Shanghai Media to split operations into 2 units

SHANGHAI, Oct 21 - State-run Shanghai Media Group (SMG) said on Wednesday it would split operations into two units, one of which would be more market-oriented, a sign that China was taking steps to loosen its iron grip on the broadcast industry.

China's second-largest broadcaster, which is run by the Shanghai government, will organise its news operation, technology division and public broadcast service into one division and let its advertising, production, distribution and investment arm form another unit to be made more market-focused. "China's media sector has experienced tremendous growth over the past years...SMG, with the latest marketisation move, seeks to hold its stake in the reform," the firm said in a statement.

SMG's restructuring was spurred to reduce its reliance on advertising and broaden its fund-raising channels, as China's strictly controlled media sector gradually pursues a partial opening.

SMG also said its new media and home shopping business had fully completed its "marketisation process" and had cooperation with domestic and international partners.

SMG's president said in May that the company was seeking funding from private equity investors in several of its businesses and would take them public over the coming two years.

SMG, whose 6 billion yuan ($879.1 million) in revenues last year mainly came from advertising, is expanding beyond traditional broadcasting into digital media, content publishing and data terminal sales.

The conglomerate's ambitious plans could put it up against state-run China Central Television, the country's only national broadcaster.