The dazzling variety of audiovisual products in a bookstore.	A still from Golden Wedding, one of 2007’s hit TV dramas.

LIKE Prison Break’s Michael Scofield in the United States, the character Xu Sanduo has become something of a household name in China since the top-rating Chinese drama Soldier’s Sortie debuted in 2007. The 30-episode series follows Xu’s travails as an ordinary soldier from rural China. In 2007, an average of 40 episodes of TV drama were produced per day in the country. “China has become the world’s largest producer and broadcaster of drama for television,” said Hu Zhanfan, deputy director general of the State Administration of Radio, Film and Television.

Currently, about 1,764 of China’s 1,974 TV channels broadcast drama series. Last year alone saw 529 domestic TV dramas certified for release, representing 14,670 episodes – double the figure of 2000. However, these apparently healthy figures hide some fundamental structural problems plaguing Chinese television drama production – problems which are curtailing quality and driving audiences away.

Paltry Fees for Productions

“Usually there’s nothing worth watching, even after browsing 60 TV channels,” complained Li Fen, a 33-year-old Beijinger. Her sentiments are echoed by China’s advertising agencies who foot the bill for the nation’s TV drama production. While advertising costs are growing year after year, series ratings keep dropping sharply.

“Quality is the key to promoting the development of domestic TV drama under conditions of overproduction,” said Yang Weiguang, president of the China Television Artists Association. Su Xiao, deputy director of the Film and TV Drama Center, Shanghai Media Group, concurs. “Plot is the key factor in generating ratings,” he said. “Currently the biggest problem in China’s TV drama market is the severe shortage of good scripts.” Most drama production investment goes on hiring stars, limiting what can be put into scriptwriting. But funds generally are spread thin across all areas of production, due to the vast number of series being made.

China’s TV drama sector is a buyer’s market, in which supply far exceeds demand. When coupled with the fact that TV stations can simply fix prices, the result is a severe undervaluation of Chinese TV dramas. Zheng Xiaolong, director and producer of Golden Wedding, puts forward these figures to illustrate the point: on average, drama series bring TV stations nearly 60 percent of their advertising revenue. The first broadcast of Zheng’s family drama Golden Wedding in 2007, for example, brought Beijing Television an extra RMB 30 million in advertising fees. Yet the station only spent RMB 4 million purchasing the series’ copyright. The terms of the deal gave them free rein to replay the drama within the period of the contract with no extra recompense for the production company. Furthermore, if the series is replayed beyond the term of the original contract, the producer receives a paltry RMB 1,500 to 2,000 (around US $200-280) per episode in royalties.

Faced with this situation, producers are forced to shoot on miniscule budgets, leading to shoddy productions and frequent violations of creative personnel’s economic rights and interests. Unfortunately, screenwriters are a long way down the food chain when it comes to dividing up what little money there is.

“Since TV stations in China are a monopoly setup, their trade with drama production companies is utterly unfair,” said Zheng. “Companies can only survive on tiny profits, which certainly affects quality.” Recently the Chinese Scriptwriters’ Union sponsored the “2008 Screenwriter Rights-safeguarding Meeting” in Beijing, where over 90 screenwriters issued a joint declaration about their infringed rights and interests. It remains to be seen whether this has any impact.

Monopolization by state media has also led to lackluster development of television advertising and marketing, further limiting the amount of capital circulating in the industry. “The pattern of television marketing is linear and singular,” said Liu Bin, an editor with the Social Education Program Production Center at China Central Television (CCTV). Currently advertising on Chinese television simply takes the form of advertisements aired during broadcasts, sponsors’ naming rights, and the insertion of brand logos in the corner of the screen. In Liu Bin’s opinion, television needs to learn from the sophisticated marketing techniques seen in commercial cinema.

Movie-related marketing has developed rapidly in recent years, especially in the use of publicity, the cross-marketing of movie-related products like games and merchandise, and more sophisticated forms of advertising like product placement. None of these strategies have been significantly developed in China’s television industry. With limited opportunities to generate income, it becomes very difficult to survive making quality products. “Adopting a multi-pronged marketing mode is a must to elevate the TV drama industry,” Liu said firmly.

Excessive Supply

While low revenues and poor quality are undoubtedly serious hindrances to developing China’s TV drama industry, many argue they are the result of a more fundamental underlying issue – massive oversupply. “The problem with China’s television drama industry is that supply far exceeds demand, a situation that has lasted for years,” said You Xiaogang, chairman of the Capital Radio and TV Program Production Association.

Indeed, many of the television drama series produced in China never even make it to the screen. Figures from the State Administration of Radio, Film and Television show that in 2007 only 7,000 of the 15,000 episodes of domestically produced drama were shown in China. At an average cost of RMB 400,000 per episode, this represents over RMB 3 billion in wasted capital. That is the equivalent of more than 10 Chinese blockbusters, like the recent hit The Warlords, languishing unseen in storerooms every year. The question of how to promote sales of their series has become the thorniest issue facing investors, meaning more money is spent on marketing than on production.

So how did such massive oversupply come about? Since it has always been difficult to generate significant returns on TV dramas domestically, in the 1990s many producers set their sights on the international market. Overseas sales of Chinese TV dramas started in 1993, with a few stereotypical works sold for as low as a few thousand RMB per episode. However, in 2000 international sales revenue from TV series began to climb sharply, hitting a peak around the middle of the decade, when a number of excellent historically themed series sold well both domestically and overseas. Titles included The Kangxi Dynasty, The Yongzheng Dynasty and The Grand Mansion Gate.

These ancient-costume dramas were warmly received by overseas Chinese, especially the 40-episode The Grand Mansion Gate, which traces the development of Tongrentang, the best known traditional Chinese medicine enterprise. This series generated massive ratings in China, and sold overseas for around US $30,000 an episode, the highest price ever paid for a Chinese TV drama. In 2004, overall international sales of homemade TV dramas reached US $30 million. Capital poured into the production sector as investors saw the opportunity for handsome profits.

Although investors hoped to repeat the success of The Grand Mansion Gate, prices began to decline quickly after peaking in 2005. Overproduction, coupled with the appearance of popular TV dramas from the Republic of Korea, began to seriously erode profits almost immediately. “In recent years, the export quantity, overseas market share, and price of China’s teleplays have all fallen,” said Li Chunliang, deputy director general of the Beijing Municipal Bureau of Radio and Television. According to Yang Yubing, president of the Shanghai Sanjiu Cultural Development Co., Ltd., the impact of imported programs has been profound. “The downturn is mainly the result of the prevalence of Korean drama series in Southeast Asia,” he said. Ratings for Korean dramas have grown steadily over the past two years. “Thanks to protectionist policies, domestic TV dramas have advantages both in terms of the number of broadcast hours and time slots. However, even though they do not play in prime time, imported series are still prevailing over most domestic titles,” said Li Chunliang.

“Korean TV dramas give a vivid and lifelike portrayal, which is educational, inspiring and impressive,” said Xiao Li, a student at Beijing Normal University. Like many of her peers, she is crazy about the imported programs. “Their superb performances mean they’re easy for audiences to enjoy.” Korean dramas such as Endless Love and Dae Jang Geum have been huge hits in China. According to statistics released by the ROK’s Ministry of Culture and Tourism, the country exported around US $101.6 million of television drama in 2005. These figures are the result of heavy investment. “Korean drama series represent an investment of over RMB 1 million per episode,” explained Zhang Lin, manager of the Overseas Distribution Department at the China International Television Corporation. “In contrast, top-notch dramas in China are made for a few hundred thousand RMB per episode at most. Homemade products are consequently of low quality in comparison.”

Some analysts claim it is not just economics that is limiting the impact of Chinese TV dramas overseas. “It is not so easy to increase the international competitiveness of China’s TV dramas because of the regional limitations of the plots,” said You Xiaogang. He believes the majority of domestic dramas are only suitable for broadcast on the Chinese mainland. “Most domestic audiences prefer stories that are close to local life,” said Bi Jiangyan, who works for CVSC-Sofres Media, analyzing regional factors in television ratings. For example, Liu Laogen, the story of a farmer who starts an undertaking, achieved audience ratings in northeast China as high as 22 percent, but achieved only a few percentage points in China’s more urbanized and wealthy south, let alone overseas.

It seems there is no easy solution to the problems besetting China’s television drama industry. Like much of the country’s economy, it faces tough challenges moving from being a production line capable of churning out masses of low-quality products, to an advanced competitive industry characterized by quality and innovation.