IPTV: Great for China, Perhaps Less So for SARFT

BEIJING --- Over the last few weeks, the phrase IPTV seems to be on the lips of every media related entity CMMI has been in contact with. In meetings with companies as diverse as educational content networks to broadcasters to certain technology related ministries, the phrase IPTV is being bandied about as the future of content delivery in China.  And of course, everyone has their own plan for launching their own service that will be the leading IPTV channel on the market.

IPTV refers to the delivery of AV content to users through the Internet network. The revenue model for China thus far has been for a telecom operator to partner with a broadcaster that holds an IPTV license to deliver the service (See New Media below), much the same as a mobile content deal. The user is then billed for the service through his or her monthly broadband access

IPTV will allow for content providers to run around the entrenched broadcast infrastructure, which has, lets face it, not done exactly a fantastic job of delivering content of more than marginal value to its end users.

The commercial model for content delivered via telecom networks in China is well established, while the TV industry has been lurching left and right trying to find a suitable model for pay-TV for at least two years.

Commercially feasible; but with serious regulatory implications:

By pushing the telecom networks forward to act as delivery platforms for broadcast content, the MII is making a regulatory play to bring "broadcast networks" under its control on its own terms.

SARFT missed opportunity after opportunity to do the same thing by pushing China's cable networks forward as obvious bandwidth rich environments that could better support broadband connectivity than DSL lines over the telecom infrastructure.

With the MII in clear control of the next digital delivery platform, SARFT will find it harder and harder over the next year or so to argue for its continued relevance as a stand-alone regulator. Indeed, SARFT has already announced its intention to launch DTH services in Q1 2006 in order to extend its regulatory reach.

However, with another ministry reshuffling rumored to be slated for 2-3 years from now, the MII's regulatory landgrab for the delivery of TV content over telecom networks may indeed be the beginning of the end for SARFT.