Coming soon: Television via the Internet
By Jiang Jingjing (China Business Weekly)
Updated: 2005-01-12 15:08

Television, radio, newspapers, magazines and the Internet. These are all the media we access at present.

But soon, a new format -- IPTV -- will open another door to entertainment, news and knowledge.

IPTV refers to TV broadcasting services based on Internet protocol, under which subscribers to the services can watch TV on a computer screen. IPTV offers both live streaming services and video on demand (VOD) services over the Internet.

China's State Administration of Film, Radio and Television is likely to issue IPTV licences this year.

Traditional telecoms operators such as China Telecom, China Netcom, China Mobile, and China Unicom said they are carrying out trials of the new services.

"Once the licence is available, we will start the service," sources from China Netcom said.

For now the spotlight is on content providers.

Besides television stations and TV programme producers, traditional non-TV media such as Xinhua News Agency, China National Radio, China Radio International and Beijing People's Broadcasting Corporation are all gearing up for a battle to tap into IPTV programme production, which they believe will prove a lucrative business.

"There is a huge potential for IPTV," said Wang Liang, head of Beijing People's Broadcasting Corporation.

There is an increasing number of Internet users both at home and abroad and advertisements and subscription fees would be the major income, Wang said.

There are limited channels for both TV and radio, whereas the space for Internet TV is endless, Wang said.

Wang's opinion was echoed by Ding Junjie, dean of the journalism school at the Beijing Broadcasting Institute.

China's Internet users are rising by 2 to 3 per cent every year, and the number of magazine readers is growing by 1 to 2 per cent annually.

On the contrary, the audience and readers of traditional media, such as TV, radio and newspapers is dropping by an average of 1 per cent each year.

Internet users will outnumber TV viewers in the next few years in China. There are over 20 million Internet users, and the new medium is attracting several million news users annually.

Cable TV viewers measure 100 million so far.

Zhao Xiaobing, president of Global China (Beijing) Media Consulting Co, pointed out it is easy to distribute profits of IPTV, compared with that of cable TV.

"The ownership of the current cable TV networks is not clear, and there are conflicts between local operators and their central counterparts. As for IPTV, such a relationship is simple and straightforward. Telecoms operators buy programmes from content providers and collect fees from Internet users," he said.

Few traditional media have enough strength for the business and financial support of the IPTV service, and this poses a big challenge for those who plan to step into the sector.

"It costs about 20 million yuan (US$2.42 million) each year to maintain an IPTV channel," Ding said

"And more than 90 per cent cannot provide that amount of money," Wang said.

Wang said Beijing Radio will self-finance as well as attract foreign capital for the new business. But he declined to tell the exact amount they have invested.

According to a report from the Beijing Morning Post, some 1 billion yuan (US$121.07 million) of venture capital is eyeing China's media industry this year.

Wang said they have advantages of interview resources and they need to make good use of them by providing TV programmes.

He further explained that when they conduct interviews to produce radio programmes, they can actually film the whole process and turning it into TV programing.

Wang said they will focus on entertainment and transportation programmes.

China National Radio will extend its advantage in healthcare programmes while Xinhua News Agency will take the advantage of its worldwide bureau for news collecting.

Ding said those media should make good use of existing resources and advanced management methods for the new business.

"Each step should be firm," he said.

IPTV does not need a high technological threshold, compared with traditional TV programmes.

"Unlike TV stations, we do not need big TV cameras, a family-use digital camcorder will work," Wang said.

"All our studios have already met the criteria to produce TV programmes several years ago, and we have hired competent personnel for the new business," Wang said.

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