The number of digital TV subscribers could more than double this year to 10 million, according to Radio and TV Information (R&TI) magazine.

This increase is due to rising enthusiasm among cable TV operators and consumers.

Zeng Huiming, president of the R&TI under the State Administration of Radio, Film and TV (SARFT), said there had been good progress recently, with 10 million subscribers constituting a tipping point for the market.

"When the number of subscribers breaks the 10 million mark, economies of scale will have an effect," said Zeng, who spoke yesterday on the sidelines of China Cable and Broadcasting Network Exhibition 2006.

According to R&TI, which has been tracking the development of digital TV over the past four years, 4.4 million Chinese households had access to digital TV broadcasting last year, compared with 1.1 million in 2004.

The statistics from SARFT were a little different at 4.1 million in 2005, from 1.2 million the previous year.

Zeng believed the increase last year was partly due to a process that aims to move all TV broadcasting in a city or a region from analogue viewing to digital in one jump.

In cities like Qingdao, Shenzhen, Suzhou, and Foshan, local operators already provide digital broadcasting to all residents, with each of these projects leading to tens of thousands of families watching digital TV.

This year, the migration will be conducted on a provincial level so growth will remain rapid.

Zhang Haitao, vice-minister of SARFT, said on Monday that the Guangxi Zhuang Autonomous Region; the provinces of Guangdong, Shanxi and Hunan; and Shanghai and Chongqing will all start promoting digital TV.

Zeng, of the R&TI, said the attitude of local operators has also changed. Before, SARFT was driving developments, but now companies themselves realize the importance and benefits of digital broadcasting.

Cable TV operators know they must provide value-added services to expand their businesses and compete against telecom operators for customers, but the government usually provides them with interest-free loans and tax exemptions, which act as a disincentive.

"Most cable TV operators know they have to digitalize and encouraging their commercial interests is a key factor in the process," said Zeng.

More extensive services on digital TV networks are also attracting the interest of viewers. Operators in Qingdao, Hangzhou and Foshan provide interactive services such as video-on-demand, e-commerce and Internet surfing through TVs. In Shenzhen, which borders Hong Kong, revenue from value-added services already exceeds total subscription fees. The city will hold a bidding conference next month to recruit content providers for its digital channels.

(China Daily 03/22/2006 page9)