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Daily News

China's CATV Goal Unrealistic
Sep 28, 2004
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ABI Research North America said that the Chinese government's goal of signing up 10 million digital CATV subscribers before the end of 2004, and 30 million in 2005, is unlikely to be met despite the government's traditional strengths in planning and implementation.

In a new study, "The Chinese Market for Advanced Video and Broadband," ABI Research found that while digital programming is being broadcast in as many as 46 cities in China, by the end of 2003 the total number of digital television subscribers amounted to fewer than 200,000.

"CATV stations were historically set up by individual cities or counties, and they are diverse rather than united," Junmei He said, an analyst for ABI Research. "So the CA and middleware standards are different for every station.

Market demand is also weak. CATV stations in China were originally set up to serve local people, and the basic monthly fee has been as low as U.S. $2. Yet with that payment, people in most cities receive more than 30 programs. While the pace of life has been accelerating in most cities, 30 programs exceed even the increased demand.

Ms. He also attributes the Chinese government's strict control of radio and TV programs as softening demand for digital television. Pay TV programs are made by television stations, not by professional production studios. China's motion picture and video industries are also still in their infancy.

ABI Research also investigated domestic CATV operators and found that the local CATV monopolies can leverage their power substantially to control the supply of stand-alone boxes (STBs). In cities covered by the research, only a few brands of STB are available, and all STBs are sold to subscribers directly by CATV monopolies. Feeling the pressure from the government plan, some SATV stations are trying to attract more subscribers by offering free STB rental with trial program subscriptions.

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