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Cooperation and innovation propel China's IPTV industry

Posted: 20 Mar 2007 ?? ?Print Version ?Bookmark and Share

Keywords:IPTV? CCID Consulting? VOD? radio?

The development of the IPTV industry in China looks bright. According to CCID Consulting Co. Ltd, the segment trend for China last year included the growing cooperation among service providers and increasing technology innovations in the segmentfactors which can drive growth for IPTV in the country.

In 2006, the number of IPTV users in China hit 550,000 and this figure continues to expand, reported CCID Consulting. IPTV subscribers are increasing in Hangzhou, Harbin and Shanghai. Meanwhile, IPTV has entered commercial use in Fuzhou, Heihe, Mudanjiang and Changchun. In Hangzhou, Shanghai and Harbin, various business models were developed for IPTV.

Also for the past year, significant development in the country's IPTV turf also occurred, including the issuance of licenses to companies SMG, CCTV International, Southern Media Corp. and CRI. The number of pilot cities for network building has been also rising. Branches of China Telecom and China Netcom carried out equipment tests, invited bids for network building and engaged in business cooperation negotiations.

General industry
According to CCID Consulting, cooperation between content integrators, fixed network operators and network equipment suppliers temporarily put aside the dispute between the radio and TV community and telecom community arising from conflicting interest for the service. The three institutions have different definitions for IPTV, while local radio and TV institutions generally adopt a hostile attitude towards the technology.

Still at its nascent stage, IPTV in China has still a long way to go in terms of unifying technical standards for coding and decoding, networking and transmission. Moreover, the country has few contents and applications suitable for IPTV services.

On the consumer side, cognition remains relatively low. Moreover, the consumers are put under pressure to change their TV habits. IPTV deployments around the country have not reached the intended scale of adoption in the localities but this problem can be eased in the future, said CCID Consulting.

In terms of innovation, segment players have explored ways of enterprise cooperation, business development, content creation and standard integration. These include the one-line-three-network technology introduced by Shanghai Daning, the full-member marketing of business promotion adopted in Harbin and the interactive functions introduced by Hangzhou Culture Radio Television Group. These innovative measures enable IPTV to address network, consumer cognition and content creation obstacles.

Moreover, innovation provides a strong impetus for business development, reported CCID Consulting. Based on their cooperation, equipment suppliers, network operators and content integrators and content providers have explored ways of enterprise cooperation, business development, content creation and standard integration.

Significant trends
Based on the current situation of IPTV development in China, CCID Consulting believes that IPTV has the three significant trends in the country.

First, cooperation rather than competition will be the main link between the radio and TV community and the telecom community.

Based on their network and fund strengths, telecom operators may have certain advantages nationwide. However, IPTV involves many links. No enterprise or department can satisfactorily prop up IPTV services. The telecom community and the radio and TV community have complementary rather competing resources. To turn IPTV's interactive advantages into market and economic advantages, the key lies in the two sides carrying out continuous innovations based on close cooperation.

Second, IPTV still has a long exploratory period to go through.

IPTV has yet to form mature business models. Currently, telecom operators, radio and TV units and content providers in China all engage in certain cooperative work. However, the specific cooperation model is unclear. Much work must be done to further explore IPTV business models, and this will take time.

Moreover, there will be a long policy exploration period for IPTV. There are two uncertainties in IPTV policies: market access and industry standard. IPTV needs policies to protect its development. The issue of access policy for IPTV needs urgent solution. Though four IPTV licenses have been issued in the country, benign market competitions are far from being formed. An effective market access system is needed to coordinate the interests between the radio and TV camp and the telecom camp and avoid fierce confrontation. Considerable experiences are required to establish industry standards. While the improvement and unification of industry standards and the development and maturity of the IPTV industry mutually develop, it is neither realistic nor necessary to unify IPTV-related industry standards at present.

Third, personalized, diversified and interactive IPTV contents and application innovations will become the trend for the segment. Based on the growing percentage of steaming media flow in IP networks, CCID forecasted that there will be more demand for personalized, diversified and interactive contents and applications.

A key to propel further the IPTV services in the country lies on integrating and controlling rich contents, or offering diversified application services. However, there is a lack of content for the segment coupled with the present monolithic applications.

According to CCID Consulting, the development of IPTV in China is centered on contents and applications, while personalization, diversification and interaction are the development directions. To achieve this, future IPTV contents and applications will take the rich digital TV contents as the main body and foundation to solve the time restriction of traditional TV on consumers, and truly achieve VOD. When users experience is proved to be positive, operators will gradually introduce attractive applications based on their consumers' interactive demand.

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