E-entertainment mart entertaining
By Li Weitao (China Business Weekly)
Updated: 2005-03-20 08:51

Peng Xingwang is a loyal fan of mobile TV.

He is not only fascinated by watching TV programmes over a mobile phone, he also hopes to cash in on the emerging mobile TV business.

"I'm hoping to co-operate with MTV to bring 24-hour music videos to mobile phones," said Peng, who runs Pengco Wireless Inc, a small start-up based in Beijing.

"I'm very optimistic about the prospects of mobile TV, and the whole wireless entertainment industry in China."

Peng, whose firm is focusing on developing the mobile TV technology, is one of several people ready to tap China's wireless entertainment market.

Analysts suggest China's wireless entertainment market is already on a roll, as people are increasingly inclined to enjoy entertainment content such as games, music and TV on the go.

And the increasing convergence of China's mobile telecoms market and entertainment sector will result in even greater opportunities.

China now has more than 50 million wireless entertainment users, said Ma Ning, an analyst with Wangxin Botong Consulting, a research firm affiliated with the Ministry of Information Industry (MII).

"The number is still on the rise."

Most of the users are students or low-income earners, but they are willing to pay for fun on the go, as they are more fascinated with ever-changing fads.

Ma estimates the value of China's wireless entertainment market was more than 10 billion yuan (US$1.21 billion) last year.

Playing games and downloading ringtones remain the major attractions in the wireless entertainment market, Ma said.

But, in the upcoming roll-out of 3G (third-generation) mobile services, games, videos and streaming media, such as mobile TV and music on demand, will become the mainstream.

That may lead to the creation of several successful small businesses like Peng's firm.

"We are going to cash in on that market," Peng said.

US-based research firms IDC and Yankee have predicted the global wireless entertainment market will reach US$76 billion by next year.

Nokia, the world's top cellphone maker, has said it expects 40 per cent of its revenues will eventually come from wireless entertainment offerings.

It is difficult to predict the size of China's future wireless entertainment market.

But the 3G roll-out, which promises broader bandwidth and faster downloading speeds, will definitely boost the entertainment market.

Telecoms operators are already counting on the entertainment offerings to be a new profit driver.

Wang Xiaochu, general manager of China Telecom Group, has said fixed-line carriers should strive to facilitate the tie-up between the telecoms and entertainment sectors, while lobbying the government for licences to offer mobile services.

That underlines a major shift in China Telecom's strategy, from a telecoms service provider to a comprehensive service provider.

Wang Yuquan, president of consulting firm Frost&Sullivan (China), said China's ever-galloping telecoms sector offers a good chance for China to emulate the run-away success of wireless entertainment in Japan and South Korea.

In the wireless entertainment offerings, "Chinese operators, content providers and service providers should target the whole global market, rather than the domestic turf," Wang said.

Chinese developers, such as Beijing Digital-Red Mobile Software, have already sold numerous mobile applications to domestic carriers and major telephone operators in Europe and the United States.

Such developers are attracting an increasing number of investments.

Last September, Digital-Red was bought by NASDAQ-listed Shanda Interactive Entertainment, the largest online game operator in China.

But the country's wireless entertainment market still faces some hurdles.

A key hurdle is China's fledgling copyright protection system, Wang Yuquan said.

Wang Ding, an official with Digital-Red, said the firm is becoming increasingly frustrated by rising piracy of its wireless entertainment offerings.

"We always find many users have started using our games, which they have downloaded from some illegal websites before we have authorized operators to offer such games to mobile phone subscribers," he said.

China, in recent years, has enhanced efforts to protect copyrights, but online copyright infringements have yet to be addressed adequately.

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