BEIJING, March 15 /Xinhua-PRNewswire/ -- 2006 marks a year of harvest for China's digital TV industry, with the introduction of new digital TV standards and number of users reaching new heights, reports CCID Consulting Co., Ltd in a survey on 2006 China's digital TV industry.
Key Viewpoints
In 2006, China scored notable achievements in its drive to promote digital TV as conversion started nationwide. A large number of provinces and cities including Guangxi, Hainan, Beijing, Shanghai, Tianjin, Chongqing, Hebei, Zibo, Ningbo, Xiamen, Fuzhou, Quanzhou, Linyi, Zunyi and Jiangmen completed overall conversion to digital TV. By October 2006, the number of new digital TV users nationwide reached 4.91 million. The accumulated number of digital TV users is expected to top 10 million by the end of 2006, up 150.8% year-on-year. Among the new users, cable digital TV users will be the majority. In 2006, digital TV in China entered the fast lane.
For "the Number of Digital TV Users in China, 2003-2006", please refer to http://www.ccidconsulting.com/upload_fr/cemc207/image01.gif .
Bi-directional digital network technology became the mainstream
After coming across the threat from IPTV, bi-directional network reconstruction became the mainstream of digital TV network reconstruction in 2006. In addition to TV contents, the biggest differences between IPTV and cable TV are time shifting and on-demand functions, which enables users to shift habits of passively waiting for a program to start to control what they want to watch by actively searching for their favorite programs. As a complete substitute for cable TV, IPTV has already posed a great threat to cable TV network operators. To stay competitive against IPTV, cable TV network operation companies have enhanced efforts in promoting digital TV services, while on the other hand, cable TV operators have started bi-directional network reconstruction in order to provide the same digital TV services that have time shifting, on-demand and other interactive functions, thus making such services more competitive. When digital TV service was first introduced, some cities continued carrying out the single directional reconstruction network and did not anticipate that IPTV would develop at such a startling speed in just a few years. Consequently, they now face the problem of reconstructing their cable networks.
2006 was a harvest year for digital TV standards
In 2006, 3 standards relating digital TV were issued. The year could well be considered a harvest year for digital TV standards.
In March 2006, the Ministry of Information Industry released Terms for Digital TV Receiving Equipment, which includes HD standards for 6 types of digital TV displays: LCD, plasma, LCD rear projection, LCD front projection, rear projection CRT and CRT. The standards became effective as of January 1, 2007.
Ground digital TV broadcasting is a supplement to and extension of cable and satellite digital TV broadcasting. After 5 years of debate, its transmission standard was finalized in August 2006. In the Announcement of Newly Approved National Standards of P.R. China -- 2006 No.8 (total No.95), the Standardization Administration of China released Frame Structure, Channel Coding and Modulation of Digital TV Ground Broadcasting Transmission Systems on August 18, 2006. This is a mandatory national standard, with a standard number of GB 20600-2006. It will enter formal implementation on August 1, 2007.
In October 2006, the State Administration of Radio, Film and Television introduced the mobile TV standard "China Mobile Multimedia Broadcasting (CMMB) System". This is a recommended industry standard, the standard number being GY/T 220-2006.
The introduction of these 3 major standards in 2006 symbolized the upgrading and extension of the digital TV industry amidst continuous improvement.
Nationwide provision of IPTV greatly stimulated cable TV network operators
By November 2006, 5 operators had obtained IPTV licenses. Following SMG and CCTV International, Southern Media Corporation, China Radio International and China National Radio all got the licenses to operate IPTV nationwide. In 2005, Shanghai and Harbin became pilot cities for commercial IPTV. In August 2006, the State Administration of Radio, Film and Television issued local licenses to 10 cities, namely Fuzhou, Xiamen, Taizhou, Xi'an, Hanzhong, Dalian, Panjin, Shenyang, Heihe and Mudanjiang. In October, 5 more cities including Changchun also got such local licenses. The number of licenses issued and the speed of such issuance and the development of pilot cities all clearly showed a quickened pace for IPTV in 2006.
Currently, operators with IPTV license have targeted China Telecom and China Netcom as their alliance partners. Compared with cable digital TV, IPTV possesses strong advantages in terms of fund strength, service control ability and even government PR ability. The provision of IPTV services has strong impact on local cable TV network operators. On one hand, this is related to the national plan for digital TV promotion. On the other hand, there is a threat from IPTV. In these cities, cable TV network operators have notably sped up their digital TV platform building and digital TV services provision.
Nanjing became a model for digital TV promotion
At the end of 2006, Nanjing became the city where promotion of digital TV was most successful. On July 1, 2006, the city formally started overall conversion of cable TV to digital TV. By the end of 2006, analog-to-digital conversion was expected to be finished for 700,000 users in the downtown area. One reason for such fast conversion in Nanjing was good preparation. The other reason is its unique marketing model. Firstly, it is the "1+3" model. For family users, the basic cable digital TV viewing and maintenance fee is waived for the second and more (not exceeding 4) terminals at the same address. This attracts more user groups from the perspective of lowering users' maintenance fee. Secondly, richer program contents. There are 60 program channels for digital TV users, that the city is currently offering the largest number of public channels in China. Meanwhile, good program quality and signal quality are delivered. Finally, analog signals are still kept in residential quarters where digital conversion has been completed to ensure that residents who have several TV sets but only one set that has completed digital conversion can still receive and view analogy TV programs. It is precisely these seeming minor marketing details that have made the conversion to digital TV proceed smoothly in Nanjing.
There were innovative models of cooperation between STB makers and operators
In 2006, the model of cooperation between STB makers and operators changed from a pure relationship of buying and selling to one of in-depth cooperation of sharing risks and profits together. STB makers took part in operators' operation process. They provided operators with digital TV STB, while operators shared revenues from digital TV services with STB makers by a certain percentage. This innovative model of cooperation solves the problem of initial fund input for operators. On the other hand, it enables STB makers to take part at the operation level and get long-term and continuous returns. However, the shortcoming of this model is that it prolongs STB enterprises' fund turnover cycle.
Digital TV breaks through predicament
Despite strong competitions from IPTV, the pace of overall conversion to digital TV did not slow down in 2006. On the contrary, under the squeeze of all kinds of competitions and pressures, a breakthrough point has been found for industry development. In 2006, there was a change in the nationwide structure of cable network operators. Previous city-centered cable TV network companies started to integrate towards provincial networks in an effort to strengthen the regional competitiveness of their cable TV networks. With the introduction of several digital TV standards in 2006, the whole industry has a clearer development direction and will enter a period of fast growth.
About CCID Consulting
CCID Consulting Co., Ltd (hereinafter known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: HK08235), is directly affiliate to China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen, Harbin, with over 300 professional consultants and industry experts. The company's business scope has covered over 200 large and medium-sized cities in China. Apart from home market development, CCID Consulting establishes international cooperation links across the United States, Asia-pacific area and Europe, by setting up agents in the U.S, Japan, South Korea, Australia, Singapore, Italy and Russia, along with the aim to be global.
Based on four major competitiveness of the powerful data channels, industrial resources, intensive knowledge and deep understandings of information technology, CCID Consulting provides customers with consulting, research and IT outsourcing services covering strategy planning, IT application, marketing strategy, human resources and information technology outsourcing. Her customers range from industrial users in IT, telecommunications, energy, finance, automobile to government departments at all levels and diversified industrial parks. CCID Consulting commits herself to become the No.1 brand for strategy consulting, the No.1 consultant for enterprise management and the No.1 expert for market research.
