Mon, 05/12/2008 - 15:40
Challenges must be overcome for China's IPTV industry to reach full potential - insiders
Shanghai. May 12. INTERFAX-CHINA - Although the number of IPTV subscribers is set to explode over the next few years, China's IPTV industry faces challenges if it is to maintain long-term development, delegates at the Asia Future TV 2008 conference in Shanghai said last Friday.
China Telecom's IPTV user base is expected to reach 2 million by the year's end, Yang Bingfeng, IPTV project leader of China Telecom's Shanghai branch, said. The branch's IPTV subscriber base alone is expected to reach 700,000 by the end of 2008, he said. As of May 8, the number was 380,000.
However, government restrictions, piracy, customer preconceptions and operator business models are all areas that could cause difficulties for the industry, said Li Yiqing, vice general manager of Huashu Digital Television Co. Ltd., an IPTV operator in Zhejiang Province.
"The government's restrictions on TV program content indicate that there will never be eye-catching programs on TV," she said. "Many good foreign TV dramas will not be introduced and some controversial content that people are interested in will not be allowed to be shown. If there is no good content, why should people pay to watch TV?"
"As for piracy, Chinese people as well as foreigners in China enjoy the country's piracy market. The programs on IPTV will never defeat pirated products in range and price," Li said.
"The third problem is that Chinese TV viewers have a deeply-rooted conception that all TV programs should be free, as the Chinese government has always defined TV as a free social service," she said.
"The fourth problem is that many IPTV operators are not conducting their businesses properly and whole-heartedly," she said. "Operators set up IPTV services as they fear being left behind. However, they don't analyze their consumers."
However, Li also pointed out the advantages of China's IPTV market. "Even if each operator just has a small percentage of the market, its IPTV user base will be bigger than the entire number of IPTV users in some smaller countries."
"Secondly, the Chinese government is developing IPTV, so it will of course release supporting policies, which is good for operators," she continued.
"The third advantage is that Chinese TV viewers had no choice over what they watched in the past," Li said. "This means there must be demand for a service that allows users to pay for choice."
Li emphasized that in order to safeguard quality, operators must work to change people's perceptions of TV as being a free medium.
"People must know that only when they pay, both the viewer and the operator are contract-bound. If the programs are free, operators will have no responsibility at all to its subscribers on program quality, which is not good for industry development," she said.
Li also objected to the business model that operators provide free content to attract more people, but generate revenue from advertisements. "If such models become widespread, people will never learn to pay for what they watch. What's more, as an operator, our focus should be on the connection with our subscribers rather than advertisers," she said.
-ZDW
