Overview

Overview

CAC is a media communication company devoted to objectively introduce China, its people, heritage, culture and undiscovered territories to US society. The company was formed in June 1999 by senior executive entrepreneurs in the US. To date, CAC has entered into agreements with China TV North America for rights to North America for Programming developed in China by Central China Telvision (CCTV). CAC is also in the final stages of formalizing relationships with up to three firms that will provide studio services, master control, uplink, downlink and distribution of its products. CAC has the opportunity to have its signal carried to 5 million homes by year-end.

CAC intends to introduce a TV channel during Q1 2000 dedicated to broadcasting objective programming on China in English language. The target audience is the mainstream society of the US ages 14 to 65, with special emphasis on educated, middle-class households and businesses. The company plans to televise over satellite and cable networks a high percentage of non-fiction content consisting of documentaries, learning courses, symphonies, concerts, sports, major events, new briefs, and on-line shopping of Chinese merchandise. CCTV has also represented its willingness to support CAC by providing access to its fifty year film and video library valued at $350 to $500M and 168 hours of daily TV programming and associated resources created by Central China TV. The company conservatively values the total film investment at $500M. Screened program content will be uplinked to a US video warehouse and programming facility for editing, post-production and distribution.

CAC plans to model its business after the Discovery Channel. Once the TV channel is successfully launched, the company intends to use cross promotion tactics by backing projects in China to generate global broadcast specials, linked to video, CD, book and merchandise sales. CAC will investigate expanding into learning channels, Web broadcasting, educational and electronic commerce Web sites, and the sale of other media forms and merchandise over time.

CAC's short and longer-term goals follow the course of Discovery Channel. The Company's short-term goal is to attract 5 million subscribers during its first year of operation by getting on the air in the greatest scale possible in the shortest amount of time with quality programming. The company plans to initially introduce 6 to 12 hours of daily programming in English language on China in the US from existing TV program libraries and new daily programming created in China. This programming will be subjected to initial screening in China, and then uplinked via satellite to a US video warehouse and post-production facility for further screening, editing and post-production.

Management is having partner relationship discussions with a major video warehouse and programming facility in the nonfiction TV production corridor to provide storage, post-production and distribution services. This should enable CAC to meet its objective of introducing its first China TV channel with quality programming during Q1 2000. Over time CAC intends to produce in the US additional high quality non-fiction programming through partner relationships. Longer range plans include creating high quality stories and specials with authenticity on China's greatest natural treasures and events for TV, Web broadcasting and the IMAX giant screen movie market.

The company plans to attract up to 30 million subscribers by its third year of operations with these strategies and tactics. CAC also intends to create non-fiction stories not merely report them. As the company introduces learning channels along with documentary programming, it hopes to lure advertisers by offering spots across a wider spectrum of company networks and simultaneous broadcasting of the channel in the US and China, via a satellite bounce of the signal, at no additional charge to advertisers. US and China advertisers, therefore, will broadcast commercials in the US and China for the price of one broadcasting. As Web broadcasting is deployed in the not too distant future that enables consumers to request a program they want when they want it, CAC intends to supplement its documentary and educational programming with access to databases capable of providing in-depth supporting information and statistics. It is anticipated that CAC's close relationship with China OnLine.net, Inc., and a China-based ISP owned by CITIC, will facilitate Web broadcasting of CAC's programming throughout mainland China in the future.


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