The grandest of sporting exhibitions, from Athens to Beijing to London, from a China viewpoint

Olympics: What Was It Like on the Green?

In the Hutong

Watching the press-laden planes climb into the sky

2102 hrs.

Okay, last Olympic post.

Media Asia did a fun behind-the-scenes review of how the various sponsor pavilions on the Olympic Green came across.

A hint to sponsors for Vancouver and London: think experience, something that will really knock people’s socks off. Media correspondent Dominic Fitzsimmons found some expected winners (Coca Cola) and some surprises (Johnson & Johnson, GE) among the winners.

Olympics: There’s Life in the Old Tube Yet

In the Hutong

Home-made quesadillas and salsa

2057 hrs.

If you’re a regular reader here in the Hutong, you will know that despite something of a history in the TV business, I have swallowed the New Media Kool-Aid in the belief that the halcyon days of television and print are over.

If the Olympics proves one thing, however, it is that television remains a singularly powerful medium in this day of , particularly in delivering live events. In such cases, the idiot box remains a superior means of content delivery.

When I wrote it up in AdAge, however, several of the responses floored me. There is apparently this meme in the business that while television has immediacy, the Internet has memory, and that makes it a superior medium.

I get that, but I still have a hard time understanding why “memory” trumps a huge-screen HDTV with surround-sound in terms of conveying the experience of a live event, and you can experience it with friends and family in a way that staring at your computer screen can’t touch.

To paraphrase the old AT&T commercials, HDTV is the next best thing to being there.

Now, lest you think I am a TV partisan, keep in mind that I still think that outside of live events and maybe breaking news, television is an inferior medium of content delivery to the Internet. My three TVs are dark. My video is delivered via iTunes and (legal) DVDs. My news comes over RSS. Games on my computer and PSP have replaced much of my TV time.

I subscribe to magazines, have the hard copies sent to my mom’s house, and read the articles online or download PDFs.

Books, on the other hand, are still 75% print. But then, Kindle is not available in China yet.

Television is in trouble, to be sure, but live events are the exception. If broadcasters focus on that opportunity, there may still be life in the old tube yet.

Olympics: Selling Phelps in China

In the Hutong

Going a bit bonkers buying stuff on iTunes

2017 hrs.

Maybe it was because I’m in China and did not get the chance to see the NBC coverage, but I have to admit to being surprised to hear some marketers I respect suggesting that Michael Phelps was going to get rich doing product endorsements in China after the games.

Whatever happens to VISA and Speedo’s efforts to turn spin the über-swimmer’s eight medals into marketing gold, it ain’t gonna happen in China. Here’s why, from my piece in AdAge.

iTunes Unblocked and The Corporation as a Social Change Agent

Starbucks Pinnacle Plaza, Shunyi

Another fabulous post-thunderstorm fall day

1113 hrs

The Olympics have ended. The athletes are heading home. Songs for Tibet is off of the iTunes main page, but it is apparently still available for sale. The iTunes music store is once again accessible from China.

Maths over at Music2dot0 did us all a real service by expanding my Bipolar Apple post into a broader discussion. BTW, apart from excellent coverage of the realities and the posturing of all sides as the music industry evolves, Maths has the additional upside of having a very international view of the related issues. A superb blog and well worth a regular read if you follow the music business, and not just because he agrees with me.

Paul Resinkoff makes some wise noises at Digital Music News. He walks the line between two points of view: he urges Apple to weigh its response carefully.

Eliot Van Buskirk over at Wired, on the other hand, represents the “common wisdom” on the issue. He thinks I am urging Apple to “censor” their content in order to appease the Chinese government. He takes me to task for suggesting that Apple become a censor on behalf of the Chinese. He misreads my point, and misses the larger picture around this particular incident.

What Really Happened

One of the reasons I usually hesitate to post on something right as it is happening is that it is impossible under such circumstances to have the benefit of perspective. As it turns out, I should have waited on posting on this – not because it would have changed my point, but because I got my psychological terminology wrong and, mor important because the post would have been made stronger had I included some important chunks of information.

I won’t recount what all of those chunks were, but do take a look at Joe MacDonald’s piece for the Associated Press here.

A read through the story makes it clear that this was not a simple matter of Apple-carries-album-Chinese-slam-door.

The salient points:

– The album was featured on the front page of the site – a choice I would wager was made by Apple, not by the activist organization that produced the album;

– The album went live in the days leading up to the Olympics;

– Pro-Tibetan activists have been attempting to leverage Beijing’s hosting of the Olympics to draw attention to their cause;

– The activists told the Associated Press that they had contacted athletes directly and provided free downloads to the athletes and urged them to play it in Beijing as an act of solidarity.

The activists then issued a press release telling the world that this was, in effect, a protest, and that at least 40 athletes in the village had downloaded the tunes.

– The site was then blocked, fifteen days after the album went up.

– The Games ended, the athletes went home, and the site was unblocked.

– The album is available for purchase here in Beijing under the same conditions as everything else on iTunes – got a foreign credit card that bills to a foreign address, and the songs are yours.

If this were a simple matter of censorship because of some content, access to the site and the album would not have been restored. It seems clear that the content itself was not a problem – what set the Chinese government off was the concern over a potential protest in the Olympic Village. Apple was a target only to the extent that it was seen by the Chinese authorities as aiding that protest.

The implicit message the the government seems to be delivering is this: carry objectionable content in your overseas sites if you must, but use those sites as a springboard for protests within China, and they will be blocked.

Regardless of your stance on the rightness or wisdom of Chinese regulators taking this stance, as a businessperson you have to take notice where China seems to draw a line over which it does not want to see companies cross.

What you do with that information is another matter entirely.

To Cave or Not to Cave is Not the Question

The moral quandaries many companies face in doing business in China, whether they come from the hearts of the managers and employees or from the voices of their customers and home governments, are a part of doing business here. They vary from company to company, but they exist and cannot be ignored.

For example, many foreign-operated websites operating in China collect and retain information that could identify the individuals who come onto their sites. After the experiences of Yahoo!, Google, and MSN, any company seeking to operate a site that collects such information had better deal with the issue of what to do when the government issues a warrant for that information in advance, not after the door opens and the PSB is standing there.

Or something else happens that calls into question the morality of doing business in China.

(Or, for that matter, what to do when somebody from some government agency makes it known that your company registration problems can disappear in return for some cash, a computer, a car, or a college education. Or when a reporter tells your PR manager that he’s happy to run a story on your press conference – for the reasonable sum of RMB1,000.)

But many companies do ignore these issues. A frustrating number of executives, activists, pundits, and others attempt to portray doing business here as a choice: either you check your morals at the airport when you arrive, holding your nose and hoping a some congressional committee, journalist, or activist doesn’t find out; you do business in China your way and risk getting thrown out; or you stay out of the market completely.

There is considerable debate as to whether Apple played an active role in assisting the efforts of the pro-Tibet activists, or the activists simply gamed the iTunes system, duping Apple into playing a role it would rather have not played. It almost does not matter.

If this was an effort to throw a sneaky punch at China, Apple risked its business in China without the upside of brownie points from its fans and others elsewhere because it never owned up to its role.

On the other hand, if this was a case of Apple’s systems being gamed by activists who used the company as an unwilling accomplice, Apple looks foolish, and risks its business in China, and calls into question whether this will happen again, all while getting no credit for it.

What is worse, none of the above affected any kind of measurable change. It was a net negative for Apple. As such, it needs to ensure that something of this nature does not happen again.

But that does not mean giving in to perceived, implied, or overt demands that go against the nature of Apple, its executives, or the people around the world who use its machines and want very badly to see the company as an unalloyed force for good.

The Middle Road

I am an idealist.

I believe – I know – that it is possible for companies to make money in China and be agents of positive social change. Doing so, however, demands corporate resolve, transparency, superb communications skills, and and a healthy understanding of Chinese politics and culture.

I believe those two goals are not contradictory but rather are mutually supporting, and that in playing that positive role you will win points in China with the government, the people, your shareholders, and your customers elsewhere.

But companies can best affect change when they are trusted and thoroughly integrated into the fabric of Chinese economy and society. Not only does that give you access, it also ensures that when you behave in a way that could be interpreted as anti-China, you are given the benefit of the doubt by both the people and by policy makers.

That influence is built over time – not necessarily a long time, but it doesn’t happen in a week or a month – and in a systematic fashion.

Unfortunately, most companies miss this. The process of gaining the access alters them, defeats their resolve, makes them pliant.

Apple need not follow that route to ensure its success here.

Apple is already deeply embedded in the Chinese economy, but because it is mostly through manufacturing intermediaries, Apple has been largely invisible to policy makers and the people. That began to change with the popularity of the iPod and the growing number of Apple resellers around China, but the Apple Stores are really going to drive home not only that Apple has cool stuff, but that it is making that cools stuff right here in China.

If Apple can do that, all while proving that it is a responsible employer, pays its taxes, turns its back on corruption, and does good in the community, it will have more than adequate foundation to become a driver for social change without endangering – and indeed enhancing – its bottom line.

The one no-go place is publicly embarrassing, threatening, or insulting the country. You go there, and you damage your ability to drive real progress.

Nota Bene

There will always be people who question the value or the morality of doing business in China. When their arguments are sincere, intelligent, and thought-provoking they form a critical check on the often unbridled enthusiasm about China. Whether those voices come from within the company or without, they deserve their due and balanced consideration not just in the PR department, but in the rooms where major decisions are made about a company’s future.

Woe to the company that ignores them. They deserve sincere, intelligent, and thought-through answers, regardless of what the decision may be.

As Paul Resinkoff suggests, Apple, for its part, would do well to consider those voices now. And if your company has not yet, it should as well.

Olympics: Li Ning’s Spanish Inquisition

In the Hutong

The kid’s last day of summer

2005 hrs.

Racism is always a sensitive topic, especially when it rears its head at the Olympics, and the people who appear to be delivering derisive commentary about another race live in a country with a controversial past.

The Spanish basketball team’s taste-free caricature of Chinese faces was an excellent example of how political correctness has yet to reach some quarters of the world.

My post on the topic – and what I think team sponsor Li-Ning ought to do about it as a Chinese company – garnered some interesting responses. Some people were totally offended, and one guy accused me of being unable to appreciate how offensive it was because I’m not Asian.

What the team did – and what their other, Spanish sponsor condoned – was stupid, infantile, and reprehensible. The question of how to react to it as a business is another matter, however.

Check the post out here.

Olympics: Let the Ambush Games Begin

In the Hutong

Trying to grow some thicker skin

1900 hrs.

My article on ambush marketing at the Olympics in AdAge.

When I first started covering marketing around the Beijing Olympics, I began with the belief that ambush marketing was a bad thing.

Now I’m not so sure.

The more I think about it, the more I feel that effective ambush marketing means a sponsor someplace is not doing a complete job.

Sponsorships buy you an opportunity, not an entitlement.

Olympics: The Real Issues are not Pollution and Censorship

In the Hutong

I really need a fridge in this office

0939 hrs.

The folks at Advertising Age have asked me to contribute to their Olympic blog over the next couple of weeks, and my first post dove into an issue that I’ve been looking at for six months, namely whether Beijing may mark the end of what I have come to call the “Uberroth-Samaranch Model” of Olympic finance built largely on the pillars of private sponsorships and the sale of broadcast rights.

In the piece, I lay out five questions that will probably not be answered when the Olympic torch is finally extinguished on the 24th, and that together suggest it is time for the IOC to reexamine the way it does business, much as it did in the wake of the financially disastrous XXI Olympiad in Montreal in 1976.

Travel mogul Peter Uberroth, who took the reins of the Los Angeles Olympic Organizing Committee (LAOOC) in 1979, was given one major goal: help Los Angeles avoid Montreal’s debacle. The fact that Los Angeles already boasted a host of sports venues helped, but Uberroth was the first to systematize sponsorships and to price television rights to their market value. Since the Los Angeles Games (which turned a $250 million profit), those two revenue streams have done much to sustain the Olympics.

Much has happened since, not just in the Olympics movement, but in the marketing business and the television industry. Uberroth’s model may be past its prime.

Check out the article on AdAge.

Business in the Shadow of the Fuwa

In the Hutong

Conference calls: the scourge of globalization

0931 hrs

Was walking through the lobby of the IBM building on my way up to the office the other day I ran across something quite cool: a giant carpool map behind a desk attended by two IBM staffers who were signing people up for carpools.

Carpools? In Beijing?

In the wake of the pre-Olympics anti-pollution restrictions, the options for the building’s workers were simple: carpool, or public transport.

All of which served to remind me that if necessity is not the mother of innovation, she is certainly a midwife.

The precautions being taken to ensure a safe and secure Olympics for all involved are inconvenient – especially for business owners near the venues. But for the vast majority of us, a little planning and ingenuity produces workarounds that can work out well for everyone. Several companies are taking the opportunity to experiment with telecommuting, carpooling, remote sites, and the like.

Anyway, a few other thoughts about the fun of doing business around the Olympics – courtesy of Marketplace Radio and Scott Tong – are here and here.

Silicon Hutong a Must-Read Olympic Blog

In the Hutong

Well, it was looking nice earlier

1612 hrs.

IDG News was good enough to name Silicon Hutong one of the six blogs to read during the Olympics.

Those of you who have followed the Hutong for a while know that we’ve been in a higher gear since mid-May, and we’re going to continue that pace through the Olympics.

If you’re new to the Hutong and you’ve just found us because of the IDG article, welcome to the Hutong. Comments are welcome, as are e-mails and other forms of communication, so don’t be shy.

There is NO next-best thing to being here

Wangjing Gardens, 23/F

Looking over Northwest Beijing

1414 hrs.

As we watch these global arguments around whether heads of state should come to China for the Olympic opening ceremonies, another question rears its head in the shadows: where are all of the CEOs? And not just around the Olympics, but generally?

There has been a noticeable dropoff in the visibility of the multinational CEO in China. Part of this is the result of growing restrictions on the time national leaders spend in the presence of non-Chinese business executives, which itself is partly the result of the falling priority Chinese policymakers assign to foreign investment.

I sense, however, that there is more to it than this. Market access is no longer as problematic as it once was. Corporate focus has shifted to the day-to-day conduct of business, and many executives have likely convinced themselves that it is not as important to come to China as it once was.

One immediate example: as Apple opens their first China store in Beijing this week, Steve Jobs could not be bothered to decamp beautiful metropolitan Cupertino to attend the opening, much to Apple’s loss. (We in the Hutong fervently hope that this is not for health reasons, and if it is, respectfully withdraw the preceding comment.) But Apple is not the only guilty party. The CEO who regularly comes to China (i.e., more than once per year) is the exception, not the rule.

That by itself is shortsighted. But I submit that much more is needed.

Put your butt where your business is…or will be

I am a huge fan of self-education generally, and I think that learning about China via books, web sites, blogs [see my blogroll], magazines, podcasts and other formats is a huge help to give yourself a strong foundation, maintain a clear view of China’s evolving context, and stay current when you cannot be here.

For someone interested in China as a tourist or as an intellectual exercise, that and the occasional trip would be sufficient.

But for an individual who is counting on China as a significant chunk of his or her company’s future, simply popping in now and again isn’t enough. I discussed this at length with Christine Lu at China Business Network in a recent podcast, so I won’t repeat it all here, but two points bear discussing – one that I made in the chat, one that I thought of later.

First, such a long parade of CEOs have aped key phrases like “how important China is to our company” and “how committed we are – and I am personally – to China” that those words have become platitudes. Officials and Chinese consumers alike simply ignore them. If you want to make it clear you are committed to China, you have to stop talking and start doing.

The best way I can think of proving that – better even than a monetary investment – is physical location. If China is so important to your company, Mr. Chairman, then transfer the flag. Take advantage of modern technology and the host of magnificent places of lodging and living and move to China for a bit.

Is China 40% of your business? Can it become 40% of your business? Then pack the bags and come spend 4 months a year here. I guarantee you that the insights, relationships, and brand value you get in the process will make it well worth your while.

MBWA is not about frequent flyer miles

Second is a lesson from Tom Peters – the best way to run a business is to spend as little time as possible at headquarters. Peters called it “managing by walking around.” To Wal-Mart founder Sam Walton, it meant four-and-a-half days a week on the floors and stockrooms of his stores and distribution centers. To my dad, it meant spending about six hours a day on the factory floor, and most of the rest with customers.

To an executive running a global business today, it means getting on the plane and renting long-stay suites in countries that may not offer the creature comforts you’re used to. Suck it up. Sure, you have great people running your offices, branches, and subsidiaries around the world. This is not about them. This is about you having an instinctive feel for the market so that your smart people on the ground can spend their time winning and keeping business, not giving you an extended course in China 101.

Elsewhere on the net

I also had a chance to talk to ChinaONTV about the China ICT conference, where I was a substitute moderator. Not quite as insightful an interview, but I really enjoyed my time at the conference and thought it stood out above a lot of the local tech confabs. Try this link if you’re in China, and this one if you’re not.

Andrew Nathan and the Olympics

In the Hutong

Learning to type while horizontal

2040 hrs.

In the thin guise of reviewing six books about China and the Olympics, Columbia University professor Andrew Nathan writes a lengthy and impassioned critique of human rights in China. Nathan holds senior positions with Human Rights Watch and Human Rights in China, and in writing in The New Republic he is preaching his gospel to a receptive congregation.

Whether you agree with Nathan’s opinions or not, the essay deserves a read, if nothing else because it spells out succinctly the position of human rights advocates on the nature of government in China. Nathan sees the Chinese government as a vast, crafty conspiracy serving interested in nothing but its own survival, and he sees the Chinese people as alternately cowed by corrupt government bullies and anesthetized by the superficial trappings of economic success.

(Nathan stops just short of acknowledging that the advocates of human rights – and he, by extension – engage in their own form of reality distorting propaganda. A nice touch.)

In short, it is not a balanced appraisal, but it is one that for the sake of balance demands our attention.

You Can’t Dive the Pyramids, but You Can Dive the Great Wall

In the Hutong

Blinds shut, air conditioning on ful

1743 hrs.

Last weekend, The Village Grouch of Sinoscuba led ImageThief and a small band of my fellow Dadu-based divers to a reservoir north of Tianjin. Their mission: to dive the Great Wall.

To those of us who picture the great wall as a series of small citadels on jagged peaks linked by a serpentine brick breastwork, the very idea of diving the Great Wall is a bit absurdist. But there is actually a section that found itself drowned by a reservoir in the 1980s that extends to a depth of 65′.

Will took his underwater video rig with him and got some cool footage. Check it out at the National Geographic site here.

Foreign TV Crews Cleared to Broadcast Live News from Beijing

Starbucks Yuanyang Tiandi

Listening to the rumble

1347 hrs.

Geoffrey Fowler at The Wall Street Journal looks like he scooped just about everybody, reporting that foreign TV crews would be allowed to uplink their news coverage of Beijing directly to satellite during the Olympics. Olympic broadcasters are even allowed to broadcast directly from Tiananmen Square, the political and spiritual heart of the city that is miles away from the venues.

On the one hand, this is a big deal, probably the first time foreigners have been permitted to uplink TV signals directly from Beijing for almost two decades.

Two thoughts jump quickly to mind:

First, I think we can be pretty sure that security around Tiananmen Square and similar venues will be even tighter than normal. I foresee lots of crew-cut lads in sweats mixing in with the crowds.

Second, I wonder how much of this concession was driven by growing broadcaster frustration over the hassles getting facilities in and around the Olympic Green ready for the big show? “Gee, we’re sorry about the logistics stuff. Oh, by the way, NBC, you can set up your broadcast booth in Arrow Gate if you want…”

Just bummed I won’t be able to see the NBC coverage here in Beijing…