Shaanxi Broadcast to deploy $363 mln in HD interactive programming
Shanghai. August 24. INTERFAX - Shaanxi Broadcast TV Network Intermediary (Group) Co. Ltd. (Shaanxi Broadcast), the sole broadcaster in Shaanxi Province, will deploy RMB 2.32 billion ($363.04 million) over three years to develop high definition (HD) interactive programming, the company announced Aug. 23.
Shaanxi Broadcast will deploy roughly RMB 1.23 billion ($192.48 million) on building a HD interactive programming platform, upgrading subscribers' set top boxes (STB) and market expansion, according to the announcement. The remaining RMB 1.09 billion ($170.57 million) will be used for network construction.
Shaanxi Broadcast expects its HD interactive business to have 1.80 million users in Shaanxi after three years, and generate revenue of RMB 1.80 billion ($281.67 million) over the next seven years, the announcement said.
Revenue will stem from STB sales, live HD broadcasts, video on demand (VOD), advertising and online TV games, the announcement added.
Industry observers, however, have cautioned whether Shaanxi Broadcast will make a return on such heavy investment. Based in Shaanxi's capital of Xi'an, the company booked revenue of RMB 67.4 million ($10.54 million) in the first half (H1) of 2011 and RMB 1.20 billion ($187.87 million) in total last year.
The announcement comes as China accelerates the merging of its cable TV, telecommunication and Internet sectors, a process known as triple network convergence.Interfax reported May 26 that Beijing had been tapped as China's first city to launch a triple network convergence pilot project.
China's central government has designated triple network convergence as a strategic emerging industry (SEI) in its 12th Five-Year Plan (2011-2015).
-CC