Internet TV market booms while hitting a few bumps

By Chen Yang

Internet TV sales have grown fast since their debut in China this year, but analysts are worrying that copyright problems may hinder the development of the emerging industry.

Sales of Internet TV, which allows viewers to choose programs online, increased by 40 percent in October compared with September, accounting for 6.5 percent of the total TV sales in the week-long National Holiday, according to a report released on Monday by All View Consulting (AVC).

Internet TV sales revenue made up 11.9 percent of the total TV sales revenue during the period, said the same report.

China has 338 million Internet users, which makes the market for Internet TV potentially enormous. Its market value is expected to top 30 billion yuan ($43.95 billion) next year, Wen Jianping, vice president of AVC, told the Global Times.

"The emergence of the Internet has changed the traditional way to watch TV programs, and the young generation is more likely to watch online,"said Han Ling, an analyst at Guideline Research.

Analysts said Internet TV provides Chinese TV manufacturers with a new arena to compete with their foreign rivals.

Domestic manufacturers like TCL, Changhong and Hisense have been releasing Internet TV products since March, ranging from 6,000 yuan ($879) to 12,000 yuan (1,758).

Global electronics giants including Sony, Samsung and Sharp have moved into the online TV field as well, with products starting from 10,000 yuan ($1,465).

According to AVC's report, Chinese products have been performing as well as their foreign competitors while offering much lower prices.

Copyright problems, however, threaten to derail the industry's development, as downloading and streaming films and TV shows illegally with the Internet TV products becomes more common.

Voole, a Chinese online video-on-demand provider, accused TCL of broadcasting more than 100 unlicensed films on TCL's Internet TV service, MiTV, in August. The trial is still underway.

The lawsuit will not hinder TCL's development, said Han Qing, vice-president of TCL at a press conference Wednesday. "We only cooperate with legal online video providers. If our partners are involved in copyright infringement, we will resort to the law to protect our interests,"he said.

Copyright problems affect TV manufacturers and online video providers as well, Hao Yabin, deputy secretary-general at China Video Industry Association, told the Global Times.

Companies that want to operate Internet TV businesses should apply for licenses from the State Administration of Radio, Film and Television (SARFT), said the administration in August. Under current regulations, only State-owned companies will be issued the licenses, some analysts said.

"It is necessary for SARFT to supervise online videos' copyrights, and we hope they will support the development of Internet TV,"said Hao.

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