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Tuesday_T23_ Kshetri_Final_Slides.ppt [Read-Only]

Tuesday_T23_ Kshetri_Final_Slides.ppt [Read-Only]






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    Tuesday_T23_ Kshetri_Final_Slides.ppt [Read-Only] Tuesday_T23_ Kshetri_Final_Slides.ppt [Read-Only] Presentation Transcript

    • Nir Kshetri University of North Carolina--Greensboro 1
    • IPTV in China  Chinese IPTV market---sizeable and gaining speed.  November 2006:  China Telecom had trial IPTV networks in 23 cities.  China Netcom (CNC) in 21 cities.  2006-end: 60% of China's major cities IPTV-ready (Chan, 2006).  IPTV subscribers:  5 million in the early 2007 (PRWeb, 2007)  Forecast: 10m in 2008 (PRWeb 2007), 23m by 2012 (Heiser, 2007).  China will be the world's largest IPTV market by 2010 (Ashling, 2005)  In-Stat--China's IPTV will generate $888m in 2010. 2
    • Idiosyncratic features of the Chinese IPTV market  A combination of an empire and a modern nation (Terrill, 2005).  Chinese IPTV landscape--plenty of wind in its sails.  The state’s entrenchment in the economy;  Regulation on culture and communications and restriction on foreign content;  A deep thirst for domestic IPTV standard; and  Availability of pirated and illegally re-broadcasted cable or IPTV signals. 3
    • Development of a technology industry: A theoretical framework  Adams (1996): “Like fire technology depends on its environment to flare or die”.  A technology’s ecosystem and environment  Economic factors:  Nature of domestic demands and inputs  Industry structure  Transfer and export conditions.  Context provided by institutions:  Formal institutions  Informal institutions
    • Factors driving the development of the Chinese IPTV industry  Chinese consumers’ propensity to adopt technology products  Propensity to adopt new technologies  Broadband leadership.  Internet access through broadband : 6.6% (end-2002), over 50% (early 2006) (The Economist, 2006) and about 66% by July 2006 (msnbc.com, 2006).  Broadband household: 79 million by the end of 2007 (Frater, 2006).  Ownership of personal computers lower in China.  IPTV-- access to Internet-based information and social networking services.  Chinese consumers’ perception of IPTV  Value perception of IPTV may differ from those in industrialized countries.  Internet component rather than the video entertainment more popular .  Online gaming.  2004: 20.3 million online game players (US$298 million  Estimated to reach 57 million by 2009 (US$1.3 billion .  Online gaming operators ---IPTV a top priority. 5
    • Factors driving the development of the Chinese IPTV industry (Contd.)  Government agencies’ adoption  Most developing countries--the government biggest user of ICTs  Government agencies in China--among early adopters of ICT applications.  China outperforms industrialized countries in e-governance (West, 2002).  CNC: providing distance education to communist party members in rural areas in Henan through IPTV.  Demands associated with major events  China’s important global position.  Hosting crucial global events.  Beijing Olympic Games  2010 World Expo in Shanghai 6
    • Factors driving the development of the Chinese IPTV industry (Contd.)  Government’s characteristics : Degree of clarity of vision and policies to promote IPTV  State strategies toward ICTs: balance economic modernization and political control  The CCP’s basis of legitimacy--MarxLeninism to economic development and nationalism.  Chinese government is showing willingness to transform provincial TV stations from “conduits for propaganda” into “cash-rich conglomerates” (Wehrfritz et al. 2005)  Confused policy has been a major roadblock to realizing the full potential of IPTV.  A lack of clear policies and regulative uncertainty.  China Telecom and China Netcom--trial IPTV networks, but unable to sign up commercial users.  Inter-ministerial fighting over whether IPTV should be promoted  Broadcasting and telephony have separate regulatory bodies in China.  December 2005: broadcasting authorities in Quanzhou (Fujian) ordered the closure of an IPTV service jointly run by China Telecom 7 and SMG.
    • Factors driving the development of the Chinese IPTV industry (Contd.)  Regulation impacting firms’ value creation and delivery  Government’s deep entrenchment-- a higher emphasis on political and social goals rather than on market share and profits.  Political pressure rather than business sense driving IPTV launch and product offerings (Yan, 2007).  China Netcom and China Telecom—ARPU: $4-10 a month (Wilson, 2007b)  Motivation to provide high quality services.  Culture and communications are among the most regulated sectors.  Foreign content is highly restricted and cannot be broadcast live. 8
    • Factors driving the development of the Chinese IPTV industry (Contd.)  Regulation impacting firms’ technology choice  Deep thirst for domestically developed ICT standards.  Royalties in past ICT standards.  The matter of national pride.  Chinese telecom companies--pressures to adopt domestic standards .  China is determined to promote home grown encoding technology, AVB, and digital broadcast technology, DMB-T.  Plans to make AVS-supported IPTV network available to 4 million users by 2009 . 9
    • Factors driving the development of the Chinese IPTV industry (Contd.)  Tax, subsidies and other institutional interventions to promote IPTV  Intellectual property rights (IPR) regime  Some encouraging signs in IPTV industry emerged  A landmark case filed by MPAA  A Beijing court ordered Sohu to pay $140,000 in damages to Hollywood movie studios and apologize.  These studios negotiating with Chinese IPTV providers to distribute movies through a video-on-demand model. 10
    • Factors driving the development of the Chinese IPTV industry (Contd.)  IPTV suppliers: Offerings, value creation, value communication and value delivery  The "soft" concepts of management not integrated into Chinese thinking  Chinese IPTV firms thus may face problems to market their offerings.  IPTV: yet to form mature business models.  Some creative offerings.  Shanghai: customers get a free set-top with a two-year contract.  Harbin: China Netcom has waived set-top box fees.  SMG: offering a service to consumers who want to upload their own content.  Shanghai Telecom’s service allows to book medical appointments over IPTV.  BesTV: working with local banks to develop a bill-paying service. 11
    • Factors driving the development of the Chinese IPTV industry (Contd.)  Businesses in IPTV’s value chain  Technology manufacturers  ZTE, UTStarcom, Huawei and ASB developing IPTV technology.  Low-cost set-top boxes  Domestic manufacturers--key suppliers of IPTV technologies.  Shanghai Telecom uses ZTE’s IPTV technology (Morris, 2006).  ZTE has won contracts from operators to supply IPTV equipment and solutions  China Telecom--partnered with the local TV maker Sichuan Changhong to produce Internet-ready TV sets .  Content suppliers  Lack of local content.  Tight controls over foreign contents. 12
    • Factors driving the development of the Chinese IPTV industry (Contd.)  Suppliers of substitute technologies  P2P services  Re-broadcasting of IPTV signals in P2P services.  P2P video streaming has been successful in the country.  Half of Internet traffic is P2P streaming (Stephen, 2007).  Early 2007: over 100 million users of P2P streaming and 5-10 million of them used IPTV services.  Cables  Foreign satellite TV is restricted.  IPTV penetration has exceeded satellite.  Most commonly viEvading the original broadcasters' fees (Xinhua Financial Network News, January 19, 2007).  ewed channels are delivered by cable (Wang, 2006).  early 2007: 12 million digital cable services (Stephen, 2007).  Most commonly viewed channels delivered by cable.  IPTV is expensive compared with standard cable services.  IPTV providers: more attractive offerings than those of cable TV suppliers. 13
    • Discussion and implications  Horizontal collaboration  Efforts directed towards communicating values  Influencing government policy by producing complementarity effects  Regional variation in IPTV diffusion  China’s changing IPR weather and the IPTV industry 14