Leading Webcasters in Greater China- One Language, Many Differences

1. Leading Webcasters in Greater China- One Language, Many Differences

2. The Emerging Webcasting Business in China Min Hang Jönköping University, Sweden Dahong Min Binyan Yang China Academy of Social Science, China

3. Webcasting Market Environment • The growth of the media industries in China • China’s media market was tightly controlled before the 1970s. • Media market deregulation started since the late 1970s. • Media industries have been growing significantly during the recent years. • Internet usage and broadband penetration • There are 103 million netizens in China by June 2005. • The number of broadband users reached 53 million by June 2005. • 75% broadband users use the ADSL services. • Policy environment • China’s webcasting business is strictly regulated by the state government. • A series of policies and regulations have been promulgated to regulate the transmission of audiovisual content. • A License to Broadcast Audiovisual Program via Internet is required for webcasting business.

4. Leading webcasters in the market • Radio and television stations • Central and local radio and TV stations, e.g. V.CCTV of China Central TV Station, Inet Radio of China Radio International • News agency and newspaper companies • Central news agency and state/provincial newspaper companies, e.g. Xinhua Net TV of Xinhua News Agency, People.com of People’s Daily • Portal sites • Major portal sites, e.g. Qianlong Net TV of Qianlong.com • Telecommunication companies • Telecommunication operators, e.g. Tiantian Net TV of China Netcom, Dream Net TV of Great Wall Broadband • Others • Other traditional offline media companies, e.g. Wuzhou Net TV of the Wuzhou Media Press.

5. Webcasting Business Practices (1) • Analysis of the 20 leading webcasters • Accessibility • Content transmission: most leading webcasters use more than one transmission method • Internet connection: most webcasters provide a 2-speed-option for choice. • Media players: Windows Media Player and Real Player are major ones. • Content strategy • More than one program genre. • Most content is repurposed and has previously shown in other media. • 65% of the webcasters have primarily domestic production • Revenue source • The major revenue sources of the 20 webcasters are advertising (80%) and subscription (55%). • International influence • All the leading webcaster are domestic by ownership. • Most content provided on site are domestic.

6. Webcasting Business Practices (2) • Survey on the webcasting consumer behaviour • Demographic features • Male users take the dominant majority. • Most users are aged between 18 to 45. • Most users hold college degrees. • Consumer behavior • Most of them use both audio and video content. • Most of them use webcasting services frequently. • The music content is the most popular. • 52.9% users go to the pure-plays webcasters, 40% visit the bricks-and-clicks, and 39.3% position themselves on the ISPs. • Most users prefer the live streaming or on-demand streaming content. • Downloaded content is primarily for self-use (65%), not file-share or retransmission • Most of them only use the free content • The quality of the content is not very satisfying.

7. Outlook of the Webcast Industry • Regulatory issues • More coordination is required among different responsible departments. • Illegal webcasters in the market • Market administration is needed to prevent the illegal webcasters. • Business models • Webcasting business model needs to be developed. • Content diversity and richness • High quality programs are required. • The IPTV issues • Initial growth of IPTV will impact the development of the webcasting business. • Podcast and Vlog issues • Emerging Podcast and Vlog market will also influence the future of webcasting business.

8. Webcasting in Hong Kong Alice Lee Hong Kong Baptist University

9. Internet and Broadband Penetration in Hong Kong • 65% of households in HK were connected to the Internet • In April 2005 household broadband penetration rate in HK was 62.4% • HK is second only to South Korea in terms of broadband penetration rate • HK is ranked number one in the world in terms of the affordability of Internet access. (Broadband service charges is low)

10. Ranking: tvb.com RTHK on the Internet HKedCity i-CABLE.com now.com.hk 881903.com Metroradio.com.hk hkatv.com Tdctrade.com Breakthrough Site Nature & Business Model: clicks-and-bricks (branded) clicks-and-bricks (branded) clicks-and-bricks (branded) clicks-and-bricks (branded) ISP (content aggregator) clicks-and-bricks (branded) clicks-and-bricks (branded) clicks-and-bricks (branded) clicks-and-bricks (branded) clicks-and-bricks (branded) Leading Webcasting Companies in Hong Kong

11. Webcast Business Model: Globalized or Localized? Webcasters in HK construct their business model which weaves around the strategy of localization: • All leading webcasters in HK are domestic sites • Leading webcasters in HK are mostly click-and-bricks webcasters and they usually adopt the branded content model in which the branded content is basically local

12. Executive managers of webcasters interviewed expressed that local content is much welcomed by their online users • Webcasters in HK provide a wide variety of audio and video clips • Popular video programs includes movies, TV dramas, TV news &public affairs • Popular audio programs include music, talk shows, news and sports

13. Characteristics of Hong Kong Webcasting • The goal of webcasting is not for generating revenue but to serve a website’s mother company or the community • Webcast programs are better developed in non-commercial sites than in commercial sites • Webcasting content focus on informational, educational and cultural materials • Webcasting targets for local young audience

14. Commercial Webcasting vs. Non-commercial Webcasting • Among the 10 leading webcasters, four of them are non-commercial sites which are closely related to the local community • Leading commercial sites regard their webcasting operation as a cost center instead of a profit center. They invest less on their Web and provide less original programs. • Leading non-commercial webcasters consider the Web as an effective perform to promote public service. They invest more and produce more original content.

15. Future Outlook With the new advancement in wireless technology, the future of webcasting in Hong Kong is full of opportunities: 1. Mini-webcasting programs on mobile phone 2. Educational webcasting programs for wireless schools

16. More Access Means More Opportunities:Analyzing the Business Models of Webcasters in TaiwanYu-li Liu, Professor, NCCU, Taiwan2005.10

17. Webcasting Market Environment • Webs-tv and hiChannel developed in 1999 and 2000. • The reasons of growth (1) big bandwidth of the content aggregators; (2) the promotion of broadband connection; (3) the support of the content providers.

18. Leading Video Webcasters • The most popular three webcasters are • Webs-tv.net Inc. • Microsoft’s WindowsMedia.com • Hinet’s hiChannel • Source: InsightXplore, 2003.10

19. hiChannel Users’ Profile

20. Media Player by Webcasters real player 15% windows media player 90% apple quicktime player 0% Other 10% n=20

21. TransmissionMethodbyWebcasters On Demand Downloading 20% On Demand Streaming 100% Live Streaming 30% Push 5% n=20

22. ContentSources Original 20% Repurposed 95 95% Simulcast 25% n=20

23. Webcaster Content by Business Models • Content Aggregator Branded Content N=16 N=4 original 12.5% 50% repurposed 100% 75% simulcast 18.75%50%

24. Revenue Sources by Business Models Content AggregatorBranded Content N= 16 N=4 Advertising 62. 5% 50% E-Commerce 56.3% 75% Subscription 50.0% 25% Pay-per-view 43.8% 25% Content syndication 25.0% 75% Other 0% 0%

25. Payment Method Direct debit/Transfer 45% from bank account credit card 60% paypal or other online 30% payment service telephone debit 55% other payment method 40% n=20

26. Webcaster E-commerce by Business Model • Content Aggregator Branded Content N=14 N=4 Media /entertainment 78.6% 75% related product licenced merchandise7.1% 25% of TV shows/stars Other commercial 57.1% 50% Product/services

27. Business Models by Webcaster Type

28. Webcaster Ownership by Business Model • Content Aggregator Branded Content N=16 N=4 Domestic ownership 75% 100% Joint venture 6.25% 0% Foreign ownership 18.75% 0%

29. ICPs Provide content Alta Provide technical support & marketing Chunghwa End user Enjoy webcasting service Provide bandwidth and billing system 50% 20% 30% pay Source：ELTA hiChannel’s Business Model

30. Hypotheses and Findings • Clicks-and-bricks Webcasters are more likely to employ the branded content model – YES • Clicks-and-bricks Webcasters are more likely to repurpose audio-video content – YES • More diversified transmission method, more diversified revenue sources – YES • Most leading Webcasters are domestically owned - YES • Majority of leading Webcasters’ content is domestic production - YES

31. Conclusion • The Webcasting market is dominated by two content aggregators. • Clear diversification of revenue sources • TV channels have their own web sites, but they do not have good performance in webcasting. They are lack of bandwidth. • People like to visit the content aggregator websites, because they are like a department store. Almost all the popular channels are provided in that platform. • Limitations of Webcasting as a Global Medium • Bandwidth, connection, and access