From The International Herald Tribune: Disney ties China park to better TV access

As Hong Kong Disneyland prepares to open on Monday, Disney will hold off building a similar theme park in mainland China until it has been assured that it will be able to air Disney shows on Chinese television, according to Robert Iger, the company's president. Disney's firm stance underlines the unhappiness of many Western media companies at the Chinese government's issuance on Aug. 1 of a new and stricter interpretation of the country's media ownership regulations.

Presented by China's culture and propaganda officials as a way to preserve Chinese culture and limit foreign influence, the rules essentially bar foreign television channels like the Disney Channel. They also make it harder for foreign companies to produce movies and television shows in China even if they find local partners.

Shanghai has been actively seeking a Disney theme park for several years, with strong support from Beijing's leaders. Discussions between Disney executives and Shanghai officials have caused considerable alarm in Hong Kong, which has invested $2.9 billion of taxpayers' money in helping to build a park here, mainly to reclaim land from the sea for the park and to lay roads and a subway line to it.

Hong Kong Disneyland would face strong competition if a similar theme park opened in Shanghai. But Iger, who will succeed Michael Eisner as chief executive on Oct. 1, said before building another park in Shanghai, the company needed assurances that it would be able to introduce Disney characters to Chinese audiences through television.

"In order for us to even consider a park there, we need to be sure we have access to television," Iger said in an interview Friday at the new, oceanfront Hong Kong Disneyland Hotel.

Disney's ABC division, which Iger used to run, recently sold its "Desperate Housewives" show to Chinese television companies. But Iger said that Disney's goal was to launch the Disney Channel in at least some Chinese cities, especially Shanghai.

"The restrictions in general do thwart our efforts to grow television in that marketplace," he said, while adding that he remained confident that, "over time, we'll gain access to the market."

Iger said other countries have demanded that television channels include at least some local productions, and that this was a possibility for the China. He voiced confidence that the company would not run into censorship problems, saying that, "it's rare that there are content issues for our product."
Disney does not necessarily need a majority stake in local productions in China either, Iger said, pointing out that Disney has a minority stake in the new Hong Kong theme park. The Hong Kong government owns 57 percent and Disney owns the rest.

"We're more than willing to have a partner" for television productions in China, he said, adding that it would be "safe to conclude we are in discussions" to set up television deals in China.

Copyright violations and other thefts of intellectual property have been a chronic problem for many companies in China. But Iger said that he did not believe taking on local partners would make matters worse in this regard.
"If we don't do anything, Donald Duck and Mickey Mouse are going to end up there anyway, and we're not going to get anything," he said.
Iger said that after the Hong Kong Disneyland opening ceremony on Monday, he planned to fly on to Beijing "to discuss Disney business initiatives in China in general." But the trip is not intended primarily as a lobbying effort for the lifting of the restrictions, he added.

If Iger wants to lobby, however, he could have an opportunity much sooner. Vice President Zeng Qinghong of China, a Politburo member with particular responsibility for propaganda, culture and Hong Kong issues, is scheduled to join Iger and Eisner for the brief opening ceremony here.
The new media rules on the mainland and the possibility of a delay in setting up a Disney theme park in Shanghai are likely to cement Hong Kong's role as a media hub for China in particular and for Asia over all. Tighter restrictions on the mainland also make the success or failure of Hong Kong Disneyland even more important to Disney's long-term performance in Asia.

Some visitors have complained of crowding during 17 so-called rehearsal days when thousands of local residents have been invited. The criticisms have prompted questions about whether visitors, fearing overcrowding, might shun the park at first.

Dick Yang, the manager of the Guangdong Nanhu International Travel Agency in Guangzhou, 160 kilometers, or 100 miles, up the Pearl River from Hong Kong, said that the agency had expected to sell 1,200 tickets to Hong Kong Disneyland for September, but had only sold 400. Potential patrons are leery of the possible crowds and are unhappy that many Hong Kong hotels have raised prices by 20 percent in anticipation of an influx of park goers, he said.
But Yang noted that demand was brisk for the so-called golden week in early October, a week-long national holiday.

Instead of letting most people choose when to take vacations, the Chinese government schedules three "golden weeks" each year, national holidays during which most economic activity shuts down. That heavy concentration of tourism into three short spasms of travel poses a dilemma for Disney, which needs to keep the park fairly full all year long to cover investment costs.
Disney is charging lower prices on weekdays, the first time it has done so at any theme park. The company is confident that through various techniques, like promoting the park at various times of year in different Asian countries, it can even out considerably the number of visitors coming to the park each day, said Jay Rasulo, the chairman of Disney's theme parks and resorts division.