China Netcom, one of the fixed line telecom service providers in China, has started a new program to hop into the Internet video market by signing agreements with eight media agents and content providers as strategic partners for the program.
Jiang Zhengxin, deputy general manager of China Netcom, said that the new program, which is called "Video Network Plan", is an active exploration by China Netcom to go towards innovation and speed its shift to the role of a broadband communications and multimedia service provider.
As a publicly-listed company with strong government ties, this could be the beginning of the end for privately-owned video sharing Web sites like Tudou.com, as the government has long desired to maintain control of Internet video broadcasts.
China Netcom will at first mainly provide a basic software operation platform and be responsible for the distribution, broadcasting, charging system and the related bandwidth and servers. The media agents and content providers such as Guizhou TV Station, Qinghai TV Station, ccidmedia.com, Hubei Film and Television Art Center and China Television Artist Association Television Commission will be in charge of content creation as well as the development of copyright protection systems for the platform.
China Netcom will earn revenue by charging a service fee from the media and content providers, while the latter make money by charging a fee from the users or through advertising.
Zuo Feng, general manager of China Netcom Broadband Online Company, said that China Netcom intends to promote the development of the industry through this open network platform and new operation service pattern.
As China Netcom already has methods and means to collect payment from users, they have a large lead over companies who can only dream of charging users to view Internet content.
Sang Lihua, deputy general manager of China Netcom Broadband Online Company, said the company will launch set-top boxes like Network DVD this year to meet users' demands for downloading video programs and enabling them to watch the programs directly via television sets.
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MYST.OB is a China Netcom partner
MYST.OB is one Chinese company that will garner big attention in coming weeks. They are revenue sharing with China Netcom and are also serving bundled ads to the China Netcom broadband site. This news will drive that stock price much higher.
Posted by Eric Solis on Thursday, April 24 2008 11:30 AM