Tuesday, May 13, 2008

China Telecom Expects 2M Subscribers in 2008

China Telecom's IPTV expects to have 2 million IPTV subscribers by the end of 2008. Shanghai is at 380 thousand IPTV subscribers today and is expected to reach 700 thousand by the end of 2008.

Getting people to pay for IPTV services is an issue in China. There are several dimensions to this issue:
  • The Chinese government restricts TV content and prevents many good foreign TV dramas from being shown on TV in the country. People in China are reluctant to pay for TV if they cannot get this kind of content.
  • Pirated programming is broadly available in China. People are reluctant to pay for a TV service when they can buy what they want to see on the street.
  • People in China believe that TV should be free since the Chinese government has always defined TV as a free service.
  • IPTV service providers are not doing a good job of marketing their services. They are not analyzing their consumers.
In spite of this the Chinese market has major advantages.
  • The sheer size of the population means that it will generate a very large IPTV subscriber based even with low service penetration.
  • The Chinese government is developing IPTV service and is likely to introduce new policies that support the service.
  • Chinese viewers want choice, which will help IPTV succeed to the degree that it meets this demand.
The IPTV operators in China have all the problems that IPTV operators have elsewhere. In addition, it has to face the content limitation put on it by the government. This is a serious problem in China. When I was there recently, I saw news broadcasts that were censored with the screen going black when the offending content was broadcast. I was also not able to access this blog! I did not think that I was that dangerous.

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