Below is an excerpt from the China Media Monitor, a weekly newsletter that covers the Chinese media business in depth.

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Looking at the headline numbers, 2008 was not a good year for TV drama producers in China. While TV drama production has grown by around 1,000 episodes annually every year since 2003, it actually dropped for the first time in five years in 2008.

Around 502 TV drama series were produced in 2008, according to data released by the State Administration of Radio, Film and TV (SARFT) on February 17. By contrast, 529 TV dramas were produced in 2007.

Even worse, a recent Shanghai Evening Post story reported that the quality of TV drama series in China also dropped dramatically in 2008. The story said the quality of production in 2008 was so low, that when the 2008 Chinese TV Drama Shanghai Ranking Award Ceremony was held on February 16 this year, the "Best TV Drama" gong was not awarded because the judges couldn't find any worthy programs.

What’s happening? TV drama series are one of the staples of the Chinese TV diet, accounting for around one third of the content broadcast in 2006 and 2007. The Shanghai Media Group considers TV dramas to be so crucial for capturing audience share, it has unveiled plans to invest RMB100 million (US$14.62 million) on producing new TV drama series in 2009.

Meanwhile, other media reports have Chinese viewers complaining bitterly about the fact that the same old boring TV dramas are re-broadcast by various TV stations over and over again.

Industry professionals have already stepped forward to nominate a few factors.

High profile script-writer Shi Kang told Shanghai Evening Post he blamed chronic oversupply. Only half of the 14,000 TV drama episodes produced every year are actually broadcast on TV and only 3,000 episodes can be broadcast in primetime. Shi Kang said this chronic state of oversupply hardly encourages producers to create better programs. He also said that the content of most dramas is too far removed from everyday life to constitute quality viewing.

Wang Zhongjun, CEO of Huayi Brothers, pointed his finger at poor profit margins. He told Shanghai Evening Post that his company generates much higher revenues from films than from TV dramas. For example, he said the film If You Are The One (非诚勿扰, Feicheng Wurao) generated total box office receipts of RMB340 million (US$49.71 million) from December 18, 2008, to January 21, 2009. In contrast, Huayi Brothers would need to produce 1,000 TV drama episodes to make RMB100 million (US$14.62 million) in just one year. Despite this problem, he covered himself by adding he thinks the TV drama industry in China will develop well in the future.

The 2008 Beijing Olympics also no doubt had a role to play in declining TV drama production levels last year. Broadcasters devoted themselves to producing programs centered around the Olympic Games, while the vast majority of audience eyes were turned to the live broadcasts of the big games on CCTV. It was not a very conducive environment for broadcasting TV dramas.

Most TV drama series were removed from the air much earlier than the Olympics, when the period of national mourning was instituted in the wake of the Sichuan Earthquake disaster in May. TV dramas were banned during the official period of national mourning from May 10 to 21, but many series remained absent from the airwaves for much longer because broadcasters considered them inappropriate for such sober times.

So will production bounce back in 2009? SMG certainly hopes not. In November last year, it announced the formation of a new Shanghai TV Drama Alliance designed to bring back the glory days of the old Shanghai TV drama industry. By creating new models for cooperation between broadcasters and producers, the Alliance hopes to spread the costs and risks, providing broadcasters with a reliable supply of high quality drama series.

It is these moves to concentrate investment into a smaller number of higher quality productions that offers most hope for the industry in the years ahead. So, rather than worry about the fall in absolute production numbers in 2008, we should be celebrating the fact that some of the producers of the 7,000 episodes that were never shown last year are at last coming to their senses.

Danwei posted CMMI's report on the TV industry in 2007, and reported earlier on the glut of serials in 2005.