Chernin: Asian Markets Smarter Than Westerners Think
Says biggest mistake companies make is they have "inadequate" respect
By Tim Baysinger -- Broadcasting & Cable, 9/16/2011 2:58:54 PM
That came in a conversation with the Dean of UCLA's Anderson School of Management, Judy Olian, during the Paley Center for Media's International Council session on Friday in Los Angeles.
Chernin argues that instead of big media companies coming in and running the show, these companies should look to partner with some of the local flavor. He says that while "there are clearly opportunities for U.S. or global content," that this region has its own customs and way of life that western-created content may not fly. "Local content will always prevail," said Chernin.
The former News Corp. president and COO launched CA Media last November specifically to scour the Asian market for business opportunities in terms of content creation, television networks, advertising and digital media. "The one thing that is a constant in all of these markets right now, is that you have brilliant young people, very well educated and very very worldly," says Chernin.
Chernin goes on to say that it won't be long before some of those markets try to buy in to the U.S. "It's probably a little ethno-centric to assume that all these people are just going to follow us," he said. "You're going to see significant Chinese investments in American companies."
"Somewhere along the line, some Chinese company is going to buy a U.S. media company or a U.S. tech company," he said.
With India and China rated as two of the highest GDP growth areas in the world, Chernin argues that the Asian market provides a plethora of opportunities; U.S. and other Western companies can't become too arrogant to think they can come in and run the show.
Chernin notes the best opportunities will come in the mobile and digital sectors. In China, 70% of Internet users are under 30 and a lot already posses the technical know-how, but since that is such an underdeveloped market, most try to create for themselves. "Everybody is an entrepreneur there," says Chernin.
In India, "there's a pretty decent so-called traditional media business," says Chernin. "There's now been 15 years of creating high-end content for cable television... but there is almost no Internet business there." Chernin also said that there are two billion mobile customers in India, China and Indonesia.
"We think we are the fountain of all knowledge," said Chernin. "What's great about the Internet is any 18-year-old kid, anywhere in the world knows as much about the Internet as we do."
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