficult to market globally. Nonetheless, it is also possible that the cultural sensitivity of each television program could vary depending on program types and genres. Beside s, some programming products might meet a universal need and hence require little adaptation across markets. MTV Varma (personal communication, August 28, 2006) presumes that music could transcend national boundaries with relative ease, since listeners do not necessarily need to understand what an artist says. If they like the beat of the music, they can still appreciate the song. In contrast, Chang (personal communica tion, July 26, 2006) considers that music programming usually does not travel well becau se of the difference in culture between countries. Artists show themselves on musi c programs or music videos. Then, local audience might feel something strange with foreign artists appearance and costume, which he or she might not be aware of when listeni ng their songs on the radio or CDs (S. Chang, personal communicatio n, July 26, 2006). Meanwhile, it is perhaps true that artists with worldwide fame and hence music programs featuring them could become successful on a global scale. MTVs VMA show, 144

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featuring internationally known artists, is well accepted in Taiwan because of their worldwide popularity (S. Chang, personal communication, July 26, 2006). Togawa (personal communication, March 15, 2006) believes that the VMA show certainly has a universal appeal. Yet, the show might be an exceptional program, as Varma (personal communication, August 28, 2006) views it as the only music show that has the opportunity to achieve worldwide success. In terms of reality shows, while believing that some shows produced by MTV U.S. have groundbreaking formats, Varma (personal communication, August 28, 2006) considers it difficult to create a show that will be succe ssful in multiple markets, pointing out that an MTV show is usually produced for a singular market. The key to success for reality shows would be in a large part dependent on how r ealistic the way characters react appears to viewers and how easily viewers can feel symp athy for the characters (Oba, 2005). Hence, it might be true that many Asian viewers cannot eas ily identify themselves with characters in reality shows produced by MTV U.S. Sasamo to (personal communi cation, March 15, 2006) claims that MTV Japan is looking for material that their target view ers can integrate into their lifestyle. For this purpose, as describe d earlier, reality show s made by foreign MTVs are sometimes remade in the local context. Cartoon Network Schofield (personal communication, August 25, 2006) and Chou (personal communication, July 25, 2006) agree on the abil ity of animated programming to transcend national borders easily relative to other types of programming. It is not difficult for many viewers including children to understand a storyl ine in animations, since universal themes and topics are oftentimes featured in anim ated programs (G. Chou, personal communication, July 25, 2006). Additionally, animation is easier to be dubbed. Cartoon Network used to also show live action shows, but they did not become successful in overseas markets, because once they were dubbed into local langua ges, viewers can see human lips moving in 145

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a different sync to the actu al dialogue (M. Schofield, pe rsonal communication, August 25, 2006). Betty Cohen, former president of Cartoon Network Internationa l, said that dubbing made audience feel like an animated film was from the home country (Mifflin, 1995). In fact, it is often the case that viewers are not aware that a given animated program was originally made in a foreign country. Certainly, animated programming might be one of most universally accepted programming genres, as seen in the worldwid e popularity of both Disneys animation and Japanese animation, which is also well known as simply anime. Then, it is reasonable for Cartoon Network to make efforts to develop original animations, which can be comparable to Disney or some Japanese animation in te rms of universal appeal, and distributes the series worldwide. In fact, the network has put in a sufficient amount of investment into original programming, such as the Powerpuff Girls, to boost its ratings in recent years (Winslow, 2001). Schofield (personal co mmunication, August 25, 2006) believes that although CNOs used to be produced for U.S. audiences and simply exported to other markets in the past, they, unlike many of MTVs network programs, have recently been made more from an international perspect ive. Chou (personal communication, July 25, 2006) considers it possible to develop animated programming, which can be popular all over the world. On the other hand, however, Chou (pers onal communication, July 25, 2006) also suggests that many CNOs are still made on the ba sis of American perspectives, and actually many people complain that many of CNOs still have a distinctly American style. As discussed later, some animated programs can cau se cultural disconnect to viewers in foreign countries because of unfamiliar settings, dialogu es, and characters appearances featured in the programs. Schofield (personal communication, August 25, 2006) acknowledges that some animated titles based on dialogues are harder to work in the non-English speaking markets. In essence, as Cartoon Network Japa ns associate director of public relations 146

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Michiko Hashida (personal communication, Marc h 16, 2006) presumes, it is likely that each country has different tastes for animated program s, and this is largely rooted in culture. ESPN On the international level, certain sporting events have long demonstrated an ability to cut across boundaries of language and cultu re (Bellamy, 1998). A good example would be the Olympics, which arouse passion in people around the world every four years. When watching foreign sports events, viewers might hardly feel the language barrier, since they usually pay attention to how at hletes play but not what athletes say. Thus, a notable characteristic of sportscast is that its appeal is determined la rgely by the play of athletes and the game itself rather than by the ability of producers or director s. In consequence, compared to other types of programming su ch as dramas, sports programming might possibly be less culturally se nsitive. Chen (personal communication, July 24, 2006) and Hase (personal communication, March 14, 2006) ag ree that sports programming is able to transcend national borders. However, sports include a broad array of ge nres. It is likely that a certain sport, which is quite popular in a country or regi on, is not accepted well in another country or region. For example, American football, far a nd away the most popular sport in the United States, does not always boast the same popul arity in most Asian countries. Wilkinson (personal communication, August 29, 2006) assumes that soccer and, to a lesser degree, golf and tennis are probably the only sports that ha ve appeal in most markets around the world. Tastes for sports basically vary from country to country and region to region. Hase (personal communication, March 14, 2006) assumes that the existence of transnational superstars influences the acceptanc e of certain sports leagues worldwide. In Taiwan, viewers like to watch the National Ba sketball Association (NBA) where there are no Taiwanese players for the present. Ch en (personal communication, July 24, 2006) attributes the popularity of the NBA in Taiwan partly to th e popularity of basketball in 147

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Taiwan and partly to the fact that audiences like to s ee the handful of top players with incredible skills, such as Kobe Bryant or Ke vin Garnett. The telecast of foreign sporting events featuring athletes of worldwid e recognition could appeal universally. Wilkinson (personal communi cation, August 29, 2006) thinks that sports news, such as ESPNs famous Sports Center, would resonate throughout the world. Yet, Chen (personal communication, July 24, 2006) asserts, It cannot work if we just put American Sports Center here. Although it is true that the U.S. Sports Center features many internationally renowned athletes, Taiwanese viewers like to wa tch local sports news (J. Chen, personal communication, July 24, 2006). According to Hase (personal communication, March 14, 2006), news about MLB without mention of Japanese players is not a ccepted well in Japan. Discovery Channel Gibbons (personal communication, August 29, 2006) believes that documentary programming can be culturally neutral, since it usually portrays the world relevant to everyone and is less deeply rooted in one cu lture, perhaps as well as news. According to Judith McHale, president and CEO of Discove ry Communications, the network has tried to develop products appealing to every person in the world (Haley, 2005) Showing universally appearing topics is actually a key concept underlying Disc overys programming strategy. Gibbons (personal communication, August 29, 2006) claims that the appeal of Discovery Channel is universal, since a significant numbe r of viewers are clearly interested in seeing what is going on beyond their country across a wide range of topics. Topics that have global resonance typically include space explorati on, science and technology, ecological issues, wildlife, world culture and hi story, ancient civilizations, and Dinosaurs evolution (J. Gibbons, personal communication, August 29, 2006). Given the issues of global interest, which could captivate a worldwide audience, it makes sense for Discovery Channel to offer programs featuring those issues as their network programs. 148

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Yet, whether or not a documentary program has universal appeal might depend on topics. In fact, Discovery Channels CEO J ohn Hendricks suggests, It is not easy to produce a documentary program that will catch audiences worldwide. People in each country have different interests. We thus ad just programs to focus on the themes that are more interesting to one country or region than another (Sri charatchanya, 1999). Besides, it might be true that a documentary program made in a given country reflects a certain point of view indigenous to that country. Gi bbons (personal communication, August 29, 2006) does not deny that some documentaries made in the United States would reflect a U.S. viewpoint. In this regard, Discovery Cha nnels CEO John Hendricks once pointed out, Many people think that our programs come fr om Western points of view and may not suit people in other parts of the world (Srichar atchanya, 1999). It is generally supposed that audiences are less interested in watching progr ams made from another countrys perspective (P. Luff, personal communication, March 17, 2006). Cross case analysis It is interesting that many executives and managers believed that the program type their networks are specialized in (e.g., music, animation, etc. ) basically has an intrinsic power to transcend national boundaries more easil y than other program types. It is perhaps true that such genres as music, anima tion, sports, and documentary commonly have a characteristic that is relatively easily unders tood in different cultural context. This is because the appeal of music and sports prog ramming is largely not based on dialogues, and animation and documentary programs often featur e universal themes and topics familiar to a number of people around the world. Yet, because those program types are less culturally sensitive does not mean that foreign-made programs of those genres are preferred by local audiences. While the understanding of cont ent is obviously a necessary condition for the preference of content, both are not synonymous with each other. For instance, while popular music might be relatively easily und erstood in different cultural cont ext, it is still likely that 149

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music preference is basically local (de Moo ij, 2004). For this reason, the importance of programming reflecting local preferences was underscored by all interviewees. It is true that many of network programs di stributed on a global basis are still made in the United States. The question is whethe r those programs are produced to intentionally target a worldwide audience, or they are to be targeted at viewers in a specific market, i.e., the United States, initially and then to be distributed to other markets. MTVs Varma (personal communication, August 28, 2006) assumes that every show is basically produced for a particular market. Although Cartoon Networ ks original animation series and many of Discoverys documentaries are believed to be pr oduced from global perspe ctives so as to be accepted in markets all over the world, it is s till uncertain if such production is really possible. It might be inevitabl e for a given program to reflect a producers viewpoint, which is rooted in his or her cultural value, ev en with inputs from foreign affiliates. Meanwhile, it is in general considered that certain artists, animated characters, athletes and their games, and social events can draw global interest, and hence programs featuring them will appeal to viewers around the world or at least in multiple markets. For instance, some internationally recognizable ar tists featured on MTV could have universal appeal, and some topics on Discovery Channel could have global resonance. Coupled with the certain programs potential to cross national bo rders, the appeal of those icons or topics could be a justification of the netw ork programs supplied on a global basis. Production Cost and Format Discovery Asias Gibbons (personal co mmunication, August 29, 2006) ascribes the difference in the ratio of original programm ing between local MTV and Discovery channels to the difference in production costs typical for both program types. Similarly, ESPN Taiwans Chen (personal communication, July 24, 2006), who used to work for MTV, assumes that what enables MTV channels to produce a number of local programs are the relatively small costs required for productions. In contrast, it might be su bstantially difficult 150

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for Cartoon Network and Discovery Channel to produce an original program for an individual local market, because of relatively high costs of production. Moreover, music programming, or more precisely back-to-back music video programming, might be among the most suitable formats for the localization strategy, since both domestic and international music material can be packaged together in a single program. A music program usually consists of multiple songs, whether music video clips or songs from a live concert. MTV Japan actually has the technique to edit foreign MTVs material and incorporating it into their origin al content (T. Togawa, personal communication, March 15, 2006). This is also entirely feasible for a docum entary program compiled of several stories. In contrast, some other programming types, such as animations or dramas, usually have a storyline comprising of introduction, development, turn, and conclusion and therefore should be presented as the whole story to fully entertain viewers. Once an animated program has been made, it might be difficult to cut a segment from the program and insert it to another program. The progr amming format typically seen in Cartoon Network, therefore, could prevent their local teams from re-editing content for local programs. RQ3 asks how the programming strategy by the U.S.-originated cable networks could be as a function of the nature of the programming product. Although television programs appeal would usually vary according to markets, some have a characteristic appealing universally. In addition, program type might be a factor to determine programming strategy, since different program types possibly have different levels of cultural sensitivity. It is also possible that the program type could be the factor on the grounds that costs for producing local program ming and typical formats differ depending on the type. 151

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Target Market Segment The international success of a certain tele vision program depends on the presence of intermarket target segments across national markets, which have the same programming preferences. The networks, therefore, might seek similarities between markets to identify opportunities to offer programming in ternationally. Then, the ques tions in regard to RQ4 are whether intermarket audience se gments really exist for ce rtain programming products and, if any, how the existence could influence programming strategies. MTV MTV, as the voice of youth culture, once believed the global appeal of its main product, pop music programming, to the segm ent that seemed to share youthful and consumerist lifestyle (Banks, 1996; Philo, 1999). When MTV began expanding into foreign markets, it was expected that the networks am bition to build the globa l rock & roll village could be carried out by identifying and targeti ng teenagers living outside the United States with cutting-edge Western pop music. MTV may commonly display the signs of global teen culture of consumption for youth items (Walke r, 1996). Recall an early discussion regarding the global teenage segment, which is supposed to have homogeneous desire for novelty and trendy designs and image and can be targeted globally by certain types of products. Certainly, there still seem to exist mo re or less foreign music lovers in each country. From finding names like Britney Spear s and Avril Lavigne on questionnaires about favorite artists among Japanese youth, Togawa (personal communica tions, March 15, 2006) infers that probably a number of viewers have at least a partial interest in Western or foreign artists. MTV Japans main focus is adding fa ns of local music to their viewers without alienating Western music fans (T. Toga wa, personal communication, March 15, 2006). Varma (personal communication, August 28, 200 6) supposes that there are audiences around the Asia region, who look at MTV for international programming, whether it is music or talk show programming. Yet, accord ing to Sasamoto (personal communication, 152

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March 15, 2006), the share of the market that wants to see MTVs network programs in Japan is probably about 10%. Cartoon Network Cartoon Networks core audience is young ch ildren, who do not usually care about where an animated program was originally made when they watch it (G. Chou, personal communication, July 25, 2006; S. Suetsugu, personal communication, March 16, 2006). In particular, preschoolers do not ha ve obvious taste for animation from a particular country. In fact, when Cartoon Network heavily relied on Turners collection of cartoons in their start up, those cartoons were believed to be well known and liked by children around the world, as former president of Cartoon Network Intern ational Betty Cohen claimed that it already had worldwide appeal (Mifflin, 1995). Besides, some animation programs are popul ar among parents who want to ensure an educational dimension of their childs viewing, i.e., that of language learning (M. Schofield, personal communication, August 25, 2006; Television Business International, 2004). Many parents in Asia focus very much on education. There is a clear preference for English in some Asian countries, even though local languages are pr ovided as an option through local audio tracks or s ubtitles. Japanese viewers of ten associate Cartoon Network with foreign and bilingual content (M. Ha shida, personal communi cation, March 16, 2006). Consequently, Hashida (personal communication, March 16, 2006) assumes, Quite a lot of parents want to familiarize their children with English while watching fun programs. For this reason, Cartoon Network Japan chooses famous and highly-regarded animated programs from various countries for their presch ool-age audience. The situation is the same in Taiwan where most of animated programs for preschoolers are from the West. ESPN According to Sports-i ESPNs Hase (p ersonal communication, March 14, 2006), not only do some Japanese viewers want to see dom estic sports but have a certain amount of 153

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interest in foreign sports. Viewers in Southeast Asia have interest in best plays chosen from all over the world rather than local games (N. Wilkinson, personal communication, August 29, 2006). These imply the existence of intermarket audience segments for sports programming. Discovery Channel As Discovery Japans Luff (persona l communication, March 17, 2006) claims, it could be often the case that audiences in different countries are interested in the same topic for various reasons. It, therefore, should be possible to reach Discoverys co-viewers around the world in certain cases with the same program (J. Gibbons, personal communication, August 29, 2006). Because their target audience commonly seeks information about the world and an insight into its events, Disc overys documentary programming can be more global in focus than other types of progr amming (P. Luff, personal communication, March 17, 2006). Cross case analysis Many executives and managers of U.S.-origi nated cable networks suppose that there are viewers who like internationa l content in Asian markets. The presence of intermarket audience segments across countries could possibl y motivate those networks to distribute the same programs worldwide. Nonetheless, the success of global programming product depends not only on the presence of the segmen ts at which a global television network can target its programming products but also on the size of the segments a nd the strength of the segments preference for the gl obal product, as suggested by the international marketing literature. Presumably, Discovery Channel a nd Cartoon Network have a sufficient volume of intermarket audience segments to target allowing the networks to distribute more programming worldwide. Yet, MTV might consider it more profitable to offer different programming products for each market rather than to count on audiences across national boundaries in aggregate and offer the same programming on a global basis. 154

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Countrys Cultural Characteristics Television programming product is cultural product whose appeal varies by national taste, and local audiences tastes are considered to be in large part rooted in their cultures. RQ5 addresses how cultural similarities and differences between markets could influence the programming strategy of U. S.-originated cable networks. MTV As a general rule, all MTV channels should be programmed based on what the audience wants, needs, and knows (M. Va rma, personal communication, August 28, 2006). Sasamoto (personal communication, March 15, 2 006) claims that progr amming that reflects audience needs is paramount, and Chang (personal communication, July 26, 2006) says, The judgment [to choose content] is whether this content would be preferred by our target audience. Thus, music programming in loca l markets should reflect a specific music preference among local viewers. Sample mark ets for the current study have different preferences for music genre: Japanese view ers tend to have a pr eference for hip-hop and rock (T. Togawa, personal communication, March 15, 2006), Taiwanese viewers for local pop music (S. Chang, personal communication, Ju ly 26, 2006), and Singaporean viewers for foreign pop music (M. Varma, personal communication, August 28, 2006). Then, it is reasonable for each of local MTV channels to attempt to produce music programming featuring music genre preferre d in their local markets. Meanwhile, U.S. MTV-made programs are in general not well accepted by local viewers in some Asian markets. MTV Japan a nd MTV Taiwan feel that only a handful out of many programs currently made by MTV U.S. can satisfy their domestic target audience. Chang (personal communication, July 26, 2006) claims that Taiwanese viewers, especially those in their teens, do not care much for Amer ican programs. Yet, the situation differs in Singapore. Varma (personal communication, A ugust 28, 2006) ascribes the high popularity of foreign programming in Singapore to the fact that the country is very cosmopolitan, and 155

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most youth speak English and are eager to know what is happening elsewhere. 47 The degree to which MTVs network program is accepted is in part dependent on the characteristics of people and culture in each national market. Although what has been discussed so far is mainly about the programming supply from MTV U.S. to Asian MTV channels, it is also true that Asian MTV channels have increasingly shared programming within the region. The success of programming shared at the region level can be in part explained by cultural similarity among markets, which provides a favorable context for the internati onal trade in television programming. It is pointed out that Taiwan has developed its own very vibrant music industry but also looks to Japan for much of its music and fashion (Television Asia, 2000). Indeed, MTV Taiwan sometimes offers programs originally made by MTV Japan. In contrast, there does not seem to be such a significant market for other Asia n artists in Japan, since Japanese viewers do not seem to have much interest in them (T. Togawa, personal communication, March 15, 2006). Meanwhile, many programs produced by MTV Taiwan are supplied to MTV SAM, since a lot of artists who play on MTV Taiw an are also very popular in Singapore (M. Varma, personal communication, August 28, 200 6). The programming flow within Asian MTV channels would basically depend on whether or not artists or music of a particular Asian country is popular in another Asian c ountry, mirroring the re lationship between American artists and demand for programs featur ing them in foreign markets. According to Chang (personal communication, July 26, 2006), MTV China, unlike MTV Taiwan, is not eager to receive MTV Japans programming, becau se in general Japanese songs are not well known in China. 47 Shows produced by MTV U.S. also rate very well in the Philippines, where viewers are very westernized and look to the United Stat es for music and fashion (Television Asia, 2000). 156

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Cartoon Network Although animated programming might be one of most universally accepted programming genres, cultural differences betw een countries could affect the acceptance of animation in varying degrees. As for the acceptance of the U.S.-made animation by local audiences, Asian Cartoon Network channels have contrasting vi ewpoints. Schofield (personal communication, August 25, 2006) infers from high ratings garnered by American animation in Singapore that it works quite well there, ascribing the success to a bigger presence of English and more westernized lives in Singapore. Suetsugu (personal communication, March 16, 2006) believes that ma ny Japanese viewers do not have any specific preference for either foreign or Japanese animation (S. Suetsugu, personal communication, March 16, 2006). There are viewers who enjoy domestic content in Japan, but they do not feel alienate d by American content. Suetsugu (personal communication, March 16, 2006) assumes that Japanese audiences would feel little discomfort with the Western animation, since the Japanese lifestyle becomes more westernized, suggesting that there would be few concepts in the Wester n animation, which might be difficult to understand. While agreeing that it is in general not di fficult for viewers to understand animation, Chou (personal communication, July 25, 2006) also points out that Taiwanese children would get confused when they watch American traditional practices unfamiliar to them, such as Halloween or Thanksgiving Day, or wh en they hear American jokes. For example, The Grim Adventures of Billy and Mandy is a series about kids being friends with the Grim Reaper. According to Schofield (personal communication, August 25, 2006), many Taiwanese viewers, who are superstitious and ha ve personal affinity with death and ghosts, did not like the concept much. While kids ma y be more curious about what they do not know or imaginative situations in general, it is also likely that they need some kind of realistic hook (M. Schofield, pers onal communication, August 25, 2006). 157

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In terms of dialogues, those featured in a show, Bobobo-bo Bo-bobo, are considered interesting and funny by Ca rtoon Network U.S., but Chou (personal communication, July 25, 2006) thinks that they are too strong for Taiwanese children. CNOs are largely based on comedy, and this is where disconnect occurs, since this sort of programs is more dialogue-based rather than action-based and, therefore, is harder to appreciate in non-English speaking markets (M. Schofield, personal communication, August 25, 2006). Furthermore, Chou (personal commun ication, July 25, 2006) also considers it difficult for Asian kids to get used to the fast-paced speech of U.S. animated programs characters. Although Cartoon Network Taiwan dubs all foreign shows into Mandarin Chinese, dubbing might not be able to help Taiwanese children to dispel their worries, because it basically has to keep pace w ith the original tempo (G. Chou, personal communication, July 25, 2006). Problems pointed out by Chou appear to arise in large part from cultural differences between Taiwan and the United States. Meanwhile, Chou (personal communication, July 25, 2006) assumes that Taiwanese children are very familiar with Japanese culture, and when watching Japanese animation, they do not face as much difficulty as they often feel when watching U.S. or Western animation. The appearance of characters featured in animation programs could have as much an impact as storylines on whether or not vi ewers like the programs. In fact, Suetsugu (personal communication, March 16, 2006) states that young child ren are attached more by the look of the program than the plot. Acco rding to Chou (personal communication, July 25, 2006), characters of U.S. animation sometimes look strange to Taiwanese children who like cute and lovely characters. Richard Cunningham, Nickelodeon As ias senior vice president, suggests, We have also found out that kids like to see themselves on television, so we try to include many Asian or local faces on the channel (Indiatelevision.com, 2003). 158

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ESPN It is quite probable that the popularity of a certain spor t in a country would be a prerequisite for the popularity of programming s howing the sport in the country. If tastes for sports vary from country to country and region to region, spor ts programming might basically be a business based on a local and re gional appeal. When ESPN began catering to prevalent taste in Asia, ESPN International s former senior vice president and general manager Andrew Brilliant once said, Our objecti ve is to become an Asian service, not an American export service (Goll, 1993). It is, nonetheless, sti ll difficult to have maximum appeal across countries in Asia with a spor t program, since each Asian country has different taste for sports. For instance, cricket is a very popular sport in India, but only a few Japanese or Taiwanese are familiar with the spor t. Different tastes for sports are also found even between Japanese and Taiwanese people, as soccer is popular in Japan but not in Taiwan, and the opposite is the case for basketba ll. Ideally, therefore, each ESPN channel should be dedicated to a specific market based on viewers preferences in the market. If no two markets are alike in te rms of audience preferences for sports, understanding and accommodating local tastes is critical in successful sports programming. Aside from some indigenous sports (e.g., sumo wrestling in Japan), many sports currently popular in Asia were originally imported from the West (I. Hase, personal communication, March 14, 2006; J. Chen, person al communication, July 24, 2006). It is possible that the sporting tastes of Asian peopl e have been in large part formed under the influence of Western countries. Pointing out the fact that Japanese lear ned baseball from the United States and soccer from Europe, Hase (personal communication, March 14, 2006) presumes that Japanese taste for sports is a blend of both American and European influences. According to Chen (personal communicati on, July 24, 2006), Taiwanese imported a lot of things, including sports, from the United States and consequently Taiw anese tastes came to reflect American tastes, as ev idenced by both countries fondne ss for baseball and basketball. 159

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The prominently popular sport in Singapore is soccer and, among others, English soccer. Wilkinson (personal communica tion, August 29, 2006) ascribes th e popularity to the first mover advantage that English soccer has enjo yed in Singapore, an ex-British-colony. Not only have English soccer teams spent a long time touring in Singapor e, but also English soccer games have been broadcast on local television networks. Presumably, the preference for sports in a given country has cultural and historical reasons (N. Wilkinson, personal communicatio n, August 29, 2006). Besides, the traffic of people between countries might have some impact on their preference for sports. The American influence on sport tastes among Japane se and Taiwanese might be also related to the fact that many people come and go from th ese countries to the United States (J. Chen, personal communication, July 24, 2006; N. Wilkinson, personal communication, August 29, 2006). From a broader perspective, it is likely that tastes for certain sports in a given Asian country have been nurtured in the context of bilateral relatio nship between that country and a particular Western country, which has exer ted its influence on the Asian country in many aspects. Although baseball was exported from the Un ited States to Japan and Taiwan and became quite popular in both countries, however, it is not true that viewers of both countries like any baseball telecasts from the United St ates. As noted earlier, Chen (personal communication, July 24, 2006) considers it importa nt that sports programs offered by ESPN Taiwan are relevant to Taiwanese viewers. In the case of internati onal sports programming, it should feature either national Taiwan teams or Taiwanese players. Hase (personal communication, March 14, 2006) claims that the pr esence of famous Japanese players in foreign sporting events has an influence on the popularity of the events. MLB and also foreign soccer leagues became increasingly accepted by Japanese audiences, as more Japanese players moved into these foreign spor ts leagues. Paradoxically it is possible that the unpopularity of American football in Japan is in part attributed to a fact that there are no 160

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Japanese players in the Nati onal Football League (I. Hase personal communication, March 14, 2006). In essence, the existe nce of domestic players is important for Taiwanese and Japanese audiences when they watch internati onal sports games, since they find enjoyment in watching domestic athletes playing actively in the international arena. Yet, Wilkinson (personal communication, August 29, 2006) views these attitudes as typical in Northeast Asian viewers, in contrast with Southeast Asian viewers looking for the best rather than the local. In fact, the top rating sp orts programs in Si ngapore are all English soccer matches featuring not a single Singapor ean player. ESPN Asia produces a weekly show featuring the local soccer league, the Asian Football Confederation, but it does not rate as well as the English Premier Lea gue does (N. Wilkinson, personal communication, August 29, 2006). Discovery Channel It is plausible that people around the worl d have common interests in the universal topics featured in Discovery Channels programming. In the strict sense, however, whether people are interested in forei gn affairs may depend on the national character to some extent. For example, Singaporeans in general have great curiosity about the outside world (J. Gibbons, personal communication, August 29, 2006). On the contrary, according to Luff (personal communication, March 17, 2006), U.S. viewers probably are less interested in international topics. Additionally the degree to which a certai n topic is accepted by viewers in a country might eventually vary depending on the countrys preference. As noted earlier, history and technology are genera lly perceived as universally appealing topics by Discovery Channels executives. Yet, the network once found that viewers in Mexico preferred programs about history and archit ecture, while those in China a nd Brazil particularly liked military technology shows (Walley, 1995). Japanese viewers in general do not like dark and terrible stories, such as those about atroc ity by Saddam Hussein, which attracted worldwide attention. Luff (personal communication, Marc h 17, 2006) assumes that these preferences 161

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could be in part ascribed to Japanese cultu re. Obviously, each local Discovery channels has to offer programs that are not likely to go against a countrys interest. Documentary programming or factual progr amming can explore a very wide range of topics. It is, therefore, likely that some topics do not draw global concerns but do regional or local concerns. Luff (pers onal communication, Ma rch 17, 2006) identifies certain topics that are of particular interest only to Asian people. An example of this is the tsunami, which may not be such a relevant topic to many Europeans or Americans but concern Asians deeply (P. Luff, pers onal communication, March 17, 2006). Gibbons (personal communication, August 29, 2006) presumes that viewers do not look at whether a program is global or local but rather whethe r or not it matters to them. Discovery Asia produced a documentary program titled The Hi story of Singapore, which was naturally very relevant to Singaporean viewers a nd hence delivered a high audience rating in Singapore. Gibbons (personal communicati on, August 29, 2006) mentions, As you move further away from Singapore, the ratings probably get less and less, because even though its a topic thats interesting for many people around the world, its most interesting in its home market of Singapore. This example might prove that audiences in general tend to prefer documentary programs specifically releva nt to their home countries and, to a lesser extent, those relevant to the region, which includes their home countries, as indicated by the cultural proximity theory. Cross case analysis A countrys cultural char acteristics could influen ce programming offerings by U.S.-originated cable networks in several ways. First, it is perceive d that audiences in general prefer programs including icons familiar to them and topics relevant to and arousing sympathy among them. Those icons and topics ar e often local celebrities, characters, or stories. Many of executives and managers inte rviewed agreed that each market has unique preference for television programming. Althoug h they did not necessarily refer to the 162

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individual markets unique culture as th e reason behind the difference in viewing preferences, audiences are suppos ed to interpret media content actively on the basis of their cultural values, as repeatedly poi nted out in the current study. It is no surprise that local Asian channels give top priority to the taste of their target audience when making programming decisions, as all interviewees acknowledge that thei r programming services must meet demands in the market. It is im portant to note that programs supplied by the network are often less popular among local audiences than local programs, which are produced specially to cater to tastes and needs in a local market. Paradoxically, network programs could be offered more, if they were pr eferred by local viewers at least as much as local programs. In fact, Sasamoto (persona l communication, March 15, 2006) claims, If we were able to increase the number of viewers by providing dubbed or subtitled American MTV content, then we might raise the ratio to 30 or 40%. Yet, the number of network programs, which could attract local viewers, might be limited under the present situation. Second, it is commonly believed that televi sion viewing preferences and hence the extent a network program is accepted significan tly differ from one national market to another. Executives interviewed all state that foreign-made programs would be in general accepted well in the Singaporean market. All of the major international shows are very popular in Singapore (M. Varma, personal communication, August 28, 2006); Singaporean viewers accept American cartoons to a greater degree (M. Schofield, personal communication, August 25, 2006); the interest in Singapore is in the best quality sport rather than necessarily lo cal sport (N. Wilkinson, pe rsonal communication, August 29, 2006); and there is a huge cu riosity among Singaporeans abou t the outside world (J. Gibbons, personal communication, August 29, 2006). These statements can be in part associated with a multicultural and cosmopolitan nature intrinsic to many Singaporeans. While Singaporean viewers often seek the best of the world in content, Japanese and Taiwanese viewers tend to look for the near to them. In addition, because of a characteristic 163

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of Singapore as an English-speaking country, network programs, in pa rticular those based on dialogues in English, would be more acceptable in Singapore than in Japan and Taiwan. Third, given a fact that many network progr ams are still made in the United States, they could be more successful in countries in which national cultural values are similar to those of the United States on the one hand. On the other hand, some Asian countries share similar cultural values between them, where by programs could be distributed more actively on a regional basis. In fact, MTV Networks Asia distributes some programs within their local Asian channels, while Discovery Asia attempts to produce documentary programs, which commonly appeal to Asian markets. In a sense, regional programming might be viewed as the middle-of-road programming po licy between network programming and local programming. It may be possible that ma ny Asian viewers would prefer regional programming to network programming made in the United States, though it is less preferred than local programming. Countrys Environmental Characteristics In addition to cultural charac teristics, environmental characteristics of a country are assumed to have an impact on product offe rings as well. The international marketing literature roughly identifi es four types of environmental differences as important factors affecting the direction of product standardization or adaptation: economic, physical/geographic, legal, and infras tructure/supporting environments. Product standardization appears feasible where those environments are most alike. RQ6 addresses the relationship between those environmental factors and stra tegy employed for television programming products. Economic Condition Some international marketing studies suppose that consumers in economically similar countries would become homoge neous, providing opportunities for product standardization. Meanwhile, as discussed in Chapter 3, the general economic condition of a 164

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country could have an impact on programming stra tegies by U.S.-originated cable networks in the national market. The development of a robust domestic television industry, which is usually achieved by the economic development of a country, would eventually benefit local television programmers to produce their own programs. MTV The extent MTVs programming can contain lo cal music and artists is related to the availability of local music videos. Japan ha s the worlds second-bigge st music industry in terms of the sales of audio reco rdings, while the music industry in Singapore is very small, as only 10 or 15 artists si nging in Mandarin release albums (M. Varma, personal communication, August 28, 2006). There is a big difference in the availability of local music videos between MTV Japan and MTV SAM. Cartoon Network Domestic animation production houses might play an essential part in Cartoon Networks local programming. The Taiwanes e animation industry currently does not produce a sufficient amount of animated cont ent, and thus Cartoon Network Taiwan has physically no choice but to rely on foreign-made animation to fill their schedule. Discovery Channel Only a few Asian countries might have strong documentary film industries with sufficient volumes of archives. A challenge faced by documentary channels in Asia might be to find sufficient quantities of high-qualit y programming in domestic markets to fill the schedule (Westcott, 1999). Cross case analysis There is no data to support that tele vision audiences in economically similar countries have similar viewing preferences For instance, although Singapore and Taiwan have similar GDP per capita (see Table 4-3), view ers in both countries would basically have different tastes for television programming, as discussed so far. It seems unfeasible that the 165

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same programming product is accepted in countries for the reason alone that viewers in the countries have a similar economic level. Meanwhile, the combination of a large population with wealth, which could be indicated by a high per capita income, in a c ountry is deemed as a contributor to the high self-sufficiency ratio of television program ming at home, as the combination makes the country a big market for television programs. As some interviewees point out, Singapore does not have a television produc tion industry as large and ma ture as those of Japan and Taiwan. Singapore is certainly a rich country whose GDP per capita in 2005 was U.S. $27,600. However, in terms of population, Singapor e is about one fifth of Taiwan and one twenty-eighth of Japan (see Table 4-3). Under su ch circumstances, it might be substantially difficult for programmers to produce or acquire a sufficient volume of local programs in the domestic market, and instead foreign-made programs might be sought inevitably as a substitute of domestic programs to fill programming schedules. In fact, U.S.-originated cable networks might not have incentives to produce a number of local programs for the Singaporean viewers, let alone provide dedicated channels for th e market. In a broad sense, this could be interpreted as the influence of the domestic economic size on television programming strategies. Physical/Geographic Condition It was suggested by the intern ational marketing literature that differences in such physical conditions as climate and topography among countries would require firms to modify products to accommodate to different e nvironments. For example, U.S. electrical appliances manufacturers might have to modi fy the size and function of their products for the residential environment and climate in overseas markets. In addition, the geographic condition could influence what product is offe red in an individual market. In fact, as described in Chapter 3, the geogr aphic region has increasingly pl ayed a pivotal role in the development of global television networks, whic h usually regard each region as a unit for 166

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their overseas operations. It is possible that gl obal television networks try to exploit an opportunity to offer the same programming on a regional basis. MTV It is common in Asia that MTV channels in different markets conclude programming carriage agreements with each other (Hughes, 2000a). MTV Networks Asia headquartered in Singapore sometimes distributes content throughout Asia. Yet, it is noteworthy that there is a clear distinction between the role of programming supplier and that of programming receiver even among Asian MTV channels. For example, as noted previously, MTV Taiwan often features Japanese programming, while MTV Japan rarely offers other Asian programming. At the same time, MTV Taiwan, as the main producer of content in Mandarin Chinese, currently supplies several shows to MTV China, although they focus only on the need of the Taiwanese viewers and do not necessarily take into consideration the preference of Chinese viewers when developing pr ogramming products (S. Chang, personal communication, July 26, 2006). Cartoon Network Cartoon Network Asia/Pacific tries to have their own productions in the Asia region. In order to produce their originals at a regional level, they look to such Asian markets with a relatively strong production capability as India and Korea (M. Schofield, personal communication, August 25, 2006). Besides, the re gional headquarters purchases some third party titles to show on severa l local channels in Asia (G. Chou, personal communication, July 25, 2006; M. Hashida, personal communication, March 16, 2006). ESPN ESPN STAR Sports purchases sports rights on a regional basis for their own channels, such as ESPN Taiwan and ESPN As ia. As a consequence, a certain amount of sports programming on those channels is identi cal. Yet, Sports-i ESPN does not share any programs with ESPN STAR Sports, since the broa dcast rights held by th em are restricted to 167

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the Japanese market, and they usually do not retain broadcast rights for other Asian countries (I. Hase, personal communication, March 14, 2006). Discovery Channel Discovery Channel in principle operates on a regional basis. Local Asian channels, such as Discovery Japan, Discovery Taiw an, and Discovery Southeast Asia, are all programmed and distributed from Discovery Asias headquarters in Singapore. In contradiction of Discovery Asias former se nior vice president and general manager Kevin McIntyres assertion that they had no pan-Asian ambitions (Dhar, 1995), Discovery Asia in fact tries to come up with a common format that would work for the whole region and already produces more than 10% of its content within the Asia region (Bowman, 2003/2004). They are committed to producing or to co-producing documentary programs in the region. For example, The Asian Masterpiece Series is Discovery Asias initiative making use of the talents of the best directors in Asia to produce original stories about Asian culture, places, and people (Dis covery Communications Inc., 2006b). Cross case analysis The influence of physical condition of a market on the programming strategies might be minimal. Differences in climatic and topographic conditions would have little impact on television programming strategies, as it is unlikely for U.S.-originated cable networks to modify their network programs to fit in foreign residential environment and climate. Meanwhile, the influence of geographi c proximity on programming is seen in a fact that local Asian channels in geographically proximate markets sometimes share the same programming. Yet, what drives the regiona lization of television programming might be cultural proximity between Asian markets, which results in similar viewing preferences. In addition, the degree to which a program can be distributed within the Asia region is also likely to hinge on how much autonomy to decide programming is given to Asian regional headquarters from corporate headquarters of the network, since the regional programming 168

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perhaps requires the coordination by the regional headquarters. Asian affiliates of U.S.-originated cable networks, namely MTV Networks Asia, Cartoon Network Asia/Pacific, ESPN STAR Sports and Discovery Asia, could ha ve an economic incentive to distribute the same programming they produced or acquired to channels they own and operate in the Asia region, but it might vary among networks if the regional headquarters is given discretion in programming. Th is point is discussed later. Legal Environment As products have to be modified so as to conform to the legal requirements of overseas markets, legal requirements in indivi dual markets, if any, could influence what programs are offered in those markets. Thos e regulations are roughl y twofold: Quotas imposed on cable networks in terms of their im portation of foreign content are quantitative regulations, while censorships imposed on content are qualitative regulations. MTV There are no specific quotas that require a certain percentage of the programming schedule to be filled with locally produ ced material both in Singapore and Japan. Meanwhile, Taiwans Cable Television Act sp ecifies that foreign programming should be no more than 80% of programming. Yet, this rule is not valid for cable channels owned by foreign companies, such as MTV Networks Asia. The amount of foreign-made programs on MTV Taiwan is restricted to less th an 50% of programming (S.Chang, personal communication, July 26, 2006). Cartoon Network Cartoon Network does not face maximum amount limits in any Asian countries in terms of restrictions on the amount of fore ign-made programs and hence are allowed to offer as much foreign programming as they like. Meanwhile, Cartoon Network Taiwan is encouraged by the Taiwanese government to wo rk actively with loca l production houses to increase the amount of domestica lly made animations. In terms of regulations of content, 169

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Cartoon Network Taiwan is officially banned from showing drug-use, sexual, or violent content even in the midnight (G. C hou, personal communication, July 25, 2006). ESPN As there are no restrictions on the amount of foreign programming in Japan, Sports-i ESPN, if they want to, could have all fo reign-made content. Yet, Hase (personal communication, March 14, 2006) thinks that it has no significant effect on their programming strategies. It seem s that the regulation of sports content differs from one country to another. ESPN Taiwan is forbidde n to show bloody professi onal wrestling shows. On the other hand, fighting sports including W orld Wrestling Entertainment, which often contains bloody match-ups, are offered by Sports-i ESPN and gain popularity among audiences. Besides, programming, which coul d tempt viewers to gamble, such as the telecast of horse or dog races, can be offered by ESPN Asia but not by ESPN Taiwan before 9 pm. Discovery Channel Discovery Japan does not face any particular regulation in terms of the amount of programs made in foreign countries. According to Luff (personal communication, March 17, 2006), no regulation bans them from presenting a ny particular topics and images in Japan. Cross case analysis It is difficult to conclude how legal regulations influence the programming strategies of U.S.-originated cable networks, since ther e are few requirements to abide by in such markets as Japan and Singapore. As noted earl ier, Japan and Singapore do not have specific quotas that require a certain percentage of the programming schedule to be filled with locally produced material. Taiwan has an im port quota, which limits the amount of foreign television programs offered by certain cab le channels, such as MTV Taiwan. In general, the content quota restrictions for foreign-owned cable channels in Asia are not as severe as those for broadcas t networks. Presumably, governments in many 170

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countries understand that it is virtually impossible for animati on or documentary channels in their countries to fill their programming only w ith locally made content. Overall, it is perceived that official regulations, whether quotas or censorships, currently do not have much impact on programming strategies by U.S. -originated cable networks in such Asian markets as Japan, Taiwan, or Singapore. Infrastructure/Supporting Sector According to the international marketing literature, similar marketing infrastructures between countries as well as the availabil ity of global marketing infrastructure could facilitate global standardizat ion strategies. The absence of such infrastructures would encourage a more localized product strategy. Furthermore, supporting sectors, including advertisers and MVPD systems, are also esse ntial for cable networks, since most of the networks receive dual revenues from both parties. Those revenues can eventually influence production budgets that cable netw orks capitalize on for programming. MTV High percentage of local programming by MT V Japan and MTV Taiwan could be in part facilitated by their strong self-production capabilities assisted by advertisers. According to Sasamoto (personal communi cation, March 15, 2006) and Chang (personal communication, July 26, 2006), both MTV Japan and MTV Taiwan are recognized as media reaching young consumers by domestic advertiser s, which, as discussed earlier, are more important than global or regional advertisers in the contemporary multichannel landscape. Although advertisers rarely voice their opinions concerning programming (S. Chang, personal communication, July 26, 2006), what programs are offered could influence advertising opportunities and ev entually advertising reve nues. Sasamoto (personal communication, March 15, 2006) claims, Theres a limit to the advertising we can aim at viewers interested in forei gn or American programming. 171

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Meanwhile, viewing MTV as being analogous with Western or foreign content, MVPD systems request MTV Japan to offer inte rnational content so that they group music channels into foreign music or local music genres for their programming lineups (T. Togawa, personal communication, March 15, 2006; Y. Sasamoto, pers onal communication, March 15, 2006). Yet, MTV Japan might not abide by the order. According to Sasamoto (personal communication, March 15, 2006), If many viewers ar e not interested in programs from the West or the U.S., these will not be aired no matter how much the platforms push for Western or foreign content. Cartoon Network Cartoon Network Taiwan is given much suggestion regarding programming neither from advertisers nor MVPD systems (G. Chou, personal communication, July 25, 2006). Meanwhile, Ian Diamond, senior vice pres ident and general ma nager of Turner Entertainment Networks Asia/Pacific, asserts th at a cartoon character or a shows success is judged by how well other commercial products related to the character are accepted by the public (Lugo, 2003). Animated characters and related merchandise could complement each other. In fact, both Cartoon Network Japa n and Taiwan tend to attract firms making animation-character merchandise as main advertisers, and Hashida (personal communication, March 16, 2006) percei ves the trend as being dire ctly related to content on the channel. ESPN Advertisers have an impact on the progr amming of Asian ESPN channels. Chen (personal communication, July 24, 2006) claims that ESPN Taiwan still relies on regional programming, but a program could be produced on a local level if they find advertisers to bear all costs necessary for the program. At th e same time, advertisers give input into the programs they sponsor, and programs are often made based on the input (I. Hase, personal communication, March 14, 2006). ESPN usually at tracts sports brands advertising, and 172

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Adidas, for instance, might expect ESPN Taiw an to feature intern ational athletes under contracts with them (J. Chen, personal communication, July 24, 2006). While MVPD systems usually do not have any requests for Sports-i ESPNs programming, ESPN Taiwan sometimes is advised by them, who aim to increase the number of subscribers. Discovery Channel Discovery Japan currently has much more reliance on carriage fees from MVPD systems than on advertising revenues. Accord ing to Luff (personal communication, March 17, 2006), some advertisers shy away from sp ending money on cable channels in Japan, partly because the number of viewers are still small, and partly because there is no regular audience ratings measured for cable channels. In the absence of audience data, advertisers would not be willing to spend for cable ch annels. Meanwhile, Discovery Channel attracts many firms, which want to advertise within the region. As noted ear lier, Discovery Asia tries to come up with a common format that would work for the whole region. The main reason for this is the needs of advertisers who plan to roll out campaigns on a pan-regional basis as well as the brand consistency in the region (P. Luff, personal communication, March 17, 2006). Luff (persona l communication, March 17, 2006) says that if the network changes programming format significantly, it offers some problems for their regional advertisers looking for solution consistent across the whole region, although Gibbons (personal communication, August 29, 2006) declines to say whether their advertisers prefer global or local programming. Cross case analysis MVPD systems offer an infrastructure for the delivery of video programs. The development of distribution infr astructure is certainly necessary for the availability of U.S.-originated cable networks on a country basis. However, it is unclear how it could affect the networks programming strategies for part icular national markets. In terms of the similarity of marketing infrastructure, MVPD systems in some Asian markets (e.g., Taiwan) 173

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are as highly developed as those in the Unite d States, as a result of their aggressive investments in upgrading infrastructures to allo w for advanced video services. Yet, there is no evidence to support that similar infrastruc tures drive the same programming product to be successfully offered both in the Un ited States and those Asian markets. In terms of the availability of global marketing infras tructure, which could be a prerequisite for global standard ization strategy, U.S.-origina ted cable networks leverage several satellites around the wo rld to distribute the same pr ogramming worldwide. Physical distribution costs necessary for the delivery of television programming products are usually not expensive, as they are intangible, information goods. These conditions would support network programs to be distributed across markets. MVPD systems may have an impact on pr ogramming strategies as revenue source rather than as infrastructure. MVPD syst ems and advertisers as deep pockets for programming might call on the networks to offer specific types of programming. It was assumed that most advertisers and MVPD sy stems would basically like programs to be locally adapted, since those programs are belie ved to increase the number of consumers, who are exposed to their ads or subscribe to their MVPD services. However, it is also possible that a local channel of a U.S.-origina ted cable network is expected to offer more international content by MVPD systems, which need to provide more focused content to cultivate niche audiences along with further audience segmentation. Meanwhile, advertisers obviously care about whether or not the programs they spons or are rated highly by their target consumers. Some adve rtisers tend to sponsor programs to which their products are linked. For example, Cartoon Network attracts su ch advertisers as toy makers, stationery makers, or entertainment industry companies whose products might feature the animated characters of a program they sponsor. It follows that such advertisers might prefer either global or local programming, depending on which is linked more closely to their products. 174

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RQ6 asks how environmental factors are perceived to influence the programming strategy of U.S.-originated cable networks. It is still unclear if the similarity in economic conditions, physical conditions, legal envir onments, and infrastructure and supporting sectors could make the distribution of the same programmi ng products more feasible. Meanwhile, the general economic condition of a country could have an impact on programming strategies by U.S.-originated cab le networks in the national market. They would have incentives to produce a number of local programs, if the market is large in terms of size and wealth. The geographic proximity between markets could have an impact on programming as the same programming is sometimes shared between local Asian channels in geographically proximate markets. U.S.-ori ginated cable networks currently do not face severe official regulations, whether quotas or censorships, in such Asian markets as Japan, Taiwan, or Singapore. As for supporting sector s, the availability of global marketing infrastructure makes it possible for U.S.-o riginated cable networks to employ global standardization strategies. Fi nally, advertisers and MVPD sy stems might have specific preferences for programming. Industry Competition In order to survive intense competition, firms might need to engage in product adaptation and provide products th at meet local needs and wants more suitably. However, as suggested by the international marketing l iterature, the choice of strategy to match competition will be also affected by whether the firm competes purely local rivals or other global rivals and whether the competitive posi tion of a firm varies among markets. With reference to RQ7, how the compe titive intensity in a market and the differences in position among markets affect the programming strategy of U.S.-originated cable networks is analyzed below. 175

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MTV As noted previously, MTV adopted local adaptation as their programming strategy to survive in direct competition with local music channels. Nonetheless, the competitive situation for local MTV channels in Asia va ries depending on markets. For example, MTV Japan competes with several domestic music channels, while MTV Taiwan, as a pure music channel, currently does not have any riva l channels, since Channel [V], a longtime competitor in the market, has changed their programming strategies to focus more on entertainment shows, reducing the amount of music programming (S. Chang, personal communication, July 26, 2006). The way each local MTV channel reacts to the competitive situation differs. Sasamoto (personal co mmunication, March 15, 2006) states that MTV Japan tries to differentiate themselves fr om domestic music channels by adding some international shows supplied by the network, i. e., locally unavailable content, into their lineup. Reality shows or non-music shows made by MTV U.S. might play a certain role in this shift. It was also assumed that pr oduct adaptation might be unnecessary in less competitive markets. Yet, MTV Taiwan tries to engage in extensive product adaptation in spite of the absence of str ong competitors in the market. Cartoon Network The Japanese and Taiwanese animated programming markets are similar in that Disney Channel has established a solid positi on in both markets with their globally renown animated programs, while some local channels rely on Japanese animated programs, which are usually popular among local audiences. Cartoon Network Japan and Cartoon Network Taiwan, however, respond somewhat diff erently to the competitive situation. Japanese animation is important for Ca rtoon Network Taiwan not only to gain higher audience ratings but also to differentia te themselves from Disney Channel, which offers a number of their own animations in Taiwan. Although Cartoon Network and Disney Channel also compete with each other in Japa n, Cartoon Network Japan tries to differentiate 176

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themselves from the rival in a different way from Cartoon Network Taiwan. While about 80% of Disneys programming in Japan is in-house material, Cartoon Network Japan features animated programs from multiple s uppliers throughout the world rather than inclining toward a certain brand (S. Suetsugu, personal communication, March 16, 2006). Although the international marketing literature suggests that competi ng against the same rival in different markets, such as Cartoon Network competing with Disney Channel, would result in greater product standardization, it does not necessarily hold true for Cartoon Networks programming products. As noted above, Cartoon Network also comp etes with local animation channels in Taiwan and Japan. Cartoon Network Taiwan and Yoyo Channel, the leading Taiwanese animation channel, show almost the same amount of Japanese animation. By offering similar programming products adapted to local preferences, they face stiff competition with each other. This example shows that in or der to compete with the domestic channel attracting local viewers, Cart oon Network has to imitate the rivals programming strategies. Similarly, Cartoon Network Japan is in rival with some local animation channels, which offer exclusively Japanese animated program s. However, Cartoon Network Japan does not focus on Japanese animated programs but empha sizes international content. According to Schofields interpretation (personal co mmunication, August 25, 2006), Cartoon Network Japan attempts to show the audience something different from what he or she watches everyday, i.e., Japanese animation. ESPN ESPN Taiwan faces fierce competition with a Taiwanese local sports channel Videoland Sports. ESPN Taiwan, which had offered the U.S. version of Sports Center until a few years ago, felt the necessity to offer lo cal sports news for Taiwanese viewers who prefer locally relevant news to interna tionally important news (J. Chen, personal communication, July 24, 2006). Then, the channel started offering the lo calized version of 177

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Sports Center. This shift in programming could be viewed as a consequence of stiff competition from Videoland Sports. A sports news show by the domestic channel typically reports local sports news and garners quite high ratings. This clearly shows that a global television network should make their global programming products more relevant to local audience so that they can compete with a successful domestic channel focusing on local sports topics. Discovery Channel For Discovery Channel, strong local rivals might be rare in Asia. Only a few Asian countries have strong documentary film industries with a large budget enough to support a 24-hour documentary channel. At the same time, the network competes with National Geographic Channel and History Channel on a gl obal basis. Discovery Channel enjoys the leading position as documentar y programmer worldwide, and, according to Luff (personal communication, March 17, 2006), National Geogra phic Channel often copies what have been successful for Discovery Channel. A firm with the competitive position unvarying across multiple markets can succe ssfully standardize its marketing strategy in all those markets, and this might hold true for Discovery Channel. The networks position as the worldwide leading documentary programmer may not be affected much by the competitive situation in individual market s, possibly enabling them to offer the same programming worldwide with relative ease. Cross case analysis The competitive situation of the industry and a networks position within it would affect programming strategies. It is commonly found that U.S.-o riginated cable networks in Taiwan offer more locally adapted programmi ng in the competition, whether they compete with purely local rivals or other global rivals. However, in Japan they tend to rely more or less on international programs in order to differentiate themselves from domestic channels. Although both the Japanese and Taiwanese vide o programming markets are competitive, it 178

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is interesting that U.S.-originated cable ne tworks tend to take different programming strategies in both countries. It is likely that they usually adopt programming adaptation in competitions with a singular domestic rival but consider programming differentiation in more intense competitions with multiple domestic rivals. Meanwhile, it might be true that as the international marketing literature suggest ed, a global product might be successfully offered if the competitive position of a firm does not vary among markets, as seen in an example of Discovery Channel. Brand and Country of Origin Both brand and country images could infl uence product perceptions and evaluations and purchase decisions by consumers. Creating positive image for a product among consumers, the brand and country of origin a ssociated with high quality could allow firms to offer standardized products across markets more easily. Yet, consumers in various countries might perceive a brand or a country of origin of a pr oduct differently. In regard to RQ8, how the brand image of a U.S.-originated cable network and the image of the country of origin of a product could affect their programming strategies are analyzed below. Brand Branding is vital for global television networks to become successful, since it establishes an identity and creates an image that communicates what type of content is offered to a particular target audience. Sp ecifically, many U.S.-originated cable networks tend to emphasize their worldwide reach and av ailability in an attempt to impress on audiences that they are global brands. Viewer s might prefer brands with global image, considering that global brands are superior in quality. MTV MTV has been successful in building strong brand images in many overseas markets. MTVs primary brand images, as commonly pe rceived by their target audience in Asia (viewers aged 15 to 34), are cool, cutting-edge, and i nternational. The former two 179

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images might result from non-product-related, sensory attributes, such as an audience imagery of being young and hip, as suggested by Chan-Olmsted (2006). Meanwhile, the international image is strategically important for Asian MTV channels. Sasamoto (personal communication, March 15, 2006) assumes, Vie wers of music channel can see the difference in image between Space Shower (a local music channel in Japan) and MTV, that is, the difference between a dyed-in-the-wool Ja panese music channel and one that has more of an international flavorIn terms of differ entiation, it is important to add international flavor to our channel for a brand image. MT V Japan is actually viewed by many people as a channel completely devoted to Western mu sic for those who like it (T. Togawa, personal communication, March 15, 2006). Some might question whether or not local MTV channels emphasis on local music is wise when local viewers associate MTV with international music and could be disappointed to find that it looks like other local music channels (Magnier, 2000). N onetheless, Sasamoto (per sonal communication, March 15, 2006) also considers that a pure internationa l channel does not fit the Japanese market. Likewise, while acknowledging the importance of international image, Chang (personal communication, July 26, 2006) claims, We still need local content to keep the viewers watching us. Thats a dilemma. William Roedy, president of MTV Networks International, said that MTV would make use of its brand recognition and plan to air both local and U.S. programs (Wall Street Journal, 2000), and, as described earlier, a recent approach actually ensures a mix of international and local music, depending on the demands of the individual market. Calling MTVs programming strategy glocal, which means to keep a global brand while being mindful of the local audience, Varma (p ersonal communication, August 28, 2006) claims, The success lies in finding the right balan ce between the international and the local programming mix. 180

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Cartoon Network The international image is also associated by Asian vi ewers with Cartoon Network. Hashida (personal communication, March 16, 2 006) assumes that the image would stem from Cartoon Network Japans programming ma de up of animations from a variety of countries, along with the channels slogan, Animation around the world is here for you. Cartoon Network Taiwan emphasizes their inte rnational image during preschooler shows, since these childrens parent s are attached by the image (G. Chou, personal communication, July 25, 2006). Yet, Chou (personal communica tion, July 25, 2006) claims that the image works only for the preschooler time block, statin g, To our main target (aged between 4 and 14), if you want to attract attention to a very international image, I think it doesnt work very muchFor the main target, we cannot pr ovide too much foreign animation from West or the U.S. Japanese animation, unlike its American or Western counterpart, might not always evoke an international image among Taiwanese teens, and, paradoxically speaking, therefore might be preferred by them. In addition to the international image, Schofield (persona l communication, August 25, 2006) suggests that Cartoon Ne twork brand is also perceived as a funny channel, because CNOs are in large part comedies. In spite of the image, however, it might be difficult for the network to di stribute comedy-based animations on a global or regional basis on the ground that they are usually dialogue-b ased, and what viewers consider funny could vary among countries. ESPN ESPN Asia is perceived by Southeast Asia n viewers to be an authoritative voice in sports (N. Wilkinson, personal communicati on, August 29, 2006). Yet, Hase (personal communication, March 14, 2006) supposes that Spor ts-i ESPN, which is still unfamiliar to many Japanese people, has not yet obtained a position as established as ESPN U.S., which motivates people to subscribe to MVPD services as a must-see channel. ESPN is clearly a 181

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global brand, whose programming services ar e available in various markets around the world. ESPN is recognized as an internationa l brand among Taiwanese viewers, since they exclusively offer foreign sports program ming, except for during primetime (J. Chen, personal communication, July 24, 2006). Chen (personal co mmunication, July 24, 2006) believes that the brand image is formed by the content actually provided to audiences, rather than affecting the decision regarding program ming. The international image, however, is sometimes regarded as a disadvantage by ESPN Taiwan, since viewers not interested in foreign sports programming might skip the ch annel soon after they watch ESPNs logo on television screens. It seems that ESPN still has a difficult time making its global brand accepted satisfactorily among Taiwanese and Japanese viewers. Discovery Channel Discovery Channel is generally perceived by Japanese viewers as a global brand, not a U.S. brand (P. Luff, personal communication, March 17, 2006). Meanwhile, Chan-Olmsted (2006) assumes that Discovery Ch annel would seek to create associations with certain product-rela ted attributes, such as the extens ive amount of information offered. According to Gibbons (personal communica tion, August 29, 2006), many viewers look for in-depth information about the world, while wanting to watch their local stories presented by a global television network (J. Gibbons personal communication, August 29, 2006). Discovery Networks programming is expected to meet those demands. Cross case analysis Executives and managers perceive their networ ks to be generally associated with an international or global image by Asian viewers. Given such a brand image, the critical question is how the image influences thei r product offerings. The high quality often emphasized by Discovery Channel might be r eadily expected, given a global image. Meanwhile, some assert that the same progra mming should be offered on a network basis to maintain the brand image. For instance, Schofield (personal communication, August 25, 182

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2006) states that local Cartoon Network channels need to offer CNOs to reinforce the Cartoon Network brand globall y. Likewise, Gibbons (personal communication, August 29, 2006) considers that in order to protect a nd to develop Discover y brand around the world, each Discovery channel should offer the same programming to some extent. Although the brand image is formed by the content provided to audiences, the image can also affect what type of programming is offered to maintain or enforce the image. It was noted earlier that th e ratio of network programm ing significantly differ among networks and markets. Discovery Channel and Cartoon Network often distribute programming on a global basis, partly because those networks believe that the global programming could help them maintain and re inforce their brands. In terms of market, network programming is offered more in the Si ngaporean market than in the Japanese or Taiwanese markets. This trend might be in part linked to Singaporean cultures characterized by high power distance and collec tivism, which are supposed to seek social and symbolic functions in brands. The Singaporean market wh ere foreign brands and products are widely accepted could perhaps provide a more favorab le context for the introduction of globally standardized programming products. Although the global image a nd locally adapted programming may be seemingly incompatible, Varma (personal communication, A ugust 28, 2006) believes that they are able to coexist with each other. Local MTV channels actually borrow and incorporate some elements from the global brand into their ow n programming. As a result, while the brand still maintains the global image, the content of individual local channels is tailored to the demands of the local market. In essence, U.S.-originated cable networks could provide a single global brand, along with products tailored to each market, as MTV does. Country of Origin Audiences might rely on what country a pr ogram was originally made in as an indicator of quality of the program. A program of a specific genre from a given country, 183

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which is strong in the genre, could en joy a favorable inte rnational reputation. U.S.-originated cable networks could offer th eir programming on a globa l scale, capitalizing on the country of origin, if the United States is famous for the genre they specialize in. MTV MTV is the first television network to adopt a music video format. Many people think that all programs showing music videos are MTV (Y. Sasamoto, personal communication, March 15, 2006). In fact, few Chines e heed the fact that MTV refers to a specific company and is not just a forei gn term for music video, although calling music video an MTV is like calling a tissue a Kleen ex or a copy a Xerox (Barden, 1999). Besides, the reality show first started with MTV s The Real World (M. Varma, personal communication, August 28, 2006). In essence, both music video and reality show programming have their roots in MTV U.S., a nd, as discussed earlier popular culture has always been one of the great American exports Yet, there is no data showing that those types of programming coming from the United States are perceived to be superior among local Asian audiences. Cartoon Network Suetsugu (personal communication, March 16, 2006) views the United States, the United Kingdom, and Japan as most highly rega rded countries by Japanese viewers in terms of the production of animated content. M eanwhile, Schofield (personal communication, August 25, 2006) suggests that whether or not vi ewers are concerned ab out the country of origin of animation would differ among c ountries. Singaporean viewers do not care much where a given animation originally came from (M. Schofield, personal communication, August 25, 2006). Cartoon Network Japans programming strategy is based on the assumption that viewers will embrace best conten t from around the world, whatever it may be. Suetsugu (personal communication, Ma rch 16, 2006) asserts, With all the internationally-produced materi al we look at, we choose programs based on content rather 184

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than country of origin. Likewise, Chou (personal communication, July 25, 2006) assumes that Japanese animation became popular in th e Taiwanese market not because it is from Japan but because of its content. Yet, Japanese animations ar e usually associated with high quality by Taiwanese viewers (G. Chou, personal communication, July 25, 2006). ESPN In terms of sports programming, Chen (personal communication, July 24, 2006) assumes that the telecast of professional baseball games from the United States or Japan is always slick. ESPN Taiwan once presented the World Cup Baseball held in Cuba. The quality of international telecast transmitted fr om Cuba was not so high, as it did not have any graphics (J. Chen, personal communicati on, July 24, 2006). Yet, Taiwanese viewers watched the game eagerly, since the quality of play was high. The appeal of sportscast is determined largely by the play of athletes and the game itself rather than the technique of sportscast, as noted earlier. Presumably, where a certain sports program was originally made might often be less importan t to viewers than the pl ay or the game itself. Discovery Channel While much programming on local Discovery channels is still originally made by Discovery U.S., it is unclear if the United States is commonly perceived as a country of origin producing excellent documentaries by Asia n viewers. It might often be difficult for viewers to be aware of a country of origin of a particular documentary program, as Gibbons (personal communication, August 29, 2006) assu mes that viewers sometimes cannot tell where a documentary program has been made. Th is tendency might be further facilitated by the fact that international co -production projects have incr easingly become common in the documentary arena. Cross case analysis In general, the country of origin effect appears to be small for television programming. Few Asian audiences might think th at a program originating in a particular 185

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country is superior in terms of quality, with the exception of Japanese animations, which are often associated with high quality. In fact, it is perhaps becoming increasingly difficult to identify the nationality of programs offered by global television netw orks. Meanwhile, it is noteworthy that there seems to be variati on among markets regarding how much viewers like programs made in their home countries Singaporean viewers usually do not care whether a program was domestically made or not, while Japanese and Taiwanese viewers in general prefer their domestic programs. It is possible that Japanese and Taiwanese viewers are more ethnocentric than Singaporean viewer s in terms of the pref erence of television programming, although it is sti ll uncertain whether or not they prefer local programs because they associate those programs with high quality. Firm Characteristics What products are offered in individual markets is determined by forces found within the firm itself. Presumably, firms philosophy and orientation, resources, the degree of centralization/decentraliza tion in decision-making, and the market entry mode could influence the product strategy. RQ9 assesses how such intra-firm characteristics of U.S.-originated cable networks possibly in fluence the decision on their programming strategies. Philosophy/Orientation How a firms overall business philos ophy and orientation affect programming strategies of sample networ ks are analyzed below. Note that although firms business orientation is certainly reflected in considerations regarding whether a given action is worth its costs or which of the options has the hi ghest benefit/cost ratio, those cost-benefit considerations are anal yzed separately under th e following subheading. MTV MTV Networks Asia produces a book en titled .2.3.M.T.V.: A Learn to MTV Book, which is little known to people outside of the network. Written in seven different 186

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languages, namely, English, Bahasa Indonesia, Simplified and Traditional Chinese characters, Japanese, Korean, and Thai, the pub lication is intended to keep MTV employers in Asian markets all staying focused on the core of the MTV brands. The book articulates, We are all equally responsible for our bra nd image and its preser vation and momentum (p.4). Local MTV channels only obligation is to be true to the MTV brand (Chalaby, 2002). While keeping the brand image unified across markets, MTV also adheres to a philosophy of localization (Viacom Inc., 2005b). Indeed, Asian MTV channels basically decide programming so as to meet the demand in each local market. These attitudes are well conceptualized in MTVs famous philosophy, Think globally, act local ly. Each of the MTV channels has to adhere to the overall style, programming philosophy, and integrity of MTV Networks, while promoting local cultural tastes and musical talent (Viacom Inc., 2005b). What is noteworthy, however, is that they try not only to meet market demand but also to create demand or to seek potential demand as a tr endsetter of youth culture. MTV Taiwan wants to introduce cutti ng-edge music usually from the United States or the United Kingdom to their local markets, even though it is unclear if the music will be accepted by local audiences (S. Chang, personal comm unication, July 26, 2006). Chang (personal communication, July 26, 2006) considers the impo rtation of fresh and new things into a local market to be MTVs responsibility. MTV s audiences in Asia ar e constantly seeking more information, creativity, and change every single day (M. Varma, personal communication, August 28, 2006). It is specif ied in the aforementioned book 1.2.3.M.T.V. that MTV strives to always be on the cutting edge of youth cu lture. In other words, MTV still tries to be a purveyor of internationally inno vative and progressive music and fashion. Cartoon Network Mark Buhaj, Cartoon Networks vice president of programming and acquisition, stresses the importance of brand integrity, st ating, You have to be careful that you do not 187

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put so much emphasis on localization that you ri sk the quality of the channelAny form of localization has to be relevant to the channe l and of a similar quality (Television Business International, 2004). In regard to this poi nt, Suetsugu (personal communication, March 16, 2006) assumes, Since all Cartoon Network channe ls have a similar identity, we all end up offering the same sort of programs. Schofield (personal communication, August 25, 2006) claims, Its important for all our channels to have some presence of our own cartoons there. Li kewise, Cartoon Network Japan considers CNOs somewhat ideologica lly. Suetsugu (personal communication, March 16, 2006) says, We could always cut back on the amount of the U.S. Cartoon Network content, but Cartoon Network Japan, as a part of the Cartoon Network brand, should always be offering a certain amount of Cartoon Networ k content. In essence, CNOs are necessary for them to maintain their identity as a Cartoon Network channel. Hashida (personal communication, March 16, 2006) suggests that CNOs make up the basis of Cartoon Network Japans programming schedule, althou gh in terms of percentage, CNOs (16%) actually do not account for a large po rtion of the programming schedule. ESPN ESPN, calling themselves the worldwide lead er in sports, might attempt to win the broadcast rights for sporting events and then to supply the telecast of these events around the globe. The network, however, runs into cons traints when they try to do so, since the broadcast rights are, as describe d earlier, usually granted for a given national territory on an exclusive basis. Hase (personal communica tion, March 14, 2006) doubt s that the network has seriously put effort into expanding coverage for markets outside the American continent, pointing out their non-interest in securing the br oadcast rights to rugby games for the rugby-mad Australian and New Zealand markets as an example of this indolence. Hase (personal communication, March 14, 2006) concludes that ESPN is not so successful on a global scale. 188

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In fact, broadcast rights i ssues are a key to understandi ng the programming of ESPN. Tim Bunnell, ESPNs senior vice president of programming and marketing, asserts, You want to get something that has maximum appeal across countrie s. But, it just gets very pricey after a while. Our approach is to localiz e as much as possible. The goal is to develop original programming for specific markets (Petrecca, 2002). Asian ESPN channels have developed much original programming. Yet, it mi ght be reasonable to as cribe this trend to ESPNs inability to secure broadcast rights for foreign markets rather than to view it as a result of the facilitation of localization at a network level. Discovery Channel Discovery Channels programming philosophy is based on the premise that people are curious about the world around them, as exemplified by their famous slogan, Explore your world. The network attempts to find new information, which has not been well known but is relevant to their viewers, and present it in the form of high quality programming (J. Gibbons, personal communication, August 29, 2006; P. Luff, personal communication, March 17, 2006). While featuring global topics that affect everybody, Discovery Channel also needs to offer programming focused on issues particularly relevant to regional or local viewers. As well as most of other global te levision networks, Discovery Channel tries to balance between maximizing programming that is shared across their local channels and being responsive to the needs of local markets. According to Gibbons (personal communication, August 29, 2006), Discovery Asia supplements their universally shared programming with content targeted very spec ifically at the needs of local markets. Cross case analysis U.S.-originated cable networks sampled fo r the present study cl arify their business philosophy and orientation, and their current programming strategies by and large bring those philosophy and orientation in to shape. In order to thi nk globally and act locally, MTV implements the localization of programming co ntaining a certain degr ee of international 189

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flavor, while targeting young audiences acros s the globe as a voice of youth culture. Cartoon Network usually gives priority to thei r original animation series, because those series are viewed as an identity for local Cartoon Network channels to be part of the network and actually make up the basis of th eir programming schedule. Discovery Channel tries to have their viewers e xplore events of the global or regional interest s through their programming products. Due to this orientati on, much programming of Discovery Channel is shared across the globe or the region. Meanwhile, it appears that E SPN does not have a clear orientation toward their international business as a global television network, at least in comparison with MTV, Cartoon Network, and Discovery Channel. Ofte ntimes, ESPN only has rights to offer certain events in a specific country, notably in the United States, and each of the affiliates has to deal with the rights indi vidually to offer them in its terr itory. In this situation, it might be hard for ESPN to formulate a pr ogramming strategy on a global basis. There is another important point that s hould be addressed in conjunction with a U.S.-originated cable networks overall business orientation influencing their approach to international marketing. As described in the revi ew of the internationa l marketing literature in Chapter 2, firms operating abroad are classi fied into the following four types, based on different strategic approaches adopted by them : international, multinational, global, and transnational firms. Which approach U.S.-origi nated cable networks sampled for the current study actually employ would be analyzed after scanning of their resource utilization, centralization/decentralization in deci sion-making, and market entry mode. Cost-Benefit Consideration It is likely that U.S.-originated cable networks would carefully estimate the overall cost and benefit of a programming product. Pr oduction costs are a majo r area to generate cost savings for television programming, since, as noted previously, the proportion of programming expense that goes toward production costs is generally large. Yet, there might 190

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be a significant difference in viewpoints concerning the cost effectiveness of product between firms. Recall an early discussion that a firm with a greater emphasis on cost control will be likely to have a policy of a unif ied product image across markets, offering standardized products, while another firm with ambitious sales will be likely to adopt non-uniform products. The economies of scale su stained from product standardization for television programs are great, and therefore such programs might be co nsidered appropriate for global distribution from a cost-benefit perspective. Because the marginal costs of providing the programming to add itional viewers are extremely low, a very high portion of additional revenues could flow through into profit s. Nonetheless, it is uncertain whether or not the profit accruing from programming standa rdization is really enormous, because profitability depends not only costs but also sales, and programs dist ributed globally might be unpopular in local markets. MTV For local MTV channels, it is certainly efficient in terms of cost reduction to air programs supplied by MTV Networks with mini mal amount of modification (e.g., language translation). According to Varma (personal communication, August 28, 2006), 80-90% of MTV Networks shows are available to them for no fee. Sasamoto (personal communication, March 15, 2006) points out, If we were to ai r only content supplied by MTV Networks, our costs would be less than halved. At the same time, however, it is believed that even if costs are low, it does not make business sense, since MTV Japan would not be able to attract many viewers with network programs, thus lim iting their advertising potential (Y. Sasamoto, personal communication, March 15, 2006). Chang (personal co mmunication, July 26, 2006) agrees with Sasamotos viewpoint, stating, E ven if you can save money [by putting content made by MTV Networks], you have to sacr ifice the ratings. Many programs she has imported to Taiwan so far have not actually been so successful in terms of audience ratings. Varma (personal communication, August 28, 2006) a ssumes that if they put an international 191

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show into a local market, the rating and therefore the revenue obtained from it in the market would be often less than those from the progr am originally produced in the market. It should be realized here that pr ofit is influenced by the balance of cost and revenue. Varma (personal communication, August 28, 2006) asserts, If you do it right, localization process is bound to be richer in revenue. Cartoon Network The development of an animation series often necessitates a lot of capital investment, and Cartoon Network Asia/Pacif ic, a wholly owned subsidiary of Turner Broadcasting, needs to bear a portion of costs for developi ng and producing CNOs. In turn, they can also make licensing and merchandise revenues (G. Chou, personal communication, July 25, 2006; M. Schofield, personal communication, August 25, 2006). Those secondary revenues could be a huge benefit for Cartoon Netw ork. In terms of merchandising, animation characters exist not only in programs but also in a whole wide range of places, such as toys, bonus goods in candy packages, prints on T-shirts, and so on, whereby easily creating synergies for the right holders. For instance, Disney characters have long been popular overseas, as witnessed by Mickey Mouses stat us among the most recognized icons in the world, and more than half of the sales of Di sney merchandise come from outside the United States (Weber, 2002). In essence, animation and related merchandise could complement each other. As Edwards (2004) points out, animated programming increases the audience recognition of and becomes a commercial for featured characters, and profits brought in from merchandising can eventually help pr oducers recoup the high production cost of animation. Presuming that the network desi res Cartoon Network Taiwan to show more CNOs to support merchandise business, C hou (personal communica tion, July 25, 2006) concludes that Cartoon Network Taiwan would have to show a certain amount of CNOs, even if they do not seem suitable for Taiwanese viewers. 192

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Meanwhile, for Cartoon Network, some third party content may be quite expensive. According to Chou (personal communication, July 25, 2006), license fees that Cartoon Network Taiwan pays to acquire broadcast ri ghts to Japanese animation are usually high. The channel, however, features Japanese anim ation as a highlight for their afternoon and evening programming, because school children want to watch them. Third party programs usually get higher audience rati ngs than networks original programs, possibly leading to higher advertising revenues (G. Chou, pers onal communication, July 25, 2006). Otherwise, the third party products will not be acquired. In contrast, only rarely does Cartoon Network Southeast Asia show Japanese animation, althoug h Japanese animation is also quite popular in many Asian markets, mainly because of a cons iderable cost of license fees they pay to offer it in a number of countries cove red by the feed (M. Schofield, personal communication, August 25, 2006). Schofield (personal communication, August 25, 2006) clearly states that they do not spend much money on purchasing even programs from Warner Brothers for Cartoon Network Southeast Asia. 48 ESPN Costs for broadcast rights to sports ev ents can vary significantly according to country, but universally prefe rred events usually charge t op dollar (Petrecca, 2002). For instance, NBC paid $3.5 billion fo r the exclusive broadcast rights in the United States to the five Summer and Winter Olympics betw een 2000 and 2008. Although Sports-i ESPN can negotiate individually with ri ghts holders, Hase (persona l communication, March 14, 2006) claims that programs with pricey broadcast righ ts are hard for them to get. While believing that the success of a sports ch annel is dependent on securing a ccess to rights for attractive 48 In the relationship with Warner Brothe rs, Cartoon Network pays the studio for programming. The studio often charges the ne twork a special discount rate. The network, however, is not always given a fi rst window for every title. In terms of animated movies, the studio often sells them to movie networks a nd over-the-air broadcasters prior to Cartoon Networks; animated series are also sold to broadcasters but not to other cable channels before Cartoon Network premieres them (M. Schofield, personal co mmunication, August 25, 2006). 193

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sporting events, Sports-i ESPN considers the co st effectiveness as the most important when choosing content. Hase (personal communi cation, March 14, 2006) states, The costs involved [for the coverage of major sporting ev ents] are enormous, and, in the end, it just doesnt pay off for us. Likewise, Wilkin son (personal communication, August 29, 2006) asserts that their ultimate criteria for progr am selection in Asian markets are cost and revenue. As described earlier, ESPN STAR Sports was formed between ESPN and STAR Sports to gain control of the market by secu ring exclusive sporting event broadcast rights and offering them to all Asian markets except Japan (Cable & Satell ite Asia, 1996b; Hughes, 1996). At present, the headquarters purchases sp orts rights on a regional basis for their own channels and asks each channel if they would lik e to offer it in their markets. As a result, while tennis and golf are usually taken by all channels in the region, Little League Baseball games, for example, are picked up only by ESPN Taiwan (J. Chen, personal communication, July 24, 2006). Although Wilkinson (personal communication, August 29, 2006) views soccer, golf, and tennis as sports popular in many countries, they are not so accepted in Taiwan (J. Chen, personal communication, July 24, 2006). The programming cost is split among channels that offer the program. In theory if a program is taken up only by one local channel, the channel has to bear almost all costs necessary to purchase the program. This could often be the case with E SPN Taiwan, which identifies a uni que taste for sports in their domestic market. Chen (personal communicatio n, July 24, 2006) claims that international programs are very expensive, even though cost s are shared with other ESPN channels. ESPN Taiwan wants to increase locally produ ced content, since it could deliver higher audience ratings with lower costs (J. Ch en, personal communication, July 24, 2006). In addition, programs purchased on a regi onal basis do not come along with local languages. Chen (personal communication, July 24, 2006) emphasizes the necessity of language customization, but it costs a lot. Based on a media economics theory, it has often 194

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been claimed that costs necessary for dubbing or subtitles are negligible in comparison with the high fixed costs initially ne cessary for its production. None theless, the costs might be considered expensive in an absolute rather than a relative sense by a local channel with budget constraints. As is the case with ESPN Taiwan, the local team might eventually shy away from spending money on language cust omization for programming offered during relatively unimportant time periods. Discovery Channel Discovery Asias former senior vice pres ident and general mana ger Kevin McIntyre once said, We recognize the need for some elements to be localized and for language customization but also realize the economies of scale in packaging and delivering centrally (Cable & Satellite Asia, 1996a). There seems to be a certain logic for Discovery Channel to maximize network programming across a number of local channels. Quality is extremely important for Discovery Channel (J. Gibbons, personal communication, August 29, 2006; P. Luff, personal communication, March 17, 2006). Ye t, high-quality programs are often made with huge production costs, and Discoverys pr ogramming is no exception. High quality and depth of information, which could meet worl dwide demand, are not obtained cheaply (P. Luff, personal communication, March 17, 2006). Therefore, the budget for such a production can actually exceed a million dol lars (J. Gibbons, personal communication, August 29, 2006), and each of local Discovery ch annel is supposed to contribute to the global or, in some cases, the regional pr oduction. As Gibbons (personal communication, August 29, 2006) suggests, by producing and di stributing the same program on a global basis, a network can achieve economies of scale, which allow them to invest more money in creating another high-qual ity programming product. Discovery Japan currently does not produce any original programming, because they do not have the budget for such endeavors. Discov ery Asia is fully responsible for providing local Asian Discovery channels with pr ogramming (P. Luff, pe rsonal communication, 195

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March 17, 2006). As for the acquisition of programs, the Asian regional headquarters secures the rights to the program s for the whole Asia region. Luff (personal communication, March 17, 2006) believes that it is much more cost-effective to sh are content across the region than to produce or acquire content solely for an individual market. It is perhaps economically unfeasible for the network to make ten different documentary programs for ten different markets, while maintaining the same level of quality as network programming made with a production budget of a million dol lars. As Gibbons (personal communication, August 29, 2006) asserts, the fundamental issue for Discovery Channel is that unless much programming is shared, and production costs are spread across different markets around the world, their business model doe s not function economically. To produce an original documentary program is, all things being equal, usually more expensive than to acquire a documentary prog ram. Yet, Discovery Channel still seeks to retain worldwide rights to programs produced by themselves so that they can leverage all the rights associated with the programs, resulting in revenues from DVDs, pay TV, and broadband and mobile services, to name a few. In essence, Discovery Channel aims to maximize the returns from ownership of rights by windowing. Gibbons (personal communication, August 29, 2006) claims, If you can do that (tap into rights), then its more cost efficient to make your own program rather than sharing the license with someone else. Cross case analysis How sample networks consider the cost and benefit of programming vary among them. Although most programs can be supplied from MTV Networks at a low rate or for free, MTVs executives and managers believe th at creating local products would eventually lead to higher revenues, considering that the potential loss of sa les that may result from not adapting a program to local tastes would not be offset by cost saving. Yet, Discovery Channel takes the opposite point of view, at taching a high value to scale economies, considering that producing a program, which can be shared with all the regions of the world, 196

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would be more cost-efficient than producing a program at a local level. To pay off huge production costs for high-quality programs, they should be distributed as widely as possible, and profits, if any, can be invested to further productions of the same quality. This logic certainly reminds us of rationa les underlying a strate gy of global products proposed by Levitt (1983): Consumer intere sts become increasingly homogeneous across the globe; people around the worl d are willing to sacrifice pr eferences in product features, functions, or designs to get higher-quality products at lower prices; and substantial economies of scale in production and marke ting can be achieved through supplying the standardized products to global markets. Cartoon Network, as well as Discovery Channel, tries to distribute their original animated series on a global basis, anticipating revenues yielded from licensing and merchandising those programs and the characters featured in them. Discovery Channel and Cartoon Network encourage their affiliates to invest in the development of network programs. Although those programs might not be so popular in some local markets, they provide networks with benefits for rights holders, such as op portunities to exploit economies of scale (e.g., Discovery Channe l) or economies of scope (e.g., Cartoon Network) on a global scale. To the contrary, it is hard for E SPN to sustain the economies of scale with the international telecast of spor ting events, since broad cast rights are usually granted for a given national territory on an ex clusive basis. Local ESPN channels consider that local programming is often not only popular in local markets but also relatively inexpensive. Property-Based Resource At the business strategy level, resources refer to inputs that can be used to implement strategies. Resources for global television networks might be programming products themselves or might be capital, know ledge, experience, personnel, or material, which could be utilized for television progr amming. Since resources include a wide range, 197

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according to Chan-Olmsteds typology (2006), th e utilization of property-based resources, which are legally protected th rough property rights, is anal yzed first under the current subheading. MTV Given each Asian MTV channels lesser reliance on MTV Networks for the supply of programming, the question is what advantag e the channel has in terms of programming for being part of a global te levision network. Sasamoto (personal communication, March 15, 2006) says, We are able to obtain content fr om worldwide MTV channels, though it makes up only 10 to 20% of our programming. The retaining of broadcast rights by MTV U.S. for programs to be shown overseas is a huge plus (Y. Sasamoto, personal communication, March 15, 2006). Varma (personal communicat ion, August 28, 2006) notes the importance of a library of material created and shared am ong all their channels around the world, saying, I can borrow MTV from anywhere and put it onto any of our channels here in Asia. Local MTV channels can in principle utilize networks cont ent resources as ofte n and as flexibly as they like, although those programs are us ually developed in a foreign market and therefore maybe irrelevant to viewers of ot her markets. MTV Taiwans Chang (personal communication, July 26, 2006) claims, You need to use your international resources, but you still utilize these resources to make local content. Cartoon Network Cartoon Network Japan has a strong sense of sharing resources with other Cartoon Network channels in terms of product acq uisition (M. Hashida, personal communication, March 16, 2006). In fact, it is often the case that Cartoon Network affiliates in several countries jointly purchase third party content. Cartoon Network Japan considers it essential to be part of a network in order to gain this access to programs. Additionally, as discussed earlier, CNOs, i.e., content resources, may generate soundtracks, books, related merchandising opportunities, possible television spin-offs, CD-ROMs, video games, and 198

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amusement park rides. When resources are sh ared across the business and transferred from one activity to another, economies of scope are sustained, leading to the creation of synergy. ESPN According to Wilkinson (personal co mmunication, August 29, 2006), ESPN STAR Sports realizes advantages to be an aff iliate of ESPN through resource sharing. ESPN provides financial resources, whic h could be reflected in prog ramming. In terms of content resource, they share news gathering services. At the same time, as Hase (personal communication, March 14, 2006) repeatedly emphasizes the importance of securing broadcast rights, Sports-i ESPNs success might hinge in large part on whether or not they can acquire content through an expanding network of local channels, such as ESPN STAR Sports, and obtain the rights to offer more appealing sporting events. Hase (personal communication, March 14, 2006) hopes that ESPN and J Sports, which operates Sports-i ESPN, will work together to secure sports broadcast rights in both the United States and Japan. While J Sports is considered by ESPN as a vital partner in Asia, however, their financial link with ESPN might be too insignificant (3%) to motivate ESPN to commit more resources to Sports-i ESPN. Discovery Channel An advantage for each local Discovery cha nnel to be part of a global television network is that they have huge resources av ailable all around the world (P. Luff, personal communication, March 17, 2006). Each local Discove ry channel constantly utilizes content resources of the network, as they can sh are much programming on a global or regional basis. Cross case analysis As a program is a property-based content resource owned by a television network, to offer the program is just to capitalize on a resour ce of the network. In fact, each affiliate can benefit from sharing the cont ent resource within a networ k. Much programming of Asian 199

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local Discovery channels is accounted for by programming, which can be shared with all the regions of the world. This also holds tr ue for Cartoon Network and, to a lesser degree, MTV. Meanwhile, ESPN distributes a relatively small number of programs on a global basis. Although ESPN Asias Wilkinson (personal communication, August 29, 2006) states that sharing of content resources is one of ESPNs advantages, it appears that broadcast rights issues often prevent ESPN from establishing a function of distribu ting content resources with complete control within the network. This is in direct contrast to MTV Networks, which usually secures broadcast rights for c ontent to be shown overseas. In essence, the degree of reliance on networks for content res ources differs from one network to another, which would eventually lead to the different amount of netw ork programs offered on a local level. In terms of financial resources, some managers of local channels feel that sufficient programming budgets are not provided to them. MTV Networks becomes more conservative in investments to local franch ise (S. Chang, personal communication, July 26, 2006). Controlled by the regional headquarters, Cartoon Network Taiwan and Discovery Japan do not have their own budgets to do progr amming exclusively for the local market (G. Chou, personal communication, July 25, 2006; P. Luff, personal communication, March 17, 2006). Chang (personal communication, July 26, 2006) claims that in order to produce or acquire good programs at a local level, they simply need more programming budgets. Knowledge-Based Resource The importance of knowledge-based resour ces in the media industry should be underscored, since such resources as expe rience, creativity, know-how, or industry knowledge, remain the essential elements in th e production and marketing of media content. The question is how those types of resources, if any, could be tapped into for programming. 200

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MTV MTV Taiwan relies heavily on the globa l network of MTV not for programming resources but for other resources, such as cr eativity or brand authority (S. Chang, personal communication, July 26, 2006). Those resources have an impact on programming, albeit indirectly. Varma (personal communication, August 28, 2006) considers talented personnel from different parts of the world and their visi ons shared within the network to be one of biggest advantages. In fact, local MTV channels often share ideas with each other within the network. Chang (personal communication, Ju ly 26, 2006) states, Thats where our creativity comes from. According to Toga wa (personal communication, March 15, 2006), information about programs made by MTV Netw orks around the world is delivered to MTV Japans programming division. Then, an idea con ceived to succeed in the local market is actively adopted in order to make local progr amming. As described earlier, Varma (personal communication, August 28, 2006) expects each local MTV channel to successfully translate good ideas into its local context. MTV also has high authority over artists. Sasamoto (personal communication, March 15, 2006) admits that MTV Japan has the significant backi ng of MTV Networks regarding bargaining power ove r artists. Unlike local music channels, MTV is a global television network. Chang (personal communi cation, July 26, 2006) says, When a label company wants to promote an artist, they will come to MTV Taiwan not only because of MTVs high rating in Taiwan but also because of our power for the whole Asian market. In addition, delivering unmatched access to major international music talent is an undoubted strength of MTV Networks. As a recent example, Michael Jackson appeared at MTV Japan's Video Music Awards 2006 to accept the Le gend Award. It is doubtful that he would have appeared at music video awards hosted by a domestic music channel. Chang (personal communication, July 26, 2006) states, If we want to invite some artists to Taiwan, we will 201

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rely heavily on the internati onal network of MTV. MTVs br and authority just helps in negotiations (M. Varma, pers onal communication, August 28, 2006). Cartoon Network As noted previously, CNOs have recently been made more from an international perspective so as to work not only in the Unite s States but also in the rest of the world. Schofield (personal communication, August 25, 2006) says that all of Cartoon Network affiliates have a voice and are involved in the green light process for new CNOs. It is likely that the sharing of creativity and the exch ange of information among local affiliates coordinated by the corporate h eadquarters are essential to developing network programs, such as CNOs, which are to become succe ssful in various parts of the world. ESPN Chen (personal communication, July 24, 2006) and Wilkinson (personal communication, August 29, 2006) emphasize the si gnificance of international production know-how brought by talented personnel who is attracted to ESPN ST AR Sports from all over the world. They believe that the know-how could be a unique resource of competitive advantage over their local rivals. Discovery Channel There appears to be good communication ac ross regions to share information and creative ideas within Discovery Channel. Dawn McCall, president of Discovery Networks International, said, We talk to each other a lot more, and that is a huge benefit (Winslow, 2001). In fact, Luff (personal communication, March 17, 2006) realizes himself being part of Discoverys international business and in regular contact with pe ople in the Singapore office, in the London office, or other places around the world. Luff claims, We get ideas from them or even give them ideas of things that we have just done and are working very well in our market. 202

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Cross case analysis MTVs local teams in Asia are not necessar ily expected to use a content resource on its own but to leverage knowledge -based resource, i.e., creativity or rich idea included in the content resource, to produce their local programs. Indeed, not only MTV but also other sample networks emphasize the sharing informati on and creative ideas at a network level as an advantage of being part of a global te levision network. There is a good level of an information sharing within Cartoon Netw ork (M. Schofield, pe rsonal communication, August 25, 2006); programming ideas are shared among ESPN affiliates (N. Wilkinson, personal communication, August 29, 2006); and as a sort of a global network, information and creative ideas are constantly shared am ong Discovery Channels affiliates (P. Luff, personal communicatio n, March, 17, 2006). It appears that U.S.-origi nated cable networks have established a mechanism to transfer ideas or know-how acr oss markets. These knowledge-based resources could be the basis of the production and mark eting of products in the entertainment industry. How those resources are leveraged for programming is perhaps twofold. On the one hand, ideas, which have been successful in a market, could be transferred to make programs in different markets (e.g., MTV). On the other hand, input s from various markets in the world are integrated in an attempt to make netw ork programs appealing on a global basis (e.g., Cartoon Network and Discovery Channel). Degree of Centralization/Decentralization According to the international marketing literature, globally standardized product would be offered when the corporate headquarter s holds centralized authorities. In contrast, if subsidiaries or affiliates have strong positions, it is likely that decision-making is decentralized and delegated to t hose local entities. If this is the case, local subsidiaries or affiliates would develop their own market strategies independently of the corporate headquarters. 203

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For the analysis of how centralization or decentralization of authority in U.S.-originated cable networks could influence programming strategies, it is beneficial to scan the ownership structure of U.S.-originated cable networks sampled for the current study (see Figures 5-2 to 5-5). They generally have a three-tier structure, consisting of owners of a network (e.g., Viacom), the corpor ate headquarters in the United States (e.g., MTV Networks), and affiliates and local channels owned and operated by the affiliates (e.g., MTV Networks Asia and MTV Taiwan). Mo reover, U.S.-originated cable networks typically have two business models in the region: the multi-market model and the single-market model. Under the former model, the corporate headquarters of U.S.-originated cable networks usually elect a wholly-owned subsidiary as a substantially regional headquarters from which several channe ls for diverse markets in the region are operated as their properties. Meanwhile, in th e latter model, joint ventures are usually formed with local partners to establish local affiliates, which operate local channels devoted to a particular market. MTV Sasamoto (personal communication, Ma rch 15, 2006) mentions, They (MTV Networks) have no say in what we choose to offe r. In an extreme case, it would be possible for MTV Japan to offer nothing but their local programs. Even if MTV Networks recommends some music or artists, local teams fi nally decide if they ar e to be presented for local audience (S. Chang, personal comm unication, July 26, 2006). Varma (personal communication, August 28, 2006) says that only very rarely do es he get a call from MTV Networks pressing him to air network programs. In essence, each Asian MTV channel is basically allowed to exercise its own discre tion in programming so long as it does not hurt MTVs image. It seems that MTV Networks has a relatively decentralized organizational structure, whereby programming decisions are made by the autonomy of local teams in view of 204

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specific local market characteristics. As the programming chief at MTVs regional headquarters, Varma (personal communication, A ugust 28, 2006) asserts that if there are any disagreements between MTV Networks and a local team in terms of programming, he usually supports the local team, respecting the representatives of the local market, because such people would have the best kno wledge of the market. In fact, MTV Networks Asia once faced a problem when the network made a one-hour special about the 9/11 attacks from the U.S. perspective (M. Varma, personal communication, August 28, 2006) Yet, they finally refused to accept the program, showi ng a respect for Muslim nations, such as Indonesia and Malaysia. This episode illust rates that programming decision based on sensitivity to local ideologies and religious beliefs function at local level within MTV Networks. Cartoon Network Cartoon Network Japan is never pushed to offer certain programming by the network, and decisions regarding programmi ng are left wholly up to their discretion. Hashida (personal communication, March 16, 2 006) says, They (Cartoon Network) dont tell us to devote a certain per centage of our airtime to Cartoon Network material or anything like that. Turner Broadcasting is basically not involved with anything other than protecting the Cartoon Network brands image (M. Ha shida, personal comm unication, March 16, 2006). Hashida (personal communication, Marc h 16, 2006) also supposes that Cartoon Network channels are all entrusted with complete control over what they chooses to offer in their local markets, claiming that they proba bly would not have much success, if their programming was chosen by the corporate headquarters. Hashidas remark, however, does not al ways hold true for Cartoon Network channels operated by Cartoon Network Asia/P acific. Those channels are basically not allowed to decide their own programming. More precisely, Cartoon Network Asia/Pacific provides a certain amount of autonomy to local t eams (M. Schofield, personal 205

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communication, August 25, 2006), but a final deci sion is always made at the regional headquarters level. Managing the acquisition budgets for local channels, Schofield (personal communication, August 25, 2006) says that she has the final say about what gets bought at the local channel level. When a local team wants to buy a program, it should be approved and finalized by Cartoon Networks Asian regional headquarters (G. Chou, personal communication, July 25, 2006). Schofield (personal communication, August 25, 2006) obviously trusts inputs from local managers understanding that they have the best knowledge of local audience and markets. Yet, at the same time, as noted earlier, Schofield (personal communication, August 25, 2006) also thinks that local Cartoon Network channels should always offer a certain am ount of CNOs. Chou (personal communication, July 25, 2006) mentions that Cartoon Network Taiwan is obligated to show CNOs, even if they do not seem suitable for the Taiwanese markets. ESPN As Wilkinson (personal communication, August 29, 2006) suggests, ESPN STAR Sports has autonomy from ESPN in terms of programming decisions. At the same time, ESPN STAR Sports also exerts an author ity in the close relationship between the headquarters and local channels they own and operate. It is li kely that the reason behind much regional programming offere d by their local channels is in part attributed to this authority. To be sure, those channels began offering relevant sports in specific markets, such as cricket in India or baseba ll in Taiwan, though within a limite d amount of time. They also present localized versions of Sports Center. Yet, their programming is basically decided by ESPN STAR Sports headquarters in Singapore, where almost all of their production teams are based in (J. Chen, personal communication, July 24, 2006). Although local teams can plan their own programming for their local channels, it must be approved and finalized by the headquarters. Actually, Wilkinson (personal communication, August 29, 2006) implies that local channels owned and operated by ESPN 206

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STAR Sports do not have any choice, simply viewing the channels as outlets for ESPN STAR Sports programming in local markets. Chen (personal communication, July 24, 2006) mentions that ESPN Taiwans relations hip with ESPN STAR Sports brings some disadvantages to the local channel, such as regional programs supplied without local language commentary and expensive cost allocation. Meanwhile, Sports-i ESPN has no choice but to exercise its own discretion in programming under the present situ ation, in which very little c ontent appealing to Japanese audiences is supplied by ESPN. ESPN takes virt ually no part in deciding what content is offered on Sports-i ESPN. Hase (personal communication, March 14, 2006) claims that ESPN says nothing, even if Sports-i ESPN purchases programming fr om a rival firm of ESPN. Discovery Channel Discovery Channels programming decisions are in principle ma de at the regional headquarters level. It seem s that Discovery Asia has the autonomy to program independently from Discovery Communications, the corporate headquarters. According to Gibbons (personal communication, August 29, 2006), There is no one forcing us to add programs around the world. We make decisions in consultation with the local markets as to what kind of programming is going to resonate th e most in that marketplace. And then, we are free to make those decisions. The n, commissioning and acquisition proposals are coordinated through a central committee, whose meetings are attended by representatives from all regions and where they are free to accept or reject any proposal, according to their perception of local needs (Jenkins, 2001). In the programming team at Discovery Channels Asian headquarters, there are people dedicated to local markets, who are aware of requirements from local Discovery channels and major topics of interest to local viewers (P. Luff, personal communication, March 17, 2006). In this rega rd, the network agrees that programming is best done by 207

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people who know and understand each individua l market, and local Discovery channels actually have a say about which programs work well in their local markets. Gibbons (personal communication, August 29, 2006) asserts that it will undoubtedly be inappropriate to impose programs on local markets. From the local perspective, however, Luff (personal communication, March 17, 2006) me ntions, Its very much a collaboration [with the regional headquarters] rather than having autonomyWe dont have the ability to just go off and do whatever we want. Not only does Discovery Japan have to work with the regional headquarters on all of their decisions regarding programming, but also, as noted earlier, they do not have their own budgets to do programming only for the local market. Cross case analysis As a whole, Asian affiliates of U.S.-originated cable networks currently have the freedom to decide programs offered in their ma rkets, as long as they are consistent with brand images of the network. MTV Networks ra rely intervenes in MTV Networks Asias programming decisions (M. Varma, personal communication, August 28, 2006); Cartoon Network Asia/Pacific is a reasonably self-suf ficient regional headquarters (M. Schofield, personal communication, Augus t 25, 2006); ESPN STAR Sports can reject ESPNs programming, which may be unsuitable to Asian viewers (N. Wilkinson, personal communication, August 29, 2006); and Discovery Asia is free to make programming decisions (J. Gibbons, personal communication, A ugust 29, 2006). In essence, each of these Asian affiliates is basically given autonomy from their corporate headquarters in terms of programming decisions. It can be safely noted that U.S.-originated cab le networks sampled for the current study all have a decent ralized structure in decision making. It seems that U.S.-originated cable networ ks in principle realize that understanding local tastes allows a network to adapt its programming to better suit the wants and needs of local viewers and that this is best done by people who are familiar with local markets. 208

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However, how much freedom with regards prog ramming decisions is actually given from regional headquarters to local teams vary among networks. MTVs programming decisions are usually made on a local channel level. MTV Taiwan usually has freedom from MTV Netw orks Asia when deciding programming (S. Chang, personal communication, July 26, 2006). However, Cartoon Network Taiwan is often not given freedom of choice by Ca rtoon Network Asia/Pacific when deciding programming, though they can provide sugge stions for programmi ng (G. Chou, personal communication, July 25, 2006). This is also the case with ESPN Taiwan, whose programming decisions have to be approved by their regional headquarters, ESPN STAR Sports (J. Chen, personal communication, July 24, 2006). Discovery Asia makes programming decisions in consultation with local teams (J. Gibbons, personal communication, August 29, 2006). Discovery Cha nnel Japans programming, therefore, is decided in the collaboration be tween the regional headquarter s and the local team, but the level of autonomy given to the local team is low (P. Luff personal communication, March 17, 2006). In essence, a regional headquarters usually wi elds an authority to exercise controls over the programming on local channels, w ith the exception of MTV Networks Asia. Programming decisions for local channels ar e finally made by the regional headquarters with input from local representatives, but loca l teams usually are not allowed to exercise their veto over the decisions. In this sense, the regional headquarte rs have established a structure of cooperative centrali zation at a regional level. The regional headquarters might originally produce or acquire programs and provide them to th eir local channels. Or, they might supply network programs to their local channels, taking into account some advantages those programs would yield for the network. When local teams do not have much autonomy in terms of their product offerings, network or regional programming 209

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probably tends to be offered more on the local channels in keeping with the intention of regional headquarters. Market Entry Mode The product policy at a local level would be affected by the choice of entry mode for the local market on the grounds that mode of entry determines the degree of control the corporate headquarters can exercise over operati ons and strategies and the flexibility to adjust to differences in market conditions. It is possible that more emphasis is placed on programming adaptation strategies in joint-venture operations than in wholly-owned subsidiaries. MTV MTV Japan is a joint venture between MTV Networks and a local investment firm, while MTV Taiwan and MTV SAM are portfolio s of MTV Networks Asia, a wholly owned subsidiary of MTV Networks. The difference in ownership patterns might have a small impact on local MTVs programming. MTV Networks Asia sometimes has programs sponsored by clients who want to reach to the whole Asian market. With the exception of MTV Japan, all Asian MTV channels have to adopt those regional programs into the programming list (S. Chang, pers onal communication, July 26, 2006). Cartoon Network It is possible that the difference in owners hip patterns leads to different amounts of network programs on local Cartoon Network ch annels. Schofield (personal communication, August 25, 2006) expects to show as many CNOs as possible on the channels owned and operated by Cartoon Network Asia/Pacific, a 100% subsidiary of Turner Broadcasting. Yet, Turner Broadcasting is basically not invol ved in the programming of Cartoon Network Japan, a joint venture entity. 210

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ESPN ESPN SATR Sports and J Sports Broadcas ting are ESPNs joint ventures in Asia. Both of them are given full autonomy to deci de their product offerings from the network. Only a small amount of network programs is currently offered on local ESPN channels owned and operated by these joint venture entities. Discovery Channel Discovery Asia is a wholly owned s ubsidiary of Discovery Communications. Although the regional headquarter s has the autonomy to program independently from the corporate headquarters, network programs are commonly offered by local Discovery channels owned and operated by Discovery Asia. Cross case analysis There could be a certain relationship be tween the market entry mode and the programming on each local channel. Such re gional headquarters as Cartoon Network Asia/Pacific and Discovery Asia tend to prio ritize network programs to be offered by their own local channels. In spite of full autonomy given from th eir corporate headquarters in terms of programming decisions, it seems that those wholly owned and operated, regional headquarters show their fidelity to cor porate headquarters by offering more network programs on local channels. Overall, it can be inferred from what has been discussed so far that each U.S.-originated cable networks has unique business orientations with respect to foreign operations. ESPN adopts a multinational a pproach, whereby programming products are basically developed by affiliates, joint venture entities between the network and local partners, with little dependence on the ne twork for programming distribution. Content resources are rarely shared within a network la rgely due to broadcast rights issues, and the fragmentation of programming pr oduction or acquisition might l ead to inefficiency at a network level. 211

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Discovery Channel and, to a lesser extent, Cartoon Network appear to have a global orientation, whereby the world is viewed as a single market, and programming products are often developed for the global market. A certain portion of local programming schedules is actually devoted to programs distributed by th e network on a global basis. The global-scale efficiency with an emphasis on cost control, resulted from the pursuit of scale/scope economies, seems to be a key part of their programming strategies. Ye t, it should be noted that both Discovery Channel and Cartoon Networ k also have a decentralized organizational structure, which is a distinctive characteristic of multinational firms, whereby affiliates are given more autonomy over decision-making on programming products. Indeed, Discovery Channel describes their operation as employi ng a multinational strategy that exploits economies of scale and operational efficienci es (Discovery Communications Inc., 2006b). Finally, MTV takes a transnational approac h, aiming to obtain both global efficiency and responsiveness to country-level operation through shared vision, flexible coordination, and integrated network of domestic resources. This interpretation may still lack conclusive evidence, as Hitt et al. (2003) point out the di fficulty to implement a transnational strategy in reality. Yet, it can be safely said that MTV Networks is relatively more responsive to local needs than Discovery Channel and Ca rtoon Network while attaining more global efficiency than ESPN. RQ9 assesses how intra-firm characteristics of U.S. cable networks are perceived to influence the decision on programming strategy Programming products certainly take shape based on networks philosophy and orientation, including the cost-benef it consideration. For instance, a network, which emphasizes cost co ntrol, tends to distribute a programming product across markets, pursuing scale and sc ope economies, while another network, which emphasizes sales, tends to adopt locally adapte d products. Networks strategic approaches to international marketing also determine how th ey leverage resources (e.g., whether a creative idea transferred within a network is used for global programming or local programming) 212

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and the degree to which autonomy in terms of programming decision is given to a local level. Whether programming decisions are made at a regional level or at a local level could influence what programs are offered in a local market. If a regional he adquarters, which is a wholly owned subsidiary of a network, exer cises controls over the programming on local channels, network programs or regional programs could be offered more by local channels. Overall Results Infusing the theoretical framework found in the international ma rketing literature with findings in the current chapte r, Table 5-2 is presented as a result table to illustrate how determining factors, which have been discussed thus far, are percei ved to exert effects upon television programming offerings by U.S.-originated cable networks. As addressed in RQ1, each of U.S.-originated cable networks ha s unique programming strategies. As a final analysis, what factors possibly have str ong impacts on their programming decisions is described below. MTV Approximately 80-90% of the programmi ng schedule of both MTV Japan and MTV Taiwan is taken up with local ly produced shows, while th e ratio is lower on MTV SAM. MTV Networks basically employs the local adaptation strategy for their programming products, giving top priority to the demand or tast e of their target audien ce in local markets. Although music programming might be a genre with relatively le ss cultural sensitivity, and some of network programs certainly have unive rsal appeal, it is considered difficult to create a program that will be successful in multiple markets. In fact, many of network programs are currently not popular in Japan and Taiwan. In addition, relatively small production costs necessary for local production and a typical format of music programming give the network an advantage to pursue the localization strategy. MTV also believes that locally adapted programming w ould often yield more revenu es than network programming. In terms of intra-firm factors, programming decisions are made by the autonomy of local 213

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MTV channels in view of specific local mark et characteristics, due to a decentralized authority within the network. The network has es tablished a mechanism to transfer ideas or know-how across markets, and this is a huge plus to the local adaptati on strategy, as an idea conceived to succeed in the local market is actively adopted in order to localize programming. Meanwhile, at least a few network programs are offered by local MTV channels, since the network believes that the success lies in finding the right balance between the international and the local pr ogramming mix, rather than of fering exclusively the local programming. The potential of some music programming to appeal universally and transcend national boundar ies, along with the contractual advantage, could motivate local MTV channels to provide standardized mu sic programming. Network programs are also important for local MTV channels to differentia te themselves from domestic rival channels. Besides, it is MTVs philosophy to introduce cu tting edge music usually from the West to local markets as a trendsetter. Network programs might play an important role to materialize the philosophy. Cartoon Network CNOs account for 18% of Cartoon Network Japans programming, 30% of Cartoon Network Taiwans programming, and 60% of Cartoon Network Southeast Asias programming. Cartoon Network aggr essively distributes their or iginal animated series on a global basis. This is partly because the ne twork believes that animation is often less culture-bound, and partly because some CNOs, wh ich are believed to be made from a global perspective, could have universal appeal. In addition, it usually requires high costs to produce original animations for a local Cartoon Network channel. It is also supposed that there is a commercially sufficient audien ce segment to support CNOs across national markets. It is commonly considered that CNOs should be offered by priority so that local Cartoon Network channels can be a member of the network, and the network can reinforce 214

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their global brand. In terms of the utilization of resources, C NOs provide the network with merchandise opportunities. Cartoon Network ha s a regionally centr alized authority, whereby the final decision on programming is ma de by the regional head quarters, a wholly owned subsidiary of Turner Broadcasting, which often expects their local channels to offer CNOs, although this is not the case with Cartoon Network Japan. Meanwhile, some factors are perceived to drive Cartoon Network to adopt local adaptation. Some animated programs, usually those based on dialogues, are considered culturally sensitive and unsuitable for specific markets. Locally adapted programming is adopted by Cartoon Network Taiwan to differentia te themselves from a global rival, Disney Channel, and to compete a domestic animation channel, while Cartoon Network Japan features CNOs to differentiate themselves fr om their domestic animation channels in Japan. ESPN Programs from ESPN occupy a very small part of the programming of Asian local ESPN channels. The network only supplies thos e channels with a small amount of programs for which the broadcast rights necessary for tele cast in a local market are already acquired. Mainly for this reason, ESPN has substantiall y no choice but to pursu e the local adaptation as their programming strategy in Asian market s. Another reason is that in spite of the possibility of certain sporting events to cut across boundaries of langua ge and culture, tastes for sports basically vary from country to country and region to region. Overall, ESPNs sports programming might basically be a business based on a local and regional appeal. Their localization strategy is also driven by the stiff competition from a local sports channel in a market such as Taiwan. In a more precise sense, however, it mi ght be more adequate to view their programming strategy as regiona lly standardization rather than local adaptation. ESPN STAR Sports, a joint venture entity of the network, often distributes the same programming to their local channels. ESPN STAR Spor ts has autonomy from ESPN in terms of 215

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programming decisions, while also exerting an au thority in the close re lationship with local channels, which are owned and operated by them and viewed as outlets for ESPN STARs programming in local markets. Discovery Channel The programming of local Discovery channe ls is in large part accounted for by programs supplied by the network worldwide. Th ere appear some distinct reasons, which drive the network to adopt global standardization strategy. It is believed that the appeal of their network programming is universal, since documentary programming is often culturally neutral, and a significant number of viewers are clearly inte rested in seeing what happened or is happening in the world across a wide range of topics. Showing universally appearing topics is actually a key concept underlying Discoverys programming strategy. The network also has a sufficient volume of intermarket audience segment attracted by thei r standardized programming. Additionally, Discoverys progr amming may not be affected much by the competitive situation, as they are the l eading network of documentary programming worldwide, and local competitors are rare in many markets. Although their production costs are usually high, by distributing the same pr ogramming products to markets as many as possible, Discovery Channel could achieve s ubstantial economies of scale and operational efficiency. It is also pointed out that lo cal Discovery channels should offer the same programming to some extent in order to pr otect the networks global brand. Programming on local Discovery channels is decided in the collaboration between the regional headquarters, a wholly owned subsidiary of th e corporate headquarters, and the local team, but the level of autonomy given to the local team is low. 216

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Table 5-1. Ratio of network programming on each local channels schedule. MTV Networks MTV Japan 10-20% MTV Taiwan 10% MTV SAM 60% Cartoon Networks (CN) CN Japan 18% CN Taiwan 30% CN SEA 60% ESPN Sports-i ESPN Very small ESPN Taiwan Very small ESPN Asia Very small Discovery Channel (DC) DC Japan Very large DC Taiwan N/A DC SEA 60-70% Table 5-2. Direction of networks programming product by determinants. MTV Cartoon Network ESPN Discovery Channel Ratio of network programming Depends on market Depends on market Low High Typical methods for local adaptation Original local production Selection based on local preference & language customization Original local production Selection based on local preference & language customization Cultural sensitivity of product Music: Low Standardization Reality show: High Adaptation Low Standardization Low Standardization Low Standardization Universal appeal of product Depends on artists featured Depends on animations but usually high Standardization Depends on sports genres Depends on topics but usually high Standardization Typical production costs Low Adaptation High Standardization Depends on games High Standardization Typical programming format Easy to modify Adaptation Hard to modify Standardization Unknown Some are easy to modify Size of intermarket audience segment Small Adaptation Large Standardization Unknown Large Standardization Countrys cultural environment If similar, standardization is feasible. Countrys economic condition Unknown if standardization is feasible between economically similar markets. Strong local economy drives local production. Adaptation Countrys physical condition Unknown if standardization is feasible between phys ically similar markets. Countrys legal environment Little regulation Standardization 217

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Table 5-2. Continued MTV Cartoon Network ESPN Discovery Channel Countrys infrastructure/ supporting sector Unknown if standardizati on is feasible between markets with similar infrastructure. Availability of global market ing structure Standardization Advertisers & MVPDs prefer either standardization or adaptation. Competitive intensity Intensive competition Adaptation or standardization Intensive competition Adaptation or standardization Intensive competition Adaptation Less intensive competition Standardization Competitors Domestic rivals Adaptation or standardization Global rivals Adaptation Domestic rivals Adaptation or standardization Domestic rivals Adaptation Global rivals Standardization Brand Global brand Adaptation or Standardization Global brand Standardization Unknown Global brand Standardization Country of origin effect of the U.S. Small Large for preschooler programs Small Small Business orientation Transnational Adaptation or standardization Global Standardization Multinational Adaptation Global Standardization Cost-benefit consideration Sales conscious Adaptation Cost conscious Standardization Cost conscious Standardization Cost conscious Standardization Resource Property-based Standardization Knowledge-based Adaptation Property-based Standardization Knowledge-based Standardization Little property-based Adaptation Property-based Standardization Knowledge-based Standardization Centralization/ decentralization in decision-making Decentralization Adaptation Regional centralization Standardization Regional centralization Regional standardization Regional centralization Standardization Market entry mode Greenfeld or joint venture Adaptation Greenfeld or joint venture Standardization Joint venture Adaptation Greenfield Standardization 218

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Practical phase Conceptual phase Making programming relevant to a particular market Meeting the needs of local target audience Translation into local language via dubbing or subtitling Local production with the insertion of materials and footages supplied by parent network Remake of programs produced by the network, keeping the idea and concept unchanged Locally produced, original programming with its own ideas and materials and footages Less adaptation Full adaptation Figure 5-1. Continuum of televi sion programming localization. MTV Networks Asia (100% Subsidiary/Reg ional headquarters) MTV Japan (Joint venture) MTV Taiwan MTV Singapore & Malaysia (SAM) MTV China MTV India MTV Japan Channels Channel MTV Network MTV Networks (100% Subsidiary) Viacom Figure 5-2. Ownership structure of MTV. 219

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Turner Entertainment Networks Asia [Cartoon Network Asia/Pacific] (100% Subsidiary/Reg ional headquarters) Cartoon Network Network Japan Entertainment Network (Joint venture) Cartoon Network Taiwan Cartoon Network Southeast Asia Cartoon Network India Cartoon Network Philippines Cartoon Network Australia/New Zealan d Cartoon Network Japan Channels Channel Turner Broadcasting (100% Subsidiary) Time Warner Figure 5-3. Ownership stru cture of Cartoon Network. Disney Hearst ESPN STAR Sports (Joint Venture/Regional headquarters) J Sports Broadcasting (Joint venture) ESPN Taiwan ESPN Asia ESPN Hong Kong MTV India Sports-i ESPN ESPN Network Channels Channel ESPN (Joint Venture) Figure 5-4. Ownership structure of ESPN. 220

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Cox Discovery Communications (Joint venture) Discovery Asia (100% Subsidiary/Reg ional headquarters) Discovery Taiwan Discovery Southeast Asia Discovery China Discovery Australia/New Zealand Liberty Media Discovery Japan* (Joint venture) Discovery Japan Discovery Channel Channels Network Channel Advance/Newhous John Hendricks *: Discovery Japan is a 50:50 joint venture between Discovery Asia and a Japanese firm. Figure 5-5. Ownership structure of Discovery Channel. 221

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CHAPTER 6 CONCLUSIONS AND DISCUSSION Findings A main objective of the current study is to shed light on the programming product offered by U.S.-originated cable networks in Asian markets, along with what factors are perceived as determinants of programming decisions by those networks. The present study was premised on the assumption that only executives and managers in charge of programming of U.S.-originated cable networ ks in Asian markets could explicate the rationale behind the programming st rategies in a real-life context. On the basis of theoretical foundations found in internationa l marketing of products, the study was intended to provide a framework for understanding how various extern al as well as intra-firm factors could affect the program ming strategies. Overall, networks sampled for the present study fully understand the significance of programming products adapted to individual lo cal markets. Given the fact that viewers generally prefer products more relevant to them, the locally adapted programming is important for U.S.-originated cable networks, providing networks with greater strategic flexibility in programming arenas. Yet, in li ght of actual programming product offerings, it was found that each of U.S.-originated cab le networks employed unique programming strategy in Asian markets. While some networks attempt to distribute the same programming on a global scale, others encour age local teams to develop more localized programming. Even within a network, some variances in programming strategies were found among local channels. In essence, programming strategy significantly differs among networks and among markets. Al though all networks, which have expanded internationally, realize differences in local market preferen ces and, hence, the significance of a national market-based approach, they are not enga ged exclusively in the locally adapted programming. 222

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Indeed, programming at a local channel le vel always consists of some network programs along with some local programs. In th is regard, as the in ternational marketing literature suggests, the choice of standardization and adaptati on are not mutually exclusive but a matter of degree, and the possib ility for each programming strategy is situation-specific. A variety of external and intr a-firm factors, which can affect the degree of product standardization/adaptation, are r oughly grouped into the followings: product characteristics, target market segment, countrys cultural char acteristics, countrys environmental characteristics, industry compe tition, brand and country of origin, and firm characteristics. While these factors, whic h were commonly identified by international marketing studies, were in large part cons istent with those perceived to influence programming strategies employed by U.S.-origi nated cable networks in Asia, some other potential determinants were found in the present study. Product Characteristics The feasibility of product standardization or adaptation would vary with the nature of the product, in particular with its cultural sensitivity. Television programming is often referred to as cultural product, whose appeal could vary across cu ltures, and hence the acceptance of television programming is bound by culture. More precisely, different program types or genres could have various degrees of cultura l sensitivity and ability to cross national boundaries, which would eventual ly entail different programming strategies by networks. For instance, such program types as animation and documentary are likely to be more easily understood in different cultural contexts in comparis on with other types of programs. In addition to the cultural sensitivity, the program type could also affect the degree of program standardization/adaptation for the reason that programming formats and costs necessary for producing original local programming differ depending on the type. Programming types, which typica lly require large costs to pro duce or have a format that cannot be easily modified or remade, are potential candidates for standardization. 223

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It was also uncovered that programming pr oducts with universal appeal, such as those featuring internationally known people, characters, and events, require little adaptation across markets. In fact, some U.S. -originated cable networks have increasingly tried to make such programming products at a network level, taki ng into consideration universal appeal for the worldwide audience. Yet, the amount of universally appealing programs differs among networks, whereby eventual ly leading to the difference in the ratio of programs supplied by the network to loca l channels. Although so me U.S.-originated cable networks try to produce programs based on the global perspe ctive so as to be accepted universally, whether or not such production is fe asible remains unsettled. In reality, most of programs distributed on a global scale by U.S.-ori ginated cable networks are still produced by the initiative of the corporate headquarter s in the United States, based on the U.S. perspective. Target Market Segment The success of standardized programmi ng products premises the presence of intermarket audience segments at which the ne twork can target their programming products. To be sure, there exist intermarket audience segments, which share si milar preferences for television programs and thus are regarded as a contributor to the success of standardized programming. As noted previously, the segment in a country market might be small but can be served aggregately and profitably if it exis ts in multiple country markets. The point is whether or not a network considers that viewers fell into the se gment are large enough across markets. Under the present circumst ance, some networks identify and target intermarket audience segments, but others do not. It should be carefully watched if audience markets would further converge worldwid e and the global audience markets for standardized programming products would become larger 224

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Countrys Cultural Characteristics The national market characteristic can be an important driv ing force behind the implementation of a certain programming stra tegy. Programming products are in principle introduced when they seem to fit in a market place. Cultural similarity and compatibility between home and host country markets are associated with the high feasibility of standardized programming. In spit e of the diverse cultu ral patterns present in different Asian countries, some similarity in terms of viewing preference could be found between individual country markets, which are culturall y proximate with each other. As some Asian countries share relatively similar cultural values between them, the same programs could be distributed successfully across those countri es. Meanwhile, given the fact that many programs, which are distributed within a U.S.-o riginated cable network, are still made in the United States, it is plausible that those pr ograms would be more favorably accepted in country markets whose cultures are proximate to American cultures. Additionally, some other cultura l characteristics of an i ndividual country may have an impact on programming offerings in the coun try. As seen in the case of Singapore, cultural diversity and heterogeneity in a c ountry could be reflect ed in a variety of viewpoints, and people in the country would be more openminded to foreign or alien elements, respecting the values of people from different cultures. In contrast, people in a country with cultural ho mogeneity or insularity might be more exclusive to different cultures. Another important na tional characteristic is whet her people seek the authentic foreign product or the domestic copycat product. In some Asian countries, Western cultural products have served as a model for emulati on and, in fact, successfully been indigenized, as seen in the example of pop music. In a sense, many media firms in Asia have deliberately adapted Western, in particular, U.S. popular cu ltural genres into more localized forms. It was found in the current study that localized Western media products are often preferred by Japanese and Taiwanese viewer s, while Singaporean viewers often like the original, real 225

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ones. Finally, the bilateral historical rela tionship or the traffic of people between two countries could influence the trade of cu ltural products including television programs between those countries. It should be noted that sample markets for the present study have formed close ties with the United States for many years as pro-U.S. nations. Countrys Environmental Characteristics There is no consensus regarding the imp act and importance of environmental differences, such as those in economic conditions, physical conditions, legal environments, and infrastructure and suppor ting sectors, on programming strategy. Meanwhile, the economic condition and supporting sectors in an individual country affect programming strategies at a local level. If the size of an individual national market is large in terms of both population and wealth, coupled with the st rong production capability in the country, the incentive to develop original programm ing products in the market would increase. Additionally, local channels of U.S.-origina ted cable networks can increase their local programming as advertising revenues and multichannel subscribers increase. As for the influence of regulations on programming, gl obal television networks owned by TNMCs might be the greatest beneficiary of the deregulation in multichannel programming industries in many parts of th e world. The strict rules, such as import quotas, which are applied to broadcast networks, often have no application to cable networks owned by foreign firms. Industry Competition The competitive situation would affect programming strategies of U.S.-originated cable networks. On the one hand, U.S.-origina ted cable television networks adjust their products to better meet needs and wants of loca l markets so that they could survive in the competition. On the other hand, these networks offer more or less network programs containing international flavors in order to differentiate themse lves from domestic channels. Although it is difficult to find definite pr inciples behind how the industry competition 226

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influence their programming strategies, it can be presumed that the networks adopt programming adaptation in competitions with a singular domestic rival but try programming differentiation in more intense co mpetitions with multiple domestic rivals, utilizing standardized content. Besides, programming products would be successfully standardized if a network enjoys a leading market position across countries. Brand and Country of Origin U.S.-originated cable networks are often associated with a global image by Asian audiences. The global image, which might be often perceived to be superior in quality by consumers, would be necessary for those netw orks, since they may be still unfamiliar to many viewers in countries outside the United St ates. Yet, the degree to extent the global image appeals to viewers could vary depe nding on countrys cultu ral characteristics. Countries in which foreign brands are widely accepted would provide a more favorable context for the introduction of standardized products. It is also noteworthy that the successful execution of brand stan dardization at a global basis doe s not always facilitate the acceptance of network programming, but it is true that U.S.-originated cable networks could maintain and reinforce a consistent global brand image by offering a certain amount of network programs. The country of origin effect is achieved successfully only when the images of the product and its country of origin are positivel y related by the targeted audiences. The country of origin of a television program is ge nerally not perceived to have much influence on audience preference by U.S.-originated cable networks. Nonetheless, it should be noted that the effect could differ, depending on th e national and demographi c characteristics of audiences as well as the type of programming. In this sense, the country of origin effect should be a function of cultural and productrelated factors. Specifically, particular countries tend to be preferred as original countries of animated programs. Animations originating in Japan are popular worldwide, whil e parents in some Asian countries want to 227

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have their children watch American animations in English. As far as many viewers have a positive image of animations made in those countries, country of origin has a certain effect on viewers selection and eval uation of animated programming products. It is also inferred from the universal popularity of animated progr ams from a couple of sp ecific countries that animation is relatively less cu lture-bound and currently made onl y in a limited number of countries. Firm Characteristics The current study is unique in that it focuses on the relative significance of intra-firm factors as determinants of programming strategies by U.S.-originated cable networks. As programming is finally decided by a network, it was supposed that characteristics inside the network would affect their programming strategies. First, different and distinct orientations and philosophies with respect to international operations are reflected in different programming strategies. An example is the difference in cost-benefit considerations, which results in different programming strategies. U.S.-originated cable networks are likely to face the trade-off be tween cost savings accruing from programming standardization, a prominent nature of tele vision programming product, and the potential sales opportunity resulting from adapting product s to local tastes. Th e economies of scale and other cost savings that might accrue from standardization are of value for some networks but not necessarily for others. A lthough all the networks should emphasize profit maximization as an ultimate goal, whether th ey are more cost-conscious or have a more sales-orientation has an impact on their programming strategies. What strategic approach, namely, internati onal multinational, global, or transnational approach, is employed by a U.S.-originated cab le network is in large part dependent on what resources are possessed by the network. Prope rty-based resources, su ch as financial or content resources, are utilized on a netw ork basis. Meanwhile, it was found that U.S.-originated cable networks have established a mechanism to coordinate and transfer 228

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ideas and know-how, i.e., knowledge-based re sources, within a network. This mechanism appears to be especially essential in the pr oduction and marketing of the content by global television networks, because of the creativ e characteristic of television programming products. U.S.-originated cable networks can benefit from creative sharing, as ideas, knowledge, and experience are exchanged betwee n headquarters and local teams to produce global programming products or to modify existing programs for different markets with the basic ideas unchanged. Additionally, the decision-making structure within a U.S.-originated cable network shapes what product is offered for audiences in local markets. In fact, the trend in many U.S.-originated cable networks is to decentr alize and delegate d ecision-making power and responsibility to the affiliate le vel. Then, decisions as to whether or not network programs are offered in local Asian markets are substantially made by affiliates, rather than being urged by the corporate headquarters. Meanwhile many local Asian channels are owned and operated by regional headquarters, which are us ually set up as wholly-owned subsidiaries, and the degree of autonomy given to each local team varies among networks. While largely realizing the necessity to ad apt programs based on inputs from local managers, some regional headquarters make programming deci sions that conform to the corporate headquarters intentions and e xpectations. Indeed, some regional headquarters assert that a certain amount of network programs must always be offered on their local channels so that the network could maintain the brand identity on a global basis, while at the same time pursuing economies of scale a nd scope obtained from those programs, not undermining the advantages of a global television network. Final Thoughts In spite of the necessity of locally adapted programming, which has been emphasized by media globalization scholars, it seems that some U.S.-originated cable networks still desire to distri bute the same programming to thei r local channels as much as 229

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possible, believing that wher e television programs are concerned, at least some elements could be both fundamental and global. Much programming currently offered by U.S.-originated cable networks in Asia is ac tually neither completely standardization nor completely adaptation but a hybrid of global and local programs. This hybridization is considered necessary for them to attract more local viewers while maintaining their global brand image and attaining cost savings. While taking into consideration local tastes, Asian local channels of U.S.-origina ted cable networks would neve r become as local as their domestic counterparts, because they often seek the relevance to local audiences within a global context. In reality, the key issue with regards programming strategies for U.S.-originated cable networks might lie in achieving the right bala nce between global and local programming products, or more prec isely, complementing global programming products with local ones. It was impressive that an executive interv iewed for the current research articulated that if the number of viewers can be increase d by offering network programs, then he would raise the ratio of those programs. If sta ndardized programming products seem to be successful in overseas markets, networks do not need to bother developing different product lines for local markets. Global television networ ks first seek out opportu nities to implement the same programming strategy and, if the standardized programming product does not appear to become successful, adjust the product. As seen in Figure 2-1, several factors were perceived to determine the direction of product standardization or adaptation. On th e basis of the international marketing framework, the current studies found that ce rtain television program ming strategy could be facilitated by each of sample networks in spec ific contexts, as summarized in Table 5-2. The findings provide some insights into the implications of the framework for international television programming strategi es, along with its usefulness as a guideline for programming decisions, as noted under the next subheadi ng. In particular, what factors favor a 230

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standardization strategy should be highlighted here, as global television networks usually takes into consideration the feasibility of programming standardization first. Again, the networks might alternatively think the local adaptation when standardization seems unfeasible. Figure 6-1 illustrate s a conceptual framework for understanding the factors that drive global television networks to offer st andardized programming products, based on the findings discussed so far. Managerial Implications The presentation of specific normative prescriptions for practitioners is not the primary objective of the current study. However, it is beneficial to note several guidelines for formulating programming strategies, which can be drawn from the research findings. After a first glance at the findings, one might be tempted to conclude that differences in the cultural context will have absolutely important de-standardizing implications for programming practice. Yet, programming standa rdization is still worth trying for global television network, because it lead s to cost savings, although th is clearly does not imply that all the programming products should be uniform across coun tries. Standardization of television programs may be financially successf ul in some product categories and across some market segments but not in others. In stead of standardizing all the programming products, a more practical appr oach would be standardizi ng wherever it is possible, balancing the cost effectiveness and greater c onsumer responses. In light of the need for cost-efficiency with standardiz ation on the one hand and the large number of differences in consumer preferences on the other hand, te levision programming strategy needs to be carefully determined via a cost-benefit analysis In essence, a networks decision should be based on estimated overall costs and revenues. St andardization works on the cost side of the profit equation, while local adaptation might be necessary in order to obtain more revenues, which would otherwise fail to materialize. The net profit resulting from the interplay between lower cost and greater revenue is what ultimately matters. 231

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Then, the key to success is a careful anal ysis of the forces driving toward the standardization of television programming products as well as the obstacles to this approach. It has been well established in the strategic management literature that the fit between both external and internal factors and the strate gy has positive impact on performance (Cavusgil et al., 1993). As far as the pos itive relationship between performance and factor-strategy fit is true, the following guidelines are useful to programming managers. First, propositions based upon the contingency framework may start with the specification of the product characteristics in terms of how the progr amming product will actually be perceived by audiences. If some programming products appear to be less culture-bound and have universally appealing characte ristics, global television netw ork should distribute them as widely as possible. Second, distributing programs on a global ba sis certainly offers opportunities for capitalizing on economies of scale, provided th at there is sufficient convergence among audiences across national markets. In today s increasingly competitive television market, the international audience segmentation is esse ntial to the survival of global television networks, which attempt to reap the advant ages of programming standardization. Thus, it should be assessed if there is a worldwide potential market segment for a given programming product. The identification of a segment of audiences who do not differ across countries in terms of thei r preferences of programming is an opportunity for global television networks to apply the positive re commendations for standardized television programming. Third, it is important to identify the ef fects of an individu al countrys cultural characteristics on audience preferences, as th ey are important indicators of audience segments and market potential. Some preference s are likely to be uni verse, whereas others are not. Then, programming managers must understand the extent to which audience preferences vary from one culture to another. Actually, severa l culture-specific preferences 232

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were detected in sample markets for the presen t study. It is quite probable that there still exist cultural differen ces among national markets in va rying degrees and that these variances have implications for programmi ng decision that would be optimal. From a managerial point of view, therefore, the comp lexities associated with serving culturally diverse national markets should be bore in mi nd, perhaps even with what appear to be relatively culture-free program ming products. Global television networks should use their knowledge of a particular markets nationa l culture to develop successful television programming strategies. Fourth, variances in firm characteristics ar e important explanatory variables as well. In general, the advantages and disadvantages of a particular orientat ion vary considerably with the individual firms res ource and the size of potential over seas markets. These affect the costs and benefits associated with each stra tegic approach and thus its desirability to the firm. For example, given a global televisi on network with an appealing programming content, the return on the resource would be maximized worldwide when it is utilized and deployed in various geographical markets. Then it might be unfeasible for the network to employ multinational approach. Another important consideration is wh ether a global television network has centralized decision-making pro cess. Central control of glob al operations is a necessary requirement for achieving a high level of sta ndardization. A distinction, however, must be made between centralization of authority in the networks and rigid implementation of standardization. Successful global television ne tworks might seek input and ideas from throughout their affiliates and lo cal channels and typically do not dictate strategies in a top-down fashion. A bottom-up rather than t op-down approach would foster greater commitment and produce superior programming at a global level. Meanwhile, in the decentralized structure, local channels might be permitted to develop original programming that can be better respond to the specific needs of local a udiences on the basis of local 233

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knowledge. For instance, MTV Network has gran ted local teams the ri ght to develop new programming products, which is a powerful way to eventually generate new ideas for the whole network. These local programs could be transformed into successful global programs at a later point. It should be noted that there is a cl ear trend among global television networks toward establishment of mechanis m for the transfer of creative ideas and information. It is also notewo rthy that providing local teams w ith the opportunity to produce local programs has an impact on the teams motivation and skill level. Finally, global television ne tworks should emphasize that they are global brands. The global image is significant for the networ ks not only because it could be associated with high quality by audiences but also because it helps local channels of the networks differentiate themselves from domestic ch annels. The actual problem in many country markets, however, is that even though viewers could be drawn to global brands as symbols, when it comes to actual content, they might look for something more relevant to them. Some global television networks might take pains to maintaining strong, single global brands, while at the same time making the pr ogramming locally relevant. Certainly, as found in the present study, so me standardized programs should be offered across national markets to maintain brand consistency and inte grity on a global scale. However, the global brand image is also able to coexist with locally adapted prog ramming, for example, by incorporating global materials into locally produced programs, that is, by digesting global elements into the local contexts, or by keep ing the right balance between local and global programming products. In ether case, it shoul d be recommended that global television networks encourage the development of progr amming portfolios that combine a balanced number of strong local as well as global programs so that they could mix and match these programs in a flexible manner to accommodate prevalent tastes in different countries. 234

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Contributions of the Present Study Despite a great deal of discussion worl dwide about media gl obalization, relatively little research has been conducted on the actual decisions and behaviors of media firms in foreign markets. In particular, it seems that little academic research has discussed the issue of media product offerings in overseas markets from manageme nt perspectives. For instance, little has been known about the extent to which programming products are actually standardized or locally adapted in practice, as no studies have systematically examined programming products by global television networks Given the paucity of research into this discipline, this study sought a comprehensive understanding of the television programming strategies of those networks. It seemed that knowledge would be certai nly obtained from wh at practitioners do and think, since they have been engaged in the international progr amming practices and hence developed their own unders tanding of the discipline. In fact, as a reflection of the experience and perceptions of executives and managers at U.S.-originated cable networks, the findings in the present study are valid and offer specific examples to be added to the literature on global media management studies. The value of this research lies in the insights, which gives into the key factor s that affect programming strategies by global television networks. It is hoped that th e analytical framework, which was proposed and validated in the current study, forms the basis for future st udies of scholarly nature, directing further attention to the relationship between program ming products by global television networks and key variables. Moreover, the present study possibly provide s a starting point in helping not only academics but also practitioners theoretically consider programming strategies in todays increasingly competitive global television arena. Given the nature of the samples and their size, no definitive conclusions can be clearl y reached. However, the current study provides some interesting insights about how a given factor could exert in fluence on programming 235

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product offerings. For executives and programming managers, it is necessary to analyze the external and internal environments to a ssess the extent to which programming products could be standardized or locally adapted. From this analysis, they could possibly weigh the advantage of standardization against any di sadvantages, selecting the most appropriate strategy. It is hoped that the propositions develo ped in this study will help them gain a better understanding of the opportunities for standardization or local adaptation of programming in the future. Limitations and Future Research Directions The present study has several limitations, whic h also provide interesting avenues for future research. As often pointed out, case studies often lack scientific rigor. The case-based approach usually addresses issues within th e interpretivist paradigm rather than the positivist paradigm, and this possibly allows the researchers biased views to influence the findings and conclusions. Indeed, the current study used executives and managers perceptions to operationalize many of the variables in the framework. It was expected that because of the executives or managers key pos itions, their responses reflected the strategic choice of their respective busine ss. Yet, little hard evidence is evident. Even though research questions in the current study ar e principally concerned with pe rceptions, the au thenticity of information might be hard to be verified. While the use of retrospective perceptions for organizational research has been found to be ac tually reliable and va lid (Cavusgil et al., 1993), the findings can be strengthened with more objective data and through alternative measurement approaches. Executives and managers opinions are in larg e part based on assumption, rather than on the motives and beliefs of the viewers. A fu rther research to assess the perceptions and attitudes of viewers to progr amming products as well as br ands would be necessary to validate the findings of this study. In particular, much information is still needed in the area of 236

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intermarket audience segments. The analysis and di scussion in this study are likely to provide important direction for internati onal audience behavior research. The present study examined programming stra tegies from the perspective of Asian affiliates and local channels of U.S.-originated cable networks. Some statements by executives at the corporate headquarters of the networks (MTV Networks, Discovery Communications, etc.) were obtai ned from the secondary sources. However, future studies might extend this study to incorporate the pe rspective of those pe ople through original interviews so that data obtained from executives or managers at regional and local levels in the current study could be evaluated in a more relative and comprehensive manner. It might be interesting to explore how corporate executives perceive the current trend in which programming strategies are mainly decided by their affiliates. Case studies are not amendable to generali zation, even though th e generalization of findings is not necessarily the aim of the studie s. The fact that only a small number of cases (four U.S.-originated cable networks in three Asian markets) were examined in the current study obviously lessens the generalizability of findings. Sample networks and markets were selected based on purposive criteria. Yet, some important networks, such as HBO and Disney Channel, and some important Asian markets, such as China and India, were not considered in the current study, since the number of cases ex amined was inevitably constrained by time and funding. Therefore, an important direction for further research is to replicate this study in different networks and different Asian market s to further deepen our understanding of the reality of programming strategies employed by global television networks. Additionally, the study could also be replicated in the context of Europe or Latin America, and the results from those regions would then be compared with the present research findings in Asia. More insights regarding the programmi ng strategy of global television networks could be gained through these research streams. 237

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A new attempt was certainly made in the current study, which seeks its theoretical base in the international marketing. While th is qualitative study has proved rich insight about four U.S.-originated cable networks, nevertheless, definitive conclusions and generalization of the research results might hard ly be reached, given the nature and size of the samples. To achieve this, a larger sample size and multiple indicators for all factors should be sought. It will be necessary for res earchers to discriminate between inductive and deductive research but, at the same time, clearly recognize the synergy between two (Bradley, 1987). In fact, the case study is often carried out as an exploratory first step that paves the way for further research, as well as offering a greater depth of information to complement the quantitative survey results. Ap plying the framework proposed in the current study, continuous study might systematically analyze a larger group of global television networks through surveys in an attempt to empirically assess wh ich of the factors is more important for global televisi on networks to consider in the programming decision. For instance, mail surveys of program ming managers in local offices of the networks might be conducted to gather quantitative data. Then, multiple regression analysis would show the linear association be tween programming standardization/adaptation and internal and external factors. Such knowledge will help firms incorporate the most important factors early in the programming developing process. This study did not directly assess the perf ormance of a certain programming strategy, although this has recently become a major con cern in the internati onal marketing arena. From the standpoint of television networks better programming might ultimately be programming yielding better financial perfor mance, which is indicated by return on investment/assets or sales growth, regardless of whether it is globally standardized or locally adapted programming. If this is true, th en the networks concer ns might lie in areas such as which programming assures higher prof its, rather than in the study of factors perceived as determinants of the programming strategy. It is still uncertain whether or not 238

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the scale effects and lower costs commonly asso ciated with standardized programming lead to increased profitability. Rather, produc t adaptation might strengthen the products competitive position in the marketplace and eventual ly lead to higher sales. Moreover, it is also required to verify if si gnificant advantages actually accr ue to the network adopting the local adaptation, not only in terms of sales but also in terms of profit. This kind of proof is not yet available. Since the ultimate relevanc e of such a strategy de pends on its performance outcome, future research could link the standa rdization or adaptation strategy directly to financial performance. The strategy-perform ance relationship can be investigated by a longitudinal design spanning several years of the ventures, thus gaining a richer understanding of the dynamics and complexity of the relationship. Ideally speaking, cross-national research including the pr esent study should be done in a cooperative manner by several researchers, each of whom is a native in and familiar with the countries under examination. This is because each researcher could work in his or her own country market and consequently gath er and interpret the data within a local context. By doing so, the research could avoid several critical problems. First, interviews can be conducted in native languages for both an interviewer and an interviewee, increasing the chance to access deeper and more nuanced information. Listening to people speaking a language other than their mother tongue is sometimes fatiguing and demands extreme concentration. Second, useful secondary sources are often available only in local languages. While information from interviewees should be complemented with secondary source data, relevant data in English was not always available for the present study. It would be necessary to look at data available only in local languages for the purposes of completing more thorough research. Finally, it seems necessary to continuously explore the programming strategies that global television networks might employ in the fu ture, as they are expe cted to change with the times. Again, when initially entering fore ign markets, U.S.-originated cable networks 239

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typically offer U.S.-made programs with little cu stomization. Over ten years later, they have shifted to offering more or less locally adap ted programming in each of overseas markets. The next issue is what will become of this trend over the long term. Some of the global television networks might choose to include lo cal elements in programming products. This would represent strategic advantages and t hus are continuously worth consideration for networks to take a middle-of-the-road approach. Meanwhile, if further convergence among viewers across country markets would occu r, and if global audience markets would emerge and grow to an adequate scale, it might be an opportunity for global television networks to develop and market programs, which would be offered on a global scale. 240

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Industry com p etition W eak com p etition Inten s ive com p etition and the necessity for dif f erentiation Leading m a rket position across m a rkets Ta r g e t ma r k e t segm ent Presence of audience segm ent across national ma r k e t s Brand and country of origin Global brand Hom e country prestige for certain program type Firm characteris tics Global orientation Desire to m a intain to global b r and im age Em phasis on cost reduction/syner g y associated w ith standard ization Content resources Af f iliates royalty towa rd corpor ate headquarters Host country s environm ental characteristics Less developed econom y Less developed supporting sectors Fewer regulatory constraints S t andardized programming Host country s cultur al characteristics Sim ilarity with hom e c ountry s culture Comm on l a nguage Diversity and heterogeneity Open attitude toward foreign products Seeking au thenticity Historical tie & active people exchange with hom e c ountry Product characteristics Program s of less culture-bound genres Program s with lar g er production costs Program s with a for m at not easily modified Figure 6-1. Fram ework determ ining ne tworks programm i ng standardization 241

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APPENDIX A LIST OF INTERVIEWEES MTV Yu Sasamoto, president and CEO, MTV Japan Tetsuya Togawa, vice president, research and planning, MTV Japan Sharon Chang, director, creativ e and contents, MTV Taiwan Mishal Varma, senior vice president, pr ogramming, music, and talent, MTV Networks Asia Cartoon Network Michiko Hashida, associate director, corporate public relations, Japan Entertainment Network (Cartoon Network Japan) Shinji Suetsugu, director, programming depa rtment, Japan Entertainment Network (Cartoon Network Japan) Gary Chou, program manager, Turner Broa dcasting Sales Taiwan (Cartoon Network Taiwan) Michele Schofield, director, programming and acquisitions, Turner Entertainment Networks Asia ESPN Ichiro Hase, manager, planning and contro l group, J Sports Broadcasting Corporation (Sports-i ESPN) Jammie Chen, marketing senior manager, ESPN STAR Sports (ESPN Taiwan) Nick Wilkinson, vice president, programmi ngSouth East Asia, ESPN STAR Sports Discovery Channel Phillip Luff, president and repres entative director, Discovery Japan James Gibbons, senior vice president, progr amming and creative services, Discovery Asia 242

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APPENDIX B SUBJECT RECRUITMENT The meeting with MTV Japans officials, Yu Sasamoto, president and CEO, and Tetsuya Togawa, vice president of research and planning, was set up by Hidehiko Kataoka, MTV Japans former vice president of comm unications. Hidehiko Kataoka used to be a colleague of the author at Nippon Television Network. The exchange of emails was done with President Sasamoto preceding the actual interview to refine the questionnaire asked in the interview. The interviews with Discovery Japans president and re presentative director Phillip Luff, Sports-i ESPNs manager of pl anning Ichiro Hase, Cartoon Network Japans associate director of corpor ate public relations Michiko Hashida, and Cartoon Network Japans programming director Shinji Suetsugu were all coordinated by Hiromichi Sakai, president of CSSi Inc., who is acquainted with persons in the Japane se cable industry and also has a long business association with the author. In terms of interviews in Taiwan, the meeting with Jammie Chen, ESPN Taiwans senior marketing manager, was coordinated by Leon Liu of Far EasTone Telecommunication, who used to study with th e author at Michigan State University. Leon Liu also introduced to the author MTV Taiw ans Chiu Kuang Wu, who set up the meeting with MTV Taiwans creative and content dire ctor, Sharon Chang. In order to recruit a participant from Cartoon Netw ork Taiwan, the author initially contacted Ringo Chan, vice president for Turner International Asia/Pacific, introduced by Sylvia Chan-Olmsted, chair of the authors dissertation committee at Univers ity of Florida. Ringo Chan recommended the author to contact Michele Sc hofield, director of programming and acquisition at Cartoon Network Asia Pacific, who oversees the pr ogramming strategies in the region. Michele Schofield set up the interview with Gary Chow, program manager of Cartoon Network Taiwan. Discovery Japans president Philip Luff spoke to Tommy Lin, who manages Discoverys Taiwanese office, regarding the inte rview. However, because his main role is 243

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advertising sales, it was deemed that he might not be able to provide much information on programming strategy, and the in terview was not appointed. Pres ident Luff gave the author a suggestion that the best person for the inte rview would be the head of programming for Asia Pacific at their regional headquarters in Singapore. In Singapore, the author intended to have three interviews. The meeting with Mishal Varma, senior vice president of programming, music, and talent at MTV Networks Asia, was coordinated by Ho Yang Mok of MTV As ia with an introduction from Hidehiko Kataoka who used to work for MTV Japan, as no ted earlier. In order to set up the interview with an official of ESPN STAR Sports, the au thor first contacted Angela Fung of STAR TV, introduced by Sylvia Chan-Olmsted, and got an introduction to Manu Sawhney, executive vice president of programming and event manage ment at ESPN STAR Sports. Although the interview with him was set up by Annie Law, a personal assistant to him, it was cancelled on the previous day because of his urgent business. As an alternative, Annie Law provided the author with an opportunity to meet with Nick Wilkinson, vice president of programming in Southeast Asia. As indicated above, Discovery Japans president Philip Luff recommended the author to meet with James Gibbons, senior vice president of programming and creative services at Discove ry Asia. Besides those three interviews in Singapore, an interview with Michele Schofield, who was me ntioned above, was arranged in Hong Kong, as Cartoon Network does not have an office in Singapore. 244

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APPENDIX C INTERVIEW QUESTIONNAIRE --What percentage of your programming is supplied from the parent network on average? --In which countries are those programs originally made? --Why do you offer programs supplied by the network? --What are the considerations when you choose the network programs? --How do you localize content for your market? --Why do you offer program originally made by you? --How do you describe viewers tastes or preferences in your market? --What influences do you think those tast es or preferences on your programming? --It is assumed that your programming special izes in one or two program type(s) (e.g., music, sports etc.). To what extent do you think your specialized program type has universally appeal to a worldwide audience? --Do you think it is possible to develop progr ams, which appeal to all over the world? --Please specifically characterize the targ et audience segment of your channel. --Given a program shared with other channe ls of your network, do you think it was made for audiences in a specific ma rket or those in the world? --Do you think viewers in your market rece ive the American-made or foreign-made content well? --Do you think there are some aspects in network programs, which cannot be understood by audiences in your market, be cause of cultural differences? --Do you think your market is developed enough to produce content your channel specializes in? --Please give, if any, some specific examples of regulations on foreign programs and materials (e.g., quota or censo rship) in your country? --Which one standardized programming or adapted programmingdo distribution services generally prefer in your market? Why? --Which one standardized programming or adapted programmingdo advertisers generally prefer in your market? Why? --How many competitors does your channel have in your market? --How do you differentiate your programming from the competitors? --What is the market position of your channel? --How is your brand recognized in your country? --Is the global image important for you? --Do you think it is difficult to maintain the global image while offering locally adapted content in your market? --What country is perceived as very strong in your specialized program type in your country? --What is the vision and philosophy of your network in terms of international business? --To what extent do you think your parent netw ork is expert in international business? --How important is it for you to be part of your parent network? --How important is your market for the network? --Please specify the ownership pattern (i.e., w holly-owned subsidiary of parent network, joint venture, or licensing agreement) of your channel? --To what extent do you think your channel is given autonomy in programming from your parent network? 245

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APPENDIX D COPY OF INFORMED CONSENT SHEET Informed Consent Dear Programming Manager: I am Goro Oba from University of Florida. I am currently working for my doctoral dissertation titled "Programming strategies of U.S.-originated cable networks in Asian markets." Based on the international marketing theory, the study discusses the extent to which globally or regionally standardized programming or locally adapted programming is offered by major U.S. cable networks in the selected markets of Asia and the rationale behind the programming decision. As part of the study, I will conduct in-depth interviews the purpose of which is to learn about what factors are perceived as significant determinants of the decision of programming standardization/adaptation. Interviewees will be asked to participate in an interview lasting about 1-1.5 hour. As I know your time is very p recious, I really appreciate your taking the time to help me with this research. Please see attached a list of questions asked in the interview. You will not have to answer any question you do not wish to answer. Your interview will be c onducted at your office. With your permission, I would like to audiotape the interview. Only I will have access to the tape, which I will personally transcribe. Your identity including name, affiliation, and title will be revealed in the final manuscript. There are no anticipated risks, compensation, or other direct benefits to you as a participant in this interview. If you have any questions about the project, please feel free to email me at obagoro@ufl.edu. Questions or concerns about your rights as a research participant rights may be directed to the UFIRB office, University of Florida, Box 112250, Gainesville, FL 32611; ph (352) 392-0433. Please sign and return this copy of the letter before the interview begins. A second copy is provided for your records. By signing this letter, you give me permission to report your responses in the final manuscript. Thank you in advance for your p articipation. Goro Oba College of Journalism and Communications University of Florida Email: obagoro@ufl.edu (Supervisor) Sylvia M. Chan-Olmsted Professor, College of Journalism and Communications University of Florida Email: olmsted1@jou.ufl.edu I have read the procedure described above for Goro Obas dissertation interview assignment. I voluntarily agree to participate in the interview and I have received a copy of this description. ___________________________ ___________ Signature of participant Date Approved By Institutional Review Board 02 Protocol # 2006-U-202 For Use Through 3/06/ 2007 246

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APPENDIX E INTERVIEW WITH MTV JAPAN-1 March 15, 2006 Oba: What percentage of MTV Japan programming is from MTV Networks outside of Japan? Togawa: The programs supplied from overseas that we accept and broadcast are mostly reality programs, such as T he Osbournes and Nick and Jessica, and also some event shows like The MTV Video Music Awards. These programs arrive as a package and are ai red with Japanese subtitles. This kind of content represents a surprisingly sm all percentage of our entire content, only about 10-20%. In general, we get these shows from MTV U.S. However, in this World Cup Soccer year, there was a nine-part drama series about soccer players from MTV Europe called The Goal. Information about programs made by MTV Networks around the world is delivered to our programming division. They select programs, which they believe will succeed in the Japanese market, and request samples from each MTV. If they are convinced that the program will be received well by Japanese viewers, we then offer it. Most of these progra ms are from the U.S. or the U.K., and very few programs from MTV Asia reach our programming schedule. We usually offer an annual MTV Asia video music awards program but edit down from a two-hour program to one hour. MTV Networks basic rule is MTV is local. The amount of the U.S. MTV content supplied for international MTV channels is actually quite small. And, there doesnt seem to be much exchange of content between the U.S. and the U.K. MTVs. MTV Europe is based in England but has cha nnels in Germany, Italy, France, and other countries. MTV U.K. sometimes distributes content around Europe, as MTV Asias Singapore headquarters does for other MTV channels throughout Asia. Oba: Aside from the 15% provided from other countries, is your programming all original MTV Japan content? Togawa: Thats correct. At this stage, we dont purchase content from local production companies. Aside from airing subtitled programs from foreign MTVs, theres always the technique of editing forei gn MTVs material and incorporating it into our original content. However, we treat these programs as our own productions. Oba: Why do you offer foreign MTV programs, though they might be a few? Togawa: We have a lot of different people making up our viewers. Some of them watch our channel because they want to see American or European MTV content. In Japan, NHK and commercial broadcast networks can be viewed all over Japan, and until recently many people were not familiar with the idea of paying for television channels. MTV knows viewers are paying to see programs they want to and so doesnt always go with what will be popular with the masses. We dont rely simply on advertising for our revenue, and so particular needs of our viewers must be met. One of the results of this consideration is that on MTV, you can see American programs that you cannot usually see on Japane se over-the-air television. 247

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Oba: Do you believe theres something with in MTV content that has universal appeal? Togawa: Yes. For example, the same version of the U.S. MTV Music Awards is aired around the world. Also, there are program s, which use the same universal format but with the content customized for the local market. MTV Jammed is a program, which features artists turning up in various places and situations, such as school graduati on ceremonies, to perform unannounced live shows. This program is aired in the U.S., Europe, and Korea under the same format, featuring different famous local artists for each market. There are many programs, which are appropriated like this. Oba: MTV U.S. certainly produces an en ormous amount of programming. What are the standards you employ when choosing content from that for the Japanese market? Togawa: Whether or not it suits Japanese view ers tastes. As for music, we think about whether or not an artist is popular locally by looking at sales data from music stores such as Tower Records and HMV. Also, in the case of artists like Britney Spears and Avril Lavigne, many are presented in the Japanese media as fashion leaders rather than musician s. So, they represent more than just music. Knowing just where Japanese youth position these artists is an important part of our programming strategies. Oba: How would you describe Japanese vi ewers tastes in a nutshell? Togawa: Well, as a basic prerequisite, young Japanese viewers expect foreign and Japanese artists to have a certain amount of musical talent. Aside from that, there are considerations lik e the artists fashion sense, how close they feel to the artist, and whether or not the artist is a good dancer. Oba: Now you mention a feeling of affinity w ith the artist. Dont Japanese viewers feel some sort of kinship to other Asian artists? Togawa: Japanese consumers have a unique wa y of thinking about Western brands. Most young Japanese have at least one ite m of Western-brand fashion label. I think this trend can be said of music as well. I think theres a strong appreciation of Western artists. To turn that on its head, I think a lot of Asian countries feel just as strong an attr action to Japan, and this is not just Japanese artists but also products, proven by the popularity of anything with the kanji characters (the Chinese char acters in the Japanese language) for Tokyo written on it. So, I think Asian youth look to Japan, while Japanese youth look to the West. At the moment, there are some Korean artists who are proving popular in Japan, but I think the main reason behind their recognition is the fact they speak Japa nese. Most Korean artists active in Japan can speak at least a little Japanese. Oba: Are you saying that Asian artists have mo re success in Japan if they adapt to Japan more? Togawa: Thats right. Not many acts have succeed ed playing on the exoticism of Asia. For example, no Indian or Thai artists have broken through here. Oba: So, you dont bring in MTV Asia-produced programs. Togawa: We could if we wanted to, but there doe snt seem to be such a big market for Asian artists in Japan. Japanese viewer s dont have much interest in Asian artists. MTV Asia aims its programs to the Chinese-speaking market and jointly delivers to those countries. MTV Korea is under the control of MTV Asia, but since Korea seems to have a strong and unique culture of its own, it 248

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doesnt seem to offer much MTV Asia content, which is made in Singapore, either. Oba: What sort of influence do Japanese viewers tast es have on MTV Japans programming decision? Togawa: MTV is a music channel, so we make the viewers needs regarding music a priority. Selection of songs is heavily influenced by viewers needs. Viewer interest is directed at whatever genr e is popular in Japa n at a given time. There are trends in what genres are popular. What we offer is the music of the moment and the artists of the moment Over the past few years, we have not aired much of the rock genre, si nce the hip-hop genre has been booming, but rock has been coming back since last year. If we are not able to keep our fingers on that pulse, there would be a gap between what people want and what we are airing, and we would lose viewers. Oba: Dont you put importance on whether it is Western or Japanese music? Togawa: Many people may think MTV is completely devoted to Western music, but 70-80% of the music market in Japan is in fact home-grown music. MTV plays whatever foreign music is pop ular, for example, hip-hop, while introducing Japanese hip-hop at the same time. We are always conscious of music genre. Some viewers like both We stern music and Japanese music, so we have a timeslot in which we air a collection of music videos of both. At the same time, we are mindful of genres. This is actually quite difficult, since there can be both Western versions and Ja panese versions of the same genre, but there are some Western music only and Japanese music only fans. So, just because music is grouped in a ce rtain genre doesnt mean it will be popular irrespective of whethe r its foreign or local. Oba: I can see now that quite a lot of people want locally made content. But, which are there more of, people who want to see only Western music or people who want a mix of Ja panese and Western music? Togawa: There are people who want all foreign content, but as a market share, they are negligible. But, what we do know from finding names like Britney Spears and Avril Lavigne on questionnaires about favorite artists is that there are probably a number of viewers who ha ve at least a partial interest in Western or foreign artists. I think there are quite a lot of people who like a bit of Western music as well as Japanese music. As the company MTV Japan, what is important is how we can get the largest share of the market. So, theres a need to schedule offerings acco rding to viewers needs so that those viewers who want to see local progr amming can watch programs showing all Japanese content, and those who want only Western music can watch those types of programs. Oba: What is MTV Japans main target audience? Togawa: Men and women in the 15-to-34 age demographic. Within that, we have our core audience of those in their late teens to early-twenties, which is the demographic we usually aim programmi ng at. Basically, its the same as foreign MTV channels. However, people signing a contract to access our channel are often not the audience th emselves but people such as their parents. So, as a business strategy, we have to provide at least a little content aimed at the people who hold the purse strings. We air a program featuring 1980s music videos but not in a prime timeslot. Additionally, something we learned from a viewer survey three year s ago is that a la rge proportion of our 249

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MTV Japan viewers are either what we call innovators or early adopters. These people receive new informati on quicker than others and pass on information to their friends. As a corporation, we use an efficient sales promotion system whereby we distribute information to people who pick up on things quickly. Compared to other ch annels, we have a lot of customers, such as those who have a lot of fore ign friends, those who are thinking about studying abroad, or those with just an interest in English. Its mostly young people who have a strong interest in fo reign countries. 30% of the music we broadcast is Western, so no one who really hates foreign music is watching our channel. For that kind of people, there are all-Japanese music channels, which probably provide enough for them. I think, after all, MTV is thought of as a channel for those who like Western music. People have differing perceptions: some are amazed that most of our content is local music, and some are surprised that as much as 30 % of it is foreign. People who watched MTV in the 1980s would be surprised that we are playing so much Japanese music, while junior high school students and high school students these days dont really have a strong image of MTV with foreign music and would be surprised to know that foreign music makes up 30% of our content. Oba: Was the shift from foreign-based cont ent to primarily Japanese content a conscious decision on the channels part? Togawa: Meeting the needs of viewers is c onsidered B2C. Aside from that, theres also the fact in the B2B aspect that we cannot reach our viewers without putting a channel on a cable ope rators. Music channels ar e easier to handle if they are grouped into Western music or Japanese music genres. I think this is because its easier to collate a line-up that way. In that sense, its easier for MTV to be taken on by a number of different cable operators if MTV mainly airs Western music. On the other hand, since only about 20 or 30% of the music market in Japan is comprised of Western content, if we specialize in that, not everyone will tune in us This is the dilemma MTV faces. MTV Japans Japanese-to-Western music ratio is something like 7 to 3, but there are some who may find this status too negative. When we say things like, We cater to viewers needs by prioritiz ing local music, we put ourselves in such a position. But again, if we were to air nothing but foreign content, we would lose our viewers. When we first began programming service in 2001, we had 2.5 million subscribing households. I think we were under the impression that if those numbers did not change, we could start offering all foreign content and secure a large viewer base of hardcore fans. The assumption was that the number of subscribers would not increase, nor would it decrease. Now that we have about six million subscribers and are gaining a projected extra 500,000 a year, I think choosing to show all foreign music once we reach 10 million subscrib ers would see us losing the 70% of our viewers who want Japanese music. Adding fans of local music to our viewers without betraying our core West ern music fans is our main focus. Oba: Do you also get requests from reco rd companies to air a certain artists video? Togawa: All music channels including MTV receive music videos from record companies. MTV pays a fee for airing them, but from the point of view of the record company, there are some products you would pay to have aired. Music videos were originally promo tional tools, but nowadays with the 250

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advent of DVD and other technology, th ey have become products in their own right. So, for the record company, music videos are both promotional tool and product. They know that MTV Japan does business by airing such videos, so they want us to pay for that privilege. Oba: Do local record companies also supply Western music videos? For example, can you broadcast the work of an American artist without going through MTV U.S.? Togawa: That depends on the record company. Some of them have what are called global contracts. But, even with gl obal contracts, we have to get our material from the local di stributor of the foreign record label, such as Universal Japan. In other words, ev en if theres a global contract arrangement between MTV and Universal, the exchange of the music video is conducted between MTV Japan and Universal Japan. 251

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APPENDIX F INTERVIEW WITH MTV JAPAN-2 March 15, 2006 Oba: Does MTV Networks In ternational intervene with MTV Japans programming strategies? Sasamoto: No, they have no say in what we choose to offer. Oba: So, would it be possible for you to offer all MTV Japan original material? Sasamoto: Its possible. To give an extrem e example, if we were to air only content supplied by MTV Networks, our costs woul d be less than halved. In reality, we choose programming that is suited to Japanese audiences from a vast library, which makes up only 20% of our programming schedule. We pay a fee to use this library, so not accepting any content from it would be a waste. Oba: What are the factors that limit your use of foreign programming to 10-20%? Sasamoto: The needs of the viewers we are targeting. In terms of music, the demand for Japanese music is huge. Aside from music, Japanese comedy is enjoying a boom right now, but if we were to import American comedy, it would not become popular. What we want is ma terial that our target viewers can integrate into their lifestyle. The curren t foreign/domestic content ratio is a natural result of this. If we were ab le to increase the number of viewers by providing dubbed or subtitled American MTV content, then we might raise the ratio to 30 or 40%. Oba: So, does that mean, assuming the criterion for selection of programming from overseas MTV channels is whether or not it would be popular with Japanese audiences, if MTV U.S. was to produce a number of such programs, the ratio might increase? Sasamoto: Thats correct. At present, the programs we select based on potential popularity eventually amount to the 10 or 20% of our total content. Oba: What is the situation regarding th e broadcast rights for programs created by the U.S.? Sasamoto: In most cases, broadcast rights ar e retained even for markets outside of the U.S. For music, these are entirely cove red. Paradoxically, if this was not the case, then I dont see why artists woul d perform on MTV. As far as the record companies and artists are conc erned, MTV is a promotion medium for their releases. So, naturally theres a considerable desire on their part for their material to be shown in as many places as possible. I dont know whether its the power of media, the power of funding, or a combination of the two, but the retaining of broadcast rights by MTV U. S. for material to be shown overseas is a huge plus. Oba: And even so, only 10 to 20% of MTVs programming is from overseas sources? Sasamoto: The balance of cost and income has an influence on profit. Even if our costs are low, it doesnt make business sens e that we cannot attract the viewers, and our advertising potential is lim ited. Our current programming ratio is about right. Oba: So, basically do you think American programs will get neither advertisers nor the viewers? 252

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Sasamoto: Thats right. The share of the market that wants to see American or foreign programs is probably about 10% of th e total market. Its not enough to satisfy the target reach set by advertisers. Oba: Are you saying that even if you target the niche market of foreign music fans, you will not make a profit? Sasamoto: It depends on the volume of that market. We have around 9 million multichannel subscribing households in Japan. Its not more than 10 million. Now, it would be untrue to say that th e majority of these households belong to the wealthier classes. Theres a limit to the advertising aimed at viewers interested in foreign or American programming. On the other hand, there are probably some viewers who would not mind paying even premium subscription rates in order to see fo reign programming. However, the cable operators and Sky PerfecTV are selling MTV Japan as a part of a larger package of channels, so even if MT V Japan were a premium channel, it never leads directly to revenue. Oba: Where does most of MTV Japans revenue come from? Sasamoto: We obtain our revenue through vi ewer subscription fees from multichannel platform firms, advertising fees, and also a little from merchandising and license fees. Most of it comes fr om subscription and advertising. Subscription fees are made up of the car riage fees we receive from the cable operators and Sky PerfecTV and also the revenue generated from official websites accessed on mobile phones. It works out that about half of our revenue comes from subscription fe es and half from advertising. Oba: Do these multichannel plat forms make any specific requests regarding programming? Sasamoto: Of course, they have their ow n ideas about development, and they request international content be aired on MTV Japan. In their view, MTV is analogous with Western or foreign content. However, the people paying for this programming are the contracted vi ewers, and so the viewers requests should be heard. If many viewers are not interested in programs from the West or the U.S., these will not be aired no matter how much the platforms push for Western or foreign content. In the end, its the viewers that decide, and so programming that reflects their needs is paramount. Oba: Is there any sort of capital par ticipation by Viacom and MTV Networks in Japanese multichannel platform firms? Sasamoto: None whatsoever. Neither Viacom nor MTV doesnt fund any platform firms. Oba: What kind of companies advertise through your channel? Sasamoto: We have a wide variety of a dvertisers, from Honda through to McDonalds, and are not really biased toward any one industry. What they all have in common is that they are all branding their products to the core MTV Japan target audience, the 15-to-34-year-old demographic. In recent years, you can see a trend in centralization of br anding and product promotion as an advertising skill. But, if we look at the situation through AIDMAs rule, MTV Japan can manage attention a nd interest but not necessarily action. Advertisers use our channel when they want to provoke consumer attention and interest in their product. Oba: Isnt it true that there are a lot of foreign-affiliated firms among your advertisers? 253

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Sasamoto: At first, this was the case. In our first year, almost all our advertisers were foreign-owned firms. But, MTV Japan ha s come to the point where its now recognized by Japanese firms as a medi um for sales and a true media brand. To begin with, we were not able to get Japanese firms to understand our product, and so we were not able to fit the product into their advertising strategies. Also, the multichannel mark et is quite small in this country. Domestic firms first consider over-theair television advertising, and over the last five years, the Internet has taken up a significant posi tion in advertising. Theres not much need for advertising of multichannel media. We call it MTV360, and the provision of MTV Ja pans cross media products has its background in that. Oba: How is the MTV brand recognized in Japan? Sasamoto: Its a fact that we are beco ming more acknowledged year by year. At the beginning of the 1990s, MTV was aired on terrestrial broadcasting, so the brand name is reasonably well known for those in their thirties and forties. But, its not so recognized by those in their teens and twenties. However, we are pretty well known by advertising decision-makers. Oba: What kind of image do you think viewers have of MTV? Sasamoto: Its ironic, but many people think that all programs showing music videos are MTV. Whether this is because MTV is an established commercial brand or the format itself is well-recognized, we dont know, since theres no real market research on this. When we firs t began the programming service, we did a survey about what kind of imag e viewers had of the channel. An incredible number of respondents said playing music videos, so they thought programmers like Space Shower and Music on TV were MTV, too. That image is changing. Viewers of music channel can see the difference in image between Space Shower and MTV, that is, the difference between a dyed-in-the-wool Japanese music cha nnel and one that has more of an international flavor. But, MTV is not aiming to be purely a music channel. We want to be the number one in entertainment media, so MTV Japan is in a different league to programmers like Space Shower. Oba: Is the international image important? Sasamoto: Yes, we want to continue havi ng an international flavor. But, we are not aiming to have a pure international ch annel. Such channels dont fit the Japanese market. Within music sales in this country, 80% of CDs sold are Japanese music. It makes no sense to air only foreign music in such an environment. Its not what the market wants. However, in terms of differentiation, it is important to add inte rnational flavor to our channel for a brand image. Oba: Do you think that Japanese are at tracted to the international image? Sasamoto: Not these days. I get the feeli ng that young people especi ally dont think like that so much. They basically see the in ternational side of our channel as a distinction from terre strial broadcasting. Oba: How many music channels are there currently in Japan? Sasamoto: There are three major channels, including MTV, but about eight all included. Oba: Which are MTV Japans main competitors? Sasamoto: Space Shower and Music on TV. Oba: How would you describe MTV Japans position in the market? 254

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Sasamoto: As regards positioning of the channel, we dont want to see ourselves as simply in the music channel domain. In this light, every entertainment channel aimed at 15to 34-year olds is our riva l. Fox Japan and AXN would also be our competitors. So, as far as positioning MTV Japan, we want to maintain the image of a music entertai nment channel. As far as business is concerned, we dont want to be seen simply as the MTV you find on cable or satellite broadcasting. As a media brand, MTV also offers content on the Internet and to mobile phones. MTV is an acronym for Music Television, but from the current media structure MTV Japan considers, we dont want to use the word television too much. The en tire advertising market in Japan is worth 6 trillion yen, but the market fo r advertising on satellite broadcasting is at most 20 billion yen. At the same time, the Internet-based advertising market has grown quickly over the past five years to the point where this year its worth over 200 billion yen. We feel theres no point in limiting ourselves to the 20 billion yen market a nd must think about getting a piece of the 200 billion yen arena. We feel we want to create a media brand that straddles the interactive advertising mark et and the cable/satellite advertising market. Oba: Where is the value in MTV Japan from MTV Networks or Viacoms perspective? Sasamoto: There are two main benefits for them. One is access to Japan, the worlds second-largest advertising market. They find a huge value in Japans advertising market as a source of revenue rather than the Japanese multichannel market. Also, Japanese ability to create content, such as animation, is prized in foreign market s. So, theres the idea of MTV taking this kind of content to the foreign ma rket. Japan also leads the world in mobile phone technology. We are a model for the rest of the world in terms of how to create mobile-based business. So, Japan is an important country as a source of both quality content and emergent technology. These strengths are utilized not only by MT V but also Nickelodeon. Oba: From the opposite point of view, what does it mean for MTV Japan to be affiliated with MTV Networks or Viacom? Sasamoto: I think being a member of MTV Networks is more important to us than our association with Viacom. We are able to obtain content from worldwide MTV channels, though it makes up but 10 to 20% of our programming. Rights to the music videos are settled comprehensively in the home country, so from a cost point of view, we have an advantage over Space Shower and Music on TV. With regards bargaining power, we have the significant backing of MTV Networks. For example, if a Japanese artist wants to do promotion elsewhere in Asia, they are unable to promote on any music channel but ours. MTV currently airs a program called Buzz Asia, which introduces artists from Japan, Korea, and Taiwan to each others viewers. Since music is essentially an intangible product, there are some aspects of it that cannot be explained theoretically. For example, we have secured the services of quite a number of artists for reasons, such as that they dont want to appear on Space Shower but want to appear on MTV. There are some parts of the business that remain immune to business dealings no matter how much money you throw at them. We get a lot of requests from famous artists to appear on our large-scale annual music awards show, MTV Video Music 255

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Awards Japan. Thats because its MTV. For the artists, we have a lot of brand power. We have this brand power, because we have know-how, which comes from putting effort into producing images. 256

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APPENDIX G INTERVIEW WITH MTV TAIWAN July 26, 2006 Chang: Our brand, MTV Taiwan, is a mu sic-based entertainment channel. Now we have twelve locally produced shows in total. Those twelve shows are music talk shows, fashion shows, and entertainment news. So, we are full of music-based shows, because we are music entertainment channel about a young people lifestyle. Oba: I wonder if your channel cannot be seen in other areas like Hong Kong or Mainland China. Chang: Hong Kong is covered by MTV China now. Oba: Does MTV China cover Mainland China and Hong Kong? Chang: Yes. Oba: What territories does MTV Taiwan cover? Chang: We are only for the Taiwanese market, but some of Singaporean, Malaysian, and Hongkongnese have satell ite capabilities. They can receive our programs. Besides, MTV China has three MTV Taiwans shows. Oba: What percentage of your pr ogramming is from MTV outside of Taiwan? Chang: 90% is locally produced. For your reference, this is our programming grid. Many of the shows are Non-Stop Hits playing music videos. We focus on 6 pm to 11 pm as our key timeslot. At 11 pm, there is an international show. We show the VH1 show. Of course, we have U.S. MTV shows, like The Osbournes or Pimp My Ride. They are produced in the U.S. They are 10% and just put on this belt. Oba: You have some Non-Stop Hits hours in the morning. These time periods have some Western music videos, right? Chang: Yes, Mandarin and internationa l music videos. Its mix. But, we focus on Japanese and Korea music videos between 7 and 8 am. Oba: How do you choose some Japane se music videos? Is it according to the request from viewers? Chang: The relationship between MTV Taiwan and MTV Japan is closer, compared to MTV Taiwan and MTV U.S. MTV Japan gives us recommendation, and we also have contracts with some major record companies. Oba: So, do you receive a kind of playing list from MTV Japan? Chang: Yes. Oba: How do you localize foreign-ma de programming like imports from the U.S. so as to cater to Taiwanese viewers tastes or preferences more suitably? Chang: Actually, Taiwans viewers dont like American programs much. They, especially teenagers, dont like Wester n programs much. So, we basically use the prime time to offer local-made TV programs and put some Western programs after 11 pm, because viewers at that time can understand American programs better than viewers at earlie r time. Our programming strategy is based on ratings. Basically, we only put American programs after 11, and programs are basically consisting of big events from MTV U.S., like VMA (Video Music Awards) and some concerts held by MTV U.S. Additionally, programming like the Osbournes is offered. I know Pimp My Ride and TRL (Total Request Line) are very famous and high rated shows in the U.S. But, 257

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when we aired them, ratings were not good. Sometimes, local audiences may not like the American style. Oba: Do you also import programs made by other MTVs than the U.S. like MTV Japan or MTV Korea? Chang: We have added MTV Japans sc hool attack show. Its a half-hour show. Artists go to school and give the audien ce surprise. This concept originally came from MTV Korea. Korea devel oped this show, and all of MTV countries liked this concept. So, MTV Japan copied this show. It had Mika Nakashima and Chemistry as guests. We aired the program, because these artists are famous in Taiwan. We offe r VMAJ (Video Music Awards Japan). Of course, we also have some Sing apore-produced shows, because these shows always have sponsorship. For Asian markets except for Japan, MTV Asia in Singapore has some sponsorship for advertisers like Coca Cola or some other big brands. MTV Asia gets local MTV branches like MTV Taiwan to adopt some sponsored programs into the programming list. Only MTV Japan directly repo rts to MTV Networks. Oba: MTV Japan is somewhat independent from MTV Asia. Why? Chang: Because Japan is a big market. Greater China includes China, Taiwan, and Hong Kong. MTV Networks is plan ning to make Greater China an independent market like Japan. Beca use MTV Taiwan has strong production capability, creative persons, and label relationship, and record companies are very strong in Taiwan, MTV may offer the programming produced in Taiwan fir the whole Greater China. Thats what MTV Networks is planning to do in the future, but not now. I know they focus on China, because China is a big market. Currently, MTV Taiwan is under the supervision of MTV Asia in Singapore, but MTV Taiwan and MTV China may be independent from MTV Asia. Maybe, in the future, we will offer very similar programs in the Greater China area including Ta iwan, Hong Kong, and China. Oba: Even now, you are sharing some programming with MTV China. Why? Chang: This is a basic concept of the ne twork. We share all the resources like locally produced programs. If producers in the Chinese market want to put some Taiwanese programs onto their channel, th ey just ask MTV Asia to help, and MTV Taiwan would provide them the programs for free. Its like resource sharing. And, its good for artists, because China is a big market. So, they can sell their records to Chin ese people. Thats a good thing. Oba: I dont know why you currently have separate programming services as MTV Taiwan and MTV China. Chang: Basically, we have different langu ages and characters. We speak a little bit differently. Mandarin is very common to everyone in China and maybe in Taiwan, but people have a different language, Cantonese, in Hong Kong. So, its not possible to use only one progr am for the whole Greater China area. And, some government policies are differ ent. For example, Taiwans national flag cannot be shown in the program in China. Our fashion shows always introduce Japanese products but the Chinese government doesnt like them. Because Japanese songs are not famous in China, MTV China doesnt like to play Japanese songs. Oba: How do you describe Taiwanese vi ewers preferences or tastes in terms of music programming? 258

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Chang: Local pop music is the first. On our music play-list, 70% is local music, Taiwans Mandarin music videos, and 20% is Japanese and Korea music. 10% is international. Oba: Do you mean Western music by international? Chang: Yes. We still have a brand image and an attitude to introduce Western music to Taiwans viewers. For example, ev en if Black Eyed Peas or 50 Cent cannot sell a lot of records in Taiwan and are not so popular to older Taiwan viewers, we still want to import that kind of music into Taiwan, because thats MTV attitude and brand image. We want to introduce the cutting-edge music no matter where its from the U.K. or the U.S. We want best artists to come over Taiwan. We want to introduce that kind of music. Oba: So, you have no choice but to accept the offer from MTVs worldwide promotion, even if you feel its not good for Taiwanese viewers. Chang: Its not something like that. It s MTVs responsibility to introduce it. This year MTV marked its 25th anniversary, and Robin Williams and Madonna are originally from MTV. Its not be cause of sponsorship but just MTVs spirit that MTV in each country has. We want to support some music and artists we think good. Oba: What is the defi nition of good music and artists? Chang: Basically, music is coming from the U.K. or the U.S. They recommend some good music or good artists. We try to think as Taiwanese people how good the music is. You cant ignore the market s taste. We make our decisions on what the imported music is like. And, we also need record companies supports. We have an artist of the m onth to promote a certain kind of artists or music intensively. We promote it if it deserves our support. So, we still use Taiwanese tastes for music to make the decision. But, MTV still wants to import some fresh and new things into Taiwan. Oba: Can you specify again wh at Taiwanese viewers tastes are? Chang: From directors point of view, I need to check ratings everyday. I still have got pressure from the ratings. The tast e of Taiwanese is basically pop music. Maybe, the rating will be high whenever we play pop music. The rating will be quite low if we play something lik e heavy metal or rock music. We can only offer rock music during the midni ght, because few audi ences like it. I feel a pressure to make ratings better. Oba: Do you have any freedom to reje ct the offer from MTV Networks when they try to push or promote music, which couldnt be popular among Taiwanese viewers? Chang: Basically, local MTVs have a full right to reject any requests from MTV Networks. Usually, the case is that MT V Networks will tell MTV Asia what kind of artists, programs, or music they are promoting. Ill take an artist for example. If MTV Networks wants to promote an artist, they will tell MTV Asia, and MTV Asia tells MTV Taiwan. The artist has a record label company. So, MTV Taiwan will go to th e local branch of the label company and ask if they are willing to put some resources into promoting that specific artist. If that works out, we will do someth ing. If the label knows that artist is not good in Taiwan, MTV Taiwan maybe rej ects this project. If we think it would be successful, we support it very much. Oba: You get materials or music videos from record companies in Taiwan, dont you? 259

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Chang: Yes. Oba: Do you think some MTV programming has universal appeal accepted everywhere in the world? Chang: I think its very difficult for some music to have universal appeal, because of the difference of language and culture. Oba: What about MTV Video Music Aw ards? Its been offered all over the world. Chang: The rating is basically based on th e appearance of big artists. Actually, big artists are the core of the program. For example, VMA South America wont be working in Taiwan, but the U.S. VM A with artists every Taiwanese knows is popular. We have a new channel calle d MTV Chi. Its offered in some areas with a lot of Chinese immigrants in the U.S., like New York or Los Angeles. The shows are actually from Ch ina, Taiwan, and some from Korea. Oba: What is the relationship be tween the new channel and whether or not a certain programming has universal appeal? Chang: Some Western big artists will ha ve universal appeal, but to the opposite, if you want to promote Asian music to the international market, its not so easy. One or two artists have done that. For ex ample, there are Japanese artists like Ken Hirai. Hes been to MTV U.S. fo r the unplugged show. There is another Taiwanese artist who once been to th e U.S. ten years ago. So, its quite difficult to promote local artists to the major American market. Its easier for MTV U.S. to present some big-na me artists to all over the world. Oba: Whats the main reason for U. S. musicians to be promoted easily in the world, but the opposite is not the case? Chang: I think thats something we should do to promote local artists and local music to MTV channels all over the wo rld. Its comparatively difficult, because each market is already compet itive. Every channel is working hard in the market, and only if artists or musi c is so popular, we are willing to use extra resources for promotion, like MTV U.S. to do something for the artist. Or else, we usually dont do that. There is no motive to promote local artists to the worldwide network. There is no reward. For example, we put our shows to the Greater China area, but its for free. We are just sharing resources. Unless the label company is willing to pay big bucks for developing artists for worldwide, we have no motives to do such thing. Oba: Why dont you have any motiva tion to promote some local artists on a worldwide basis. I think the bigger the market, the bigger the profit. Chang: The language and cultural part is not so easy to be overcome. For example, an artist, who is very popular in Taiwan, would go to the U.S. and be interviewed. If his English is not so good, its very difficult for him to explain himself or perform well. There is a kind of afraid that this wont be working out, because he is not presen ting himself well on the stage. I think basically Chinese songs, music, and la nguage are very difficult for Western viewers to accept, unless it is already so popular. Its just cultural difference basically. The current situation is that viewers in the States accept more Japanese music than Mandarin or Chinese music. Oba: So, is it impossible for you to promote Taiwanese programming or artists worldwide with MTVs global network? Chang: Because MTV Taiwans programmi ng is offered in most countries of MTV Asias network, like Hong Kong, Malaysia, and Singapor e, they all import MTV Taiwans show on their channels. When a label company wants to 260

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promote an artist, they will come to MTV Taiwan not only because of MTVs high rating in Taiwan but also because of our power for the whole Asian market. MTV Taiwan can send some programs and artists, put the artists on the show, and promote them in the whole Asia. But, it depends on the artist. In the case of Jay Chow MTV Japan and MTV Korea would be willing to feature him in their progr amming. But, they may not be so interested in other artists. And, this is not the case in the U.S. or the U.K. but only in Asia. Oba: Do you think music programm ing in general can cr oss national borders easily compared to other types of TV programming like animation or sports programming? Chang: Yes, I think its an easier form at to cross national boundaries compared to news, cartoons, or some other kind of programs. But, I also think music programming is basically something for relaxing. We send you music when you have free time. We are not doi ng really serious programming. So, its basically not the mainstream programming or channel among a lot of channels. So, the market is still limited. Oba: Do you think the preference or taste for music programming is not so much bound by culture? Chang: Different cultures still have so me impact on the programming. Foreign artists show their appearances or costumes differently on the TV programming. For example, in Taiwan, in Japan, and maybe in Mainland China, artists dressing on the TV show is different to some extent. Because of cultural difference, their fashion will be a litt le bit different. If you see someone dressing not like you or not like your local fashion, you th ink its strange, and the rating wont be good. It is a little bit different fr om radio, because youve got to see the pictures on TV. So, culture still has strong impact. Oba: You have some programming offered in Greater China. When you develop such kind of programming, do you initially try to target the whole Greater China, or do you first develop the programming for the Taiwanese market only and then put it to other countries? Chang: I focus only on the Taiwanese mark et. If China thinks its a good show, they will pick it. Oba: So, you dont need to take into consideration what kind of programming is preferred in the Chinese market, in the Singaporean market, or in the Hong Kong market. Chang: No. We focus only on Taiwan. Maybe in the future, we have to focus on Greater China. Oba: MTV is a global network. At present, do you think you rely heavily on MTVs global network for the acquisition of your programming? Chang: We rely heavily on the in ternational network of MTV but not for programming. Its other resources like brand-new musi c videos from the U.S. Maybe, when local label companies ha vent got the music videos, we may already have got the videos from our global network. If we want to invite some artists to Taiwan, we will rely on the international network of MTV. There is a special feature of MTV to work with global partners and affiliates. Every month, affiliates like Taiwan or Hong Kong send tapes to Singapore, and they will coordinate to see what parts are best. Then, they will have all things into one tape or one CD and give the tape or CD to all local channels. 261

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Thats where our creativity comes from. Other than programming, MTV Asia published this book for Asian MTV channels to tell MTV workers what MTV is. Oba: Do you have any regulations in terms of the amount of imported programming? Chang: There are some regulations, but we usually send a proposal to the News Bureau in Taiwan, which is responsibl e for that kind of matters. They see on our proposal what kind of programming we will have. They need local content over 50%. Oba: The quota for domestic content in Taiwan is 50%. Chang: At least 50%. Oba: Do you mean music videos or programming? Chang: Its not about music videos but programming. Oba: So, at least 50% of your programming should be made in Taiwan. Chang: Yes. Oba: What about regulations for content? Chang: There is a kind of regulation. MTV has its own network regulation. Things like religion, pornography, violence, and homosexual things cannot be shown on MTV Networks. Thats MTVs regulation. Oba: I guess younger people are sometimes more attracted to music videos, which look exciting, including vi olence or pornography. Chang: We are adding something like mosaic when we do the post-production. Basically, the principle of Taiwans ne ws bureau is You broadcast first, and I review later. So, if some viewers ar e not comfortable with what they see, they will protest and tell the news bureau. The news bureau will review the program and impose a fine or some punishments on the TV network. But, because MTV itself has very strict self -regulations, its not a big problem for MTV Taiwan. Oba: In general, what kind of advertisers do you attract? Chang: Our major viewers are teenager s, so cell phone or drink manufacturers come to MTV for advertising. Oba: Are they more multinational or domestic companies? Chang: International clients will tell MTV Asia in Singapore. They will cooperate with MTV Asia and will not cooperate directly with MTV Taiwan. Thats the pain for me. Our sales team cannot approach Coca Cola in Taiwan, because the regional office will intervene. They are approaching big artists, brands, or projects internationally. Oba: Do local advertisers have specific requests for your programming? Chang: The advertisers want to use the st rength of MTV, our creativity. Usually, they will cooperate with MTV, and MTV ma kes some commercial films for them. For example, there is an event like a street dance contest. Maybe, we make some commercial films on our own ch annel. It looks like a MTV program but actually a commercial film. There is some kind of cooperation between advertisers and us. Oba: What about their demand s or requests for the choice of music? Chang: Usually, we dont have requests from advertisers in terms of programming. They come to MTV because of their focus. Our target audience is 15 to 24 and very focused. There is no reason to change our programming strategies. We are the only one channel whos e target audience is 15 to 24. 262

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Oba: MTV is a very strong brand in the U.S. What is the situation in Taiwan? Chang: In the user session for teen agers or some younger people between 15 to 24, their brand recognition is over 90% or almost 100%. Everyone knows of this brand. But, this is not their only choi ce of music channel in Taiwan. There are a lot of entertainment channels attracting these teenagers or younger peoples attention. Oba: What brand images do they have toward MTV in this market? Chang: Cool. It is still very intern ational brand image. Even if over 60 % of our programming is local content, they s till think, This is an international channel. But, it has something good and bad. Oba: Do you think the global image or the international im age of MTV is very important for your channel? Chang: Yes, I think. Oba: Do you think you have to offer more foreign programs or foreign music videos in order to maintain those images? Chang: In terms of image, we will hope to strengthen the image that MTV is international and have a lot of new things from foreign countries. But, when people really watch this channel, the rating is the most important for MTV. We need local content to keep the viewers watching us. Thats a dilemma. If you do something you want everyone to know, you will invite some foreign artists. But, in terms of conten t, they are still local content. Oba: Isnt it difficult to maintain the global image with local content? Chang: Local content is locally produced content, but it can be international. For example, you can have a show that tells Taiwanese people what hip-hop is or international music trend. This kind of programming is local content. It doesnt just use foreign programming in its own. Add some production on it, and then you can do these two things, in ternational at the same time you are local. We are not going to present ve ry Taiwanese songs. Do you know the difference between Taiwanese and Mandarin songs? The market for Taiwanese music is not small but very lo cal. It is very local music. MTV is not going to play that kind of music on our channel. Other channels have aired it. Oba: Do you think the Taiwanese music could not be accepted in other Asian markets? Chang: There are some markets overseas, but its not as large as Mandarin music. And, as an international network, we wont choose that kind of songs and music. Its very limited, and its very local, even in Taiwan. Oba: What are your main competitors in this market? Chang: Channel [V]. But, now Channel [V ] is an entertainment channel, not a pure music channel. Channel [V] is trying to transform from a pure music channel to an entertainment channel. They have a lot of entertainment shows. So, we can say now MTV is the only music channel in Taiwan. Oba: How do you differentiate yourse lf from other competitors in terms of programming? Chang: There was only one competitor in Taiwan. It was Channel [V]. But, Channel [V] is trying to transform itself and become other things. So, there is no obvious competitor in this market now. But, there are maybe so many competitors in Taiwan, because all th e channels have a little bit music programming on their program lists. Some cable channels that are not pure 263

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music channels have some music progr ams, for example, from 6 to 7. So, you can say we have no pure competitors. You can also say we have a plenty of competitors. And, Taiwanese viewers are not very loyal. They probably are not patient to watch the whole music video. They will switch channels. Oba: So, do you think if this market is very competitive or not? Chang: Very competitive. MTV is going to insist on original fans as the only pure music channel. We insist on MTVs image or spirit. In the future, if advertisers are looking for teenagers and music channels, they will come to MTV but are not going to Channel [V], because the market becomes bigger for Channel [V]. But, at the same time, its not so pure for music viewers. Oba: MTV U.S. is no longer just a mu sic channel. They have very limited time for music videos. Are you going to follow the same way? Chang: In the U.S., MTV has many different channels like MTV, MTV2, VH1, and Nickelodeon. They can try to differentiate each channel. For example, MTV focuses on music and fashion. MTV2 is for youth and music. VH1 focuses on audiences over 30 years old. Nickelodeon does cartoons for kids. They can do very specific things on each cha nnel. But, since we have only one MTV channel in Taiwan, we still fo cus on music and our main audience. Oba: From MTV Networks perspectiv e, how important is this Taiwanese market or MTV Taiwan? Chang: The Taiwanese market is small, so its not very important. But, Taiwan is important in terms of Chinese content production, because MTV is looking for the future Chinese market. The Greater China market is very big. The Taiwanese market is important, because we have the same language. We have a very strong capability in pr oduction in Taiwan. That makes MTV Taiwan more important, but if you only consider the market, its not so big. Basically, the Chinese government doe s not allow any international TV networks to have channels in China. The programming service that now can be shown in China is a programming block, using MTVs icon on the screen just for two hours. They have a 24-h ours service only in Guangdong. Even if China is a big market, it has a lot of difficult restrictions and regulations. Oba: MTV Taiwan is the main producer of content in Mandarin Chinese. Chang: Yes. Oba: This is the opposite question. Ho w important is it for you to be part of a global television network? Chang: MTVs resources are very important for MTV Taiwan. Oba: What resources do you mean? Chang: Most important and valuable things in this network are branding and creativity. In terms of cr eativity, you get it from all over the world. We share creativity with each other within this network. For branding, of course, MTV is doing well. The international brand is very important. But, in terms of budget or some human power, we dont get them much. They dont support a lot on capitals. Oba: In spite of a member of a global network, you offer just a few percent of programming from outside Taiwan. Why? Chang: In the end, the ratings are still very important. We tried many times to import programs from foreign countries. Theyve not been so successful in terms of ratings. We need localization to adjust programming for Taiwanese tastes. So, 10% of foreign stuff will be good for Taiwan viewers. 264

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Oba: MTV now has a presence in Asia at least for 10years. From your perspective, is MTV Networks very expertis e in international business? Chang: In terms of business in Asia, the market is pretty much full of music channels like MTV. So, we have a strategy to promote other channels. MTV is promoting VH1 and also Nickelodeon into this Asian market. There is some cooperation going on. Oba: So, do you think MTV is very expertise in inte rnational business? Chang: Frankly speaking, they are not do ing very well in the international market, especially in Asia. They are doing quite well in Australia. But in Asia, they are not doing well. Oba: Do you think Asia is a tough market for U.S. firms to get into and become successful? Chang: I think a company based in the U.S. has difficulty doing business or doing TV programming in Asia. Leaders of the company maybe do not make good decisions. Its not very successful now. But, its not because the company is based in the U.S. or foreign countries. Oba: What type of difficulties do they face in Asian markets? Chang: I think the biggest issue is lo calization. You cannot just use some foreign programs to put into a market and as k the viewer to accept that kind of foreign content. You need to use your international resources, but you still utilize these resources to make local c ontent. Thats the bi ggest challenge. So, viewers will accept this is international, but its also preferable content for them. Maybe, local people need to introduce this kind of international content. We need to respect the decision from local programmers or producers. Because the economic was not doing very well in previous five years, the MTV group becomes more cons ervative in terms of investment on local franchise. Comparatively, STAR TV keeps investing lots of money, so they can make big shows and do a lot of cooperation and events. We dont have that kind of supports from the parent company. Oba: Do you think the localization needs more money? Chang: Spending money and localization ar e not necessarily equal. But, you need to have decent budgets to make decent programs. Maybe, we dont have enough budgets compared to competitors. Oba: I think it costs less if MTV Ta iwan puts content made by MTV Networks and just offers it in this market. If its true, why dont you take that? Chang: Even if you can save money, you have to sacrifice the ratings. Oba: Thats why I asked if localization might cost a lot. Chang: Making programs by ourselves cost s more money than just bring videotapes to offer. Oba: How much freedom do you have in terms of programming decision, free from MTV Asia or MTV Networks worldwide? Chang: Totally free. Oba: So, your decisions are always prioritized, even if MTV Asia or MTV Networks reject them. Chang: But, we need to reserve some time programming blocks for MTV Asias sponsorship. Oba: Are you owned by MTV Networks Asia? Whats the ownership pattern? Chang: There are no other investor s. MTV Networks owns MTV Asia, and MTV Asia owns MTV Taiwan. 265

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Oba: So, in a broad sense, MTV Networks is your parent company. Dont you need to follow what they ordered? Chang: The parent company is shari ng resources like they recommend you, This show is really good and popular in the U. S., or There is something very popular in India. Do you want to see or do you want to use this in your programming? They are doing recommendation but not intervening. But, we have some copyright issues. For example, MTV U.S. offers you some programs. But, copyrights for the programs might be owned by some production houses. MTV only has oneor two-year rights on these programs. So, we have some pressures to make decisions within the two years. Oba: At the end of the day, what do you think the most significant factor when choosing content in this market? Chang: The judgment is whether this content would be preferred by our target audience between 15 and 24 years of age. 266

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APPENDIX H INTERVIEW WITH MTV ASIA August 28, 2006 Oba: MTV Networks has many count ry specific programming feeds in Asian markets like MTV Japan or MTV Taiw an. What MTV programming feed is dedicated to the Singapore market? Varma: There are 10 different MTV f eeds in the region. You have MTV Japan, MTV Korea, MTV China, MTV Taiwan, MTV Philippines, MTV Indonesia, MTV Thailand, MTV Australia and New Zealand, and MTV India. And then, you have a feed, which we internally call SAM, Singapore and Malaysia. There is one channel that goes to both Singapore and Malaysia markets. So, its not part of Southeast Asia, because each ma rket in Southeast Asia has a different channel. Our strategy and success in the region has been localization. There are many aspects of localization. One is reflecting the tastes the likes, and the trends of that particular youth in that particular market, and the obvious differences are language and music tastes. Each one of our local markets has a very unique music style basically that comes from their own language. Oba: Im actually not sure what lo calization really mean s. Does it mean you prioritize local music, or you prio ritize demands among local viewers? Sometimes local viewers may prefer in ternational stars rather than local stars. Varma: I would like to call MTV as gloc al, because thats global and local. On two levels, one is global, because its a gl obal brand, and then another is the local part of it, because its talking to lo cal audience. I thi nk the key from our programming strategy point of view is to be very mindful of the people that we are just talking to. Thats why we have separate channels in each market. You are completely right in that ther e are many audiences around the region who look at MTV for international progr amming, whether its music or long talk shows. And then, many markets look at MTV today as want for all the local programming. So, the success lies in finding the right balance between the international and the local progra mming mix. It is very different in different markets. For example, in India, we play 95% of the music and the programs are all Indian, whereas in the Philippines, its only 60%. But, in the Philippines, there is a lot more wants for international programming, especially the U.S. programming. Its not necessarily the case in India as much. India has its own thriving film industry and therefore music industry. So, obviously our channel is very reflective of that. However, having said that, India is also a very big market, and so we have two brands there. We have MTV and VH1. VH1 is not like VH1 that you might know from America. Its very different. VH1 is the international channel that complements MTV. You and I might travel the world and see MTV all over the world. I have a lot of people who co me into Asia and say, This is not MTV. This is something else. But, for the audience, which is whats most important to us, it is MTV. It is someth ing that they have seen and developed in their own market. So, it is really im portant for each of us never to loose sight of the fact that we are progr amming this channel based on what the audience wants, knows, and needs, no t on what we per ceive it or anybody 267

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else perceives it to be. I think when somebody comes to me and says, Oh my god! Look at the music you are playing on MTV. This is an MTV. That to me in a funny way is success if its coming from a foreigner. They dont understand it at all, but probably the lo cal audience understands it, and thats very important. So, its a very difficult game to play, and its very difficult balance to strike. But, it is something that weve done very successfully in the markets and why we have the reputation of being the number one youth music channel in the region. Its becaus e we have embraced local music like nobody else has. I remember India eight years, nine years ago, or ten years ago when I started. We were playing a lot of international music. We were getting maybe five music videos a month from local artists, because nobody would play their videos. And then, they started play their videos. Now we get 25 local videos a week, because now peopl e realize that ther e is an outlet for their music, and so they create more music. They invest more time and money to create, and even the qualitys gone up. We used to get some really bad quality videos. Obviously, it is all business in the end, and its all economies of scale and economics. What was happening was for local pop artist to produce records and videos and spend a lot of money on that was not worth it, because nobody would play thei r videos. But, now MTV is playing it, so they have started spending. And then, they get popularity. They start selling records. They start spending more money on more videos. And, today weve got so many Indian videos, an d we dont have place to play any international video. Oba: Why do you have the same programming feed for both Singapore and Malaysian markets? They might have different preference for music programming. Varma: You are right. They do. On various levels, they do, but there is a nice mix of audiences in Singapore. You have a very strong Malay-Indian population. You have a very strong Chinese pop ulation, and you have a very strong expatriate English speaking populati on. In Malaysia, obviously you have a predominantly Malay-Indian population. But, you do have a strong Chinese population as well. So, you actually do ha ve very many similarities in the two markets. Also, this is our headquarters, and I dont think that right now we are in a position to create one separate feed for Singapore and one separate feed for Malaysia. I think when the business opportunity comes up to do that, we will do that, but it obviously is not one of our priorities. When we were setting up in Hong Kong, we didnt have a separate channel for Hong Kong. We use the Chinese channel for Hong Kong in China. But, there is a strong case to argue that in most of China, they speak Mandarin, but towards the south of China and certainly in Hong Kong, they speak Cantonese. And, in Hong Kong, there is a very rich Cantonese music market. So, there is a distinct need for us to create Cantonese-based programming channel, which we havent done as yet. Oba: I checked the programming line up of StarHub cable TV in Singapore. They offer two MTVs, one is MTV Southeast Asia, and one is MTV Mandarin. Which does MTV Mandarin mean, MTV China or MTV Taiwan? Varma: MTV Taiwan. Thats because again th ese are some of the restrictions that we need to work from our business stan dpoint. Our deal with StarHub Cable invites us to have two music channels So, if we start playing a lot of 268

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Mandarin music on the SAM channel, th e Singapore and Malaysia channel, which they call the Southeast Asia channel, then there is no need for them to have a Mandarin channel. So, from a business point of view, from a commitment, and from a deal point of view, there are two separate channels we are looking for. That also restri cts us from playing too much Mandarin music onto our channel. Oba: I know about 75% of Singaporean s has Chinese origin. So, I assume they prefer MTV Taiwan rather than MTV SAM. Varma: Its surprising. It should be corr ect but not necessarily the case. We get more ratings for MTV SAM than we do for MTV Mandarin. I think thats because even though their origins might be Chinese, they are very cosmopolitan country, and most kids speak Englis h and are very aspiring to whats happening out there. In terms of crea tivity and experience, they are very eager to know whats happening everywhe re else. So, in fact, some of our long form shows from the U.S. have rated very well in Singapore and Malaysia. Oba: As for MTV SAM, do you have all programs in English? Or, do you have any language customization? Varma: Most of the programs are in English with the exception of a very few Mandarin programs and one or two Malay programs. But, most of it is I would say 80% to 90% of English. Oba: Do you have some programs produced by foreign MTVs like programs produced by MTV Taiwan, MTV Japan, or the U.S. MTV? Varma: MTV U.S. and MTV International, of course, lots. MTV Japan, not consistently but very often, like the MTV Japan Video Music Awards will play here. MTV Taiwan is more, because a lot of the artists who play on MTV Taiwan are very popular in Singa pore as well. They are all the North Asian big stars. A little bit of Korean as well. So, its a mixture of stuff. But, its not to say that if a program was successful and if we thought that it worked for this market, we could use it. Thats not a problem, but we are even considering doing a chart show for Hindi film music in Singapore, because Hindi film music is quite popul ar in Singapore and especially in Malaysia. Oba: Can you give me approximate ratio of programming coming from other MTVs to MTV SAM? Varma: On MTV SAM, 60%. Oba: So, 40% is produced by Varma: Either produced here or back to back to music and things like that. Oba: Whats the main reason you offer foreign MTV produced programs on MTV SAM? Varma: Because I think that some of the shows produced in the U.S. are very groundbreaking formats. Their shows have been very successful internationally, and now because of on line and access to the Internet, kids learn about these shows very fast and want to have a look at them. About three or four years ago, I didnt think some of our international shows were as successful as they are today. There have been some hits and misses to be fair, but Pimp My Ride is obviously globally very popular. Punkd with Ashton Kutcher is very popular. The Osbournes is very popular here. I think all the big internati onal shows are very popular here. There are some of 269

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the newer ones that we are also adding on the channel, like even in the way it drops in the project, for example. Oba: Whats your relationship with MTV Networks in terms of supply of programming? Can you get whatever you like for free? Varma: Yes and no. I dont program for any channel, but all the programs across the region report to me. So, my colleague collects all the information from international and all the shows that are available, and then we distribute it to all the channels in the region includi ng Australia and New Zealand. So, the answer to your question is yes. All the shows are made available. Some shows in the U.S. today are co-produced with third parties. When they are co-produced with the third party, it is possible that there could be a small fee applicable to that acquisition. But, I would like to say 80% to 90% of the shows are available to us at no fee. There are two ways you can get the shows. One is you can take the actual show, and the second thing you can do is you can take the idea and make it yourself here. Oba: When I had an interview in MTV Taiwans director she said basically Taiwanese viewers dont like American programs much. CEO Sasamoto at MTV Japan also said the share of the market that wants to see American program in Japan is very small. He sa id its probably about 10% in Japan. How about the situation in Singapore? Varma: I think it is much higher, but there is two ways of looking at that. Thats what I was saying that sometimes its the idea that works. Lets say, Pimp My Ride wouldnt work in Japan, unless you do it in Japan. Thats what I am saying that sometimes the idea is so strong that you need to apply that in the local context. If tomorrow you created a Pi mp My Ride in Japan, Im very confident it will be succe ssful if you have the right host. I know how much Japanese kids love their cars. Honda and everybody there have racing team there. So, if you would create a show to pimp cars in Japan, its going to be successful. I will bet my money on it. But, if you carry the American show or the U.K. show, it wont be as successf ul. So, yes, I agree, but no, I dont agree. The same thing in Taiwan. Taiw an market is very influenced by the American market. Basketball, hip-hop, all are influenced by America. But, what the Taiwanese do very well is they translate that very quickly in their own context. And, I dont only mean language. I mean making it more relevant to them. So, the biggest hip-hop artist for Chines e audience is still Jay Chou. When he does hip-hop, he will sell ten times more than Eminem. And then, the same thing is shows. I thi nk they are right in saying that if they were to take a lot of American s hows and put it on MTV Taiwan or MTV Japan, it wont be successful. But, the fi rst step is to add a subtitle or dub the show, and the second step is to create the same show in Japan or in Taiwan. Then, it would successful. So, I agree with them, but there is a caveat. Oba: In reality, there are some programs produced by MTV Networks and offered on the global scale, like the Osbournes or Pimp My Ride. Do you think those programs are produced intentionally to target worldwide audience or are they made initially for viewers in a specific country like for those in the U.S. and then just export to othe r countries or markets? Varma: It is very difficult to create a s how that will be successful in multiple markets. The successful show is to create a show that works in your own market because of the hype it creates in your ow n market. You can then export it. So, 270

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to answer your question directly, every show that is ever produced is produced for a singular market. It is very difficult to come up with a concept for a show that works in more than on e market at one time. I am trying to think of a show that has had that su ccess. Even The Amazing Race hasnt had that success. The Amazing race is a pretty popular show. You look at CSI, which is today one of the most talked about shows globally. It is made for one market, but it exports itse lf really well. You look at The Office, a classic example, a show produced by the BBC in the U.K. Its very funny, and a lot of people added the s how on their channels. America added on their channels, and now they make thei r own version of the Office. It just explains to you the theory. The Osbournes was made for MTV U.S. It was such a phenomenon success that people started saying, I want to see that, and they started seeing it. But, it is made under any circumstances with intention of appealing to one market. You will see what happens there. From a programming strategy point of view, if you were tryi ng to please Goro san in Japan and Mr. Kim in Korea, I am trying to think of an idea that works for both of you. That means I am definitely not satisfying anyone of you 100%. So, I rather satisfy Goro san 100%, and then you say, Why is Goro san so happy with the show? I want to see. I will show it to you. Oba: I think the Music Video Awards show has a kind of uni versal appeal, though. Varma: It does, absolutely. A music award is the only thing that has opportunity to travel. We do The MTV Asia Video Music Awards, which is quite successful across the region. If we were to play only international artists and Taiwan artists, Taiwan will love the show. But, Taiwan has a problem when they see an Indian artist. They have a problem when they se e a Thai artist. So, you will always have that one problem. So, if we wanted to make it really successful, we should play 10 international artists and two local artists from each market and give them separate edits of the show. It is possible, but its just a headache. Yes, it has more range to travel. Thats like a music video. I dont consider that a programming format, because its like a music video. You get a music video Britney Spears will play in every market, and everybody likes it. Now she is not making the song, though. You can say that she is making the song to make sure she has got global domination with the song, but her primary market what she sings about and what she talks about is the U.S., which is her home market When Ayumi Hamasaki creates a song, she doesnt think about exporting it outside. She first wants it to be a hit in Japan. When its a hit in Japan, she tells people, OK, now its a hit. Please try and sell it for me in another market. Even music or anything you do, you will always want to make it a success in your market. Like when you do your book, you probably will do your book in Japa nese, release it in Japan, and if its successful in Japan, then you want to release it in another market. Oba: Do you think music programming is in general able to get across the national boundary easily compared to other t ypes of programming like animation or sports programming? Varma: Sports cross. You play a football for practically every country in the world and want to see it. I think there are shows like sports, music, and, not as much but also animation have more possibility to transcend different markets than anybody else. The thing is music. Thats good as that if you dont understand what the artist is saying, if you like the beat of the music, you 271

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still appreciate the song. Thats what music transcends. But, when you are watching football, you dont care what language they are speaking. You just want to see the game. In any sport, you want to see the game, and you dont want to hear anything. And, anywhere in the world that you watch the game, you are probably getting commentator speaking in their local language, so thats localized. Its no longer intern ational. The same in music. I guess music does cross. It does cross out b oundaries, but again, if you go across the region, you will see outside artists sell diff erent numbers in different markets, like if you go to Indonesia, its a very rock heavy market. If you come to Singapore, singer-songwriters are much prolific and also se ll much more. If you go to India, international artists dont sell so mu ch. Its all local artists that sell. So, it really depends. So, to create one music block that works across the region is very difficult. The music probably then have to be different. So, if I was to play the same songs on half an hour block in all the markets, I would be very surprised if I get the same ratings in each of those markets. Oba: What is the specific charact eristic of Singaporeans taste for music programming in general. Varma: Its very varied. I think that ther e is a huge taste for international music, but there is also quite a wide spread, beca use, like you said, 70% to 75% of the audiences is of Chinese origin. They want Chinese repertoire. All the big artists especially from Taiwan are ve ry successful in Singapore. So, I think its quite balanced in terms of the music. Oba: Compared to other Asian markets? Varma: Yes, compared to other Asian mark ets. Like I said, if you go to India, 95% is local music. If you go to Taiwan, 90% is Chinese music, and the same thing in China. In Taiwan, they watch a lot of Japanese and Korean music and, of course, International. So, about 20% of music that we play on the channel is a mixture of Japanese, Korean, and Inte rnational, and the rest is all local music. In Thailand, 70% to 80% of it is local music. In all our channels across the region, its minimum of 80 % local music. Two channels are different. Philippines is where also there is a lot of English spoken music thats played. So, I would say that in Philippines, we have about 70% of local music and, in Singapore, local music is very low. Its maybe 30% or 40%, most of it coming from Ma laysia and not Singapore. Dont forget that an artist is relatively successful in Singa pore, because the market is so small. They usually export themselves to Taiw an, like Stephanie Sun who is one of biggest female artists in the region. She signed to the label in Taiwan, not in Singapore. Oba: Do you mean its sometimes ha rd for Singaporean viewers to get only the domestic music, because the amount of local music is very small compared to other markets? Varma: Yes, absolutely. But, I dont th ink they look at Taiwanese music as domestic music as much as they look at it as language. They look at it as Chinese music and international music. There are 10 or 15 artists in Singapore who sing Mandarin and are releasing albums. Its not much more than that. In your own market like Japan, for example, thousands of artis ts are releasing music. And, in the end, there are few ar tists in Malay, but obviously if you were to sing in Malay, you are be tter off singing in Malaysia. You make 272

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much more money there. So, its unfortunate, but this is not a big enough market for an artist to create a career here. There is a good artist called Ado in Singapore. Stephanie, like I said, is now signed to the label in Taiwan, but Ado has still signed with the label here in Singapore. But, obviously he spends his lot of time in China and Taiwan, marketing his music, because thats where he will get his money from. In Singapore, you will do really well if you sell over 30,000 units, and you can t make a career out of that. So, you have to sell it in China, Taiwa n, Hong Kong, and all other Chinese speaking markets, to try and recover cost of the record and also make some money for yourself. Oba: People in general speak Mandarin Chinese rather than Cantonese Chinese in Singapore. So, Cantonese language mu sic is not so important here. Varma: Not as important. Dont forget that still the phenomenon in North Asia is especially the Chinese speaking markets. A lot of your artists are also film stars. You might get an artist like Sammi Cheng who is a big Chinese film star and also a top Hong Kong singer. But, she can never be as popular as Stephanie Sun, for example. Oba: So, if Chinese singers try to b ecome more successful, they have to sing in Mandarin Chinese even if they are originally Cantonese. I think actually thats what most of Hong Kong singers try to do. Now, for Hong Kong singers, its common to sing in Mandarin Chinese. Varma: Right. There is an export market for Cantonese music like I said, but in Mandarin, you have far more. I think even if you go down to Thailand, to Malaysia, or to Indonesia, all the Ch inese in those countries are more Mandarin speaking Chinese than they are Cantonese speaking Chinese. Oba: Let me ask you something about advertising. I think you have two main revenue sources, one is revenue fr om advertisers and one is from multichannel platform like cable operators or satellite broadcasters. As for advertisers, you may have pan-Asian re gional advertisers as well as very domestic advertisers, which want to reach a specific country market. Which one do you have more? Varma: There are a lot of global or inte rnational brands that advertise on all our channels. Dont forget that our channel is perceived to be more of an A+ and B+ audience profile. So, there is a certain kind of a product that you would see on a channel. If you go to our In dia channel and you see some of the commercials on the India channel, they are very different from commercials on some other channels in terms of th e kind of products. You have a lot of regional sponsors like Motorola, Toyota, and brands like that. Nokia wants to align themselves with the youth across the region. So, you speak to MTV as a region. But, in certain markets, you might want to do a local. There are certain companies like Pepsi or Coca Cola. They are changing now again, but until a year or two y ears ago, they were doing no pan-regional purchases. So, we had Pepsi buying on many of our local channels. We had Coca Cola buying on many other local channels, but we didnt have a pan-regional Coca Colas, because they were not spending like that. When Toyota makes a decision to spend on MTV, the decision comes from Japan. But, if Toyota Thailand wants to do something with th eir office, the decision comes from Toyota Thailand. So, it really depends. In a certain scenario, if you take 273

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Toyota India as an India client, then the local advertising is far greater. If you take Toyota India as part of a regional client, then the region is far greater. Oba: Whats the common request from advertisers in term s of programming? Do they have any special request or demands for your programming? Varma: Not really. I think a small a dvertiser looks for a small brand fit. Oba: What does that mean? Varma: For me, MTV is a very unique brand where MTV talks to the kids 24 hours a day. When you go to an entertainment channel, you buy into a show, specifically because you get an audience to that show. With MTV, you get an audience that comes in and out all the tim e. They are kids and very flipping. So, I am not doing anything for half an hour. Thats what you do. Its not pre-planned. I have a certa in time that I watch AXN, for example, on Sunday, because there are some shows that I like that are coming on that time. Thats a more adult audience. Thats an audience for a very entertainment-based and time slot-based channel. MTV is not yet th at kind of channel. So, I think that the brand would look to align itself with MTV so that when MTV talks to an individual or more of the youth across the Asia, then they are saying, Oh, MTV is somebody that I listen to, and this brand on MTV must be pretty cool. It must be a brand that I should associate myself with. So, it does not really matter which show that they are there. It more matters that they are there in principal. However, having said that, there are certain brands that also look for a further association. So, they look at MTV to create an opportunity to bring themselves out of situations. For example, Motorola had a situation where they felt that their brand was established in the market, and you could rely on Motorola, but it didnt have the wow factor. It didnt have the edge. And, they needed to align themselves with someone that would endorse them. That would allow their kids to say, Ah, I should consider this brand. And so, they came to us. And, what we did was we created something that was very unique to Moto rola. I really respect the gentleman, who is driving the Motorola brand, by the name of Neil Stewart. I really respect him for the fact that he walked to our lives and he said, This is my brand Motorola. Its a great brand, but it does not have th e edge. I now got some new products that have the edge. I want you to tell th e kids that I got this product that has the edge. So, we said, What are you looking for? He said, I dont know. You do. Its your ch annel. you decide. And, that was really good, because what he did was he trusted us with his brand. We came up with some really over the top ideas to send the message that Motorola is not an old peoples brand. And, when we did phone that was an MTV Motorola phone, the numbers of the phone jumped by 600% the sales. So, he has been with us ever since as an ad vertiser on the brand, and we together have developed a property that work s for both of us. So, thats a good example of how an advertise should a nd could work with MTV, and thats sort of right way to work with MTV. Y ou are part of the landscape and find a unique hook point within the landscape that you sort of make your own. MTV and I bring you this experience. For example, with the Motorola phones, we made a commercial where we had all these noises of people farting and burping, saying, Use thes e as your ring tones on your Motorola phone. Motorola person looked into and, Oh my god. But then, we said, Trust us. 600% increased. Fra nkly speaking, only MTV would have 274

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thought of doing something like putting a fa rt as a ring tone. So, we do crazy things, and thats what people or brands come to us for. And, we are for the audience as the first stop for music and music information. So, it is very important for lot of the brands to be with us. Oba: How is the MTV brand perceived by Asian viewers in general and Singapore viewers specifically? What brand image do they have toward MTV? Varma: I think the brand image that they have is Its my MTV because of the localization. It plays music that I like. Its relevant and creative. Its aspired, because there are lots of things that happen on MTV that you would want to do. And, very importantly its very real, because the faces you see on MTV are very real faces that are from your own market. Thats really important when you have a host hosting a show. In Japan, when you see the channel, Japanese people are hosting the show When you see it in Singapore, Singaporean people are hosting the show, and that makes a big difference. That makes it real, that makes it mine and that makes it believable. So, I think MTV is still definitely the pref erred choice. To be fair, we do have some competition in some of our mark ets, but in most markets, we dont have any competition anymore. In fact, we dont consider music channels as our competition. We consider mainstream television as our competition today in most of our markets. In some markets like in Thailand, in Philippines, and in India, we still have Channel [V]. There is a local channel in Philippines, which is competition fo r us. I still think that they look at MTV for information, for aspiration, fo r relevance, and for creativity, and dont forget all reality show s that you see today. It first started with MTV with The Real World many years ago. They look at us for something new. Its like only MTV could have thought of that. Its difficult, because the audiences are very picky nowadays. It s difficult to make them happy. Oba: Are you making any efforts in programming so that you can maintain those brand images? Varma: Yes, thats part of my job as long as my colleagues is to come up with new ideas and new execution of pop shows that would work across the region. If anybody tells you from a programming point of view, its all about ideas, ideas, and ideas. I think there are some basic formats that work. Every idea that you see is an extension of that format. So, its not a rocket science. But, the thing to do is to push them, a nd we are constantly looking at opportunities and ideas. We can present it in a different format that makes it more intriguing or exciting for people. What is the most popular thing in most markets are talk shows. On every channel everywhere its a talk show, but you keep looking and say, Oh, this one is great. Whats the difference? They are all talk shows. In Japan, you have thousands of talk shows, and you have thousands of those entertainment va riety shows. All are the same format, but you prefer one or the other, because either the host is very good, or the guests are very good, or whatever it is But, there are not many different formulas. They all are very same ev erywhere you go. But, how do you create the opportunity? I think the success for me is to find the obvious and just make people realize that. So, wher e you do it with the Osbournes, the obvious was, Oh my god. This family is completely mad. If they allow me to show the world how mad they are, I would be really happy. So, the world got mad. Seriously, you just look at th e obvious, and you take away from that. 275

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You look at Ayumi Hamasaki, for example. Today, she is still very popular, but three years ago, she was a mega st ar. Anything you do with her would be successful. So, even if you ju st do the half an hour show of Ayumis dress, how she makes an album, how she reco rds an album, and how she does her marketing, for every kid in Japan, it w ill be amazing to see that. Wow!! This is what she does. This is what Ayum i does in the morni ng, in the afternoon, in the evening, and in th e night. Its not a great idea, but because I know that every kid in Japan loves Ayumi, I just want to find the way to get Ayumi on the channel. When the World Cup was going on, if she did shows in the World Cup football, everybody will be watching. So, its getting the right timing, understanding what the people wa nt, just putting those all together, and then presenting it in a form th at nobody has ever presented it before. Thats it. What I will do is, if she gi ves me permission, I would do a search in Japan to find Ayumis boyfriend. Can you imagine if MTV suddenly said you get a chance to be Ayumis boyfriend? You have to do this, this, and this. You know how many people will stand in line to become her boyfriendthousand of people. Who beco mes her boyfriend is not important, but the fun you will have is what they are willing to do to become her boyfriend. You tell them to jump off a three-story building, and she might go out to dinner with you. Then theyll ju mp. So, I am just saying that you can use just the Ayumi phenomenon and try a nd cover up with 20 ideas to make it exciting. I think the success and what we always look at is to find out. Like I said, its not rocket science. Its just to be able to find out whats the topic of time, whats the buzz at the moment, or what can be the next buzz at the moment. And then, use that as a tool to create something thats linked to that. And thats what constantly change it and constantly adapt it, because our audience is today not patiently willing there to see the same thing again and again and again. Oba: I heard there were a number of Ayumi Hamasakis followers all over the Asia. I still dont know why she became so successful all over the Asia. She basically sings in Japanese, and in my view she is not necessary the one and only superstar in Japan. Varma: I remember when she came to perform for us in Singapore and when she came in, there were so many people outside. Sighing and screaming fans. They came one day before, waiting for her to come. I think the package is very important. What Ayumi did very smartly is that every time she came out with music, she had a different image. I think that she made herself so successful from an image point of view and the music was also so good that if she put both together, its like Madonna. Madonna will hate me for making the comparison, but you think abou t Madonna. She cant sing, but the package is fantastic. Look at Brittany She cant sing, but the package is fantastic. These girls very successful ly present themselves very uniquely every time they come out with a piece of music, and they market themselves really well. So, whoever does their mark eting is very smart, because if you actually think about it musically, its nothing exceptional. You listen to this artist, Ayaka, when you go back to Japan. She is very new and signed to Warner Music. She is 17 years old and fantastic. Now, will she be as successful as Ayumi? I dont know, because she does not have that package. She is a true singer-songwriter. She wr ites on her own music. So, she will not 276

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dress like a doll, which will make it mo re difficult but will take longer. The thing about people like Ayumi is that Ayumi will peak and fall and peak and fall: image, release, peak, and then fa ll. People like Ayaka will stay. She will be stable. You will enjoy the Ayumi phenomenon when its there, but when its not there, you will forget about it. But, you will always remember a good artist. Do you remember Spice Girl s when they were there? Everybody bought the album. Nobody listens to it a nymore. But, you rotate. You listen to it all the time. Oba: Whats interesting is Puffy, a Japanese duo, is very successful in the United States right now because of their anim ated films. But, I think Puffy is probably not so popular as Ayumi Hama saki or somebody else like BoA in Asian market. I think the difference between these cases resulted from the difference in preference between Am ericans and Asians for females pop artists. Varma: I also think it might be just th e success of the animation in America. That helps the artist. Did you ever hear of the phenomenon that was called F4? Its a funny story. There was an animati on series in Japan called Meteor Garden. I dont know what the Japanese name is. That series was then taken over in Taiwan, and they made it real life. In real life, they hired four boys to be the main actors. It was so successful that it was broadcast in every country in Asia except India as a TV series. Sony BMG signed the four boys as artists, and they called them F4. Ev ery time the series was released, Sony BMG would release the album. They sold millions of albums across Asia. In the Philippines, they would sell. Th ey went to the number one in the Philippines in Mandarin. It was not because of the music. It was because the TV series was so successful. Because the TV series was so successful, everybody bought the music. It could be the same phenomenon. Oba: Is it common for Asian view ers in general to perceive MTV as an international or global channel? Are they usually associating MTV with something global or something international? Varma: I think they associate MTV as a local channel that gives them global viewing opportunity, because, like I said, even if you see international shows in Taiwan, theyre all subtitled or dubbed in to Chinese, and the same thing is in Korea and in Japan. So, even though you know its an intern ational show, its being played to you in a local context. So, they look at MTV as their channel, which means a local channel that plays their music and international stuff that they like. Oba: Then, what does globalization mean for MTV Network? Varma: If a globalization strategy was to be really accurate in my mind, I think that there is a great value to have an overall strategy a nd be into the overall brand. But, I think that it needs to be execu ted very carefully. With MTV, I think you need to have some core brand values that are unified across the world. If you dont steer away from those, people might look and feel different in each market but globally say the same thing. The best litmus test for doing something like this is to ask kids in Singapore, kids in Taiwan, kids in America, kids in Poland, and kids in maybe Mexico. Ask them all the same question about MTV. If all the answer s are the same, you got a global brand. If all the answers are different, you don t have a global brand. Just by calling it MTV doesnt make it a global brand. It needs to translate into the same 277

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thing. So, I watch MTV for music. If a ll the kids say that, MTV is music. I watch MTV, because its creative. I watch MTV, because its relevant. I watch MTV, because it gives me my be st shows. Whatever those qualities are and whatever those brands are, its got to have the same answers when you ask the question in any market. That makes it a truly global brand. It doesnt matter whether it is a red color, it s a green color, or its a blue color. It depends on your translation. For me, as a television channel, it has to mean the same thing for each person around the world. If it does, then youve got a global brand. If it doesnt, you dont have a global brand. Bu t, there are two ways of looking at it. When you talk to Coca Cola, they will probably say something different. Theyll say, I dont care what anybody says. Its got to be red. Its got to have this. Its like Nike. Its got to have the Swish. I dont care what it looks like. But, Nike in e ach market can create products in each market that are unique to that particular market. As long as it has the Swish, it makes the connection. So, its different applications. For me, this is what I think MTV should be. Starbucks is co mpletely opposite to what I said. Starbucks whole mantra in life is that I get the same experience anywhere in the world. So, I get great coffee. I get the same environment when Im in the shop. I pay the similar price. The cup looks the same. The coffee tastes the same. And, there are a lot of people who argue the same. But, I am in China, and how come it tastes the same? For me, its fantastic, because I love my coffee, and anywhere in the world, it tastes the same. For me, thats one of best companies in the world. Oba: You mentioned glocalization earlier. I wonder if it is difficult to maintain the global image while attempting to cater to local preferences or local demands. I think there are some kind of conflicts or disagreement between the global image and the localization of content. Varma: Yes, they could. I dont know if there are any conflicts I think that when they see an international show and when they see a local show, they absorb it very differently. When they see an in ternational show, they see it as an international show, and then they look at it as a wow factor. Wow, this is what they do there. When they see a local show, its more about part of what I do. This is part of what can happen to me. So, I think the acceptance or the message that is given in both cases is very different, but both are accepted. I think they do want to know. They want to be hip and cool. So, thats the kind of thing that I think kids today are very greedy and want information. They need information over and over to make themselves significant, if not successful. They just need to exist. And, to exist today, you need to have that power and knowledge, and they want that all the time. So, they would want it in various levels, and the entertainment is one key factor. Music and sport are two grids where people draw off th e boundaries, and they can communicate and speak one language. You will always find a commonality with music. You will always find a commonality with sports. So, there are certain kinds of music, and there are certain kinds of sport that are very equal along the world. If you are a football fan, and I am a football fan, we ll start talking about football, and well go to our ow n countries, well go to the European League, then well go to South America maybe, and you dont know how far you will go. So, basically what Im saying is that they do want that knowledge of whats happening out there, and they very importantly want 278

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not to lose the knowledge of whats happening in their own market. That is why they want to listen to internationa l music as well as they love their local music. Oba: Do Asian kids in general are curious about whatever exciting regardless of where it has happened? Varma: Right. I really believe that th ey are no longer satisfied with the basic knowledge. I think what they learn on the Internet in many cases is far more relevant than what they learnt in school today, because you get lots of applications when you go online and you do your own research. Oba: Sharon Chang at MTV Taiwan says that MTV always needs to import and introduce some fresh and new things into local market, even if they might not be so popular to local viewers. Sh e says thats MTVs attitude. I wonder if this policy made something go ag ainst MTVs localization strategy, because they might not be n ecessarily accepted by local kids. Varma: It will go against the localizati on policy if you are not willing to accept you made a mistake and then change it. So, if today we see a new show in the U.S. that we know has been successful, thats not the level of the Osbournes or Punkd or something where the whole world knows how successful it is. There are some other shows that I belie ve have been successful in the U.S., but they havent yet come as terms of mainstream knowledge outside of the U.S. Wed be very happy to air that on MTV, because its one of our products. If it doesnt work, well be very happy to remove it as well. I think that one reason why weve been accepted with our audiences is also because we are quite honest. In a sense, if something doe snt work, well simply say, Fine. It didnt work. Sorry, well give you so mething else. And, I think if you are willing to accept that, then thats good. Th ats what we need to do especially with our audiences who are very, lik e I said, constantly wanting more information, more creativity, and more relevance. They look for changes every single day. So, if its not working, then wed be the first one to say its not working and get out of it. So, I don t think it goes against the localization strategy as long as youre identifying the right shows for that particular market. The key is to really know who your audience is, what they want, and what could excite them. In all our market s, we make it a very serious point to continuously check with our audiences. So, research plays a big part in our life. Oba: In general, how important are Asian markets for MTV Networks? Varma: Very important. Its definitely one of the growth markets. I think there are lots more we can do in each one of the markets. There is more local production that we can do in each one of the markets. So, its still on a growth curve. MTV has shifted the dial in the U.S. If you go to the U.S., people complain that they dont play music on MTV anymore. You have 10 or 15 videos in a day. Here, you still see a lot of music on our channels. I think you will see a shift in the progr amming, once the audience is ready for it. I think you will see more local pro duction. I think we are certainly a long way to go and have lots more to get down. And then, there is a whole digital strategy that will come into play. Plus, there are other channels that we would launch. Weve launched VH1 already in many of our markets, Thailand, India, Australia and New Zeala nd, and then we adjust some blocks that are sold separately. 279

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Oba: MTV Taiwan has some programming block on the evening for VH1. Varma: Right. Oba: I suppose you as an Asian headquart ers play a role of ki nd of an intermediate between the MTV Networks Internationa l and the local channels like MTV Japan, MTV China, or whatever. Then, whats your response when there are some disagreements between MTV Netw orks and the local perspectives on programming? For example, MTV Netw orks tries to put a particular programming on a global basis, but some local channel says, No, it was not acceptable in this market. Varma: Its a difficult question to answer but nine out of ten times I will support the local channel. I will respect the person in that market, because that person would have the best knowledge of that market. There are some shows that I believe can have traction in a local mark et, and so sometimes I would step in and ask them to carry something. But, very often I tell MT V International, No, because I really believe that it is ve ry important. It firstly is very rare for that to happen. The way we operate is that MTV U.S. will create a program that they think has been suc cessful. Very rarely do I get a call from MTV International, saying, You have to air this show. Sometimes, I get it for pro-social messages, and I even reject those. I dont even go to the channel sometimes, because I myself can tell that its not going to work because of a pro-social message that is made in the U.S. especially about the situation of the world today. I keep explaining to them that we broadcast to markets like Indonesia and Malaysia, which are very Muslim heavy. And, something that might make sense in an educated adult market in any part of the world, if you are playing it to a Mu slim audience, would not mean the same thing. So, I will not blame that market. When 9/11 happened, I remember they did a one-hour special on what happened in that market, and I refused to play it. And, I had a problem because the head of the company got really upset with me, saying, How can you say no to something like that? And, I said, There are a lot of Muslim people here who think differently, and I am not about to put our channe l and our people at risk, because you think its the right thing to do. I am sorry. When I explained it to him like that, he understood. There are certain shows that are a bit too risky for some of our audiences in Asia. We do have to be concerned with cultural sensitivity, something that somebody mi ght feel. And, you see this is another thing that we very conscientiously d o. We pay attention to how something might translate in a local market, and if we think that its not tasteful, then we wont air it, even if it means its successful. So, even with the Osbournes, we were wondering in some of our ma rkets, like in Indonesia, whether we were scared. And, we had a bit of a de bate between my Indonesian colleague and myself, saying if we should air th at, because it can be perceived as entertainment, but it can also be pe rceived as Look. This American channel is doing all their nonsense again, spoi ling the minds of our youth and stuff like that. So, you have to be careful. You have to pay attention to these requirements, and you have to strike that balance. So, I think that some of our shows in Indonesia do far more successful than any of the other markets. But, the kind of shows you air in In donesia are different than the kind of shows youll air in Korea or in Taiwan. In the month of Ramadan, we completely tone down the channel fo r Singapore, Malaysia, and Indonesia, 280

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because thats their holy month. We ha ve to pay respect to that. And, we dont even play videos with women in tank tops and stuff, because we respect their ideologies and their religi ous beliefs, and we dont want to push it. So, I think that is recognized not only by the governing authorities in that particular market but also by even the audiences that we are mindful to. In MTV Indonesia, five times a day on the channel during the Ramadan month, we break for the prayer. We actually r ead the prayer on MTV. Which MTV in the world would do something like th at? And, most people from America would be like, How can you have pr ayers on MTV? Are you mad? Thats not MTV. Thats not cool. For Indonesian, it is. Oba: So, you have much autono my or freedom when you decide your programming independently from MTV Networks International, and also you give much autonomy or freedom to your affiliates like MTV Japan to decide their own programming. Varma: Yes. Oba: MTV Japan is a joint venture, while MTV Asia is 100% wholly owned by MTV Networks. Vaama: I dont know if its public knowledge, so please be careful, but MTV Japan is now no longer a joint venture. But, yes. Till such time, its a joint venture. We have a deal in Indonesia, in the Philippines, and in Thailand. Otherwise, all our channels are 100% owned by MTV. Were just having some structural changes in our company as well. Basically, our President here will be the head of MTV Networks Asia Pacific. So, all the channels from New Zealand to Japan will fall under this headquarters. Oba: Whats the advantage to be part of a global tele vision network like MTV Networks? How can you take advant age of the global network? Varma: I think one of the biggest advant ages is the people. I think you have some really amazing individuals all over the world that you can share. I recently helped somebody from America who works with our Korean channel. Hes brought a lot of assets to it. One of my colleagues from this office is sitting in Japan right now. So, I think to borrow talents from different parts of the world and allow them to share their vi sion in a local context. Somebody from, lets say, Mexico comes to Singapore and starts programming in a Mexican style. I think its a Mexican translatio n of whats happening here that makes it very exciting and makes it very unique which makes it very different and gives it a different perspective. Its still local but gives it an international flavor. I think thats very important, and I also think through these people, I have come across some really unique ideas that had worked. Markets like Europe and markets like Latin America are very similar in many ways like Asia. So, Ive been able to use some of the experiences that theyve had in those markets and translate them into an Asian context successfully. Thats really important. Also, the fact is that there is a whole library of material being created every day amongst all our channels around the world, and there are now 100 plus channels around th e world. They are all called MTV, so I can borrow MTV from anywhere and put it onto any of our channels here in Asia. Some of ou r spots that weve created in Asia have played in other channels around the world. So, thats a great advantage that I have. All our channels have a library to choose from. Thats a big advantage. Another advantage obviously is the fact that MT V is one of more powerful brands in 281

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the world, and you are part of that fam ily. It helps you in simple negotiations. It helps you in a lot of othe r things. But, apart from th e fact that its a great company that is run really well, I think the success of MTV always lies in its people. And I think strangely the humility and the humbleness of the people is part of its success. So, MTV is being as relevant and creative as it attracts a lot of creative people, and that is great. You get thes e creative people all over the world who are dying to work with MTV, because MTV allows you to express yourself creatively. MT V pushes the boundary like no other networks do. Many advertising people ha ve some great ideas and want to do these great things, but they cant do it, because that particular brand wont let them do it. But if you come to MTV, well let you do it. Oba: You mentioned human power resources, content resources, and brand resources as well. From the perspe ctive of cost reduction, which one, localization, I mean producing content for each market, or sharing content among some markets, is more efficient? Varma: Obviously, if you take the same show and play it in 10 markets, it is going to cost less than producing that same sh ow in 10 markets. But I think if you would take an international show, tran slate it, and put it into ten markets, then the revenue that you can get from them and the ratings you get from them would be far less than if you would have produced the same show in each market. It will be more expensiv e, but your revenue will probably be higher. So, if you want to define cost ef ficiency in relation to P&L (profit and loss), then creating your own product on the ground would be far more effective. But then, on the other hand, if you were to take one show and play it in all the markets simultaneously, you dont need so many people. So, you bring your operational cost down, whic h means your revenue needs to be less. To me, if you do it right, localiza tion process is bound to be richer in revenue. Oba: I know global TV networks lik e Cartoon Network, Discovery Channel, or ESPN make their local affiliates to contri bute to or to make an investment in the development of the programming content, and their programming is shared among those affiliates. Is that the case for MTV? Varma: Not necessarily. Weve done some, and weve not done some. It really depends. We have the mother ship, which is MTV U.S. that creates some phenomenal shows for the U.S. market, which are so good that they work in other markets. Thats fine. And then, if we think that an idea is really good, but it doesnt work in its original state, then we take the idea and create it again locally. So, we dont have too many situations where we need to contribute financially towards the product. Its very rare. 282

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APPENDIX I INTERVIEW WITH CARTOON NETWORK JAPAN March 16, 2006 Oba: Is all of your content made up of animations? Suetsugu: We have celluloid, 2-D anima tion, clay animation, and small number of puppetry-based programs. We are purel y an animation-based channel and have no live-action content whatsoever. Oba: What are main supply sources of your programming? Suetsugu: On Cartoon Network Japan, we offe r three basic types of programs. The first type comprises original Cartoon Netw ork programs, which are principally animations made by Cartoon Network U.S. These are then translated into Japanese and shown on Cartoon Networ k Japan. We also air a number of animated features made by Warner Television of the Time Warner Group. We have a library of both old and new programs, all animated shows from the Warner Television collection, for example, programs such as Tom and Jerry, Bugs Bunny, Batman, and C artoon Classics. Finally, we have what we call third party content, wh ich is all content from neither Cartoon Network nor Warner Television. These programs have no real affiliation to any network but are purchased by Cart oon Network if they are thought to meet with our programming standards. An example of this type of program that we are currently airing is Pi nk Panther, which we purchased from MGM. The animated version of Mr. Bean is produced by the BBC. We are able to access The Charlie Brown and Snoopy Show from an agency called United Media dealing with the Snoopy brand in Japan. We also purchase content from large production compan ies such as Dentsu or Canadas Decode Entertainment. In percentage terms, around 18% of our content is original Cartoon Network material, while Warner content accounts for another 12%, giving us a total of 30%. The remaining 70% generally comes from third party producers. Oba: Do you pay for content from Cartoon Network and Warner Television? Suetsugu: We do. Cartoon Network Japan is not wholly owned by Turner Broadcasting and so operates as a private en terprise under a separate name. Oba: Is there any difference in budget for when you purchase content from Cartoon Network and Turner Broadcas ting and for when you purchase third party content? Suetsugu: Theres no hard and fast rule. Third party content may be quite cheap, but on the other hand, theres some expens ive content, too. There are also conditions regarding the length of time these programs are available. Cartoon Network and Turner Broadcasting program s are not especially cheap. Theres no real distinction in budget. We coul d always cut back on the amount of the U.S. Cartoon Network content, but Cart oon Network Japan, as a part of the Cartoon Network brand, should always be offering a certain amount of Cartoon Network content. And, of c ourse, some of the programs most popular with our Japanese viewers are Cartoon Network products. But, its true that we dont have a minimum pe rcent amount of our programming set aside for Cartoon Network content. Hashida: If we were to have quotas like that, there would proba bly be problems, such 283

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as who would take responsibility when those quotas did not bring good results. Oba: Do you have anything like a shopping list of the programs from which you choose when you purchase programs from Cartoon Network U.S. and Turner Broadcasting? Suetsugu: We choose programs from a huge list of titles. Excluding special cases or circumstances where we cannot broad cast due to copyright concerns, we choose pretty much at will. Oba: Isnt it difficult to pick out a future hit from all the animation produced around the world? Suetsugu: Its tough work. We go to the MI PCOM and MIPTV websites to help unearth material. Oba: What sort of things do you think about when you select content? Suetsugu: Whether or not it will please Cartoon Network Japans target audience. Oba: What is your target audience? Suetsugu: Our target audience is childre n under 12 and their parents, men and women, 35-45 years old demographic. Oba: What are the attributes of th e viewers that Cartoon Network Japan targets? Suetsugu: In order to be able to view Cartoon Network Japan, you first must have to subscribe to cable television or Sky PerfecTV. So, we attract many families who are interested in culture and willing to pay for access to various programs on top of their over-the-air broadcasting. Hashida: Paying 3,000 or 5,000 yen a month to watch TV is paying money to take part in a cultural activity. A characteristic of our viewers that might be pointed out is that many choose to pay for access to bilingual programs for the sake of their childrens education. Quite a lot of parents want to familiarize their children with English while watching fun programs. We often hear comments like, Our kids copied so me of the English dialogue [from Cartoon Network Japan programs]. It seems that a lot of parents want to expose young children to English progra ms. We have chosen a number of famous and highly-regarded animated programs for preschoolers from various countries for our Pipora Pepora section. Oba: Are the foreign-produced programs all dubbed into Japanese? Suetsugu: As a channel catering to children, our programs are on the whole dubbed, but a tiny percentage of them are subtitled. Hashida: And, the dubbed programs are also broadcast in the original English as dual-language programs. Oba: Which countries are the most highly regarded as producers of animated content? Suetsugu: Id say the U.S., the U.K., Canada, and Japan. Oba: Are the programs you purchase from Cartoon Network and Warner Television American-produced? Suetsugu: Most of them are American-mad e. A small percentage of them are produced in Korea under a subcontracting sche me, but for all intents and purposes, they are created in the U.S. We acquire third party content from a number of different countries. Oba: Do Japanese viewers re ceive the American-produced content well? Suetsugu: We have a wide variety of anim ation fans here in Japan. You have the one who is into bishojo (cute, young girls) animation genre and another who is 284

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into robot action shows. In the same way, you have fans of foreign-produced programs and those who prefer Japanese-made programs. Yes, there are viewers who enjoy American content. However, to say that they watch only American content is a mistake. In f act, many of them are perhaps not aware of the origin of the pr ogram when they watch it. I dont think its even possible to lump all the American-mad e content together in one group. For example, Superman is clearly an American-made program, but Teen Titans is produced in the U.S. in a Ja panese animation style, and as such doesnt really come across as American. The characters faces and body movements resemble those of Japanese animation. And, sometimes programs, which may look American, turn out to be made in France, Australia, and so on. So, I dont think theres a demogra phic out there saying, I like this, because its American. The tastes of animation fans cannot be so easily generalized. You get things like, I like A, but I also like B. Its not possible to evaluate animation with simple distinctions like American-made and Japanese-made. Our slogan at Cartoon Network Japan is animation around the world is here for you. The divers ity of the countries that produce our programs is one of our appealing features. Hashida: Animation is a difficult genre to categorize. Our main viewing audience is children, and children lo ve just about all types of animation. Suetsugu: Little kids dont usually thi nk about where a cartoon was made when they watch it. As long as it is entert aining, thats enough for kids. Oba: But, dont you find there are sometimes concepts in foreign animation that are not understood by Japanese viewers because of cultural differences? Suetsugu: I think Japanese audiences would feel as little discomfort watching American programs as Americans do watching Japane se ones. In general, the Japanese lifestyle is becoming more westernized. Many of the American programs we air on Cartoon Network Japan are based on conventional American lifestyles, so I dont think Japanese viewers woul d feel alienated by their content so much. For example, we dont have many programs dealing with the lifestyles of Native Americans. Theres very l ittle on Cartoon Network Japan, which is complex or difficult to understand. Hashida: For example, we dont show any satires of the current U.S. administration or other such things, which would be di fficult for Japanese to comprehend. Suetsugu: Most of the programs broadcast by Cartoon Network Japan are one, which portray everyday life or are based in out er space or the future. Just about anyone can understand the themes of outer space or the future. Oba: Are there any original Cartoon Network Japan programs? Hashida: Not at this stage. However, Japan Entertainment Network, which runs Cartoon Network Japan, is a joint ve nture, being 20% owned by Itochu Corporation, and 80% owned by Turner Broadcasting. These two companies have created a mutual fund and are working on producing animated programs. And, there are plans for Cartoon Network U.S. to develop programming in collaboration with Japanese partners. In fact, the robot-themed action serial, IGPX, is made by a Japanese studio called IG, which is invested by Cartoon Network U.S. Suetsugu: We also have some older Japanese-made animation on our programming schedule as third party content. Carto on Network Japan caters to viewers 285

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needs, and, of course, there are vi ewers who want to watch Japanese animation on our channel. Oba: What exactly are Japanese viewers needs? Suetsugu: That, of course, depends on the in dividual viewer, but our target audience is children up to 12 years old and their parents. These adult viewers seem to like programs they watched when they were younger. Tom and Jerry was once broadcast on over-the-air television. Programs, such as that one, appeal to parents for nostalgic reasons and also to kids, who find them fresh. Younger viewers are interested to lear n that they are watching the same programs their parents enjoyed when they were children themselves. This is the kind of thing we consider when choosing content to air, so theres not really any preference given to American-made programs or Japanese programs. Its more a case of tailoring to viewers tastes. Oba: Programs made by Japanese or w ith direct reference to Japan seem to have large acceptance among Japanese viewers in other genres, such as music or sport. Does animation fall into this category? Suetsugu: The answer to that is not entirely clear-cut. Hashida: There are some animation-only ch annels competing in this market. There are those, which broadcast only Japanese -made content, but Cartoon Network Japan is an international animation channel. At present, we have around 4.8 million household subscribing to our channel, so we believe theres definitely a market for the inte rnational content we broadcast. Oba: How many subscribers do you currently have? Hashida: Around 4.86 million househol ds subscribe to our channel. Suetsugu: Cartoon Network recommends its af filiates to tailor their content to their local market. Cartoon Networks in India, Taiwan, and Australia, for example, each feature completely different programming. Hashida: Each international Cartoon Netw ork is entrusted with complete control over what they choose to offer. Each country has different tastes in what they like in their animation, and this is rooted in culture. Th e understanding is that if their programming was chosen for them by the headquarters, then they probably would not have as much success. Oba: What sort of tastes are rooted in Japanese culture? Suetsugu: Well, its actually more accurate to say market than culture. For example, 20 years ago, Tom and Jerry was broa dcast every evening on over-the-air television. Anyone who was a child at that time grew up loving Tom and Jerry. Even middle-aged Cartoon Networ k Japan viewers love that program. The same goes for Snoopy. Viewers feel a certain familiarity with these characters. Hashida: Snoopy is incredibly popular in Japan among people of all ages. Products bearing the characters images are everyw here, and fans are not just kids but also their mothers. This phenomenon ha s historical reasons behind it. So, if we broadcast Snoopy programs on Cartoon Network Japan, we get great results. Oba: When Cartoon Network Ja pan chooses content programs, do you worry about any content of a viol ent or sexual nature? Suetsugu: Of course, we give it our utmost attention. We dont accept any programs, which have been considered problematic in the U.S. Over there, Detective Conan is always aired at a time mo re suited to adult viewers, although it 286

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would be difficult to do the same here in Japan. In that program, every episode begins with a shooting or a killing. Very little Cartoon Network Japan content features death or kil ling. After all, we have a lot of young viewers, and we dont want to expose them to such graphic scenes. Hashida: We actually have at Cart oon Network Japan an established standard regarding violent or sexual content. Animation has a wide-range of genres, and while there are a number of adult-oriented programs, our principal audience is children. So, an important poi nt in program selection is whether parents would like their children to watch the program or not. Oba: Dont you ever choose program s that are a little ou t of the ordinary? Suetsugu: At the moment, thats not some thing that concerns us. However, we have ideas to start offering a small amount of adult-oriented content on a limited basis. Hashida: We are constantly weighing up new ideas, for example, whether to begin airing the adult program, Adult Swim, wh ich is aired late night in the U.S. Suetsugu: Adult Swim is a savage sa tirical animation along the lines of The Simpsons. We also air on Cartoon Network Japan the Aardman Animations productions (famous for Wallace and Gr omit) Creature Comforts, which is more of a program adults will chuc kle at than a kids show. We air it on Saturday nights. But, because it contains no depictions of violence, its also fine for children to watch. Oba: Are there any restrictions on wh at kind of content can be aired in Japan? Suetsugu: We adhere to the guidelines set down by the National Association of Commercial Broadcasters in Japan. Oba: How about restrictions on the amount of imported content? Suetsugu: No, there are none like that in Japan. Oba: What is your main source of revenue? Hashida: Advertising and carriage fees. Oba: Which portion is bigger for you? Hashida: Im not at libert y to disclose the exact ratio. Oba: Do platforms such as Sky PerfecTV and other cable television operators provide suggestions re garding programming? Hashida: Those are the people closest to our actual viewers. We get opinions from them like, Programs like this are popul ar now, and This kind of thing is selling well. We treat this as one of the forms of feedback we receive. Of course, we also pay attention to the feedback we receive at our customer center and on our website. Oba: What kind of requests do you get a lot of? Suetsugu: A lot of people want us to air bilingual programs. There are a lot of mothers out there who want to expose their children to English. Oba: What kind of advertisers do you tend to attract? Hashida: We get a lot of entertainment industry companies, like movie distributors, for example, and also companies making animation character merchandise. I think thats because its directly lin ked to our content. We also have child-oriented food and drink companie s, and theres quite a few English language learning material makers. Oba: Do your advertisers ev er give opinions on program content? Suetsugu: Not so much. Most of them place ads on us knowing what kind of channel Cartoon Network Japan is. 287

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Oba: Is there any movement on the part of the multinational corporations to push more foreign-made content? Hashida: No. Cable television is target me dia, so we have a greater chance of reaching a certain viewer than over-the-air br oadcasting. As a result, I think they choose programs according to their products, for example, products that they want parents to notice and buy for their kids. I dont think whether they are multinationals or not has much to do with it. Oba: How is the Cartoon Network brand perceived here in Japan? Hashida: Its recognized as an anim ation-only channel. I think the foreign and bilingual content is another asso ciated image. Also, I think the mischievous and energetic image is strong, too. I think the slogan we started using this year, animation ar ound the world is here for you, has been well interpreted. Oba: Is there anything you have to pay attention to with regards programming in order to maintain such a brand image? Suetsugu: I think the brands image is that of an international animation channel. We actually air a great number of internationa l programs and also ones that younger children can enjoy. We dont offer any programs that might scare or upset them. Oba: Who are your main competitors? Hashida: Other animation channels such as Kids Station, Animax, Disney Channel and Nickelodeon. Disney launched a new animation channel last summer called Toon Disney. Oba: Cartoon Network is in direct competition with Disney Channel and Nickelodeon in many markets around the world. How do you distinguish your channel from those others in the context of the Japanese market? Suetsugu: Cartoon Network Japan offers fa r more third party c ontent. Nickelodeons content is something like 90% Nick elodeon-produced. And, about 80% of Disneys programming is Disney materi al. But, since they do have a very well-known character in Mickey Mouse, I think it would be difficult for them to use outside content. Cartoon Network Japans content is only about 30 or 40% Cartoon Network and Warner materi al. I think because we are aiming to show content from around the worl d, our programming selection doesnt show any partiality to a certain br and, while Disney and Nickelodeon air mostly their own material. Oba: How is Turner Broadcasti ng connected with the management of Cartoon Network Japan? Hashida: The board of directors is made up of staff from Turner and Itochu Corporation. Most of the decisions regarding management are made here. Decisions regarding programming are le ft to Japan Entertainment Network. Basically, Turner is not involved with anything outside of protecting the Cartoon Network brands image. They dont tell us to devote a certain percentage of our airtime to Cartoon Ne twork material or anything like that. The heads of Japan Entertainment Ne twork work in close contact with Cartoon Network Asia/Pacific Headquarters in Hong Kong. Oba: Is Japan an important market for Cartoon Network? Hashida: Its extremely important. By As ian standards, and even global standards, our market commands a large share of ea rned revenue. Its very much an important market, so much so that headquarters in Hong Kong have 288

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designated the development of the underlying potential in the Japanese market as one of the corporations priorities. Oba: Is it important for Cartoon Ne twork Japan to be part of the Cartoon Network group? Hashida: Thats an essential factor. We are under the umbrella of Cartoon Network, an internationally expanding brand. And from the point of view of programming, if we were not a member of this gr oup, we would not have access to the programs, which make up the basis of our programming schedule. Suetsugu: If we were not part of Cart oon Network, it would be difficult to know what to air. We would lose our identity and our ability to put together a broadcasting schedule. We dont ha ve any restrictions regarding programming, but we have to maintain an identity. Hashida: We have strong horizontal links with the U.S., Hong Kong, and Indian Cartoon Networks at the management programming, and production levels. For example, if we have an interest in a program India has produced, they will send it to us. Theres a strong se nse of sharing products among members of the same network. Cartoon Networks in several countries have bought Pinky Dinky Doo, by the Sesame Workshop of Sesame Street fame, as third party content. Suetsugu: We sometimes broadcast by chance the same content that you find on Cartoon Networks in other countries. Cartoon Network Japan used to air a program called Little Robots, which was once part of an educational program segment called Tickle U on Cartoon Network U.S. Since all Cartoon Network channels have a similar identity, we all end up offering the same sort of programs. Oba: Do Cartoon Networks ev er collaborate in producing content? Hashida: Im not exactly sure of that. Oba: What is the most important point for consideration when choosing content to air? Suetsugu: Whether or not our target audience of children under 12 and their parents can relax and enjoy the program. We choo se funny, enjoyable shows that may also be good for you. If we veer from these guidelines, its possible to include almost anything. But, with all the internationally-produced material we look at, we choose programs based on content rather than country of origin. Oba: For viewers of animation, are the characters the most important point? Or, is it the storyline that is more important? Suetsugu: Its both. But, for younger viewers especially, strong characters are more important. Little kids are attracted mo re by the look of the program rather than the plot. 289

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APPENDIX J INTERVIEW WITH CARTOON NETWORK TAIWAN July 25, 2006 Oba: Is all of your programming anim ations, or are you incl uding any other types of children programs? Chou: Generally, 99% is animations. Oba: What about the remaining 1%? Chou: We have a movie franchise (time block). Sometimes we have action movies. They are not animations. Oba: Are the action films for kids? Chou: Yes. Oba: So, all of your programming is for kids, isnt it? Chou: Not really. We dont define Ca rtoon Network as a kid channel. We hope adults also watch Cartoon Network. But, to be honest, the main target is kids. Oba: How can you define the main target of your channel? Chou: This is last months our audi ence proportion. 25% is boys 4 to 9, and 16% is girls 4 to 9. Oba: You are attracting younger viewers compared to other channels. Chou: Yoyo and Disney are kids channels. They have light shows and in-house programs. They have more mother view ers who ask their kids to watch. But, Cartoon Network is simply an anim ation channel. There are not many females who spend time to watch us. Oba: Even if you define yourself as an animation channel, not a kid channel, you have larger proportion of kid viewers under 9, compared to Disney or Yoyo. Why? Chou: It is because now we have some Japanese shows popular for that target like Mirumo De Pon. During this year, they are very popular, so we have more kids who watch us. Oba: What percentage of your programming is from outside Taiwan? Chou: We have only one show made in Taiwan. The rest is all from abroad. Oba: What type of programming is that? Chou: Its animation for preschoolers. Oba: Except for the programming, do all programs come from foreign countries? Chou: Right. Oba: What is generally the most popular country as a produ cer of animation in Taiwan? Chou: I think there are three markets: Japan, America, a nd the rest countries. American animations are mainly from Disney Studio. Japanese animations are like Miyazaki and other famous Japanese animations. And, for the rest of the world, they may attend animation festivals and get awards. There are some local movie distributors for them. Oba: What are the main supply sources you are importing from? Chou: We have original Cartoon Network shows. We call them CNOs (Cartoon Network Originals). Theyre all Americans. We also have shows from Warner Brothers like Superman and Batman. We also have some older titles from Hanna-Barbera. They have a lot of titles like Popeye and The Yogi Bear Show. Actually, we have a kind of relationship with CNO, 290

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Warner Brothers, and Hanna-Barbera. We invest more on CNO, because we gain more than just programming. Th ey are our properties on a worldwide level, which have been created specifically for Cartoon Network, so we exploit licensing, merchandising, and mobile etc with them. Warner Brothers and Hanna-Barbera should be left out of this group, as we only acquire rights to broadcast on our channels. It is more like a straight program acquisition agreement. And, besides that, we have most of the rest titles from Japan. Oba: Are they coming from Cart oon Network Japan or ot her productions in Japan? Chou: We buy Japanese animations dire ctly from Japanese productions or through local vendors. Oba: What is the percentage of your programming coming from Cartoon Network U.S., the library of Warner Brothe rs, or from others, respectively? Chou: In the weekday of 2005, 30% was from CNO, 9% was from Warners library, and 34% was from Hanna-Barbera. Ge nerally, Hanna-Barberas shows are run in the midnight. And, the remaini ng 27% of programming is from Japan and Western countries. For the past six months, we actually have added more Japanese animations. Taiwanese like to see Japanese animations very much. For the whole month of June, shows in the top 20 on all local animation channels were almost all Japanese. You can see only Mulan is Disney Pictures Studio, and Mr. Bean is a live action show of Disney. Yoyo is currently number one kid ch annel in Taiwan. You can see almost all of their top shows are Japanese. For the top 20 on Cartoon Network, only three titles were from Warner Brothers Studios, and the rest were all Japanese. Oba: Are you offering Japanese animations more often than Disney Channel or Yoyo do? Chou: I think Yoyo and Cartoon Network may show the same proportion of Japanese animations. Disney is special, because their recent policy is to show more Western or Disneys library shows. They dont have much Japanese animation. Disney showed a lot of Japanese animations two years ago, but in the recent two years, I think their policy has changed. Because there is Disney Land in Hong Kong, their policy is to show more Disney animation to attract kids to go to Hong Kong. Oba: This channel, Yoyo, is your rival. Do they offer the same titles as yours? Chou: Programs like Doraemon or Detective Conan have many seasons. Maybe, they have more than 10 seasons. So, licensers maybe sometimes give two seasons to this broad caster and the rest to another broadcaster. But, for most shows, they have only one, two, or three seasons. So, generally licensers select only one broadcaster. Oba: It depends on the number of episodes, doesnt it? Chou: Right. Doraemon used to be maybe the top one in Taiwan. Kids and adults like to watch that. Oba: Do even adults like Doraemon? Chou: Yes. Not many adult viewers actua lly are very old yet. They liked Doraemon when they were kids and still watch it. Oba: Do you have anything like a li st of programming from which you can choose content? How do you choose content from a huge programming list of Cartoon Network and Warner Brothers Studios? 291

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Chou: They give our Hong Kong headqua rters a list, and we choose which one may be suitable to our viewers. Hong Kong headquarters may find some titles only suitable to India but not suitable to Taiwan. Then, they will pick them up only for India. What they give us is a complete list of what they have. We have a lot to choose. We dont have to take all of them. Oba: Isnt it difficult to choose ri ght content for Taiwanese viewers from a large number of titles? Chou: We can choose from all of the Warner Brothers animations. But, they sometimes have some deals with m ovie channels. We may wait for a few years to get a movie title. But, for animation series, we can always get them very soon. If a new episode or a new season is shown in the U.S., we can take it maybe six months later. Oba: Can you get those programs from Cartoon Network U.S. or Warner Brothers Studios for free? Chou: We have to pay. Oba: Which one is more expensive, to purchase from your affiliates like Cartoon Networks U.S. and Warner Brothers Studios or from the third party? Chou: Actually, we invest more in CNO. We develop license and merchandise business for CNO. But, as you know, Japanese animations now are very popular, and their license price is amazi ng in Taiwan. Its very expensive. Many Taiwanese vendors are very successf ul to do Japanese animations. They get all rights and sometimes want to sell us a package. Do you know Naruto? If we want to buy Narut o, the vendor may ask us to buy other three titles put in a package. Weve got to pay a lot. Vendors can deal with all rights. We, a broadcaster, can only buy TV rights. Generally, Taiwanese vendors get the price finally, and we ca nnot deal directly with Japanese production companies, so making the pr ice higher and higher every year. Oba: So, in a nutshell, whats your priority when choosing content from a number of titles? Chou: When we buy shows from the thir d party, weve got to take the cost into consideration and also li cense periods and runs we can use. Generally for Japanese animations, we may use six r uns in two years. Thats a license period and the number of runs. Vendors sometimes give us only four runs in two years. The cost is very high. If we can only show four times in two years, we think its not worthy of spending a lo t of money. For program content, we think if this show is for our target or not. Our target is between 4 and 14. If the show is for teenagers, like Naruto, kids will watch Naruto, but more audiences who watch Naruto are teenagers or older men than 14. So, we have to think if Naruto is suitable for our channel. For boys, I would take comedy, adventure, and action. Girls may like a kind of magic animations like a Japanese show, Magical Doremi. Oba: Do you also have animations fr om countries other than the U.S. and Japan? Chou: We have many preschooler shows from Western countries, Europe or Canada. Oba: How are those shows perceived by kids? Chou: I emphasized preschoolers, because they dont have obvious taste for Japanese or not. Preschoolers mother s watch the show with them. Mothers think Western preschooler shows are al so very funny because of the image. 292

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Actually, Japanese preschooler progra ms have not come to the Taiwanese market. Most of preschooler animations are from the West. Oba: I heard in Japan that parents like their kids to watch U.S. animation films in English for the educational purpose. Is this also the case in Taiwan? Chou: I think its the same. Oba: You are offering a large number of foreign-produced animation films. Are they all translated into Mandarin Chinese? Chou: Yes, we translate all shows to Mandarin Chinese. Oba: Are you using dubbing or subtitles? Chou: All kid channels in Taiwan have subtitles. Oba: How about sounds? Is the sound English or Japanese orig inal version, or are you also using dubbing? Chou: We dub all the show into Manda rin. But, there is some special programming block. They will show in original language. Disney has some franchise for movies. On Friday midnight, they wi ll show original English version. Oba: Do you have two sound track s from which viewers can choose either Mandarin or English? Chou: We dont do that. But, some broadcasters do that. Actually, we think we are an animation channel, not a kid channel. We are not interested in English-learning programming. Oba: You are using both subtitles and dubbing. Why do you have to use both? If animated characters speak Chinese, I dont think you need subtitles. Chou: Like you say, actually they are speaking Mandarin. But, Taiwan is very special, as audience is very used to sub titles. If we dont ha ve subtitles, they feel they lose something. Oba: You might be able to use onl y subtitles. Given an animation film coming from Japan, of course, characters speak Japanese originally. But, if you add subtitles, you dont need to use dubbing. Chou: I think, for animation program s, younger audience pref ers dubbing. But, if the channel is a movie channel, like a Western movie channel, they will not dub. HBO, a movie channel, just uses s ubtitles, and there is no dubbing. But, for animations, they will dub. Oba: Cartoon Network Japan hardly uses subtitles. Almost all programs are dubbed into Japanese. But, you are usi ng both dubbing and subtitles, arent you? Chou: Yes. Actually, the cost is very high. I dont know the price in Japan, but I think the dubbing in Japa n is very expensive. Oba: Do you think animation pr ogramming in general can cross national boundaries easily compared to other types of programming like music or sports programming? Chou: I think so. It is not difficu lt to understand animations. If you dont know the language, you dont enjoy music at al l. But, you can just watch and understand animations. Popular animati ons like Disney or some Japanese animations generally have a lot of commercial promotions. Other programming like sports doesnt have much promotion. So, I think animations can cross internationally easier. Oba: Why are animations promoted so heavily? Chou: I am just taking the case in Taiwan, because its an important business in Taiwan. Because Japanese animation is important and big business in Taiwan, 293

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Taiwanese vendors do as much promotion as they can. And, we also have a lot of animation fans in Taiwan. Oba: Do you think Taiwanese viewers preference has some influence on your programming decision? Chou: Definitely. Oba: Dont you think preference fo r animations is bound by culture in each market? Chou: Yes. I think, in most American and Western animati ons, characters speak quickly and a lot. But, in Asia, kids dont speak as much and quickly as American kids. Oba: I am not sure whether people sp eak fast or slowly is related to cultural influence on animation. What is the relationship between them? Besides, you are using dubbing. Viewers do not know how characters originally spoke. Chou: Youve got to keep the origin al dialogue and conversation. There are also American jokes or American festival s like Halloween. Kids dont even know what Halloween or Thanksgiving Day is. With that kind of things, theyve got confusion. Oba: Do Taiwanese kids easily unders tand Japanese cultures featured in animation films? Chou: They understand them very much. I think Taiwanese kids are very familiar with Japanese cultures. So, its no t a problem for them to understand Japanese shows. For example, you ha ve a lot of hot springs in Japan. Taiwanese kids are familiar with them, but maybe American kids dont go to hot springs a lot. And, Taiwanese kids also like characters, which look cute and lovely. American-style characters l ook very strange. Generally, American animations cant come to the Taiwan ese market, because their characters look very strange. And, Taiwanese kids like interesting stories. I think a Japanese animation is very successful in a story. Taiwanese kids also like a slower story. I mean tempo. As I to ld you, American animation characters speak a lot and quickly. Thats why Am erican animations are difficult to come to the Taiwanese market. Oba: Which one, Japanese animation characters or stories, do you think Taiwanese kids typically like or both? Chou: I think both. Oba: What do you think of animati ons produced by Studio Ghibli of Japan? Do you think their shows are too Japan-orient ed or appealing to other countries? Chou: I think they are very Japanese style. But, the shows are not much regarding culture. You just understand the story and dont need to really take culture. I think its not difficult for foreign people to understand. Oba: You have some animations produced by Cartoon Network U.S. and offered globally. For example, The Powerpuff Girls is perhaps watched all over the world. Do you think those animations produced by Cartoon Network U.S. are targeted at global audiences or are initially made exclusively for the U.S. audience and then exported to other markets? Chou: Cartoon Network Asia/Pacific also invests in th e production of Cartoon Networks original shows. Actually, we spend more. We can give some suggestion to them. We do provide inte rnational inputs from Asia in the Cartoon Network shows, as they are being developed. But, the final decision is depending on American Cartoon Ne twork. They are still the dominant 294

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decision-maker in the productions at our Cartoon Network studios, as they are the key investor in each series. Id say sometimes they still have a kind of American perspectives. They are still using American thinking to do the show. We think its just an American style, but Cartoon Network U.S. may think its global. Because Cartoon Networ k is developing globally, the global image is important to Cartoon Network America. I think they are getting more consideration for the global imag e. The last time the president of Turner Broadcasting came to Taipei, we asked the same question. He said, Of course, its global consideration to develop animations. Actually, many people complain that many of Cartoon Networks original shows are very American style. Characters look ugly and do not work in Taiwan. Oba: Do you think its possible to develop some animations, which can be popular all over the world? Chou: I think its possible. Power puff Girls is the one. Cartoon Network also co-produces animations with French and Japanese companies. This is another Powerpuff Girls, Powerpuff Girls Z. Its also co-production between Cartoon Network, Toei, Aniplex, and TV Tokyo. Oba: They try to modify characters more Japanese style. Chou: Yes. It started to run this month. Actually, I thi nk characters are really better than originals for Asian people and kids. Oba: What I found interesting is that the development of them has nothing to do with Cartoon Network Japan. Why? Chou: Its supposed to be a deal be tween Japanese animati on studios and Cartoon Network America. Oba: Do you have any regulations or restrictions on content? Chou: Of course, we are not allowed to show drug-use, sexual, or violent content even in the midnight in Taiwan. For so me shows, dialogues are very strong. We may not put them in the daytime but in the midnight. Oba: Are they your self-regulati ons or regulations by the Taiwanese government? Chou: The government has an agency to check us regularly. Sexual content and too violent content including a bloody image are not allowed. Oba: Japanese animations are someti mes criticized as being too violent, though. Chou: Local broadcasters including us will not show that kind of show if its too violent. Do you think Naruto is too vi olent? By our definition, its not too violent, and its still popular in Taiwan. Oba: Given a program, European might think its violent, but Asians might not, and vice versa. Chou: Yes, and I think it is very subjective. This show, Bobobo-bo Bo-bobo, includes very strong dialogues, but Cartoon Network America still shows this type. They think the dialogue is interesting and funny We think it cannot be shown in Taiwan. Oba: What about the regulation in terms of the amount of imported programs? Chou: We dont have legal regulations, but the government encourages us to produce more in-house programming. We dont have the formal regulation for the percentage of imported prog rams. Generally, the government just cares about if our adver tising is too much. They have regulations for advertising. We sometimes get concerns later from the government like, Your advertising is too much. But, fo r the past two years, we have never gotten the concern from the governme nt about content or programs. 295

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Oba: Why, as you mentioned, is th e government concerned about the amount of imported programs? Do you have a sufficient amount of animations made in Taiwan? Chou: Yes, but a very few. Oba: It could be difficult to offer a large number of Taiwanese animations instead of imported ones, because there is a very limited amount of Taiwanese animations available. Chou: I think the government just enc ourages us to work w ith local producers. For Cartoon Network, Disney, and Yoyo, the government checks every seven years if those channels are qualified. Every seven years weve got to apply for new license. So far, they think Cartoon Network, Disney, and Yoyo as general channels kids have no problem to watch. Generally, the government is not concerned about our programming content, because they think we are qualified. Oba: You have two different types of revenue sources. One is advertisers, and another is cable systems. Wh ich portion is bigger for you? Chou: Advertising. Oba: What are main advertisers for your channel? Chou: The number one is female produc ts like shampoos and lotions. The second is kids products like toys or stationary. Oba: Do they have any requests for your programming? Chou: To be honest, the sales depart ment gets comments from advertisers. Advertisers in Taiwan dont really give much advice to broadcasters. They are concerned about audience ratings. For female products, even if kids ratings are pretty low, they dont care. They only care female ratings. For female 10 to 39, our ratings are very lo w. Female products advertisers care about this. Oba: How about cable systems? Do they have any specific requests for your programming? Chou: Generally, they dont. In Taiwa n, channel distribution is a package, and we have an agency. They may put us with other channels like drama channels or variety channels. System companies ge nerally dont give us any advice. Oba: How is Cartoon Network percei ved as a brand among Taiwanese? What kind of images do they have? Chou: Funny, active, and creative. Becau se we try to present our shows in a more creative way, some kids think we are more active or funnier. I think we are improving. We didnt have local Taiwanese people working for the programming department before I came here. During that period, because our headquarters is in Hong Kong, a ll dubbing and promotion were made by Hongkongnese. Because they speak Cantonese, it was difficult to depend on Mandarin. During that time, some audi ence complained about the promotion, and the dialogue was very strange. We are improving but still behind Disney, because Disney is very good at branding in Taiwan. Oba: What do you care about in term s of programming in order to keep those images? Chou: I think we can do that with on-air promos. Oba: What is the relationship between the promos and brand images? Chou: In Taiwan market, almost ev erybody actually says our promo is very nice, because we take more cost and time to do promotion, making the promo very 296

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nice. Local broadcasters promos are just done in a very short time. Our promos quality is actually very different, compared to other channels. Oba: Is it common for Taiwanese viewers to perceive Cartoon Network as an international or global cha nnel, or do they think its just a local channel? Chou: I think kids may not think Cart oon Network is an intern ational channel, but adults know its a global channel. Oba: Do you think you have to offer mo re foreign animation films in order to keep the global image? Chou: We are a commercial channel, so we still have to serve our main target. For the main target, we cannot provide too mu ch animation from West or the U.S. But, we do want to put more interna tional images into preschooler shows, because we have a preschooler franchise. I mean a time block. We have Tiny TV, Miguzi, and Cartoon Network Theater. They are not program titles. Miguzi is between 5:30 to 7:30 pm on Monday to Friday. We put Tiny TV on Monday to Friday, 7:30 to 11:30 am. During this time slot, we put more global image actually for kids pa rents. We think preschooler kids parents like to have more global image. But, in the afternoon and evening, we put more Japanese animations, b ecause school kids only want to watch Japanese animations. Oba: Is it difficult to keep the gl obal image, if you offer only Japanese programs? Chou: Disney tries to have global imag e. Disney is trying to do not just Japanese style. But, we are still targeting 4 to 14 audiences. We may not be able to do that like Disney in the near future. Oba: You are competing with Disn ey Channel in this market. Dont you have Nickelodeon in Taiwan? Chou: Nickelodeon is already in Taiwa n, but its platform is digital cable by set-top box. Disney and Cartoon Networks plat form is basic cable. In Taiwan, almost every household has basic cable, but only a very few audiences pay another cost to see digita l cable. Its not popular in Taiwan, so I think only a few people know Nickelodeon. Oba: How do you distinguish your channel from Disney in this market in terms of programming? Chou: Disney is very good for audience between 4 and 9 and adults. We try to be more successful for kids between 10 and 14. Actually, we are very successful in 10 to 14. We try to put shows for older kids. Disney shows their movies and also has Miyazakis library. There ar e a lot of adults who like to watch them. A lot of their new shows are in credible and very strong animations from Pixer. They show those shows, making their ratings jump. Oba: You have a large number of Warner Brothers shows, though. Chou: I think Warner Brothers library is definitely the number one in the world, but unfortunately they cannot support us mu ch. They have their own business, and we have our own business. I asked for the top of management, but every time they say its not possible. Oba: Do you mean Disney Channel is more close to Disney Studio than you to Warner Brothers? Chou: Yes. Actually, Disney group has Disney channel. Oba: Are you a wholly owned subsidiary of Turner Broadcasting, or a joint venture? Chou: We are 100% held by Turner Broadcasting. 297

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Oba: How is Turner Broadcasting connected with the management of Cartoon Network in Taiwan? Whats their relationship with you? Chou: Turner Broadcasting holds Ca rtoon Network Taiwan. But, I think Cartoon Network Taiwan is just held by Hong Kong headquarters of Cartoon Network Asia/Pacific. We dont have lots of direct relationship with Turner. Oba: You dont know if Turner has a number of requests for you in terms of programming, do you? Chou: They hope us to show more CNOs Id say they will pay more attention to if we show CNOs more. Oba: Why? Chou: Its because we are Cartoon Ne twork and get shows, and because we also have Cartoon Network original shows merchandise business. So, they hope us to show more CNOs to support merchandise business. Oba: Why do you have Cartoon Network Taiwan separately from Cartoon Network Asia headquartered in Hong K ong? In general, I think Taiwanese and Hong Kong viewers might have ve ry similar preferences. Cartoon Network may not necessarily have to have two different feeds. Chou: In the whole Asia Pacific, we have three branches: India, Australia, and Taiwan. In these three countries, we have local offices. For Thailand, Philippines, Korea, Pakistan, and Southeast Asia, they are all operated by Hong Kong headquarters. I think it is becau se of advertisers. Another one is that we use different languages for Ta iwan and Indian feeds. Actually, in Hong Kong, Cartoon Network is English-sp eaking channel. What they do is not very suitable to local markets. Oba: So, did they have to devel op a Mandarin-speaking channel for the Taiwanese market? Chou: Yes. Oba: Do Cartoon Network Taiwan and Hong Kong share the same programming? Chou: We share the same Cartoon Netw ork library, Warner Brothers library, and Hanna-Barbera library. But, for anima tions from third party, we sometimes may buy only for Taiwan. Or, we can buy some titles together for Taiwan and Hong Kong. It depends. Oba: Do you have much freedom in order to decide your own programming independent from Honk Kong headquarters? Chou: Local offices cannot decide it. If we want to buy a program, we have to be approved by Hong Kong headquarters. We cannot just decide what to buy, because it has to be finalized by Hong Kong headquarters. But, they generally use our opinions. We can do our advices or any suggestions to them. Oba: What will happen if you think, This program would be successful in the Taiwanese market, but Hong Kong headquarters says, No, for some reasons? Chou: Then, we will not buy that. Oba: So, you have to follow the order. Chou: Unfortunately. But, there are some animation fans of Warner Brothers library. If we think it cannot work for Ta iwan, we dont have to use it. Thats why there are some Warner Brothers animations shown in India or Philippines but not in Taiwan. We can al so do our suggestions to see if we 298

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want it or not. But, for CNOs, we have to show them anyway, even if its not suitable. Oba: In general, do you think Taiwan is an important market for Cartoon Network? Chou: I think so, because the revenue from Taiwan now is the number three for Asia Pacific. So, it is an impor tant market to Cartoon Network. Oba: Do you think it is also importa nt for your channel to be part of Cartoon Network? How important is it to be part of a global network? Chou: I think Taiwan is actually a very tough market, because there are so many channels to show animations. I th ink headquarters knows that. How they operate Cartoon Network Taiwan is a good experience to them. For rating performance, we have been improving from the last October. Last year, we were actually very low. But, for th is year, we are improving a lot. How improved is a very good experience to headquarters. Oba: A Taiwanese leading animati on channel, Yoyo, has nothing to do with global networks, but you are part of a global network. How can you take advantage of this position? Chou: We hope the channel to be mo re localized. Actually, we dont really emphasize or look for very internationaliz ed channel. To our main target, if you pay attention to a very international image, I think it doesnt work very much. Thats why I say I can do that only during the preschooler time block, but for the rest of time block, I cannot do that. We try to localize more with dubbing and any on-air and off-air promotion. Oba: You dont necessarily have to be part of a global network if you try to localize your programming. Chou: Actually, I think it is not very important to the operat ion of the channel, because I want to localize the chan nel more. We want to show more animations local audiences like. Thats what I call localization. If local people like to watch Japanese, then we will show more Japanese. Oba: So, do you think you should be freer from the network? Chou: Yes. Of course, the top management also always hopes we can show more Western animations like Warner Brothe rs. But, I think now they know very clearly that cannot work in Taiwan. Oba: You dont rely on Cartoon Network so much. Why arent you independent from the network? Chou: I can take Disney for example agai n. Disney used to be in the same situation before. But, now Disney Taiwan is ve ry independent. They have their own budgets for acquisition. They have their production team. For Cartoon Network Taiwan, our budget is all contro lled by headquarters. But, Cartoon Network India is more independent, because the Indian market is very huge. They have more people and costs in Indi a, so they allow the India office to get more freedom to do what they want to do. But, in Taiwan, they still want to control directly. Oba: After all, what is the most important thing when you decide programming in this market? Chou: Its very simple. I think if this program gets ratings or not, and if it is going to be acceptable or popular to audiences. Oba: What types of programming usually get higher ratings? 299

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Chou: Comedy, action adventure, magic, or romance. That kind of content usually gets better ratings. Oba: Do you think whether or not those certain types of programs get higher ratings has nothing to do with where those programs came from originally? Chou: Id say that. I think Japanese animation became popular not because it is from Japan but because of its content. Japanese content is generally more popular to Taiwanese. Oba: Do Taiwanese always associat e Japanese animations with high quality? Chou: I think so. 300

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APPENDIX K INTERVIEW WITH CARTOON NETWORK ASIA/PACIFIC August 25, 2006 Oba: In Asia, you have country specific feeds for Japan, Taiwan, and India Schofield: Yes, and the Philippines and Australia and New Zealand. Oba: Where are those feeds programmed and scheduled? Schofield: They are programmed and scheduled in the individual count ries, in Japan, in Taiwan, in Australia and New Zealand, and in India. Then, the Philippines feed is programmed from here. The S outheast Asia feed that covers many countries is programmed here in Hong Kong. And, we also have Boomerang Channel, which is classi c cartoons, programmed here in Hong Kong. But, all other feeds apart from the Southeast Asia and Philippines feed is programmed in those specific countr ies themselves, but they broadcast from here in Hong Kong. Oba: Do you provide the totall y same programming on the same schedule? Schofield: No, Taiwan is programmed by Gary specifically for Taiwan, and its his decision of how he wants to make the sc hedule. Its very different from many other schedules that we create for all the feeds. Same with Japan, same with Australia and New Zealand and India, the schedules are tailored for the competitors in that market and for the viewing habits in that market. Oba: What about Hong Kong a nd Singapore? Do they have the same programming? Schofield: That is the same. The one feed that goes into most of Asia is what we call the Southeast Asia feed. Its the one pr ogramming grid and gets seen by Hong Kong, Singapore, Malaysia, Thailand, Vietnam, Cambodia, Macao, Fijia lot of different countries. All see the same one program schedule. Oba: What should I call the programming feed? Schofield: Cartoon Network Southeast Asia. We call it just Cartoon Network to viewers, but internally we call it the Southeast Asia feed that goes to most countries in Southeast Asia. Oba: Whats the reason for providi ng only one feed for those various countries? Schofield: The reason we divided off into se parate channels is for ad sales revenue. If we want to sell advertising and show it only in one country like Taiwan or Philippines, we would give them their own dedicated feed. It is not until we recognize a country like Singapore, H ong Kong, or Malaysia as very important for ad sales that we would give them their own separate feeds. The Southeast Asia feed by having the one channel means that we can make distribution revenues, which means cable operators pay us money to provide them with the channel. Our main revenue stream from Southeast Asia is distribution, not ad sales. So, it costs us less to just program one channel and send it to those many countries. It becomes bit of profit for us if we just run one feed and make the distribution revenues. Oba: Whats your definition of localization? Schofield: Its about making audiences realize that the channel is made for them. We might name programming blocks on the channel something that would relate to their local language or their local ki nd of slang words so that they realize the channel is being programmed for th em. And, localizing a feed is in terms 301

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of branding it so that the audience realizes its a local feed. The other way we would localize it is just to make sure we are looking at their habits and their viewing patterns that are about country and the competitors within that country. Oba: You have Cartoon Network Southeast Asia in English only. Schofield: In Thailand, we have Thai dubbi ng, so Thailand receives it in their local language, and Korea receives it with s ubtitles. Everyone else receives it in English. Oba: As for content, do you have any animated films produced in Hong Kong or Singapore? Schofield: No, we dont actually. No one has tried to specifically sell us animated content that was made in Singapore or Hong Kong as yet. With our channel and our brand, nothing has taken our in terest to acquire. There is more available in Singapore, because of thei r media authority promoting animation to be made, but we havent been shown anything that we felt strong about acquiring. Oba: In my opinion, localization seems easier for Cartoon Network Japan, because Japan has a number of animation titles made in Japan. Schofield: Japan does, but Cartoon Networ k Japan specifically stays away from buying Japanese titles, because they want to offer the audience something different from what they see everyday, which is international cartoons. Oba: So, most of animated films offered by Cartoon Network Southeast Asia were made in other countries not covered by the feed. Schofield: No, the programs that we show in Southeast Asia are usually not made in Asia. They are made in Europe or Canada or the United States for the most part. Oba: What about Japanese animation? Schofield: In some of the Asian markets th at are covered by our Southeast Asia feed, Japanese animation is very popular. Ag ain, it would be a large cost to our business to buy Japanese animation that covers so many countries by that one feed. If we would show a license just to many countries, we will be looking at a very expensive license fee. So, we dont even look at Japanese animation for Southeast Asia feed at all. Oba: Whats the main suppl y source of programming for Cartoon Network Southeast Asia? Schofield: Main source is ourselves. The channel is largely made-up of Cartoon Network original programming. Second to that would be Warner Brothers cartoons, and third to th at is the acquisitions. Oba: Can you tell me the ratio? Schofield: Its probably a bout 60% Cartoon Network origin als, 30% Warner Brothers, and 10% acquisitions. Sorry, 30% I guess Warner Brothers and Hanna-Barbera, but we dont put ve ry much Hanna-Barbera on Cartoon Network anymore, because we have Bo omerang, which is a classic cartoon channel for Baby Looney Tunes, Flints tones, and Jetsons. So, really the few Hanna-Barbera titles you see in Southeast Asia would be Tom and Jerry. Oba: Cartoon Network is a property of Turner Broadcasting, and Turner Broadcasting is owned by Time Warner So, whats your relationship with Warner Brothers in terms of programming? 302

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Schofield: Collaboration is not exactly the word I am looking for. There is a relationship that we still pay them for their pr ogramming, which doesnt mean we get programming for free. They still have budgets and profit margins to make. They say that they charge us less than market rates. There is a favored rate in there. And, for some of the cartoons I would agree and, for others, I wouldnt agree. So, its not like they will give us first windows. They still have their business to talk to movie ne tworks first and to sell to terrestrials before us. In terms of movies, definitely thats the case we will wait a while to get animated movies. For animated series, they will work alongside us for Teen Titans or Xiaolin Showdown, a Warner Brothers animated series. It may sell into terrestrial at the same time as us, but they wont sell it another cable channel before they will let us premier usually. Thats about the strength of the relationship. Its not real ly output deal, but its a large deal we do with them, because we use so much of their content. As for movies, it depends on the availability in that mark et. If they have already sold it to HBO, HBO obviously can pay more than what we can pay. So, they may get a Scooby-Doo movie before we would get it. Then, we would be allowed to get it. So, we dont have first pi ck on everything, but there is an understanding that the cartoons that come out of Warner Brothers animation are offered to us for acquisition if they are available. Oba: What are your criteria when you choose content for Cartoon Network Southeast Asia? Schofield: At the moment, we tend to get ca rtoons that have a si milar appeal that our CNOs and Warner Brothers cartons have because that is the largest amount of the channel. We want the broade st audience possible, so we dont buy preschool shows, whereas with the other feeds, we will buy preschool shows for specific smaller demographic. With the Southeast Asia feed, we want to get 4 to 14 as our core demographic. We usually look for something thats got comedy or is an action comedy. Something that has a similar feel to our brand and our brand statement is that Cartoon network is fun, funny, and fearless. We will be a bit edgy or try new things sometimes. We dont have to be very safe and very politically awar e of every single thing we choose that some other big nullified company ha d to think about. But, we look for something thats fun or funny or has a bit of adventure. Oba: Is there any difficulty to c hoose right content for vi ewers living in various countries in Asia, because I guess perhaps Singaporeans have different preference for animation to their Hong Kong counterparts. Schofield: We think about the channel in terms of the look, the f eel, and the experience of coming to Cartoon Network and the fact that its in English. We dont think about as much what Malaysia is going to think about this, what Hong Kong is going to think, and what Singapore is going to think. We only measure ratings in Singapore, and that is used for ad sales to sort where we position ourselves. But, we are not pr ogramming for just Singapore. We understand that we are representing a brand across all of Asia. We would never do this for any other feed, because its dedicated. We would think about Taiwan and the audience. We would think about India and the audience. But, for Southeast Asia, we think ab out the channel, the brand, and the experience. How does this programmi ng complement the other programming on the network? Where would we schedule it? And, if it fits the criteria, and 303

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then we will acquire it, that said we only acquire the show for all of Asia. If its ever going to go on Southeast Asia, it means its required for all of Asia. When we acquire for Taiwan, we might acquire just for Taiwan, because they have a dedicated feed. But, we dont specifically try and buy shows just for Southeast Asia. Shows that Southeast Asia has on there are acquired or bought in a pre-buy or very early stage that we can get the whole territory. Oba: There are some animati ons produced by the U.S. Cartoon Network and offered on a global basis, like The Po werpuff Girls. Do you think those animations are produced intentionally to target global audience or do you think its initially produced for the U.S. audience and then just simply exported to other countries? Schofield: I think in the past it was defin itely more so produced for U.S. audiences and just exported. And, we were fortunate that some of those shows were worth well in Asia, like the Powerpuff Girls. We are now working more and more towards international, which is all of the Cartoon Networks outside of the U.S. having a voice and being involved in the green light process. So, when a series is still in the development stag e, we are shown scripts, story boards, and animatics (previsualization). We pr ovide feedback to the U.S. How much wide that feedback is given, we dont really know. We will often say we dont want that series, and it will stil l get made, because the U.S. may feel very strongly that its going to work for them. So, when they are putting in the biggest portion of the production budge t, often it is that a series gets made, and it will come to the rest of us. But, more and more they are listening to international and understandi ng that a show ideally has to work around the world. But, we are not going to have the kind of input that says we want to show just like this, because this is what would work in Asia. It has to also work in Europe, in the U. K., in Latin America, and then in the U.S. as well. The U.S. is still th e dominant production fo rce in creatively controlling the series. Oba: Do you think its possible to de velop animation films, which can be accepted and become popular all over the world? Schofield: Thats what we are aiming for now Weve just been with the investment of production that we have done in th e U.S. We committed $500 million over five years to creating Cartoon Network cartoons just in the U.S. for the whole world. Now, weve just set up our production studio in the U.K. as an extension of our U.K. office where cart oons for international regions will be made. The U.S. can then use them as well, but theyve been made more from an international perspectiv e. Along with that studio being setup in the U.K., they are now giving money to us in Asia for development. So, we are looking to India and Korea. We are looking to these countries where animation is being made, and we want to make it for ourselves. We are working in our market but also try and create something that we can then show in the U.S., the U.K., and other country markets. We make this primarily for us, but we want to have universal themes to work outside of India or Korea. So, thats a really positive step forward that we are doing for Cartoon Network to be trying to have co-productions a nd full productions here in Asia. Oba: I know that the U.S. Cartoon Network is developing some programs in collaboration with Japanese productions. For example, they have the 304

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Powerpuff Girls Z. Whats the purpose of this? I think its a modified version of Powerpuff Girl for Japanese viewers. Schofield: Yes, it was made primarily to wo rk in the Japan market We are still looking at whether we think of working in a ll other markets. Do we want to now create an English version? Ameri ca primarily focused on taking a known property, making a new version that will work in Japan and starting co-production relationships for further. The U.S. is very serious about making more and more co-productions between the U.S. and Japan. Japans generation is shrinking. There are not as many young people in Japan as they used to be. When we are looking to Ja pan for their cartoons to work in our markets, very often they are getting more violent. So, the U.S. is saying, Let us come in and make cartoons. We s ee that will work in our markets as well. Oba: In my opinion, the Powerpuff Girls Z looks more suitable for Asian viewers than original Powerpuff Girl. Schofield: Yes, we know that. The U.S. was well aware of that. They said this was made for Japan. We told TOEI to make a cartoon that would work in Japan to not compromise to try and make it work in every single country. So, it is a primary Asian cartoon, and the U.S. is st ill going to decide whether they will take that to the U.S. as a ne w version of Powerpuff Girls. Oba: In comparison with othe r types of programming, do you think animation films are able to go across national boundaries more easily because of the characteristic of animation? Schofield: Definitely, yes. We find that in India as one case for sure animation works. We were the first kids channel in Indi a. We have been in India for over 10 years now. And, being Cartoon Network, we always offered animation. Once live action started to show on kids channels in India, we really realized live action does not work as well, because once you dub that, you can see human lips moving in a different sync to th e actual dialogue. For kids, they dont know where the animation is made. Of course, its going to relate to them better, depending on the cartoons. Some cartoons work better than others. And, in Taiwan, for instance, Japanese cartoons work better than western cartoons. But, overall I think animation stands up better in Asian countries that speak their local lan guages. Its easier to dub. Oba: As you mentioned, in fact, for the top 20 on Cartoon Network Taiwan in June, only three titles were from Warn er Brothers studio, and the rest were all Japanese. Do you think Asian viewers in general receive American produced animated content well? Schofield: No, as well as they receive Japane se or Asian content. Ja panese is what they prefer first and foremost. Even when they look at Chinese and Korean, they will still be able to tell its not Japa nese. So, they still have a number one preference for Japanese. The American content we make is largely based on comedy. Thats where a disconnect happens, because comedy is very dialogue-based. If we can get visual comedy like Tom and Jerry, they love it. They will definitely accept it. In India, Tom and Jerry is one of the best rating cartoons. In Philippines, it is our best rating cartoon along with Pokemon. So, something that can provide them with action or with visual comedy, even if its not from Asia, will work. Something thats very dialogue-based is harder to make work in the non-English speaking markets. 305

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Oba: You talked about dialogue. Are there any concepts in western animations and in U.S. animations specifically, which cannot be understand by Asian viewers, because of cultural difference? Schofield: Yes, there are. Actually, we have one cartoon calle d Fosters Home for Imaginary Friends, and we are told in India they dont have the concept of an imaginary friend at all. They j oke about how there is such a big population you dont need an imaginar y friend. You have got people all around you. But, they dont really get th at concept thats come from our studios in America. Another show, T he Grim Adventures of Billy and Mandy, has two kids being friends w ith the Grim Reaper. Taiwan will watch it, but they dont like it as much, beca use an Asian market is perhaps more superstitious and really has a personal affinity with death and ghosts. They dont like the concept of kids being friends with the grim reaper. They find that bit scary. So, there is definitely that disconnect. But then, the world of cartoons makes believe as it is that so many of our cartoons are giving you so real imaginative situations that are ta king kids out of the ordinary and putting them in really extraordinary unique ci rcumstances, which I dont think the Japanese do as much. So, the Asian countri es that are very used to Japanese stories want to realistically look peop le and stories they can understand a little better. Oba: Do you think kids are in general more curious about what they dont know? Schofield: Yes, they are. But, I guess they need to be some kind of realistic hook there that they can grab onto to relate to something Oba: Do you think viewers in Asia share something common in terms of preference for animation program in comparison with American viewers? Schofield: If you are comparing Asia with America in that way, you could clump all the countries together in the same continen t and say yes. They all prefer Asian cartoons more than American cartoons on the whole. If you are looking at Korea, Japan, Taiwan, and Hong Kong, I would say that. I think some like Singapore accept American cartoons more. I just feel like they have got more of an English presence in Singa pore. Theyve got more American acceptability in Singapore. They are little bit more westernized than somewhere like Taiwan or Korea. We find that our American cartoons will work quite well when we look at th e ratings in Singapore. And, when you look at the channels, even Kids Central is showing Warner Brothers cartoons, and its not all about Japanese cartoons. They will show plenty of western cartoons and Disney and Ni ckelodeon. And, we are all putting that injection of western entertainment into Singapore whereas in Taiwan, you still really need to feel Japanese content. Oba: Do you mean Singapore kids are more westernized or Americanized compared to other Asian kids so that they can accept the U.S. animation more? Schofield: I think so. Oba: Do you have somebody in this regional headquarters familiar with Singapore markets or Singaporeans preference fo r animation? Otherwise, I think it might be difficult to grasp what Singapore viewers like. Schofield: We just have an Australian who works for us now. He used to live in Singapore for seven years, working for Disney in Singapore. He is about the closest connect we have to Singapor e. I dont know any of the American 306

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cable channels that program specifically for Singapore, because none of us have a dedicated Singapore channel. Nickelodeon just puts their Asia channel in there, so does Disney, even though there is the Disney broadcast office in Singapore, and Nickelodeon is in Singapore. Maybe, they have a better understanding of Singapore, because they live there, but they are not programming specifically for Singapore. Disney is looking at the same feed going into so many countries. They are hoping that they will rate in the Philippines just as well as they can rate in Singapore. Oba: You said earlier the audience is in general not con cerned about in what country animation was originally made. Schofield: Depends what country you are talking about. Taiwan, yes, they do. They wanted to be made in Japan. Oba: I am talking about the viewers for Cartoon Network Southeast Asia. Schofield: I think that they like animation more than live action as a whole, because I think it translates better. If you are talking about taking it into a local language, like India or like Taiwan, I wouldnt try to put live action dubbed in Taiwan as easily as I put animation. In Southeast Asia, in Singapore specifically, I dont think they care as much what country of origin the cartoon has come from. If its in English, they used to watching all of the cartoons in English. I think its more about the characters and identification with them, and whether its comedy or action. Some of our best rating shows in Singapore is Teen Titans. It has act ion and comedy. Its Codename: Kids Next Door. Fosters Home for Imagin ary Friends. Probably they do get that concept enough, and they do like it. S o, for Singapore specifically, I dont think they mind what country its made in. Oba: You are also focusing on preschool animations. Schofield: In all other markets, its a big focus. In Southeast Asia, again we are not buying many cartoons. We get Baby Looney Tunes and Firehouse Tales from Warner Brothers, and we put them into our Tiny TV, which is our preschool time slot. So, we do program for preschoolers. We just dont spend as much money on buying new programming for Southeast Asia feed as we do in India. In India, it takes up six hour s of that day. Its very important block for us in India, but not as much in Singapore. Oba: Are most of preschooler tit les from western countri es or from Japan? Schofield: From western countries. We havent found that much preschool programming from Japan, to be honest. I havent seen Asian or Japanese preschool animation as predominantly as western animation is available. So, kids are still watching the animation that s made in the U.K., Europe, or the U.S. Oba: Do you think education is a key factor involved in your programming? Schofield: Not in Cartoon Networks programming. When we offer preschool, we are still wanting to entertain young viewers. We dont want them to feel like they are just sitting down for an hour to e ducation. We want them to learn through being entertained. So, we dont look for programs that have numbers and letters and like, Here is a lesson for you. Its more learning social skills. Its learning self-acceptan ce. Its learning courage, laughter, or the different kind of developmental awareness and l earning in that respect rather than school kind of academic learning. 307

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Oba: Actually, I heard in Japan that parents like their kids to watch U.S. animation films in English because of the educational purpose. Schofield: We have that reaction from Korea, where this Southeast Asia channel is in Korea with subtitles, and the feedback that we hear that parents encourage their kids to watch, because learning Eng lish is so important in Korea. But, its watching the channel as a whole ra ther than just a preschool, because they can get English language from the whole channel. Oba: Each country in Asia has its own very unique regulations for content. And also, sometimes they have regulation for the amount of foreign programs. How do you deal with these regula tions, which may vary depending on countries? Schofield: We go into those countries as a foreign channel. For Korea as an example, we go onto satellite and some cable ho mes as a foreign channel. If we launched Cartoon Network Korea as a Korean local channel, there are broadcast quotas that a third of the channel has to be Korean made and produced content. That is when we need a specific channel and program that schedule very differently. But, we dont have the content quo ta restrictions on any other country for Southeast Asia. Korea will then be a Korea channel, not Southeast Asia. Once we switch th e channels in Korea from Southeast Asia to being the local channel, then we have to fulfill the quotas, but the Southeast Asia channel is considered a foreign broadcast channel thats put in English, and we dont have to fulfi ll any broadcast quotas in any of our countries. Oba: I asked this question, because I think that the standard for, for example, violent content or maybe sexually explicit content differ among countries. Schofield: It probably does, but we dont even look to put violent or sexually explicit content on our channel, because its aimed at 4 to 14 audience. Were self-regulating in the standards and pr actices all the time. So, even with Taiwan, when we buy Japanese content, there is nothing saying we couldnt put violent content on the channel, but we choose carefully to not put violent content on the channel, because we want parents to realize that our kids channel is programmed specifically for kids. Oba: You might have Asian regional advertisers as well as domestic advertisers, which want to reach a specific country market. Which one do you have more on Cartoon Network Southeast Asia? Schofield: We would do an activity in Malaysia especially for KFC Malaysia, or well do something in Singapore for the Singapore Zoo. Its more country-by-country based than someone paying to advertise across all of Asia. Oba: Do the regional advertiser s have any request in terms of programming? Schofield: Not regionally. We get more requ ests from specific clients that if its in Singapore and they are doing something for a Singapore client, we can still program specifically for that client. Ev eryone will see it, but it will just be maybe running a marathon on the weekend or putting double episodes of Baby Looney Tunes for a month in this schedule, and our client in Singapore may sponsor that. But, its still accep table programming for the rest of the region. Oba: Do you have to prioritize the demand from advertisers? 308

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Schofield: Yes. Its still not a heavily a dvertised feed. You dont watch Southeast Asia and see ads all over it. Its still a pretty clean channel. So, we dont have that problem too much, but yes. Oba: I think you have multiple sources of revenue. One is from advertising, and another is from multichannel providers like cable services or satellite broadcasters. In the markets like Singapore or Hong Kong, very few cable system operators have very oligopolistic or monopolistic marketing powers. Schofield: Yes. Australia was the same. Its only three. Somewhere like India has hundreds. Oba: And, in those situations, they might have very strong power. I think they play a role of a kind of bottleneck for you to offer programming, because without them, you cannot offer any programs. Schofield: Right, but I am not a best pers on to speak on this subject, because I dont work in distribution and work with the cable operators. But, I havent heard of more problems being encountered by countries where we only have a few cable operators than the countries wher e we have many. I think its in a way easier to control the relationships when we only have a few cable operators, and they rely on us to be one of th eir channels. We service them more because of those viewers to serve. So, th ere its easier to tie -up with them for marketing opportunities or for collaborative ways to push the platform to increase subscription rather than when there is just hundreds or thousands of cable operators. Oba: Do those platforms have any other requests for your programming? Schofield: I dont know it. Oba: How is the Cartoon Network brand perceived generally in Asia? Schofield: I think its perceived well. Its perceived as a comedy channel that is for cartoon lovers of all ages but primarily as a kids channel with a mix of action as well as comedy. I think the Power puff Girls and some other are very well-known titles that are still what people recognize as our channel brand. Oba: Is it common for Asian viewers to associate Cartoon Network with something international or global? Schofield: Yes, I think so. Oba: How does their image about Cartoon Network influence your programming? Schofield: It doesnt really, because the S outheast Asia channel doe snt have a lot of acquisitions. The Cartoon Network Channel in Southeast Asia really equals the Cartoon Network brand with a mix of Warner Brothers cartoons in there. So, that really defines our brand, a nd we dont get negative feedback that makes us change our programming. We look at the ratings, realize what works, and use that more often in the schedule. Oba: I think you, as the Asia h eadquarters, are supposed to be a kind of intermediate or middleman between Turner Broadcasting and local affiliates like Taiwan or Japan. Is that correct? Schofield: Thats one aspect of it. We are not really playing intermediately. Yes, we do report back to the U.S. at the end of the day. But, we are pretty self-sufficient headquarters right here. So, Taiwan reports into us, and its pretty self-contained. Once the reporting comes up to Hong Kong, it pretty much stays here. We feed information back to, say, Taiwan about when new cartoons are coming out from the U.S. So, thats the level of the information comes from the U.S. 309

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Oba: Whats your response, if there are some conflict or disagreement between the perspective of Turner Broadcas ting and the local perspective? Schofield: I wouldnt say Turner Broadcasting. I would say Turner Entertainment Networks Asia. We do have those circ umstances where you do have to trust your local program manager, because theyve grown up either being Taiwanese or being Indian, and they have a sense of their audience and their local market. And, I have a sense of our brand, our channel, what can be done, what cant be done, and whats worked in the past. So, there is usually just a discussion that has compromise that reaches that Id like to give them a certain amount of autonomy and ownershi p of their channels. So, in certain circumstances, I will say, OK, do it. You know how to take the risk. I trust you if you really feel that thats th e best thing to do, and, in other circumstances, I may use my knowledge and experience from working on the channel in longer than their working on it and advise them. Oba: So, you think you give match aut onomy or freedom to the local offices when they decide programming. Schofield: Yes. There is always a big amount of autonomy and trust that I give them in that we hire people with programming experience that have worked in the local channels before and know their audience. But also, it comes down to that I have worked with Cartoon Networ k probably longer than they have, so there is a good level of an inform ation sharing and discussion and compromise. Oba: I heard Cartoon Network Taiwan have to be approved by Hong Kong headquarters when they want to, for example, acquire some programming. Schofield: We still control the money from here. Im managing the acquisitions budgets for all of the feeds. So, it does come to us. Gary will be the first point and look at it. And then, he sends screeners to me and says, Watch this. I will like it, and, in some cases, he will say, I would like to get this, and I will say, I dont think its very good, and we are not going to pay that kind of money. So, I do have the final say of what gets bought, but I trust his inputs a lot. We do discuss where we think it s valued, how far we want to go to acquire, or when we dont pursue it anymore. Oba: Cartoon Network gets local ch annels like Cartoon Network Taiwan to put sufficient amount of investment in the development of Cartoon Network Originals. Are they obligated to invest some money? Schofield: Yes, the U.S. will pay the larges t percentage, and then the rest of the world will share the remaining costs. Then, it is divided up, so we are paying for the Cartoon Network Originals. Oba: Whats the main reason for this? Schofield: Because it supports all of our channels around the world. These are brands, our characters. We can merchandise them, and we can license them. We want to show the work on our channel we have a 100% ownership. We dont want to be running channels as purely acqu isition channels for each local market. So, its only fair that with the U.S. having a largest population and being the largest market, they pay the largest su m, but they dont just give us that content for free. We pay a portion of that content, and then we are making ad sales revenues, distributi on revenues, and merchandise revenues. They are toward Asias net revenues to be made So, there is a cost to making those revenues. 310

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Oba: Cartoon Network Japan says th ey should always be of fering certain amount of CNOs. They think affiliates of your network have to share some programs so that they can keep a globa l brand. Do you agree with this? Schofield: The volume varies, because it s a struggle between ratings and between brands. So, in somewhere like Taiwan, we need the Japanese cartoons to drive ratings, but we need our cartoons to be there to reinforce our brand. That is the difficult one, but its importa nt for all our channels to have some presence of our own cartoons there, so kids understand. Even if they dont know that these are the cartoons that are made by Cartoon Network, when we are putting merchandise on shows, theyve seen it before. Oba: Actually whats advantage to be part of a global TV network like Cartoon Network? Schofield: The resources can be shared, whic h is not only the cartoons that get made in the U.S. that we pay for. We pay to us e them for all rights in perpetuity, so, unlike license of a Japanese show for th ree or four years, you will get to use something like the Powerpuff Girls as long as you want to use it, because you have contributed to the making of it. You can put merchandising there. You have a brand that extends worldwide. When people are traveling outside of their own countries, they can see that this brand is in many other countries. So, we are all helping each other with that kind of brand presence. We share marketing materials. We can share on-air promotional materials. So, there is a certain pulling and sharing of resour ces that come from having networks that are all working, which saw the same content. 311

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APPENDIX L INTERVIEW WITH SPORTS-I ESPN March 14, 2006 Hase: There are two contracts between ESPN and J Sports. One is the so-called content supply contract, under which ESPN provides Japan with programs. The other is the naming rights contract which enables us to use the ESPN channel name. Oba: Would you tell me about the ra tio of foreign-produced content to Japanese-made content currently shown on Sports-i ESPN? Hase: Overseas content accounts fo r about 50%. Anything apart from that is independently produced here in Japan. All our foreign ESPN content comes from the U.S. We dont receive any what soever from ESPN Asia. ESPN U.S. collates a list and supplie s suitable programs, for which they have the necessary broadcast rights for the Japanese market, to Sports-i ESPN. This is called a bulk contract, and it entail s the supply of thousands of hours of offering material over a single year. At the end of the day, Sports-i ESPN chooses material from this list to broadcast. Oba: Does that mean that ESPN U.S. cannot supply Sports-i ESPN with every program they have? Hase: There are many programs, which cannot be offered in Japan for broadcast rights. Programs that cost us money to gain broadcast rights for are hard for us to get. On the other hand, there ar e programs, which are often not popular to begin with but, as they grow in popularity, become more expensive and eventually disappear from the list of c ontent available on a bulk contract. The ratio of programs provided from ESPN is extremely low. Our current situation is that we cant rely heavily on ESPN content to get by, and ESPN understands this. The Japanese market is not the kind of arena where you can succeed simply by copying ESPN U.S. or going along with them for the ride. Oba: Sports-i ESPN has been in Japan for about ten years now. Have you always maintained this point of view? Hase: No. Until last year when we merged with J Sports, we depended on ESPN much more. But, that doesnt mean ev erything always went smoothly. Since the merger, both Sports-i ESPN and ESPN have been exploring new avenues, and we are now looking to establish a ne w type of partnership. On the 24th of this month, George Bodenheimer, president of ESPN, is scheduled to visit us here at Sports-i ESPN to discus s mutual possibiliti es. Even though ESPN has been the second-biggest shareholde r in Sports-i ESPN for many years, the president has never visited Japan until now. Now that we have merged and have become the number one sports channel in Japan both nominally and virtually, ESPN are expecting big things of us. Oba: What is the situation with the fees you pay to ESPN for programming? Do you pay for each program separately? Hase: No, its a package, in which we pay a certain price for thousands of hours of content. After that, we are free to air wh at we please. Its kind of like a lucky dip bag in a way. Oba: What is your cha nnels budget for each program? Hase: Thats a little difficult to divulge. 312

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Oba: Is ESPN important to you as a source of content? Hase: Thats a difficult question. We dont get much of the so-called killer content from ESPN, i.e., the program s that make Japanese viewers think Id subscribe to the channel just to be able to see this program. Far more often than not, we dont have the broad cast rights to that kind of material, nor are we able to get hold of it throu gh bulk contracts. Spor ts Center is an original U.S. program, but aside from that one, theres nothing else about it that really stands out. The major c ontent of ESPN U.S. are MLB (Major League Baseball), the NFL (National Football League), and the NHL (National Hockey League) broadcasts, but they do not have the rights to provide that material here in Japan. For example, MLB broadcasts are sold directly to Japan through Dentsu. We dont get any baseball from ESPN. The same goes for American football, which is also sold directly to us by the NFL, without passing through ESPN. In this sense, there is not a great deal of major content aired in Japan. Oba: Are any of the programs you obtain from ESPN not dubbed into Japanese? Hase: No, they are all dubbed. We like to try different things with dubbing and subtitling. The programs we air are not completely the same as those shown on ESPN U.S. If we air live coverage, we always have play-by-play commentary in Japanese. During halftime of soccer matches, we cut back to the Japanese studio for commentary but then return to the arena when play restarts. We dont show a great deal of live sports from ESPN but usually edit a recorded version, a dd Japanese commentary, and offer at a different time. As well, viewers interests are different between Japan and the United States, so we cater for our own audiences tastes. For example, there are sports, which are quite popular in the U.S. but dont have big acceptance here in Japan. The most popular prog ram on ESPN and the one, which has the highest price, is Sports Center. We dub the sportscasters comments into Japanese when we offer this program, but we dont show Japanese faces. The format of the show stays the same as it is in the U.S. We never do anything like adding footage here on the Japanese side. However, for example, we have a story about Major League Baseball. In Japan, any sports news without mention of either Matsui or Ichiro doesnt go down well. The news stories we choose to air differ from those chosen in the U.S. For the moment, we are offering this program in exactly the same version as it is shown in the United States, but we are hoping to begin a version of our own in the future, something like Sports Center Japan. We would like to have more footage of Japanese athletes and mo re Japanese commentary, but at this stage, its a plan yet to be realized. Oba: The anchorpersons on Sports Center use of lot of American-style humor. Can your Japanese audience comprehend this? Hase: If its translated well, yes. WWF (World Wrestling Federation) programs are cleverly subtitled into Japanese. Subtitl ing actually costs more to have done than dubbing. You need to set down act ual words on the screen, and so it takes more time. Oba: Are subtitling and dubbing really such an expensive process? Hase: Yes. Having someone listen to English speech and translate it into Japanese alone costs hundreds of thousands of yen. Oba: Is language a big hurdle when offering foreign sports programs? 313

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Hase: Having to translate everything into Ja panese is a big difficulty. Even if we are able to get broadcast rights for a program, we absolutely must have it translated into Japanese. That cost s money. For other English-speaking countries, once they have bought the ri ghts to the program, they can start bringing in revenue without any extra real costs. We dont have that luxury at Sports-i ESPN. At the very least, we ha ve to pay for translation fees: either subtitling or dubbing. Oba: Which sports are most popular here in Japan? Hase: Japanese baseball and soccer sta nd head and shoulders above the rest. Its difficult to say what would be in thir d place, but Id have to say right now fighting sports like wrestling are popul ar. Things like Pride, K1, and Japanese professional wrestling. WWE is also really popular here. Oba: What influence do Japanese vi ewers tastes have on your selection of content? Hase: The main focus of U.S. ESPNs content is U.S. sports. Soccer leagues such as Serie A, the English Premier League, and the Spanish League are not offered much at all. Its mostly Am erican-centered. In contrast, theres a European sports channel called B Sky Sports, which offers mostly soccer [like Premier League] and very little American NFL or MLB. Most sports channels around the world focus primar ily on their local sports and show sports from other countries as a kind of bonus. Japanese professional baseball and J-league soccer is our ma in content, but European soccer such as Serie A is also popular, as is MLB. Japanese vi ewers like not only American sports but also soccer. So, th ey like a mix of a lot of different things. Japanese viewers have quite a mix of sporting tastes, which is quite unique. Not only do they want to see do mestic sports, but there is also a certain amount of interest in forei gn sports. However, with regards the offering of domestic sport in Japan, over-the-air broadcasters wield power. As a specialized sports channel, its quite hard for us to go for genres such as Japanese professional baseball or Jleague soccer. We end up showing so much overseas sport. Oba: Why do Japanese have such broad tastes? Hase: Japan has always imported things from a wide variety of cultures. We brought in good things from the U.S. a nd Europe and created our own unique culture, one that arranges th ings in a Japanese way. I think that trend goes for sports as well. We learned baseball from the U.S. and soccer from Europe and created our own unique sports culture. And, I think that is reflected in what we play and watch. If you were looking for one, Id say the only truly Japanese sport is sumo. Oba: As you said, there are some U.S. sports, which are popular in the U.S. but not so popular here. Why do you think that is? Hase: American Football is pretty popular in certain places, such as Germany, but it is only really popular in the United Stat es. I think the biggest reason its not popular here is that there are no Japanese players in the NFL. And, even if there were any Japanese players, they wouldnt really be act ive. The level of play is just too high. Also, because the players faces are hidden wear full-face protection, its difficult for the viewers to empathize with the players. In addition, the rules are comp licated and difficult to follow. Most Japanese viewers dont even try to fi gure them out. I think the number of 314

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Japanese interested in American Footba ll is quite low. And, people who have never lived in places where they could develop an appreciation for the sport, such as in the U.S. itself, have very few chances to see the sport. I think the people who have lived in the U.S. ma ke up a very small proportion of our viewers. But again, the main reason fo r its non-popularity is the lack of Japanese professionals. The Japanese media dont pick up American football. There are some broadcasts of games on late-night over-the-air television, but its not enough to get pe ople really into it. Oba: What about the NBA? There are no Japanese players in that league, and yet its reasonably popular, isnt it? Hase: When Michael Jordan was playing, yes. Jordan was the kind of superstar who transcended race. Thats why there were many people who watched the NBA just to watch Jordan. When he retired, the popularity of the NBA in Japan declined. Its the sa me with golf. There are people who want to watch golf just to see Tiger Woods play. But, superstars who can transcend race like Woods and Jordan are rare. The NFLs Joe Montana didnt ever make it to such a status. Oba: People say that sports cross borders but are sports programs also able to do that? Hase: I think so, but sports that are popu lar in Japan tend to be the ones in which Japanese are active. There are not so many cases of sports without famous Japanese players becoming popular. As I mentioned earlier, the NFLs popularity in Japan is pretty poor. I th ink the influence of having a Japanese star is huge. When Japanese driver s broke into Formula One racing, its popularity took off. Soccer, too, started becoming more accepted as more Japanese players went to foreign league s. Its difficult for sports played exclusively by foreigners to succeed here Tastes in sports programs clearly reflect national character. So, I think music, for example, is far more easily exportable than sport. We are trying our hardest, but there are not a lot of cases in which American sports have really succeeded overseas. The U.S. doesnt import much foreign sport, either Its as if there is an invisible barrier. I feel things like music a nd movies are more readily accepted overseas. Oba: So, its not so much as case of whether the sport itself is popular, but whether or not there are famous Japanese players? Hase: I think so. There are currently no Japanese players active in Serie A. As a result, we have seen the leagues popularity steadily dwindled. Our core fans are still there, but we have ended up lo sing a lot of the bandwagon types. Oba: Does the presence or absence of Ja panese players in a gi ven sport influences the programming decisions of Sports-i ESPN? Hase: It does. But, the difficult thing is, if we focus too much on a Japanese player, then if that player leaves the scene, a lot of those bandwagon-type viewers stop watching our channel. Take for ex ample the German Bundesliga. If we want to increase the number of long-term fans, we have to consider showing viewers the most interesting and exciti ng aspects of the league and having them understand it rather than simply bl anket coverage of Japanese players. Having viewers come round to the idea that watching sport from different angles is interesting is vital in build ing a stable and loyal viewer base. Oba: I dont think there would be any Japanese sportspeople featured on the 315

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programs on the lists of content you are se nt by ESPN U.S. In that case, how do you make judgments about what content to air? Hase: There are no real standards. In such a case, we weigh up the value of the content in terms of the s port itself and whether it would be popular in Japan or not. Oba: Which sports have high value in Japan? Hase: Within the content sent by ESPN, the Scottish soccer, and probably Sports Center. Also, maybe X-games, although it is still quite a minor sport here. In the U.S., X-games are popular, but here their value in terms of a program contract from ESPN is not that great. Oba: Dont you think American-produced sports content is relatively superior? Hase: That depends on how you look at it and on what sports you like. There are some aspects of sports like soccer, go lf, and cricket that make it seem like the sport just evolved naturally, as if people invented these sports while just playing around. In contrast to that, yo u have sports like American football and baseball, which were devised by people with the sport on their mind. In that respect, I think American sports a nd European sports have very different origins. Oba: Generally speaking, whic h do Japanese viewers prefer? Hase: Thats a good question. Since base ball is so huge here, I would have thought American sports, but aside from baseba ll, theres not really much support for American sport. Americans dont real ly recognize a sport, unless an American is number one in it. So, they create their own sports, have their own athletes become the best at it, an d then give their championships names like World Series. This runs counter to the European way. Many countries in Asia were once colonies of European countries, and as su ch are closer to Europe in terms of culture. But, Japa n has a strong American influence. Perhaps, its a blend of both American and European influences. Oba: How many subscribers do you currently have? Hase: About 6.5 million. Of these, 1.5 million subscribe through Sky PerfecTV and the other 5 million through cable contracts. Oba: What are the characteristics of the viewers Sports-i ESPN is targeting? Hase: 90% of them are male. They are aged in their late twenties to early thirties. I think theres some influence from the X-games in that. Oba: What are their economic attributes? Hase: In Japan, people who subscr ibe to multi-channel contracts are high wage-earners. Oba: How do you see the economic st atus of Sports-i ESPNs subscribers compared to that of other channels subscribers? Hase: I dont know. However, I dont th ink there is such a discrepancy across channels. Sports-i ESPN comes in the basic pack with other channels on Sky PerfecTV or other cable TV networks. These packs provide 30 or so channels for a set subscription fee. Not many subscr ibers buy these packs, just so they can watch Sports-i ESPN. Oba: Are there any striking similarities or differences between Japanese and American viewers? Hase: In the United States, having ESPN is almost a necessity. Most people dont subscribe because there is a certain s port they want to watch, but because having it is like a must item. Sports ch annels in Japan are yet to reach such a 316

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status, and people subscribe after thinki ng that they want to see something particular. Perhaps, its a bolder type of person who subscribes here. That is an area where Japan differs from the US. Oba: Do you think its possible to tr ade content between foreign markets with similar viewer levels? Hase: That all depends on the broadcast rights. If Sports-i ESPN has these rights, then we can sell content. But, with re gards the broadcast rights of foreign content, Sports-i ESPN does not hold rights for most other Asian countries. The rights we have are restricted to Japan. Oba: Are there any restrictions on the amount of content you can bring in to Japan? Hase: No. We could have all fore ign-made content if we wanted to. Oba: How does the lack of such restrictions influence your programming strategies? Hase: It has no real effect. We only ai r quality content anyway, so its not really relevant. Oba: What is the ratio of subscripti on-generated revenue to advertising-generated revenue? Hase: About 9 to1or 9.5 to 0.5 with subscr iptions bringing in far more revenue. The market for advertising is still quite sma ll. The U.S. market is far bigger. Oba: Do platforms, such as Sky Perf ecTV or the cable operators, give opinion into programming decisions? Hase: No, theres none of that. However, as a shareholder, Sky PerfecTV does take part in discussions and other exchanges of ideas. Oba: Does ESPN invest in any other channels in Japan? Hase: No. Oba: What kind of advertisers do you tend to attract? Hase: Its not really predetermined, but Sports-i ESPNs main client is Honda. They have sponsored a program called Moving You for many years now. We have a lot of advertising from co mpanies whose image matches that of the channel, such as sports brands like Nike and Adidas. Oba: Do these advertisers have a say in your programming decisions? Hase: No, but they do give input into the programs they sponsor. Im not a producer, so I cant give you any details as to what they request. Of course, as sponsors, they have the right to do this, and programs are made based on this kind of influence. This doesnt go for spot commercials, though. Oba: Does ESPN mount any campaigns for a firm on a global scale through each countrys affiliate? Hase: Im sure it does happen, but I dont know exactly what kind of companies run such campaigns. Within the contract with ESPN, there is a clause, which states such sponsors can be added. Oba: ESPN is a strong brand in the U.S. How about here in Japan? Hase: Its still not real ly strong. Anyone who has lived in the U.S. knows of ESPN, but still few Japanese have heard of it There are not so many people in Japan who sign up for a multichannel package, so they can watch ESPN. Also, there is whats called a corporate co ntract, so we are well recognized by foreign firms and hotels that subscribe to our network. But, as to whether the ESPN brand name has established it self in Japan, Id have to say no. 317

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Oba: What kind of programs do foreign corporations or hotel guests expect from Sports-i ESPN? Hase: That would be Sports Ce nter or the four major sports. Oba: Those kinds of viewers probably ex pect to be able to see the same programs in Japan that they can in the U.S. S o, is that expectation reflected in your programming decisions? Hase: No, it isnt. Again, in reality, we ha ve to deal with the issue of broadcast rights. In most cases, ESPN has only th e rights to broadcast in the U.S. As long as this is the case, its impossible for Sports-i ESPN to broadcast that kind of material. Oba: How are you going about improving the brand image of ESPN in Japan? Hase: Since many of ESPNs programs do not come with broadcast rights for this country, I think ESPN and J Sports should work together to obtain the rights for broadcasting in both the United St ates and Japan. One way they could do this is to jointly purchase some prog rams. Japan has only the Sports-i ESPN channel at present, but I think another way to boost the image is to diversify into other areas ESPN U.S. has, like the ESPN Zone cafes, apparel, and mobile phone web services. The marke ting rights for ESPN are held by a separate corporation, so Sports-i E SPN cannot currently sell ESPN products independently, but Im sure we will go in that direction in the future. Oba: Which channels are you in competition with? Hase: All of the channels dealing with all-Japanese sport are associated with J Sports. J Sports 1, 2, and 3 used to be our direct competitors, but since Sports-i ESPN is now a channel owned by J Sports, we are no longer rivals. Then, you have GAORA and Sky A, but they also have entertainment content. About 70 to 80% of their pr ogramming is sports but I dont think you can call them pure sports channels. Oba: How does ESPN currently rank Sports-i ESPN? Hase: The firm is actually J Sports rather than Sports-i ESPN, but it is considered a vital partner for the Asian region. I think we are seen as a bridgehead into the Asian market. ESPN is a success in the U.S., but on a global scale, it is not so successful. It only airs American sports and hasnt localized its content for other markets. Oba: How is ESPN dealing with that? Hase: Its true that theres no clear-cut an swer to that, but I be lieve they are, along with J Sports, committed to improving the influence and the image of the ESPN brand throughout Japan and the rest of Asia. Oba: Do you think ESPN is skilled at doing business internationally? Hase: ESPN have established ESPN STAR Sports for Asia, but I dont know how serious they were or how much effort they put into it. They have broken through in South America, but theres not really a track record of them expanding outside of the American continent. The same could be said of American sports in general. Whether for the NFL or the NBA, theres not really a lot of effort put into e xpanding coverage overseas. The NFL makes enough money with just the domestic market, so its a big drop-off for them from the domestic to foreign markets. In terms of numbers, the domestic/foreign ratio is about 100 to 1. Most U.S. sports leagues and associations thought the American ma rket alone was enough for them. If these sports dont make the move to fore ign countries, then its difficult for 318

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ESPN to do the same. On the other hand, if ESPN changes its approach, things will change. For example, they might air mostly soccer in Europe and compete with B Sky Sport for broadcas ting rights to the Premier League soccer. I dont think they are taking such action at the moment. Rugby is popular in Australia and New Zealand, but ESPN are not trying to secure broadcasting rights to rugby for that market, while Sky Sports is. Oba: All things considered, what is the greatest influence when choosing content? Hase: Cost-efficiency. In other words, how much revenue we can expect for a given amount of spending. Our reve nue is linked with how highly our viewers rate the programming we provide For events like the Olympics or the Soccer, the viewers ar e obviously happy to have coverage, but the costs involved are enormous, and in the end, it just doesnt pay off for us. We choose to air programs, which are balanced and will give the greatest possible cost efficiency. In addition, th eres always the idea of cultivating our viewers through Sports-i ESPN. We have cultivated our viewers through things like the famous cycling race th rough France, The Tour de France, which we have offered for many years. We also did this with American professional wrestling. Its quite hard work. Professional wresting is popular in the United States, but its not something on ESPN. We have to purchase professional wrestling conten t from another source. Oba: Are you saying that you buy content from a rival company of ESPN? Doesnt ESPN have anything to say about that? Hase: No, they dont say anything. Ultimately, it might be all right if we could offer all U.S. ESPN content exactly as it is, but its extremely difficult to do that because of broadcast rights. We have no choice but to compile our own programming. Oba: At the moment, ESPN takes virtually no part in deciding what content will be aired. Hase: Thats correct. However, whatever we say about them, ESPN is still the worlds largest sports channel and th e worlds most successful. For that reason, we want to learn from them as a business model. There are many things they can show us. Oba: What things, for example? Hase: Well, how to initiate management diversification, for example. And, from a brand perspective, the fact that U.S. households see ESPN as an essential media entity, like CNN and MTV, rather than subscribing because they want to see a certain thing ESPN offers. I th ink U.S. subscribers think about what they want to watch after they have si gned the subscription contract. We want Sports-i ESPN to become a channel like that. So, there is a lot we can learn about that from ESPN. We want to know what kind of transitions ESPN went through to get to where it is today. ESPN has immense program buying power, so we would like to be a part of that, also. However, I dont think it is working well if we only receive content from them in a one-way arrangement. 319

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APPENDIX M INTERVIEW WITH ESPN TAIWAN July 24, 2006 Chen: Actually, our programming a rrangement is design ated by the Singapore office, our headquarters, but they have different strategies for different areas and countries. In Taiwan, most popular sports are baseball, basketball, and pool billiard, nine ball and snooker. In a lot of other countries of Asia, people love soccer, but its not very popular here. We like basketball and baseball. So, we choose these kinds of sports here just for Taiwan. But, for strategy, we buy programming for the whole Asia. Then, we can choose our own games and matches we want for Taiwa n. For MLB (Major League Baseball), we always choose Wang Chien Mings games from Yankees. Other countries dont choose them. For soccer, we need to watch other countrys choice. Female Chinese players were very strong in Wimbledon and Australian opens this year. We wanted to watch a lot of Chinese players here. Most of programs are purchased for all areas, but we can choose the matches we want. So, the difference among countries is matches and the percentage of programming. For example, high percentage of our programming is basketball and baseball. We create a lo t of local basketball and baseball events here. In other countries, the hi ghest percentage is soccer. They have English Premiere League, Spanish League, and Italian League. Oba: Whats the ratio of forei gn-produced content and Taiwan-made content shown on ESPN Taiwan? Chen: Maybe, its 80 to 20. 80 is foreign, and 20 is local. But, we are trying to increase local events. Right now, we have SBL (Super Basketball League), the local semi-professional basketball league, for Taiwanese. We are trying to show more baseball and basketball, something like high school basketball and high school basketball, and some in ternational events in Taiwan. So, we are trying to increase the percentage, but right now, I think its just 20%. Oba: How do you specifically localize im ported programs to Taiwan so as to cater to Taiwanese viewers demands more suitably? For example, you might be able to add Chinese langua ge by subtitles or dubbing. Chen: We just have presenters a nd commentators speaking Mandarin. We have no subtitles. We think sports dont need much subtitling, because fans can understand how the game is going. Oba: I understood almost all programs offered in Taiwan have subtitles. Chen: Taiwanese viewers rely on subtitle s. If they listen to foreign language, they will skip it. Its a habit. Oba: Do you have some programming offered without any Chinese subtitles or commentary? Chen: We have programs just in English, like sailing and some soccer games. We think they are not very important to Taiwanese. The Singapore office doesnt do any commentary or subtitles. Oba: Do you think you should add Chinese commentary even to that kind of unpopular programming for Taiwanese viewers? Chen: Yes. Oba: Why dont you do that? 320

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Chen: Because they need costs. Oba: Is it true that subtitles cost a lot? Chen: Right. And, we think the most im portant thing for localization is the match. For MLB, Taiwanese people like to watch Taiwanese players like Wang. We try to get Taiwanese players games here when we broadcast MLB games. For the NBA (National Basketball Asso ciation), Taiwanese people like some specific players. They dont like all pl ayers but some fam ous players, like Kobe Bryant or Kevin Garnett, or famous teams, like Lakers or Heat. Even if we choose and broadcast foreign games, we will try to meet Taiwanese interests. Oba: I was watching ESPN last night and found you were offering a Japanese professional baseball game. I wonder if there is sufficient demand among Taiwanese viewers for Japanese baseball games. Chen: We have a Taiwanese pitcher, Lin Ying Chie, in Rakuten. So, we purchased Rakutens home games this year. If a Taiwanese player plays for a foreign team, we will try to purchase the teams games. For example, more and more Taiwanese players go to Japanese Lea gue. So, we will try to increase their home games. But, when we purchase the home games, the NPB (Nippon Professional Baseball) is not like ML B. We buy the rights to NPB games from teams, while, for the rights of MLB games, we are talking with the association. If we want to broadcast NPB, we can broadcast just one home teams game. So, we will choose a team, which Taiwanese player is with. For example, we broadcast Seibu last year. This year, we have two Taiwanese players there, but one is in the minor league. So, we just broadcast Rakuten this year. Oba: When I had an interview with an executive of Sports-i ESPN in Japan, he said that Ichiro and Matsui, baseball players originally from Japan, are of course very popular among Japanese, but its very hard to get broadcast rights to Major League Baseball games in Japan. Is that the case for you? Chen: No. I heard that NHK has the right s to all top Japanese players. I think he said its tough to get the rights ma ybe because of NHK. But, because we have focused MLB for many years here we have a very good relationship with MLB. Of course, other TV stati ons can also buy the games, but we will have the first choice for cable TV. In this year, PTS (Public Television Service), which is similar with NHK here, also broadcasts Wangs game here. So, they are our competitor this year, but they are terrestrial TV. For the cable, we have the exclusive one. Oba: I also watched the Taiwanese version of Sports Center. Sports Center is very famous programming in the United States. Why dont you just put the U.S. version of Sports Center but pr oduce your original Sports Center for Taiwanese viewers? Chen: Taiwanese people dont like to see too many foreign faces and languages, because most of Taiwanese dont know English well. They rely on subtitles, but subtitles are very expensive here. We have a very big problem. Almost all of our production teams are based in Si ngapore. We have a small crew here, but a lot of production works are done in Singapore. They cannot use subtitles. They just hire Taiwanese people who go to Singapore to put the Taiwanese commentary in the program. And, Taiwanese also like local things, 321

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so we need to use some local news for Taiwanese viewers. It cannot work if we just put American Sports Center here. Oba: You said some specific profe ssional teams like Los Angeles Lakers are very popular in Taiwan, though. Chen: Taiwanese still prefer local th ings more than popular foreign things. For example, Videoland Sports has local sports news. The news is 45 minutes, and they just have 15 minutes for talking about foreign news. For the most part, they report local thi ngs. Most of local news are not very important at the international stage, but Taiwanes e viewers like to watch them. Ratings are always very high and higher than S ports Center. Thats why we always try to do the local. Oba: As for foreign-produced content imported to Taiwan, is this always shared with some ESPNs in other countries? Can it be dedicated only for Taiwan? Chen: It depends. The NBA may be shared except for India, because Indians dont watch basketball. Other c ountries have the right to broadcast NBA games. MLB may be just for Southeast Asia and Taiwan. Just two areas broadcast MLB games. If we broadcast golf or tennis, it will be covered by the whole Asia. So, it depends on programs. Some times, foreign programming is just dedicated for Taiwan. Do you know W illiamsport Baseball? Its a junior baseball game in America but a worldw ide event. Its a little league. Just only Taiwan liked to broadcast the game because Taiwan had a team to join the event. Oba: Other ESPNs didnt have any interest in the little league. Chen: Right. Oba: Whats the specific reason to share programming with other ESPNs? Chen: It depends on the market needs. They will request the programming or say, No, we dont want to broadcast it, becau se the cost will be shared by all markets. So, if you want to broadcast the game, you need to share the cost. The Singapore office will ask all regions if they want to broadcast. Oba: So, they have a kind of progr amming list, and you can choose from that. Chen: Right but not all of programs. We can choose most of programs but not all. For example, costs are very low for some programs. Then, the programming department in the Singapore office doesn t need to ask. They can broadcast directly. Oba: Is it difficult to choose th e right programming for Taiwanese viewers? Chen: We just care for the program on the prime time or the important event. If they are broadcast in the afternoon or in the midnight, we dont care them a lot. The Singapore office can choose by themselves to put some programs there, because when you purchase one program, they will buy another. Its a whole package. We just want major programs, but there will be other unimportant events attached into the package. We need to broadcast the other events maybe in the midnight or in the afternoon, which are not our care. Oba: Do you mean I can watch the same programming both in Taiwan and in Singapore in the midnight or in the afternoon? Chen: Yes, but the prime time would be totally different. Oba: Given some programming shared among ESPN Network, is that available to you for free? Chen: No. As I mentioned, the cost is shared by all markets. So, if we want to take the program, we need to pay. 322

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Oba: Is that shared equally? Chen: Not exactly. It depends on hour s. For example, we have two NBA programs one week, and Hong Kong has th ree. So, we may pay less. Oba: But, sharing programming with other ESPNs is much cheaper than producing local content by yourself. Chen: No, its not cheap but very e xpensive. Actually, doing our own programming is cheaper than purchasing the rights to sports games. Sports rights are very expensive. Our new MD (managing di rector), who is just on board, emphasizes to produce our own programs, for example like magazine shows or sports-related programs here, because the cost is much lower than purchasing the sports rights, especially for the international programs. NBA or MLB games are very expensive, even if we share costs with other countries. Oba: ESPN Asia has some contracts with MLB or the NBA. Chen: Right. We share NBA and MLB games with other countries, but for MLB games, we have more games. We have three games a week, but other countries maybe just one or two games. Oba: In spite of th e advantage, your local programming is just 20%. Why? You might have 100% of local programming. Chen: Its quite difficult to define whic h is local or international. 20% local is just dedicated for Taiwan like SBL or so me international games, which are shorten. As I mentioned, we are trying to increase the local content, because the costs are lower, and the ratings are hi gher. But, if we initiate local content, we need to find out local important events to broadcast, because its different from variety programs. You have to find the game and broadcast it. So, local events are not easy to broadcast, and we have other competitors to broadcast the local events. So, we need to look for our local events, for example like CPBL (Chinese Professional Baseball League). The Videoland has rights to all the games. If we want to broadcas t it, we need to share with them. You need a lot of negotiations. Oba: Do you think you rely heavily on ESPNs international network for programming? Chen: Actually, we still rely on th e regional programming, because we have no independent department he re. Its a problem of or ganization. If we have an independent department here, we can choose by ourselves. But, right now, Singapore has the key men to decide which programming is in which area. Oba: You mentioned earlier that you have 20% of programming domestically, but where is the 20% of programming is decided? Chen: Here. But, we still need to let Singapore know lo cal programming. They need to approve it. All of our program s need to be approved by our board or senior management. If we initiate some local programs here, we need to get their approval. Even if its 20%, they need to agree. Oba: I dont know exactly the differ ence between ESPN Taiwan and STAR Sports Taiwan. Chen: We have two channels for our programs. We have two brands. These two channels are belonging to our company. Oba: What is the difference in terms of programming? Chen: For ESPN, we have most of popular programs in Taiwan, like basketball, baseball, and pool. And, for STAR S ports, we will have a variety of 323

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programs, which have more entertainment and more fun, like motor sports, tennis, rugby shows, soccer, and someth ing like that. ESPN would be more professional. If we just define them ba sically, we have different personalities for the two channels. Oba: Which one is more popular? Chen: ESPN, because Taiwanese people think STAR Sports is one of channels of STAR TV. Another reason is the Mandarin title of STAR Sports. It is too complicated and too many words. ESPN is very famous here and easy to understand and recognize. For the sports industry, whether players or fans, they all know ESPN U.S. So, they see ESPN quite professional and international. STAR Sports is quite w eak. So, we try to improve the branding of STAR Sports by the new personality with variety and entertainment, not by so serious sports. Oba: People sometimes say that sports cross borders easily compared to dramas or comedies. Do you think sports programmi ng is also able to easily cross national boundaries? Chen: Yes, of course. Oba: Dont you think the preference of sports programming is bound by each culture? Chen: Taiwanese are America-oriented. So part of culture is quite similar between America and Taiwan. For Taiwanese and Americans, sports orientation is very similar. For example, Americans dont like soccer, and Taiwanese, either. Taiwanese like basketball and baseball, and Americans, too. China and Taiwan are actually quite different. China likes soccer. But, there are still some sports, which Taiwanese and Chinese also like, like Basketball. So, it depends on the category of sports. Oba: Do you mean in general Taiwanese and Americans have very similar preferences? I dont know if the U.S. a nd Taiwan have very similar culture. Chen: The whole culture is different. But, for sports, Americans exported a lot to Taiwan. Many Taiwanese are also planning to go to the U.S. for their study, or families move to America to live. It s a kind of similar culture. Americans influence Taiwanese a lot, but E ngland or other countries dont. Oba: Do you mean Taiwanese preference for sports is very much influenced by America? Chen: Yes. Oba: What about the influence of Japan? I found a lot of Japanese cultural influences in Taipei. Chen: The question is very interesti ng. Baseball is influenced by Japan. But, for other kinds of sports, I d ont think so. For example, basketball is not very popular in Japan, but its very popular here I think sports culture now is seen as a lifestyle. I dont know why other lifestyles are imported from Japan but not sports. Oba: Again, what sports are most popular here in Taiwan? Chen: Basketball and baseball. Oba: Do you find any specific reasons? Chen: For basketball, its because the na tional team is great. Weve ever played at the Olympics and won the second place in twelve years ago. I also believe it is because it was imported by the U.S. For baseball, we call it the national sports. 324

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Oba: How about American football? Chen: No. I think it may be hard to understand. ESPN broadcasts the NFL (National Football League) games. Ac tually, generally speaking, sports are not very popular here unlike Japan or Korea. People here like variety shows or maybe movies, but the rating of sports channels is not very high. So, just one channel, ESPN, broadcasts NFL games. Actually, not many audiences watch the program. But, there are three stations broadcast NBA games. A lot of channels broadcast baseball. Some variety channels also broadcast baseball and basketball. But, the NFL, softball, tennis, and golf are just broadcast by sports channels. So, they cannot be very popular. Oba: In a nutshell, how do you think Taiwanese viewers ta stes or preferences impact your programming or your choice of content? Chen: We still watch the rating. We can analyze the rating from Nielsen to decide our challenge. We still do our own study for the market to choose what programs we will broadcast. Oba: Do you think the audience rati ng indicates the popularity of programming? Chen: Of course. Oba: I think sometimes it depends on what your competitors do. If your competitors offer the most popular program in Taiwan, you may not be able to get higher ratings even with ML B games or your killer content. Chan: Right. The World Cup soccer is an example. When the World Cup soccer was played, we had Wimbledon tennis. S o, the rating was very low. But, its just for some very important events. Oba: Do you have any regulations on foreign content imported to Taiwan? Chen: Just a little bit. For example, we cannot show bloody wrestling matches. Our channel needs to be kept as a general channel for all ages to watch. Wrestling is sometimes a little violent. I dont think other programs will have limits. Oba: You are not allowed to offer vi olent wrestling shows. How do you decide if this might be against the regulation? Chen: Our monitoring department will check in advance. They will check out the programs before they are aired. Oba: Thats the self-regulation by yourself. Chen: The Taiwanese government will notice us if we have some programs, which are against their regulations. Another thing is gambling like horses or dogs. We cannot broadcast gambling horses or dogs. Oba: Are you not allowed to of fer gambling programming by the Taiwanese government? Chen: Right. The monitoring department is also in Singapore. We will tell the regulation of the Taiwanese government to them to check if we have any illegal footage. They will check and monitor it. Oba: Is the gambling program OK in Singapore? Chen: Yes, its OK in Hong Kong and Singapore. Oba: You cant share those program s with Hong Kong or Singapore. How do you think that kind of regulations influence your programming? Chen: We can air the racing after 9 o clock in the evening. Before that hour, the Taiwanese government has regulations for some programs, which cannot be shown to children. They will have a kind of limits. If we have bloody footage, the government will call us to pick up. Oba: Do you have any limit for the amount of imported programs? 325

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Chen: I dont know the number. Oba: What kind of adve rtisers and client s do you attract? Chen: We have different types of clie nts for different programs. For golf, we have cars, banks, and some products for seni or people. For basketball, we have drink and consumer products more. Oba: Can you specifically tell the name of clients? Chen: Lexis sponsors our golf events a lot and tennis. Hey Song drink sponsors our basketball and baseball. Nike and Ad idas are also our major clients. Oba: Which one, domestics or mu ltinationals, is more important for you? Chen: All are very important to us, because they continue to sponsor our major programs. For example, Chung Hwa Telecom, a big local telecom company, continues to sponsor our SBL, a basket ball event. Nike is also our major sponsor of SBL. Hey Song also sponsors our basketball and baseball, MLB games. So, they are very important to us. Oba: Do they have any requests for your programming? Chen: All of their requests are about ra tings. So, we need to get our ratings higher. They just watch the rating report, which will influence their costs. Sometimes, they will care about events. For example, if we initiate some local events like SBL, they will ask us to make some events for them, and we broadcast the activities on the air. They want to be involved to many programming things. Adidas will want us to broadcast the game of Adidas players like KG (Kevin Garnett) or T-M ac (Tracy McGrady) or like Bulls or Magic. We still need to balance our matches, but we will put a little more Adidas players. Oba: Do cable operators have any requests for programming? Chen: Of course, they will have input about the rating. They want more households and more audiences. Oba: How many sports channels do you have in Taiwan? Chen: 24-hours sports channels are just three, ESPN, STAR Sports, and Videoland Sports. Videoland has five channels. Th ey have one dedicated sports channel but also broadcast sports events on other channels. For example, Videoland Variety, another channel, broadcasts sports like local baseball and local basketball. Oba: Do you think the Taiwanese market is very competitive in terms of sports programming? Chen: Yes, because other channels, wh ich are non-sports channels, also want to broadcast some important events. For ex ample, most of channels would like to broadcast Asian baseball games. So, it will be very competitive. We need the competition for the program, which is very popular. Oba: How are the Taiwanese market and ESPN Taiwan strategically important for ESPN? Chen: I think, of course, its not the firs t priority to them. But, Taiwan is the core, important market in Asia. Perhaps, Taiwanese people have very powerful purchasing power and high incomes, which are very important to them. The sales revenue of Taiwan is very high. So, its a potential market for them. And, they think Taiwan as the gangwa y to the Chinese market. Taiwan has some similar culture with China. For example, the language is similar, even if not the same. Oba: Is Taiwan a potential market for ESPN? 326

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Chen: As I mentioned, sports are not very popular here. Its a very potential market. We have the space to improve. Oba: How many years have you had ESPN in Taiwan? Chen: Ten years. Oba: Its not a short time period. Chen: Yes. In the past, we had no local content. All programs were American or foreign. Even for Sports Center, we broa dcast the U.S. version. Sports Center just has four or five years. It indicated Taiwan th e local production. Oba: Is it now popular among Taiwanese viewers? Chen: I cannot say its popular. Its just popular to sports fans but not for all Taiwanese people. All of our ratings are not very high. We are famous for sports fans but not for most Taiwanese people. Oba: ESPN is a strong brand in the United States. Whats the situation in Taiwan? Chen: Its also famous but just among sports fans. As I mentioned, sports are not very popular here. So, just young people or some senior people, who like golf or tennis, watch. Most of Taiwanese viewers dont watch sports. Oba: What images do Taiwanese generally have for ESPN? Chen: The worldwide leader in sports. Thats very true. Oba: In spite of ESPNs internationa l image, it seems to me that ESPN Taiwan is not necessarily eager to offer interna tional programs. For example, you want to broadcast games more related to Taiwanese. Meanwhile, STAR Sports broadcasts foreign games unpopular among Taiwanese, like soccer, rugby, or motor sports. In this si tuation, I think th e international image is more appropriate for STAR Sports. What's your idea? Chen: I think it's because of the image. ESPN is a very famous sports channel in the world, so Taiwanese audience looks it's an international br and. Of course, STAR Sports is also international, but it's not popular to audience. Oba: So, people usually associate E SPN with global and inte rnational. Why dont you offer more international progr amming? Why do you try to increase domestic programming? Chen: As I mentioned, most of viewers like to watch local a nd relative programs. Even if they watch MLB games, they want to watch Wang and Taiwanese players. When they watch Japanese baseball, they want to watch Taiwanese players. So, what we do is to use the international sour ces to support local sports and to develop local sports into the international level. They will appreciate ESPN, which is internationa l-based, but what we do is for locals. Oba: Do you think you should offer the same programming in order to keep the brand image all over the world, or the brand image and programming are totally different? Chen: I think the brand image depends on what content you provide audiences. But, audiences dont care about what progra ms are broadcast in other country. They just want to watch what they lik e. Whatever other country broadcast, they dont care. For example, they just want to watch NBA or MLB games but dont care if other countries have the World Cup or cricket. Cricket is extremely famous in India, but peopl e here dont care about cricket. They dont even care about soccer like Europ eans. Branding is to support people to pull in to the channel. But, if they like the channel depe nds on the content. Oba: What country is famous as the country of origin for excellent sports programming in Taiwan? 327

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Chen: Actually, if the quality of ga mes is higher, its good enough to watch. People just prefer the category. For example, we broadcast the World Cup Baseball, which was played in Cuba. The quality of programming was very low. They had no graphics, but people watched it, because of content and because people just wanted to watch baseball They dont care about the quality. Of course, if the quality is high, for exam ple like the broadcast of NPB or MLB, it will be very interesting, but it is not the key point to their choice. Oba: Its an overall question. How impor tant is it for you to be part of ESPNs global network? Chen: Actually, we have more disadva ntages than advantages. We have a lot of programs for foreigners. As I mentione d, we just care about the prime time. For non-prime time, we broadcast forei gn programs. Some local people, who are living in the mid or south of Taiw an, dont understand English a lot. So, when they watch ESPNs character, th ey will skip it because of the English language or touch. Its our problem. A nd, even if we share programs with other countries, its quite expensive. We dont have a lot of advantages but a lot of problems from them. The only advantage is that we have an international brand image to most e xperienced people. Even if we do the local programming, for example SBL, the quality is higher than local television and Videoland. Our broadcast team and ability are better than them, because we have producers who came from Singapore, the U.S., or Europe. And, we have the interna tional know-how. The know-how is difficult to learn from locals. Oba: So, do you think ESPN is gene rally very expertise in the international business or producing progr amming internationally? Chen: Our production teams produce events just for the whole Asia. Their ability is of course better than lo cal television. We have very high status in the production. If we produce a local event, our budgets are higher than other competitors. Our quality is also better than them. To viewers, they will appreciate our quality. Its quite our advantage. Oba: You said earlier that programming quality is less importa nt than content itself with an example of the baseball telecast from Cuba. But, you say now quality is very important. Chen: I mean priority. Viewers also can accept lower quality. But, if they have two choices for SBO, for example, if ESPN and Videoland broadcast the program at the same time even for the same game, they can see the quality difference. Of course, they will choose higher quality. But, if they have just one choice, they dont care about a lot. Oba: Do you have freedom to d ecide programming independently from ESPN, regardless of the order from headquarters? Chen: Actually, it depends on our ad sa les. If they are ads for ourselves, we can cover the cost. We could choose the programs by ourselves when we could cover all of the cost. Oba: If an advertiser want s Asian programming, you cannot replace the programming by yourself. You have to meet the advertisers demand. Chen: Right. Oba: MTV usually has very high freedom to decide programming themselves. Chen: They produce programs by themselves here, because the programming cost is very low. But, its very expensive for sports. 328

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Oba: You are a joint venture between ESPN and STAR TV. How do you think the ownership pattern affect your programming? Chen: I think they have no influence. We have two channels. Both are supported by the senior management group, which cam e from ESPN STAR Sports. When all of them agree the programmi ng, then we will go ahead. I know the approval process takes a long time. Maybe its the joint venture problem, but I dont understand whats the difference. Oba: I asked the question, because E SPN is a worldwide network, but STAR TV is very Asian specific network. So, I wonder if there is some difference between them in terms of th e expectation of programming. Chen: I dont think they have any argum ent for that. They just care about profit and loss. STAR, News Corp., or ESPN just want profits. I dont think there will be a problem. Oba: Do you mean they dont have any difference in terms of programming preference? Chen: Right. Oba: What is the most significant f actor when you decide content in this market? Chen: Relevancy is very important. For example, it is national Taiwan teams, Taiwanese players, or Taiwanese preferen ce. Its a very important factor for our choice. And, time scheduling is importa nt. If a game is played in prime time, for example in Japan or in Asia, it will be much better than a game in the U.S., because if it is in the U.S. or Europe, the time will be in the morning or in the midnight at Taiwan time. But, if the game is held in Asia, it will be on our prime time. We have two factors. Oba: Do you mean sports games should be live? Chen: Yes, of course. Live is a ve ry important thing. People dont like the game, which they know the result. 329

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APPENDIX N INTERVIEW WITH ESPN ASIA August 29, 2006 Oba: I understand ESPN has ma ny country-specific programming feeds in Asia like ESPN India, ESPN Hong Kong, or ESPN Taiwan. Where are they programmed and scheduled? Wilkinson: In pretty much every market, we have two networks. As you know, we are a joint venture at ESPN and STAR Sports. Both ESPN and STAR Sports for each market are scheduled and progra mmed from here and are broadcast from here as well. Oba: So, is it uplinked here to each market? Wilkinson: Yes, the uplink is on the roof of this building. Oba: What ESPN programming feed is dedicated to the Singaporean market? Wilkinson: In this Singapore market, the channel is called ESPN Asia. But, thats how we refer to it internally. In any listin g magazines or any external magazine, it will be referred to as ESPN. Oba: What countries and territ ories does ESPN Asia also cover other than Singapore? Wilkinson: All the major markets it covers other than Singapore are Thailand, Malaysia, Indonesia, and Vietnam. Those are the primary markets. And, its also in Laos and Cambodia. Oba: Why do you provide the same programming feed for those multiple markets, which may have different preferences for sports programming? For example, Thai people and Singaporeans may have different preference for sports programming. Wilkinson: I think there is some local di fference for sports programming. I think by and large ESPN carries a lot of footba ll programming, and that resonates throughout Southeast Asia. The interest in Malaysia or Indonesia for the Premier League or any other football, if you look at ratings across the market, tends to be pretty similar. Oba: I heard during the intervie w with the programming manager at ESPN Taiwan that on non-primetime, Asian ESPNs incl uding ESPN Asia or ESPN Taiwan basically provide the same programming at the same time. Is that true? Wilkinson: I am not familiar enough with the Taiwanese beam, but they are separate beams. ESPN Asia is not available in Taiwan. Its in English. We are not sending two channels into the Taiwan market. Oba: I am asking about programming. Do they offer the same programming? Wilkinson: Its immaterial. The two ch annels arent offered in the same market. Oba: What do you mean by two channels? Wilkinson: We have a separate Taiwan ese feed. So, just because ESPN Taiwan and ESPN Asia have the same programming, its not for any particular reason. Were simply speaking that only one E SPN feed is available in Taiwan. Oba: My question again is why you offer the same sports programming to various Asian countries where the taste for sports varies. Wilkinson: If you are looking at Taiwan, theres also maybe football on the Taiwanese network. But, its not promoted in the same way. It is not reported in the same way in the news. There is no support programming around it. So, 330

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whilst it may be on the network, its not treated in the same way. I dont think that there is an example in Taiw an which programming content of local relevance and interest is preempted by international content, which a baseball game isnt scheduled so that a soccer game can be scheduled. I think they both get scheduled. My guess is so ccer is scheduled like four in the morning or two in the morning. So, its on the network, but is it on the prime time? The answer is maybe one night a week. I think you need to look at program two networks 24 hours a day a nd 365 days a year. Its huge amounts like 8,000 hours a year. You need some max. But then, dont focus on that. Go and look at the content that you ac tually scheduled in the prime time. Oba: Is ESPN Asia offered in English? Wilkinson: ESPN Asia really is exclus ively in English. ESPN Taiwan is majority Mandarin during prime time. Oba: Do you have any language customization including subtitles, dubbing, or local language commentary for the markets of Thailand, Malaysia, or Indonesia? Wilkinson: No, were in English. We dont fi nd that to be an issue really in any of our markets particularly. I think in Thaila nd market, it might be a slightly bigger issue. But in Malaysia an d Indonesia, the typical view er of our network is an English-speaking viewer, particularly in Malaysia. Were exclusive from the Astro platform in Malaysia, and the ma keup of their audience is very much an English-speaking audience. Oba: Do you mean language customization is not so big issue for yourself? Wilkinson: We would love to be able to do it, but we dont do it. We dont find that its a huge issue for us. Oba: What percentage of ESPN Asias programming is not produced here in Singapore? What percentage is coming fr om other ESPNs or other countries? Wilkinson: Off the top of my head, I dont know. We have an output deal with ESPN International. Were 50% owned by E SPN. Theyre a syndication company. We have an output deal with them each year where we buy a fixed amount of hours that are at a fixed price. The majority of our programming does not come from ESPN International. There is a reasonably sized output-deal with ESPN International. But if you look at the majority of the hours on our network, its made up of football co ntent that we buy from the Premier League or from the UEFA (Union of Eur opean Football Associations) or golf content that we buy from Augusta Mast ers. The majority of ours did not come from ESPN. Oba: Can you tell me more detail about the output-deal with ESPN International? Wilkinson: An output-deal is an agreement whereby we nominate. We have an arrangement, which says we will buy an agreed amount of hours at an agreed price per hour from a catalogue of pr ogramming. Thats essentially what an output agreement is. We may nominate, for example, the deal is 100 hours. You would send stuff here. We agree to buy 100 hours from you at $100 per hour. Then as you go, you look in the catalogue and agree which hours actually make up the 100 hours. And, that will vary by market. Sometime well buy hours specifically for Taiwan or that resonate better in India, for example. Oba: Can you choose whatever you like? 331

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Wilkinson: Yes, we get first pick. And, as ESPN is a joint venture, we get to look at. If we dont buy the hours, then ESPN will go and sell the hours to anyone they choose. Oba: Its a kind of content supply contract. Wilkinson: Exactly. Its a content supply. It s an arms length deal. Its done on strictly commercial terms. Oba: Please let me ask you some thing about localization. It seems that every global TV network these days cares lo calization. What is your definition of localization for ESPN Asia? Wilkinson: It would be local language co mmentary and possibly local language graphics. It just depends. Very much you have to look at the source of the supply. Sometimes we cannot access the content without graphics. It is coming in with graphics. So then, you have a choice. Do you want to, in Taiwan for example, overlay Chinese language and graphics over existing graphic packages? If its cleaned of graphic, a nd you want to localize, then we might do it with graphics. But, really the definition is I would say all of our localization would be commentary. Some of that would be Chinese language graphics as well. Oba: So, in your idea, localization is very much related to languages. What about the relationship between lo calization and very specif ic local needs, because sometimes your programming may have to reflect local needs in order to do localization. Each market has very specific preferences for sports programming like Indians may prefer cr icket, and Taiwanese like baseball. They are totally different. Whats the relationship between such preference for sports programming and the localization? Wilkinson: In India, basically our programming is in English. We do some cricket and some football in Hindi. In Taiwan, most of our primetime hours, which would include baseball and basketball, would be in Chinese. Im not sure what else. Theres local language co ntent in India. And, for the sport programming, we do a new show in Hindi. In Taiwan, we do a new show in Chinese. We do Baseball Tonight in Taiwan. And so, some sport programming is done in local languages as well. Oba: Do you think its a kind of lo calization to take into account very specific preference in each market? Wilkinson: I think broadly localization ta kes the form of commentary, and I would say that is the biggest spectrum in terms of ours. There were some programs that were created specifically for local ma rkets, for example, Taiwan-specific Sport Center and India-spec ific Sport Center. India has some cricket shows, which are specifically produced for India. Taiwan has a baseball show that is specifically produced for Taiwan. Oba: Sports Center is very famous programming in the States, and you produce the local version of Sports Center for each market. Why dont you just put U.S. Sports Center but produce your original Sports Center for Asian viewers? Wilkinson: We have a rights issue down there. ESPNs domestic Sports Center isnt available for us in Asia. Oba: Sports-i ESPN offers the same version of Sports Center in Japan with dubbing into Japanese. 332

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Wilkinson: That may be the case. This joint venture does not operate in Japan, so I simply do not know what happens in Japa n. If ESPN in Japan is airing Sports Center, then I presume it has the rights to do so. We looked at it here for Asia. We were unable to do it, pr obably due to the rights. Oba: So, its just because of ri ghts issue, not because of whether or not local people like that. Wilkinson: Its not so much of a conten t issue. Its primarily only a rights issue. Oba: ESPN Taiwan and Sports-i ESPN said their domestic viewers usually dont like foreign sports games or foreign sports programs, which dont include their domestic athletes. How about the situation in Singapore? Wilkinson: I would say its completely different in Singapore. If you look at the top rating sport shows on ESPN here in Si ngapore, theyre all English football matches featuring no Singaporean. I think th e interest in Southeast Asia is for the best rather than necessarily local If football is the number one sport, which it is rating wise, then people want to watch the best football. There is certainly some interesting local football. We carry a package of games from AFC, the Asian Football Confeder ation. We produce a weekly show featuring local league football, but it doesnt rate as well as the Premier League does. Oba: You mean soccer by football, right? Wilkinson: Yes. When I say football, I mean soccer. Oba: So, soccer is the most popular sport in Singapore. Do they have any professional soccer league here? Wilkinson: Yes, its called the S Lea gue. I guess its probabl y semi-pro. I dont know if people playing in the local teams do th at for their jobs or not. My guess is they have other ways of earning income as well. Oba: Do Singaporean viewers usua lly care about whether the soccer game is from England, from Serie A, or somewhere? Wilkinson: There is a huge difference. [F rom the top] English football, Spanish football, Italian football, German f ootball, and everything else. Oba: Are you talking about popularity or quality? Wilkinson: Im talking about popularity. If youre looking at rati ngs, English football is a standout and a long way above an y other football that we carry. Oba: Why do they prefer English f ootball rather than Italia n or Spanish football? Wilkinson: Brand and time in the market. English teams for a l ong time have come out to Asia in the summer months to tour and play local games. Im guessing that the networks in Asia have carried E nglish football longer than they carried Spanish or Italian football. There woul d have been a big upsurge in Spanish football three years ago wh en David Beckham went to play at Real Madrid. But, by and large, I think its because of the amount of time that English teams spent touring in Asia in the summer months, and the amount of time that the English football has been sh own on local networks. Its first mover advantage. Oba: Does the English Premier League have any Singaporean players now? Wilkinson: Not that I am aware of. There are Asian players in the Premier League. There are Chinese players and Korean player s. Most of those would be Korean players. I think there was a Singapore referee. There was a referee at the World Cup from Singapore, and then he became bit of a loca l celebrity. But, as far as I know, there are no Singaporean players in the Premier League. 333

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Oba: Singaporean viewers dont car e if the Premier League includes any domestic players or not. I heard that Japanese viewers very much care about that, though Wilkinson: To generalize, I think its a North Asian thing. Taiwan cares about Taiwan. Korea is interested in the performanc e of Korean players in the Premier League and would be interested in the performance of the Korean team in the World Cup. I am not sure that theres much ground, but its a lot of interest. And as for Japan, obviously youre in a far better place to comment on that than I am, but I would guess it was the same. Oba: Do you think some ESPN sports programming in general have universal appeal, which could be accepted worldwide? Wilkinson: As a news brand, yes. Sports Center. I think sports news resonates throughout the world. I think probably onl y soccer is a sport that resonates everywhere around the world. Even in th e United States, I would argue it has resonance. ESPN too has built a lot of their business around soccer. Theyve had ABC, which carried the World C up for a number of years. ABC/ESPN just had a very big license fee for two World Cups. Whereas back in 1994 when the World Cup was in the States, it wasnt actually borrowing time on the networks todays game. Its changed dramatically. And, I think if you look at the progress of football in Am erica and the recent performance of the American team, its due to college and high school participation in the sport. But, its regionalized. Its Los Angele s with the Mexican population. Its Florida, as you know, with big South Am erican population. I used to work at Fox in the U.S., so I did a little work on it. So, I would say soccer is probably the only true global sport. Obviously, th ere are events like the Olympics that have global resonance, but its an event. Oba: In general, do you think sports programming is able to go across national boundaries more easily compared to other types of programming? Of course, the Olympic can do that. Wilkinson: Yes, I think its multi-territo ry rather than global sport. I think football probably resonates in most markets; cr icket, only in some markets; NFL, relatively few markets; baseball, in Japan, Taiwan, and the U.S., but does it resonate in Europe? Not really. I think possibly extreme programming, skateboarding, motocross, or X-Games type of product, might resonate, but thats more perhaps sort of cultural phenomenon than a sporting phenomenon. I would say that there is a kind of programs might well resonate in multiple markets. I guess golf resonates in a lot of markets. Tennis maybe, but I would say golf and football, soccer, are extreme programming would resonate in most amount of markets. Oba: Its interesting that each sport has territory in the world. How do you think each sport has established the territo ry? For example, why baseball is popular among the U.S., some East Asian country, and some Latin countries but not in Europe? I think cricket is popular only in India and its neighboring countries besides England. Wilkinson: I think cricket is definitely about colonization. The count ries where cricket is big all used to be territories that belonged to Brita in: India, Pakistan, which itself was split off from India in the 50s, South Africa, Australia, and New Zealand. 334

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Oba: So, it has something to do with colonization. What do you think about baseball? Wilkinson: I dont know. Ive always assumed that the interest for baseball in Japan was based on the U.S. presence in Japan after the Second World War. If baseball was played in Japan prior to the Second World War, I dont know. Likewise, Im assuming that there is interest in those products like baseball and basketball in Taiwan, China, and Japan, and I dont thi nk its a coincidence in its proximity to the U.S. Im guessi ng its an immigration thing going on there from Japanese to the West Coast of America and come back. Im guessing thats what it is about. And frankly, if you see the U.S. presence in Japan after the Second World War, that may be your answer. Now, I dont know the reason baseball and basketba ll havent taken root in Europe, despite the fact that there was a lot of American presence in Europe. I mean it wasnt quite the same presence. Foot ball was obviously a very established game in Europe, even at the end of th e 19th century. What I think interesting is places like the Caribbean, which traditionally were English colonies and football playing places, are now much greater American influence. Youd probably find a lot of people playing bask etball now and not so much cricket. Oba: Do you mean the countries wh ere American sports ar e very popular are also influenced by the U.S. culture? Wilkins: I would guess. I think if you look at the Caribbean, thats almost certainly true. If you look at proximity to Amer ica, Im guessing North Asia as well. Oba: So, the preference for sports has something to do with Wilkinson: Cultural and historical reasons, I think. Oba: And so, what is important is which country imported a certain sport to that market. Wilkinson: And, I think tastes change in ma rkets as well. I dont th ink that the taste is static. If you look at the growth of football in India, which we dont think would be, I think what happens with s ports is a kind of interest around huge events, the World Cup, for example. A nd then, depending perhaps on success, that interest then spreads out. So, it peaks around the World Cup, but theres interest leading up to the World C up and leading out of the World Cup. Oba: Please let me ask you so mething about brand. How is the ESPN brand perceived by Asian viewers generally a nd specifically by Singapore viewers? What is the brand image they have towards ESPN? Wilkinson: We differentiate our brands E SPN compared to STAR Sports. Both of them are authoritative forces of sport. Th e question is the delivery. I think the delivery for ESPN is more formal and mo re traditional in a sports TV sense. So, you get guys sitting behind desks, probably wearing a tie, and talking about a soccer match. If you look at the way we treat soccer on STAR Sports, its still very knowledgeable and still the best journalist, but the delivery is perhaps more relaxed setting. You and me are talking with no ties on a couch. STAR Sports aims to be more youths viewing. Oba: Its more like entertainment. Wilkinson: Yes, exactly. If you are looki ng for analysis, you might get it over ESPN. If you are looking for behind the scenes chat s or look at a more casual delivery of the same information, you look into STAR Sports. I mean in both cases we see ourselves as authoritative voices in sports Its about the delivery rather than the content. 335

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Oba: I didnt know the di fference between both channels clearly. Wilkinson: What weve involved in as a project really since a bout February is ongoing. It is to differentiate clearly by cont ent and by delivery. So, Wimbledon is on STAR Sports. STAR Sports is known for Formula One motor racing. ESPN is known more for its football. Yet, STAR Sports has football as well. So, if you look at the football as being on both networks, then on ESPN its delivery is, as I say, more formal. It has a more formal style of delivery. STAR Sports has more casual style of delivery. Oba: Going back to the brand issu e, is it common for Asia n viewers to perceive ESPN as an international or global ch annel? Are they usually associating ESPN with something international or global? Wilkinson: I think that ESPN is also authoritative. No, to be honest, I dont know the answer to the question. Oba: Do you think its important for you to maintain international or global image? Wilkinson: I think ESPN prides itself on having the resource of a number of sources around the world. It prides itself on havi ng the best of everything. So, if you want basketball and NBA news, come to ESPN. I believe that people watch ESPN, because its ESPN. In that se nse, I think people watch to consume their TV in a little more local level. They dont necessarily watch it, because it is the Sports Center in America. Oba: ESPN Asia is the Asian headquarters for ESPN, isnt it? Wilkinson: This is very much a JV. On th e surface level, I believe youre absolutely right, but ESPN is only half of this company. Oba: I think you are supposed to play a kind of role as an intermediary between ESPN International and local affiliates like ESPN Taiwan in the Asian market. Is that correct? Wilkinson: They are ESPN STAR Sports. Theyre not affiliates. Its not like a broadcast market in the U.S. Taiwan isnt an affiliate. An affiliate implies it has choice, right? The affiliate implies contracts, right? This is absolutely no. ESPN Taiwan is owned by this company. Its the local delivery of this company. Its an O&O if you are looking for more U.S. -centric term. The channel is owned and programmed by this company. It is a local channel but not an affiliate. The difference is Taiwan is a specific market, so distributi on and ad sales are handled locally. The same is China, India, and then the rest of Southeast Asia. Oba: Do you think ESPN Asia has much autonomy or freedom when you decide programming independent fr om ESPN International? Wilkinson: ESPN International is a s yndication business. Theyre selling programming. ESPN International or ESPN also owned half of this business. We have a board that is half made up of ESPN and half made up of STAR Sports. We report to the board. The board is independe nt. And, what is done is to advise on the interest of both companies. They add value in terms of STAR operating with these markets, and ESPN operates in these markets as well. So, the boards role I guess is both a dvisory and regulatory. It has autonomy for joint venture. It works remarkably well, but its made up of two parties for working whats ahead of it. It does work very well if the partner seems to have the same interests in growing their business. So as a rule, I am not aware of any tensions. Yes, its autonomy. 336

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Oba: What relationship do you ha ve with ESPN? ESPN is obviously your parent company, holding 50% of stock. What is the ownership patte rn reflected in your programming? Wilkinson: ESPN STAR Sports operates as a joint venture. Its role is to create value in those sports channels under the two bra nds here in Asia. As ESPN owns half the company, they take half the profits. Thats the kind of work their role is. So, ESPN have 50% of the decisionmaking capability. Both EPSN and STAR have other interests within this market. Within Asia, maybe STARs interests are a product that would be to generate and take in some movies and documentary. And, ESPN is all about syndication. Oba: What happens if ESPN U.S. tries to promote some sports programming on a global basis, and you think it may be unsuitable for Asian viewers? Can you say no to them? Wilkinson: Absolutely. Oba: They are a parent company, though. Wilkinson: Not one parent. I dont think there is a problem. You could say that absolutely, because maybe the other parent would say no as well. You could, whenever we acquire programming from either party. STAR through its relation, through its servi ces, and through News Corp has relationship with Fox Sports International, which themse lves are a syndication business. If I buy a program from Fox Sports Internati onal, I have to declare that to the board. If I buy a show from ESPN Intern ational, we have to declare that to the board. Oba: Can you also get some sports programming from Fox Sports? Wilkinson: I mean in theory there is nothing to prevent us from doing so. ESPN is a sports brand in this market. Fox Sports isnt. In the Middle East, it is. Theres a Fox Sports channel in the Middle Ea st. Fox Sports operates a business in the Middle East, and so does ESPN outsi de this joint vent ure. Do we know the people there? Yes, of course. Do we have relationships with them? Yes, we do. But then, we do with all any number of sports broadcasters. Oba: Whats advantage to be a global TV networks like ESPN? Wilkinson: I think that would be brands a nd access to content. I think they help. There is sharing of resources and ideas. As I would speak to programming people at ESPN in New York, I was able to Fo xs programming guys in Australia. I think the key advantage is in ESPN a nd STAR for that matter. Youve got two companies who are interested in growing their own channels in the Asian market. They have been here a long time and want to stay for a long time. And so, it provides stability in funding. Oba: What do you mean by resources? Is that personnel reso urce, content resource, or financial resource? Wilkinson: Financial resource and content resource. We share news gathering services. We share programming ideas. We dont operate in any way with other broadcasters, because everyone has thei r own agenda and their own needs. But, if you wanted to get a feel for who can be selling the Spanish League internationally, I might pick up the p hone to my colleagues in Europe and ask them if they know the answer to that question. We access a lot material from B Sky B in the U.K., which is a 36% News Corp company. But, that again is not connected that they provide us with content. They provide us with packages of programming like Goals package, for example, news 337

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clips. That again is at an arms le ngth relationship. S o, I guess its like any family network you are closer to, an d so you know that someones always got something to add to you in terms of experience or knowledge. One of the guys on our ESPN board used to have this job here and used to have programming here. He now works for ESPN in New York and sits on our board. Another one of our board member s is the head of acquisitions for ESPN in the Americas. So, if you want to talk about your acquisition or see some ideas on how you might deploy c ontent, were equally on the STAR side, on the News Corp side, and on th e ESPN side. There is no restriction. Oba: What are your responses wh en there is some conflict between STAR Sports and ESPN in terms of programming. Fox may say, Oh, it is good for this market, but ESPN may say Oh its not Then, whats your response in this case? Wilkinson: To be honest, Ive never seen that Id be very surprised if there was a kind of that one part of the board saying absolutely it doesnt work, and the other half saying absolutely it does. You might have to use on relevance, interest, long-term security, or whatever, but I am not aware of there having been a conflict like that. Oba: But, I think News Corporati on and ESPN or Disney have somewhat different policy in terms of programming. Wilkinson: That may be true on the movie si de, but its sport. There isnt really such a disagreement. Were positioning also based on content rather than necessarily based on which p ackage of movies we have I accept that in the documentary space or the music space that may well be different. STAR Movies is different from the Disney Movie Channel. Thats going to be positioned differently, but in this business area, its not really like that. Dont forget that the underlying interest or the underlying cost of this business is its sports rights. Were not really buy ing sports rights from our parent companies. Sometimes we do, but the output deals, which I referred, is a very small part of our business. Were buying rights from third parties. So, its not like were saying this packag e of movies owned by Disney is better than this package of movies owned by Fox. You can see the conflict, and frankly people went to HBO or Cinemax. I know that their in itiative is studio initiative, and there is conflict, of co urse. But, in this market, were, by and large, buying content from third parties. So, the problem doesnt seem to exist. Oba: As for sports broadcasting rights, I understand ESPN STAR Sports makes their local channels like ESPN Taiwan or ESPN India to make investment in and contribute to the acquisition of br oadcasting rights of sporting events. Is that correct? Wilkinson: No, it doesnt really work like that. Oba: So, you will never rush local channels to make some contribution to get some sporting rights for the whole Asian markets. Wilkinson: I mean you might allocate costs to them, but youre not asking them to pay for them. Youre not asking them to put their hands in their pockets and pay for rights, because all the rights ar e owned by the company. ESPN Taiwan doesnt exist as an affiliate in the way that you might be thinking. It is a channel. Its that where you might say, OK, we bought the Premier League, assuming that most of the cost s for the Premier League set to go to 338

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Southeast Asia and a tiny amount to go to Taiwan. But, thats on allocation basis. Its not a question of paying for the rights. Oba: However, when you purchase the broadcasting rights for Major League Baseball, each of the local channels will have to share the purchasing cost. Wilkinson: Its an allocation. No one is going to ESPN Taiwan and saying, How much are you prepared to put in for this program? Likewise, no one is going to STAR Sports Taiwan and saying how mu ch it pays. You are looking at it as the whole. Were buying for all these markets. What we do is we say, Look, is there any interest for this property in Taiwan? No, not really. OK, lets not buy Taiwanese rights. Taiw an is allocated some of the costs and allocated the revenue as well. We write reve nue both on a regional and sub-regional level. So, Taiwan would be allocated a piece of the regional money as well. Oba: What are your criteria when you choose content for Asian markets? Wilkinson: Ultimately, cost and revenue. There are some properties we would expect to make money on, and some properties we would expect to lose a bit of money on but good for the prestige. And, some properties would be in the balance. But, the finances are only one part of decision-making process. You are looking at it strategically, perhaps. You re looking at growth. Youre looking at rating. You are lookin g at content. You make decisions based on a number of different ways of looking at sales. But primarily, its about service to the consumer. Is the viewer interested in our programming? I guess thats probably the number one cr iteria. Sure, youre providing a TV service. And then, people would watch our networks, affiliates want our channel, and advertisers want our channel. Not ever y decision is made that way. But, overall were looking at how we offer the best service to our viewers. 339

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APPENDIX O INTERVIEW WITH DISCOVERY CHANNEL JAPAN March 17, 2006 Luff: Discovery operates very much globally. The first thing Discovery does is whatever possible to create programming that will be of interest to most Discovery viewers around the world. There are various offices in major regional centers underneath Discovery Ne tworks International, which look after each of their own regions. Each of those offices actually has the programming department and works very closely together. Sometimes, those offices decide that they will put mone y in something like pool funds, so each of them has their own budget to some extent to do their own programming. For example, Discovery U.S. wants a program to be commissioned or co-produced. It mi ght be a space program about mankind going back into space. All of the internat ional offices agree that thats a very important program for everyone in the world, including all of their viewers in that region. So, they can put mone y into that production. In fact, that production is made for every Discovery viewer in the world. We call this a DCI (Discovery Communications Inc) commission. DCI is the parent company that works from the world h eadquarters in Silver Spring, Mary land, the U.S. When DCI does a commission, it s on behalf of every region in the world. So, Discovery Japan will automatically get that commission program. Oba: Do you get the commission program for free? Luff: No, we all have budgets we need to contribute. But, it s quite a complicated process how the money actually flows from Discovery Japan to DCI. The Singapore office is the regional headquart ers for Discovery Asia Pacific, and Discovery Japan is actually part of As ia Pacific. We mainly provide money to Discovery Asia-Pacific in Singapor e for our programming. At the moment, we dont have a budget to do local commissions. We dont do commission that are Japan-only from this office. We pay money to Discovery Asia, and in turn, they are fully responsible for pr oviding us with all of our programming needs. The reason for that is its much mo re cost efficient to do that. It also enables us to have an input into what programs we want the money is used efficiently, because the Singapore office can pool the funds from each of the offices in the region and come up with something that will work for everybody. By actually pooling the funds, they can produce something thats of higher quality that has appeal to all of the viewers. So, its not about just acquiring whatever the U.S. Discovery produces. We have a say about what programs should be produced The Singapore offices responsibility is to listen to each of the regions and to come up with common things and common program ideas that are relevant to most people in the world. Thats mainly how we operate. We mainly operate as a global company that is looking for issues that affect people in a way that it is common to everyone in the world. Oba: What are issues commonly in teresting to people of the world and those particularly to Asian people? Luff: Issues about the environment, engineering development, science and technology are affecting everybody in the world. These are the main sort of 340

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big global issues that we address as a company on a global basis. On the other hand, we realize that there are cer tain topics that are of particular interest only to the Asian region as we ll. An example of that might be the tsunamis that may not be a relevant topic to viewers in Europe or viewers in the U.S. But, as the Asian audience obviously is directly impacted by tsunamis, its very much an Asian-Pacific topic, and so the Singapore office may realize tsunamis are very important thing we need to be considering. We will have a discussion about the particular type of program to produce. We will say, Yes, its definitely relevant to the Japanese audience, so we need to include topics about Japan in that program. So, the program will be about tsunamis generally and will feature c ountries all around the region that are affected by tsunamis. It will include some Japanese stories as well. So, its not solely a Japanese program but will include examples from Japan that are particularly relevant for the Japane se audience. Of course, viewers in Australia and viewers in Singapore are inte rested in Japanese stories as well. Oba: Are viewers outside Japa n interested in Japanese stories? Luff: Japanese topics are interesting to a lot of people in the world. So, whats really part of our role as a global company is to also take Japanese stories to the rest of the world as well. We bri ng in foreign stories to the Japanese audience but are also taking Japanese st ories to a foreign audience. And so, thats how we operate globally, sharing ideas and stories. Apart from the big global stories, we also need things that are specific to the Japanese audience. They are topical and relevant to th e Japanese audience but may not be relevant to the Australian audience or the U.S. audience. Oba: What are the topics relevant to especially for the Japanese audience except for tsunamis? Luff: An example is engineering de sign and how engineers in Japan are coming up with new ways to design buildings to reduce the impact of earthquakes. We featured stories on the Roppongi Hills de velopment when it was first built. We are probably doing some stories now looking at other developments in Tokyo and other parts of Japan. So, anythi ng thats particularly relevant to our brand, the Discovery brand, is all about enabling our viewers to explore their world and also to satisfy their curiosity. An essential component about brand is giving information that th ey didnt know before. So, we are constantly looking for new information, new developments, and new discoveries, not only on a global basis but also within Japan for our own audience. Other things we look at in Japan are developments in the automotive industry. Japan is leading the world at the moment in terms of engineering for motor vehicles. Toyota is in fact the largest motor vehicle company in the world. So, its a very important topic not only for the Japanese audience but for the global a udience. So, the way we operate is actually kind of a hybrid or mixed mode l. At any one time, there could be several productions being made in Japan, not necessarily only for Japanese audience for Discovery. For example, Canadian Discovery Channel has their own budget for commissioning programs. They have done many stories in Japan. They came here during the expo at Aichi. They did a whole hour program just on Japan, while they were here. They featured the expo, various developments in computer technology in robotics, and lots of science and technology stories coming out of Japan. Those are the stories that are not 341

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only of interest to the Japanese audien ce but very much of interest to the Canadian viewers of Discovery Channel as well. That program was originally commissioned by Discovery Ca nada. They made the series. We have access to that program so we can c hoose to take that program exactly as it was made particularly for Canadian audience, but we can also choose to adapt that program. We can acquire th e rights to the program, with the additional rights being able to edit it or to localize it, or to repackage it. A good example is the Canadian series in Canada called Daily Planet. It was particularly made for the Canadian a udience. It has two Canadian hosts who are traveling the world, looking for stor ies to bring back to the Canadian viewers of Discovery Channel. What we are doing with that program through our Singapore office is that the office ha s acquired the rights to that series for the whole of Asia Pacific including Japa n. We were particularly interested in that series, because it has many Japanese stories. What the Singapore office is doing is re-versioning or repackagi ng that whole series by taking segments of stories from the series. They reedit ed it and made it particularly relevant for the Asia Pacific audience including the Japanese audience. It is being reversion, it is being repackaged, a nd it is shown on the Discovery channel throughout the whole of Asia Paci fic including Japan. The Singapore programming team is looking at that seri es with a fresh perspective on behalf of all of our viewers in the Asia P acific region. We will take out anything that is only directly relevant to the Canadian audience. We will also add in things that we want to be relevant to our Japanese audience and to the Asia Pacific audience. Clearly, that costs m oney. Youve got the original license fee that we have to pay to Discovery Canada, plus the cost of actually repackaging and re-versioning that series. Oba: Do you have original programming fully produced by Discovery Japan? Luff: We are not doing very much fully original programming that is only made for Japan. We are looking at ways of doing that at the moment, identifying additional funding opportunities to do local production solely for Japan. But, to do that is obviously much more e xpensive than doing something that will work across the region or can be shared with all of the regions of the world. We have had Japanese productions th at have been commissioned or co-produced by Discovery Asia and ofte n with another part ner in the world. For example, last year we showed a special program called Secrets of the Battleship Yamato. This was a production all about a Japanese ship, the largest battleship ever made. Its obvi ously very much of Japanese program, particular interesting to Japanese au dience. And so, the challenge for that program was actually to tell the Japa nese audience something they didnt already know. The way that program wa s financed was Discovery Networks Asia in Singapore co-produced that pr ogram with the Public Broadcasting Service (PBS) of the U.S. They have a regular programming block called NOVA, specializing in documentary programming, focusing on history or science and technology. They identified this story was very interesting and very important for the U.S. audience as well. PBS put money in together with Discovery Networks Asia, so th e producer was able to make that program for two different audiences, actually creating two versions. One version was made predominantly for the Japanese audience, which also worked very well for the rest of Asia on Discovery Channel. But, the U.S. 342

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version actually had a different perspec tive. The story is the same, but it just looked at the story from a different vi ewpoint. Its assumed that the U.S. audience didnt know a lot about this battleship and background, and wasnt really familiar with what the word Y amato means. So, there was a lot of information that had to be explained to the U.S. audience that the Japanese audience would already know. Instead of just doing one program to work for both audiences, the producer decided it wa s very important to actually have two separate versions. One is very re levant for the Japanese audience, and another one is very relevant for the U.S. audience. Its very interesting that you can actually do that with one story. It doesnt mean you change the facts. Obviously, the facts cannot be changed. But, its treated from a different perspective. It was during the World Wa r II, and Americans were involved in the war. It looked at particularly from the U.S. side as well. How had the U.S. people felt about that period? That was very balanced reporting, so it wasnt at all one-sided view. It was very ba lanced in both versions, but it just approached from a different perspective. So, its difficult for me to actually give exact percentages of how we do this, because we are not going to track it that way. Almost everything we offe r to our audience in Japan has been considered from the Japanese audi ences perspective, even if its a production thats been made originally for the U.S. audience, or its been made for the U.K. or European audien ce, we will look at that program and decide this is relevant to our Japanese audience. Does it have topics that are of global interest including the Japane se? Or, does it have topics that are particularly relevant only for the Japa nese audience? Does it feature local topics? I can say that none of the programs that we show to our audience is not relevant to our audience. We look at everything thats being offered to us and have a say just about everythi ng. We are very fortunate that the programming team in Singapore who looks after the region makes out a large team, and there are people who are de dicated to the Japanese business and are constantly in contact with us ever yday. They are very aware of what our requirements are and major topics that are of interest to our viewers. We give them a lot of customer feedback, and in turn the Singapore office works very closely with the U.S. office and the othe r international offices to say, Tokyo is really looking for stories about science, developments in genetics, DNA research, and DNA mapping. There seems to be an increase of interest in this area. We also find that the rest of the region like Australia is really interested in this area. The Singaporean s are really interested. The Chinese are really interested. Europe then sa ys, Thats good, because we are finding the same thing. The people in Europe are now saying they want to know more about this sort of area. And so, we can actually come to the conclusion that this is a topic that is a particular interest to various regions of the world. Americans were not really interested in this area. So, they are not going to be doing topic about this. There are cases where you will have various regions excluding the U.S. get together to pro duce a series that have particular interest to their regions but not of an y interest to Americans. I think the international business has a different fo cus in many respects from the U.S. business. The U.S. is such a large count ry and has such a large diversity of population and of cultures of geographical regions that th ere are lots of 343

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stories in the U.S. that are particular in terest to U.S. viewers. I think probably the U.S. viewers are less interested in international topics. Oba: Do you mean viewers in other coun tries are more interest ed in international topics in comparison to th eir American counterparts? Luff: I think an Australian audience fr om my experience is much more interested in stories from Europe, from Asia, and from Japan, than may be the U.S. viewer. That influences the decisi on making about what programs are produced and what countries will show those programs as well. There is a kind of constant dialogue about what is particular interest of which region on which country. One thing we have just done recently is actually a hire of our own general programming manager just for Japan, and we have identified that our business is now at a level that we would like to identify opportunities to start commissioning and acquiring programs particularly for Japanese audience that may not be of inte rest to anyone else in the region or in the rest of the world. What w ould happen is that our programmer identifies a topic for program that he knows will be of real interest to the Japanese audience. Its al so quite often the case th at you will have two very different countries with very different audiences interested in the same topic for various reasons. Oba: Whats the topic, which viewers in two different countri es are interested in? Luff: We might decide to make some programs about marine world for our Japanese audience. I would not be surp rised if the Australian office says, Our audience is very interested in this as well. That is probably because Australia is an Island just like Japan is. We are very much influenced by the oceans around us, so the marine world is of particular interest to both countries. We may actually pull funds to have the rights for both of those countries. But, ultimately its kind of an economic equation. The question is whether the Australian market is bi g enough to justify putting money into a production that may only be seen by the Japanese and the Australian audience. Sometimes the answer would be yes, and sometimes it would be no. We may decide the answer is yes but think we should wait until another topic that we have identified. So, its all of question of balancing our interest and our finances and making sure that we use our money wisely and most efficiently across all of our bus inesses. Ultimately, Discovery Japan does not have its own budgets to do Ja pan-only productions or commissions, but we can speak with the Singapore of fice and globally about creating more Japanese stories or identifying stories th at are of particular interest to our Japanese audience. Oba: Do the Discovery Channel in Si ngapore and the Discovery Channel in Japan have the totally same programming format? Luff: No. Actually the Singapore offi ce looks after the whole Asia Pacific region. Singapore is also the regi onal operations center. So, we physically create all of the channels for the whole region in Singapore from our single production and distribution center. There is actua lly a dedicated feed for Discovery Channel Japan, Animal Planet, and Disc overy HDTV for Japan. They are all created in Singapore and then beamed out by satellite and then set down by cable systems here in Japan. So, its a bit like the way the actual schedule and the actual grid, what programs ar e shown on what particular nights and what particular times, is designed. We try and come up with a common 344

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format that would work for the whol e region for various reasons. One is brand consistency. People are becomi ng much more mobile, and someone, for example, a Japanese person, goes to Singapore and he or she sits down and watches Discovery Cha nnel in Singapore. We like them to feel like they are watching the same brand, even though the programs may be different and the schedules may be different. So, as much as possible, we like to link the schedules and keep the grid for the whole region as close as possible. The other reason is for advertising. We do quite a lot of regi onal advertising, and Singapore is actually a set up for regiona l advertising. A lot of agencies and clients based in Singapore want to adve rtise across the region. They are often looking for a solution that is consistent across the whole region. They want media that will work for them across Asia Pacific. And so, if we actually change our grid or our format significan tly, it just offers some problems for our regional advertisers. We have to cu stomize it further and further for them. They generally prefer not to have that level of complication. They like to have a solution for their a dvertiser requirement: thats very simple, very easy to measure, and very consistent. So, we have to balance the interest of keeping a unified brands and keeping our regional advertisers happy. On the other hand, we also need to satisfy our local needs. For example, we have identified aggressive animal progra mming like really wild programming of predators in the rest of the region. It may be identif ied that most of Asia Pacific like to watch that sort of pr ogramming, and its really popular, and so it would be scheduled at prime time. Ho wever, in Japan, we may decide that most of our viewers really are not interested in wa tching the programming in the prime time. They want to see pr ogramming that the whole family can watch together, and potentially children should not be watchi ng that sort of programming before they go to bed. We may actually move that sort of programming into a late night timetabl e. So, we may be different from the rest of the region where they have 8 o clock wildlife predators. But, in Japan, its not shown until 11 oclock or even midnight. So, there is some room for change. So, we change our grid from the rest of the region for editorial needs, from what the audience is looking for, and from feedback we get from our audience. We also sometimes change it from the rest of the region for our own advertising requirements. Often we work with local advertisers in Japan. They want to advertise only to a Japanese audience. We can offer them programming schedules to f it with their own brands, and also we can create special programming for them to send a particular message for their audience. We may actually change what the re st of the region is doing and have something different for our own advertisers. We can work with our advertising partners to create an envir onment that is going to be relevant to message they trying to deliver to their customers as well. Oba: You refer to some dissimilarity between Japan and other Asian countries. At the same time, do you also think Asia n viewers share something common in terms of expectation for documentary programming? Luff: I think generally documentary programming or factual programming can be across a very wide range of topics. Di scovery channel is particular about science and technology, engineering, history, world culture, and human adventure. There are these lots of topics we focus on. But, what our audience requires from us is and what we continually try to offer them is a level of 345

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quality in terms of the production: very high production values, cleaver editing, new camera techniques, etc. I m ean a quality production or technical quality but also quality in terms of providing information that is not generally known. So, really our specialty is gaining access to stories, to people, and to facts that are generally not known. Thats part of our brand, the word Discovery. Its all about telling me something that I didnt know before. And so, audiences expectation about our brand particularly is You are a documentary channel or factual entertainment channel so I expect certain types of stories, but, on top of that, you really have to tell me something I didnt know before. So, thats where we would differ from other documentary channels. Not just to show beautiful pictures or have a very high technique of production, but th e actual topic itself needs to be generally not really well known or go a further step to whats been done before. There is certain topic that th e Japanese audience is interested in. Egypt for many years was very a lot of interest. The Titanic or major engineering stories are of a lot of inte rest. But, as other networks and other channels cover similar stories, our ch allenge is always to find additional information. If we are going to do anothe r Titanic story, it has to be very different from every other Titanic stor y ever told. In the past, we have worked very closely with James Came ron, the Hollywood producer. He has a lot of technology thats allowed us to go further explore more, look at more detail, and discover more facts that were just not known before. So, we will only able to do another Tita nic story if there is a completely new angle what we can expose to our audience. Ther e is no point in doing the same story over. It always has to be a fresh resp ective. Otherwise, our audience will be very disappointed. Oba: What type of programming is c onsidered to be univ ersally appearing and accepted by audience worldwide but not necessarily supported by Japanese viewers? Luff: Thats a very good question. I think as a general statement the Japanese audience is interested in very inspirin g and positive stories that reinforce the fact that the world is constantly improving. Now, in comparison, there are some countries where Discovery Channel viewers are demanding of more of what I would call the underb elly stories like Please tell that there is a problem. I really need to know that there is a problem. I think the U.K. audience, for example, is actually more in terested in this sort of semi-stories and in sort of darker stories. So, Eu rope or the U.K. may do stories that reveal problems and issues, for example, getting really inside what Saddam Hussein did to his country. I mean so me terrible stories about what was done under his leadership, not always positi ve. There is not always a positive outcome in the fact that he was actually captured in his own trial. To do that story, a lot of that atrocity and a lot of that horrible torture have to be shown. The European audience demanding that to be included to have really balanced view of that sort of story re quires the channel to show exactly what went on. Of course, there is a lot of footage ava ilable that shows exactly what was done. I mean its horrible f ootage. Its neither enjoyable nor entertaining. But, I think as a curren t affair story or as a documentary treatment the European audience woul d be very demanding that all be included. From my experience so far, th at sort of story is not so popular in 346

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Japan. The audience doesnt seem to react positively to those sorts of stories. It might be a cultural thing where dayto-day life may be a bit harder here, particularly in Tokyo, a huge and very urba n city. There is a lot of stress just in day-to-day life. When people get ho me and watch television, they want to relax and be entertained and uplifted. They are not necessarily looking for hardcore current affair stories. As a general statement, Japanese terrestrial television focuses very much on light ente rtainment, variety, and fun. Its an escape from the hard life that people have experienced during the day. And, the people seemed to be less interested in hard core typical issues. The other thing I just want to add is that, li ke everywhere, I suppose the Japanese audience is less interested in watching programs that are from some other countrys perspective. For example, if the U.S. Discovery were to come here and do a story for the U.S. audience, it probably wouldnt be of interest to our Japanese audience, because its assuming of very basic level of knowledge about Japan. It would be telli ng stories that the Japanese audience would not be interested. They alread y know a lot about that. So, we would tend to avoid that sort of programming, because its not designed for a Japanese audience. Its tell ing a story from a different perspective. It may be interesting to somebody else but not interesting to us here in Japan. Oba: Do you think a documentary film in general is more easily understood or accepted by various parts of the world in comparison with other program types like music programmi ng or sport programming? Luff: Its a hard question. I think so me genres of programming need to be much more culturally relevant to a partic ular market. Documentary programming particularly for Discovery Channel ca n be more global in focus. For the reasons as I mentioned earlier, we focus on global topics that affect everybody, regional topics that affect pa rticular region, and then very local topics for things that are very to pical in particular country. I think documentary programming lays itself being much more globally and regionally focused, than lifestyle progra ms or even music video programs or even news. News often needs to be very locally focused. We have that sort of luxury in a way that we can operate much more globally as a program producer. Obviously, we still need to do local productions and we are very aware of that local audience, but they are less concerned about being Japan focused. I think our audience is much more outwardly focused. When I watch other channels here in Japan, I find that the music video channels and the news channels are very focused on Japan. I think there are cultural and political reasons for that. The channel brands themselves were even very locally focused. For example, even MT V from what I see does a lot of Japanese programming although there is also a huge mix of U.S. music. MTV programming is very different from us. They do a lot more local production, and I think thats a cultural thing. Thei r audience is younger, and they arrange some music and youth issu es. Those sorts of issues are very much Japanese focused. I also think their business model generates lot of advertising revenue from doing local events and local productions. The music generally allows you to do that a lot more than a documentary. Documentary programming really does n eed to be dealing with in-depth issues and also provide very balanced coverage. Our brand does not really allow us to change our focus in that programming for the benefit of an 347

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advertiser. I think the MTV brand is mu ch more open to doing that, actually changing what they are doing for the be nefit of an advertiser. We have a different focus than what some of those other brands do. Oba: Can you specifically characterize the target audience of Discovery Japan in this market? Luff: Particularly in Japan, we are ve ry fortunate that the brand that we have internationally suits really well with th e Japanese audience. We target people who are really curious regardless of a level of education or financial status. But, we find much of our audience does have a very good education and generally is so curious to know mo re their own lives. They have many opportunities to further their education to get jobs and are quite successful and have quite good income as well. In Japan, the standard of living is generally very high, the average income is very high, and many of our audience actually have a high education. Mo st of them probably at least have one university degree, if not two. And, ma ny of our viewers hold very senior positions in companies and therefore are ve ry influential in their careers, so we particularly enjoy having them as our viewers, because they constantly demand a level of information and a level of quality that we are really comfortable with. We like to be pushed in that way. We like our audience to be satisfied with what we have delive red them. As a general rule, we target men and women between 25 and 54 as sort of our core group. But, of course, we have 8 year olds watching and lovi ng our channel and sending us emails or writing us letters to tell us how much they want the channel. We also have 88 year olds telling us exactly the same thing. So, its actually less about age, and I think more about mental attitude. Particularly in Japan, the longevity of Japanese people is growing, and people are getting older and older. The average age of our audience is probably getting older along with the general population. They have a very good diet and access to excellent medicine. We are constantly identifying topics that w ill be of interest to that audience as well: the future of genetics, the future of health, or how to combat breast cancer. We would like to offer more programming in that area to inform and educate our audience. Oba: How is Discovery Channel as a brand perceived in the Japanese market? What kind of brand image is generally shared by the Japanese audience? Luff: We are actually constantly doing customer research, and last year, we did done quite lot focus groups for our vi ewers. Our brand is very well known, even amongst people who currently dont subscribe to our channel. Its generally perceived as a global brand, not a U.S. brand. This is a very good thing for us to hear b ecause although Discovery Ch annel was started in the United States, its now global brand and we try not to be the U.S. focused. We try to be globally focused. I think ha ving the globe in our logo helps us in that way. People generally remember the globe as a logo for us. They know the word Discovery and understand what it means in English. They have said that its very much of that exposing new information, being very balanced, and offering stories that the broadcast networks wont offer. We have core viewers who are very loyal to us, a nd their feedback was generally very positive. Please dont change the way you operate. Please dont change the programming that you are doing. Do mo re of the same level of quality and then remain a lot of our progr ams. Generally, turning on Discovery 348

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Channel is their first destination when they turn on their television. They want to see whats on Discovery before they go anywhere else. Oba: Do you find any regulations on showing foreign programs in Japan like quota for the amount of foreign pr ograms? How about censorship? Luff: In terms of the amount of foreign programming, we havent found any particular regulation. There is no requirement either minimum or maximum. That works to our audience as advantage. We are completely in the hands of our audience in terms of what they want to see. We are able to offer them a whole range of topics from different countries including Japan. So, its very much of free market in that sense. In terms of censorship, as a global brand, we are very conscious of not being culturally derogatory. We are very sensitive in terms of profanity, any wo rds that are offensive. Obviously, we have to be very cautious and think balan ced in reporting if it is a very serious documentary topic. We have to be careful about what images we show. For example, if there is violence, we have to be very conscious of what time of the day we need to show that. Its le ss sort of regulation and more of just being very sensitive to the audiences requirements. We are just very conscious of our audience and what their expectations are and listen very carefully to what they tell us. If they are offended by something, we know immediately. If they tell us that we havent gone far enough, they tell us. Our audience is very vocal and immediately sends us e-mails or telephone to our customer service centers. But, as legally, Im not aware of any real regulations that sorts of protect us fro m showing any particular thing. We are more sensitive to our audiences expectations. Oba: There should be mainly two sources of revenue for you. One is the license fee from platforms like cable system ope rator, and another way is of course advertising revenue. What is the ratio between them? Luff: The ratio varies from country to country. In Japan, sp ecifically the ratio is still very in favor of the affiliate revenue. Its mainly because of the distribution of the channel. As a general rule, the CS (communication satellite) industry in Japan is still in a very much of developing or growing phase. Terrestrial television viewing in Japan is still dominant. You have 80% of homes who have over-the-air br oadcast but dont have CS. Out of the 20% of homes that have CS, its up to each channel to maximize their distribution within that universe. So, at the moment, advertisers require a certain level of distribution before th ey can justify spending money. We are fortunate with Discovery channel that its now exceeded 5 million households in a total CS universe of 9 million. So, its got pretty good distribution, and advertisers have actually been attracted to it as a platform. In Japan particularly, we have a nother obstacle: there is no regular viewership rating for the CS industry, and advertisers usually require some sort of measure or effectiveness. Wit hout that sort of accountability, its sometimes hard for an advertiser to ju stify allocating any of their budgets to the CS industry. So, at this point, we have still much more reliance on our license fees from our cable and satellite affiliates. But, advertising revenue is a growing percentage. I cant give y ou exact numbers, but the predominant source of revenue for us is still our affiliate fees. Oba: Do you have multinational or global advertisers more or domestic ones? 349

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Luff: As a global company, we opera te on the three levels. Headquarters for international sales is based in New Yo rk. Each of the regional headquarters also has a division focusing on international deals. And then, for example, in Singapore, theres the regional headquarter s for any advertiser that wants to advertise within the Asia-Pacific regi on or outside the region. The example of the way that works is that we ha d a very good relationship with Tourism New Zealand for many years. We actuall y offer their campaigns to Discovery Channel viewers almost around the w hole of our distribution around the world. You will see an ad on Discovery Japan promoting New Zealand for tour. That deal was come through the Singapore office, because New Zealand is part of the territory. The Singapor e office then take that campaign to Europe or to the United States, and if you are a Japanese traveler and you go the United States, you will see that ca mpaign on Discovery Channel in the United States as well. Tourism New Zealand identified Discovery Channel viewers as a great targ et for travel to New Zealand. There are the international deals and th en regional deals. Companies like Honda, Sony, or Samsung out of Korea look to advertise on a regional basis, and sometimes that will include Japan as well. So, you will see ads on Discovery Channel for Samsung, which are targeting the Ja panese audience. Similar campaign is running across the rest of region. S o, when you are watching Discovery Channel in Japan and seeing the ad, it could have come from the New York office, from the London office, from th e Singapore office or from our Tokyo office, depending on where the deal was done, where the client is based, and which territory they want to cover. Oba: What are your rivals or competitors in the Japanese market? Luff: Of course, our biggest competitor generally is the terrestrial networks, because they still have the biggest share of viewership. Within the CS industry, our closest competitors would be History Channel and National Geographic Channel. I think Discovery Channel still has significantly high distribution than National Geographic Ch annel, but we are constantly aware of them as a competitor on a global basis. They are constantly competitive and identify our successes and often copy things that have been very successful for us. And, if I were them, I would do the same thing. If you want to succeed, then copy the leader in th e field. In Japan, Discovery Channel is still the leading provider of factual doc umentary entertainment, but we are constantly watching what National Geographic is doing. Oba: How important is the Japa nese market for Discovery Channel? Luff: The Japanese market is a very large one. There has a very high population, very high income levels, and very high level of education, so as a market, it is a very important one for our busine ss globally. Within the region, its one of most important and la rgest markets. In terms of opportunity, it also has huge potential, because currently the CS industry is only at about 19%-20% penetration. The economy is really imp roving as coming out of the recession period post the 90s. We have the sup port of both of our shareholders, Discovery International as well as our local partner, to expand our business, so we are very focused on opportunities in this market. Its also a high technology market. New products are released all the time. So, its kind of leading the way even ahead of the Unite d States in many respects in terms of the products that can be offered and what the consumer demand is. The use 350

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of the mobile phone here is probably higher than in many markets in the world. Already with the development of mobile television technology and video-on-demand content being set to mobile phones, there is a huge opportunity for our brand in that area as well. Oba: What is the advantage for Disc overy Japan to be part of a transnational television network as Discovery Channel? Luff: The advantage is that you have huge resources available all around the world. Even though I work for Discovery Japan, Im still very much part of Discoverys international business. I am in constant contacting with people in the Singapore office, in the Australia n office, but then also it might be the European office. Im talking to people in London constan tly and talking to people in the United States. So, in terms of all aspects of our business, there are many resources available. We can share research globally. We can share programming on the global basis. We can identify opportunities for our audience that can be shared with other people in other markets. As a sort of a global network, we are constantly shar ing information, material, and creative ideas. We are also operating on a digital basis. The Singapore operation center is a 100% digital now. So, whet her its programming or short film program production, content can be shared across the whole world. It can be loaded onto a digital media center web si te and instantly viewed by people in my office or shared with people in the London office. So, we can share material that can reduce the cost and also increase the level of creativity. Because we are sharing ideas constantly my head of creative services, who is in charge of all of our promotions, can see what the London office has done, what the Singapore office has done, and even what the U.S. office has done. We get ideas from them or even give them ideas of things that we have just done and are working very well in our market. Its constantly evolving a brand on a global level. Oba: To what extent is Discover y Channel Japan given autonomy in terms of programming decision from Discovery Network International or Discovery Asia? Luff: At the moment, its very much of collaboration rather than sort of having autonomy. We work really closely with the Singapore office on our all decisions regarding programming. So, th e level of autonomy in some respect is low. We dont have the ability to ju st go often do whatever we want. There are several reasons for that. One is rea lly to ensure consis tency of the brand. We are not doing anything that would hurt the brand or would be substantially different from the way th at the brand is presented in other regions of the world. The second reason is really just a financial one. Its much more cost effective to share material across the region than to something solely for Japan. Having sa id that, in terms of programming decisions, my team is involved in all of those decisions. They are constantly giving feedback to the Singapore office about what works here, what doesnt work here, and suggestions about the schedule. The Singapore team is very receptive to those ideas. Its a very mu ch of collaborative process. Outside programming, we do a lot of production here in Japan like a short film between the programs. Most of that is done solely for the Japanese audience. And, in fact, we do a lot of brand work thats just made for Japan, solely produced in Japan either by my marke ting team or by my creative services 351

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team. Now I see, as we do more and more work with advertising companies and the advertising clients in Japan, we are actually producing a lot more material, which usually takes short form at this stage. It ranges from a 15 second to a 3 or 4 minutes. But, it will solely be produced for Japan. So, we have quite a lot of autonomy in that sort of short film areas. In fact, we usually go ahead and produce those thi ngs and then share them with the Singapore team or with other regional offices afterwards. Although ideas are shared before the production is done, we are doing something consistent with which the wider brand is presented in our regions. Its a hi ghly collaborative process and, because of the way, we work as a global company. Oba: At the end of today, what do you think is the most significant factor to determine your programming schedules? Luff: What the audience expects and feedback from the audience. We do get occasional viewership ratings informa tion. Its only twice a year for the whole industry, but we take out that information into account as well. We are constantly looking for major stories that are relevant to our brand and our audience. So, its all about the audi ence really. I mean audience and the brand, and what we can offer them and what they are asking for. Oba: Do you mean the expectation of audience is much more important than how much a program costs? Luff: Obviously, we have budgets that we need to work to. But, the audience pretty much dictates how you spend your money as well. The fact that our audience really expects a high level of quality a nd a high level of depth of information means that we do have to spend more money on our productions. If the audience would say to us, We dont mind you can give us really low level of information and we dont mind bad qua lity, we would really change the way we operated. But, our audience is not telling us that. They are telling us high quality and depth of information that dont come cheaply. So, we are constantly looking for ways of deliver ing that production cost efficiently. Thats a big challenge but the advantag e of being a global company. We can share production cost and commission cost and find co-production partners all around the region. 352

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APPENDIX P INTERVIEW WITH DISCOVERY CHANNEL ASIA August 29, 2006 Oba: How many programming feeds to specific countries or markets do you have in Asia? Gibbons: We have 17 feeds across the Asia Pacific region. These 17 feeds are divided between our channel brands as well as geographically. So, for Discovery Channel, we have 6 feeds. We have a Southeast Asia feed. We have Taiwan, Japan, China, Australia and New Zealand thats five, and then there is also India. We dont manage India from this office but operate it from this office. And, those feeds are customized into different languages into complex and simplified Mandarin, Thai, Malay, as well as Japanese and Hindi in India. So, each of our brands is divided into geographical feeds, which are then language customized. Key markets in terms of the significant volume of business for us are Japan, Taiwan, and Australia. Oba: Do you provide the totally sa me programming simultaneously for those markets? Gibbons: Weve got to stop by saying that there is a common buying strategy across all of our feeds according to the brand. So, Discovery Channel will have a programming philosophy and strategy, which means that whether you are in Taiwan, Japan, or Australia, we will go through the same kind of thought process in selecting programming. Now, we always try and maximize programming that is shared across the feeds. The reason for this is because we believe that to a very large extent, the appeal of Discovery is universal. If you like space programming and you ar e Japanese, and then if you are Taiwanese, there is no reason why you shouldnt also like space programming. Why buy two different shows when we can buy the same show? So, there is a certain logic to maximize shared programming across those feeds. However, what we have also realized is that in order to connect with our viewers and to con tinue to grow our viewersh ip, we need to be very locally relevant at the same time. This means offering content to people that is very close to their own personal experience. And, this means that we supplement our universal programming with very targeted local programming. So, for example, just on Sunday in Taiwan, we add a program called Man Made Marvels: Hsuehshan Tunnel as part of our Man Made Marvels series. Hsuehshan Tunnel is a new road tunnel that they have built that connects Taipei to the coastal tunnel of Yilan. Oba: I saw that program last night. Gibbons: Oh, you saw? Yes, thats the one That actually received extremely high ratings in Taiwan, probably the highes t rates of program we ever had in Taiwan in 12 years of being there. S o, when something is very relevant to people, that can deliver a very strong rating performance. What we are trying to do is to supplement our universally shared programming with content that is targeted very specifically at th e needs of that market. When you look across each feed, there is shared programming, but there is also programming that is dedicated and specific to that feed. Oba: Approximately what percent of programming is shared across regions? 353

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Gibbons: This is very rough, but I would sa y probably 60% to 70% is shared across most regions. Oba: What percent is shared betw een Discovery Channel Asia and Discovery Channel U.S.? Gibbons: The company is headquartered in the U.S., but each geographical region has a certain management, which means that each region really makes their own decisions about what programming they buy. So, in terms of what they share with the U.S., each region is different. For Asia, I think its commonly known that about 60% of our content is shared with the U.S. Oba: What should I call your programmi ng feed catered to the Singapore market? Gibbons: Singapore does not have a dedicated feed. Singapore is part of the Southeast Asia feed. Southeast Asia feed covers all of the Southeast Asian countries: Singapore, Malaysia, Indonesia, Tha iland, and the area up to Hong Kong. Oba: You also provide some language customization for each market. Gibbons: Yes. Let me explain about language customization and about the breaks. Just because we have a single feed for Southeast Asia region doesnt mean that we cant provide a dedicated service for each country, and what we can do is that we can send a number of audio tr acks and subtitle tracks along with our video signal. So, basically depending which country you are in, you can take the correct audio track. We can have the shared video feed that people can take their own audio that is referring to their market s. And also, in terms of the breaks, we have the same Oba: Do you mean commercial breaks? Gibbons: Yes, I can tell you about commercial breaks. We have the same promos and ad works that run around the region, but each local affiliate operator is able to insert their own promos at a pre-a rranged point. So, in that case, we can have local people see local ads and also sometimes local promos within the affiliate time. Thats how we make sure that the shared feed, the Southeast Asia feed, is still targeted at the specific markets within it. Oba: Localization is a kind of buzz wo rd in these days for global TV networks including you. Whats your definition of the localization of programming? Gibbons: I suppose that broadly speaking, lo calization means speaking to people in their own languages with conten t that is relevant to their cultural society. But, it can take many forms. You can look at language customization. So, as language customization policies as they relate to localiza tion, you can look at the grid (the schedule). So, you might have the same programs, as Taiwan could have the same programs as Singapore, but maybe we just need to schedule them differently. You put this s how at 10 oclock and this show at 8 oclock, so the grid is Oba: Is it because of time difference? Gibbons: Time difference is obvious one, but also maybe the environment in Taiwan is different from Singapore. Im just gi ving you an example, and this is not necessarily the fact. But lets say in Singapore, the peak viewing time is 8 oclock, and then, of course, you put your good series at 8 oclock. But, maybe Taiwan is later. Maybe its 10 oclock, so you put your good series at 10 oclock. So, there might be environmental reasons why you want to change your schedule for each market. So, language customization, a dedicated schedule and line up, and dedi cated promotables ... the concept of promotables is important. A promotable is basically a show that we choose to 354

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market very heavily. Now, it may be the certain things resonate more in Taiwan than in Singapore. For exampl e, in Taiwan, they like mix, the wildlife programming featuring snakes, so we might do snake weekend in Taiwan, but we dont do snake weekend in Singapore, because its not so popular. So, in terms of promotions, we will also localize. And then, finally in terms of actual cont ent itself, localization of content means that you source or create content that is immedi ately relevant to their marketplaces. So, for example, the Taiwan tunnel pr ogram or The History of Singapore we added in Singapore became the highest rated program in the history of Discovery in Singapore. So, to create a regional content or source regional content for a specific market is sort of ultimate form of localization, because its also the most expensive thing to do. And then, another area is customizing the on-air promotions, whic h basically we use to promote our own programs. That also is fully langua ge customized, not just the audio but also the graphics so that the local lang uage is used on all of the forms for the on-air promotions. So, localization covers a very wide range of activities, but all of them are aimed at speaking to people in their own language with content that is relevant to them. Oba: Generally, what are your cr iteria when you choose content or produce content for Discovery Channel Asia? Gibbons: There are a few considerations. First of all, thats looking at the brand itself. Whatever we produce, whatever we s ource, or whatever we buy needs to deliver the brand promise. The brand promise means what you expect from Discovery Channel. What is that viewers expect from Animal Planet? What is that viewers expect from Discove ry Travel & Living? So, we obviously understand our own brands. We have done re search to help us identify what people expect from that. For example, we know on Discovery Channel that quality is extremely important. We know that people look for Discovery to help them understand the world around them, making an insight into every area of human activities. One, at the same time, is accessible, engaging, and entertaining with our content. So, these are filters that we use to make our decisions about what we source and wh at we buy. There is more complex terminology that we also use. But br oadly speaking, we look at what the viewers expect from our brands. And, we make sure that we deliver very consistently, like any brand even in ot her industries. The ability to deliver what customer expects from your brand is vital to the future and the growth of your products. Oba: How is Discovery Channel br and perceived in Asia in general and specifically by Singapore viewers. Gibbons: Again, we have a lot of research, so I cant sort of give you all the details, because it would take too long. But, it is very clear what people are looking for from Discovery. They are looking for information about the world around them. They are looking for an insight into events in the world around them, something like behind the headlines. People can see what is happening around them when they watch news channels, but they want to understand what are the reasons for these things. Th ey want to understand more in-depth what is going on. People also are fascin ated with certain topics. So, we know that science and technology is very a ppealing. We know that people still love wildlife programming. We know that pe ople are interested in culture and 355

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history. And, we know people are intere sted in space exploration. So, there are certain categories of content that we know people are interested in. People want our programming. People are more interested in, for example, a forensic approach of story telling, m eaning that they like programs, which identify a problem or a mystery that ha s to be solved, and then to go through the process of trying to so lve that mystery almost like a detective story. So, this is a very popular format of pr ogramming that we discover people like from doing our research. People expect Di scovery to always offer quality. In our production values and the way we do our programs, we must always deliver that level of quality. And, people like things that are topical and relevant and things, which actually are t op of mind. If they are current events or in the news, or if terrorism or someth ing like that is in the news, they want discovery to help them understand mo re about why its like that, who is involved, what is the history and the b ackground, and that kind of thing. So, we just show the things that we discover from the regular research that we do for Discovery Channel. Oba: Do you think Asian viewers in general receive foreign produced documentary well? Gibbons: Sure. There is definitely a market for international documentaries. We know that because of the success of our ratings and the success of Discovery Channel in brand studies, according to the PAX survey, Pan Asian Cross Media Survey. Its a viewership survey. Discovery has been the number one in that survey for eight years. So, we know that there is a strong demand for international documentaries. Pay TV reaches a smaller number of people than the terrestrial TV. So, we are no t saying that everyone is going to love watching international documentaries, but there is clearly a significant number of viewers who are interested in having a window to the world, in being able to see what is going on be yond their country across all kinds of topics ranging from science through to th e exploration. So, there is a market. Having said that, I think that we have also discovered that if we can find ways to be more locally relevant, we give them the same kind of quality and the same kind of insight. Oba: Do you think its possible to deve lop documentary films, which appeal to all over the world? Gibbons: Let me give you a good example. A number of years ago, we did a project, a co-production with BBC, called Walking with Dinosaurs. Walking with Dinosaurs was a breakthrough program, because it used animation technology that had not pr eviously been used in documentaries. And, it created a world of Dinosaurs that was more realistic than anything that had ever been seen on television previously This was a worldwide smash hit and broke ratings records everywhere, every country. Since then, we had other examples. Some are more successful than others, but I think every year there are a number of titles that cut through around the world. They tend to be on universal topics: Dinosaurs evolution, space exploration, ecological issues, world history like specially Egypt, and ancient civilizations. Those certain topics do have a global resonance, but not every show. Oba: You have a program titled the Hi story of Singapore. Do you think its locally relevant content or content for viewers other than Singaporeans. 356

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Gibbons: Its a very good question. I think the point to make is that things are on black and white. So, something, which is loca lly relevant, can also have appeal around the world. The History of Singa pore is a good example. I mean the History of Singapore is something, whic h, of course, is very relevant to Singapore. But also, the History of Singapore is something, which is interesting for many viewers around th e world, and one of the reasons is because Singapore is actually a country that could easily never have existed. So, the question is how Singapore surviv es from essentially being separated from Malaysia with nothing, no na tural resources and no wealth, to becoming such a fast developing nation. S o, that story is interesting for the rest of the world, but when you look at th e ratings, the ratin gs are highest in Singapore. And then, as you move furthe r away from Singapore, the ratings probably get less and less, because even though its a topic thats interesting for many people around the world, its the most interesting in its home market of Singapore. Oba: Im not sure if I am going to watch when you provide some programs like the History or Japan. Gibbons: I mean it depends what peoples view s are. Some people may prefer to watch domestic TV channels for local content, and, in some ways, when an international channel is doing a local story, perhaps some local people are not so interested in the international pe rspective on their stor ies. But, I think what we discovered is that there are some people who maybe not interested, but there is a larger number of people w ho want to see their own local stories featured on the internatio nal station. And, we have found that whenever we do a program that features a most specifi c country, almost all ratings for that program are higher than for the average programming. Oba: President Luff of Discovery Japa n said to me that one of most important things for Discovery Channel is to show viewers stories generally unknown. Do you think viewers in Asia have curiosity to what they dont know as well as Japanese viewers? Is there a ny difference among country markets? Gibbons: Yes, it is same. I cant give you a scientific answer, but just for my own observation, I think that Asian viewer s on a whole are extremely curious, and thats why the Discovery brand is been so successful, because people really appreciate a television service that addr esses that in a curiosity. In terms of who is more curious than others, I th ink it is very difficult to compare between countries, but there may be cer tain cultural, social, and political reasons why some countries perhaps have more of an intere st in the outside world than others. Singapore is so dependent on international trade and business that its a very cosmopolitan place. There is a huge curiosity about the outside world. There is a huge inte rest in traveling in Singaporeans because of its relatively small size. A lo t of people travel as well. When you get one bigger country like Japan, of course, I think the domestic issues probably are occupying more peoples time, and maybe not so many people have traveled. I am not sure what the nu mbers are. But, having said that, the Discovery Channel wouldnt have been successful in Japan if people were not curious about the world around them So, I think you find there may be differences, but I think you find the curiosity everywhere. 357

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Oba: Do you think documentary films are able to go across national boundaries more easily compared to other types of programming like music programming or sports programming? Gibbons: Its interesting. Probably, if you think about music programming, music programming has been quite successfully exported. And, thats because people around the world like to consum e each of those music culture. And, the countries like the U.S. and the U.K. and other countries like Japan and Korea as well export their music cu lture. There are people all around the world who would like to consume this music culture. So, I think music seems to me to be quite international. Sports is very international. People will watch the football from the Olympics, golf, or whatever all around the world. Entertainment TV is all the different because of language in some cases. But, even that, the U.S. is a huge exporter of entertainment content. I think that in many ways, documentary industry is smaller than these other industries to some extent. But, I th ink that what is different about documentaries is that with entertainment and music, there isnt really an international part. People consume pr oducts of other cultures, so you have American comedy series, you have Kor ean drama, and you have Japanese Anime. But, with documentaries, its less culture specific. You can actually have an international documentary, and people dont know where its been made. They dont know if its made in th e U.S., Singapore, or Japan. It is a culturally neutral, and I think that is what is unique about documentaries. It is possible to have something, which is more culturally neutral. Oba: I know some documentary film s are less culturally bound compared to other types of programming. But, sometimes I think, for example, documentary films made in the United States may refl ect the U.S. point of view, and some people in some countries may not like that. Gibbons: I agree. I think thats certainly true to some extent, but not with every program. When you just go back to our example Walking with Dinosaurs program, I dont think there are any cultura l values in that show that people would have objected. But, there are other programs. I cant give a specific type of, but lets say someone wants to make a program about terrorism or about religion. Programs are like inevitably the values of the culture. People from other cultures who do not see that topic in a same way may not respond to that well. So, in those cases, we make the documentary program that we choose not to show in Asia, because we dont think its going to be well received. We just have to be car eful how we make that selection. Oba: I heard from President Luff that Discovery Networks International makes affiliates like Discovery Channel Asia or Discovery Channel Japan put a sufficient amount of investment called commission. Gibbons: A commission is a fully funded program. Oba: Whats the reason for this? Gibbons: We commission for the fund of our own programs, because we need a certain number of program hours for our schedul es every year. We need thousands of hours to supply our networks. We can buy some of these programs from marketplace. We can jointly produce some of them with other production companies. Oba: Do you mean independent documentary productions? 358

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Gibbons: Thats right. But, for some, we have to fully finance them and pay for them ourselves, because there is no one else is interested in co-financing that program, or sometimes maybe its an id ea that we want to own all of the rights. If we want to own all of the ri ghts, then we need to fully finance the program, because if someone else comes into and helps with financing the program, they will share the rights. This is particularly important in the world of the media, because as we se ek to explore ourselves across multiple platforms, its important for us to own a ll of the rights. And, for us to do that, we have to fully finance, i.e., commission of programs. Oba: Do you think thats more cost efficient way to produce programming? Gibbons: It is a very difficult question. I will put it this way. If you co-produce a program, and you have other partners, that is cheaper for you, because someone else just paid a half of it or a third of it. Then, you would think why we dont co-produce everything. The reas on is because its all about your ability to monetize the ri ghts. So, if you can mone tize all of the rights associated with the program, then yo u might as well commission it, because you make one of payment to make th e product, and after that, you collect your pay TV revenue, your mobile revenue, your online revenue, your DVD revenue, and your broadband revenue. And, if you can do that, then its more cost efficient to make your own program rather than sharing the license with someone else, because if you share the license with someone else, and suddenly you want to roll out a mobile TV service, you find they move on the mobile TV rights. Then, you got a problem. So, it depends on your ability to monetize the rights. Oba: Discovery Channel Japan says that you keep up certain amount of common format that would work for the whol e Asian region as part of Discovery Network. Gibbons: Right. Oba: Do you agree that affiliates of a global network should offer the same programming to some extent? Gibbons: Yes, I think there is no question th at in order to prot ect and to grow the strength of our brand around the world, we need to offer a consistent experience to our viewers. Now because people tends to be interested in similar things that I said before, there are certain topics th at resonate around the world, whether its space exploration, Dinosaurs, or topical of events. So, it should be possible to reach Discover ys co-viewers around the world in certain cases with the same program. And, by making the same program, you create economies of scale and allow th e company to invest more money in creating a high quality product. Whereas, if you made 10 different programs for 10 different markets, it would be t oo expensive, and it wont be efficient to do that. So, there is a question of what is the most efficient way to deliver consistent viewing experien ce to our audiences, and th e answer to that often is to have a shared program or even a shared format that can appeal to all these people. Oba: It is because you need huge production budgets. Gibbons: Exactly. The production budget can be 200, 000, 300,000, 500,000 or more than a million dollar. If you cannot come out to show this program between the different markets, your whol e business model doesnt function. Oba: So, making a good documentary needs a lot of cost. 359

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Gibbons: It is a lot of cost. Oba: As an Asian headquarters, I think you are supposed to play a role as a kind of intermediate between Discovery Comm unications and each of local Asian offices. Whats your response when th ere is some disagreement between Discovery Communications and local offices like Discovery Japan or Taiwan? Gibbons: Ultimately, I think every organizatio n will deal with this differently. For us, its true that we have a global orga nization DCI (Discovery Communication Inc), and an Asia Pacific organization, Discovery Networks Asia. Then, we have, for example, Discovery Channel Japan in Tokyo. These are separate business entities, so I gue ss all I can say really is that there are internal procedures and rules of engagement between each of those entities that enable us to resolve any differences that come up. And, I guess only thing I would say is that on the whole, orga nization believes in, on the one hand, managing a global brand and, on the othe r hand, being very responsive to the needs of our local markets. So, we have procedure in some place enables us to balance that, and each time a di sagreement comes up, we are able to discuss it between those parties a nd always to find a solution. Oba: Is it difficult to take ba lance between global pe rspective and local perspective? Gibbons: Yes, sometimes its an issue, but we are not inflexible. So, there is no one forcing us to add programs around the world. We make decisions in consultation with the local markets as to what is programming that is going to resonate the most in that marketplace. And then, we are free to make those decisions. So, that kind of conflic t doesnt really ever arise. Oba: So, you are giving much autonomy or freedom when your local affiliates like Discovery Channel Japan chooses content. Gibbons: Yes, basically we are sensitive to th e needs of our local markets. So, there is no question of imposing programs on mark ets which are not appropriate, and that wouldnt happen. Oba: So, if you prioritize local perspectiv e, what are the advantag es to be part of a global network like Discovery Channel? Each affiliate might be able to independent in terms of programming. Gibbons: I think, in each local market, th ere is recognition amongst the management and the ownership of those organizati ons that Discovery is a global brand, and that there is going to be a large elem ent of the channel that will be shared with other regions, because otherwise it just wouldnt make any sense. The reason why we running Discovery is because the Discovery brand has been built up on a global basis, and people expect certain things from it. The only way to deliver consistently those experi ences to people is to take advantage of Discoverys ability to produce those programs. So, I think it will be very difficult for any country to run a Di scovery Channel without taking programs from Discoverys global production mach ine. It would not be feasible. Oba: Do you mean that level of produc tion quality for Discovery Channel is very high compared to other networks? Gibbons: I always say that our quality standards are extremely high, and we invest what we need to maintain those standa rds. The fundamental issue is that if we dont share programming, that business model doesnt really work. The business model for almost many international TV brands is based on a 360

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certain element of a shared content. Otherwise, economically the business model doesnt work. Oba: But, for MTV, there is local ization in each affiliate by producing its own programming. Only handful percent of th eir programming is shared all over the world. Gibbons: I cant comment on MTV, but I thin k even MTV has some shared content. But, the balance depends on how cost effectively you can localize. So, I would say that its different to do a studio show in a local language and to create a high quality documentary. Oba: How important the Asian market generally is and the Singapore market specifically is for Discovery Channel? Gibbons: I cant really say much about how important we are globa lly, but certainly I think the Asian Pacific market is ex tremely important to the company, because its a growing market and becau se the economic growth rates here are higher than many other parts of the world. And, I think people see the potential not only of developed markets like Japan but also markets, which are not yet at that full stage development, like China. So, you have a region that has Japan, China, and India. I think people think it is important. Oba: Again, it seems to me that localization and sharing programming resource among local affiliates within a global network are somewhat inconsistent to each other. Whats your idea regarding this point? Gibbons: Why do you think its inconsistent? Oba: To localize your programming, you may have to produce programming for each market, which doesnt mean sharing content. Gibbons: What you are saying is that locali zing undermines the economies of scale. Oba: It could be. Gibbons: You are correct when you are analyzing the business model. You are always looking at the opportunity cost of localizing. On one hand, you have a program that can air in 100 countries, a nd then you have a program that airs in one country. And, they cost the same. This program [the former] is better than this program [the latter]. But, the thing is not as simple as that, because the thing is that this program maybe air in 100 co untries, and it cost a $100 to make. Maybe, this programming only air in one country, but maybe that only costs $10 to make, and often it is cheaper to produce. For example, in Taiwan, our production costs are much lower than they are in the U.S. We can produce more cheaply for that one ma rket, so thats one thing that can help us actually offset that equation. Th e other thing is what if this program can air in 100 countries, a universal program, and this is a local program, talking about the Taiwan market. I add the universal program, and it gets me one rating. I have a local program that gets me two ratings points. This is better for my business two ratings points. So, if the price of this program is half of the cost of making this pr ogram, can you see the economics can actually work? It depends on cost. It depends on audios delivery. We make those decisions, I mean, make those tr ade-offs. And, in certain cases, its profitable to do local programmi ng. In certain cases, it is not. Oba: Which one in general advertisers prefer? Gibbons: I dont think you can say that the adve rtisers prefer either universal or local programming. They want brand defini ng Discovery conten t that generates big audiences, but that could be Walk ing with Dinosaurs, or that could be 361

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Hsuehshan Tunnel. Both of them have pulled in a lot of advertising. I guess fundamentally the last thi ng I want to say is that the viewer doesnt look at the channel and think, Okay, this is my global program, and this is my local program. They look at it and they th ink, Does this help me understand my world? So, what is in my world is my awareness of the countries, my interest in space exploration, or my intere st in wildlife. But, my world is also my understanding of my own history of famous people from my own country. So, people dont see global or local, but they just see, Does it matter to me? I guess all we are trying to do is to make sure that we make content that matters to people, according to wh ich country they live in. That involves a different balance between, in our terms, universally sourced product and locally sourced product. 362

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BIOGRAPHICAL SKETCH Goro Oba became a faculty member in the Department of Cultures and Communications at Kyoto Gakuen University, Japan, in 2006. He currently teaches Mass Media Theory and Media Industr ies, along with four seminars, and also is expected to offer Content Business from 2008. In 1991, Goro Oba received his bachelors degree at Keio University, Tokyo, as a sociology major. Then, he worked for th e Programming and Produc tion Division at Nippon Television Network until 2001 when he left his job to study at the graduate level in the United States. After receiving his masters degree in telecommunications from Michigan State University in 2003, he chose University of Florida as the place to pursue his research interests and to earn his doctoral degree. In 2006, he became a doctoral candidate in mass communication. Goro Obas fields of research interest include issues in strategic management, marketing, and branding by media firms, competition in media markets, structure of media industries, and media globalizati on. He has published articles in such academic journals as Journal of Media Economics, Journal of Media Business Studies, Gazette: The International Journal for Communication Studies, Media Asia, and Keio Communication Review. He has also presen ted his research at major conferences, including Association for Education in J ournalism and Mass Communication (AEJMC), International Communica tion Association (ICA), Broadcast Education Association (BEA), along with national conferences in Japan. He wa s given best paper awards from some of these conferences. 389