With the Chinasat-9 satellite in orbit, officially sanctioned satellite-TV services are set to become a reality in the world’s biggest market. With a population of more than 1.3 billion people, China offers broadcasters, equipment manufacturers and others a tantalizing opportunity but also a market that is tightly regulated. Will the launch of Chinasat-9 and the Olympics lead to more opportunities to develop this market, and what role might satellite play?
The Olympics will focus the eyes of the world on China, but will the event, which will be broadcast in high-definition (HD) to all corners of the globe, lead to the development of a more progressive broadcasting and digital TV market in the country? For the Chinese population, the launch of Chinasat-9 in June is a highly significant event for the country. The satellite, manufactured by Thales Alenia Space, will provide coverage of the Olympics and also help initiate free direct-to-home (DTH) services in different regions of the country as part of a project dubbed Cuncuntong, a village-to-village TV broadcasting initiative. "This project will help people in rural areas who are not able to receive standard terrestrial broadcasting or cable TV," says Maurice Liu, general manager of NDS China. "They will use satellites to cover these areas that cannot receive cable and terrestrial broadcasting. The Cuncuntong project only covers rural areas, and it allows people on the ground to set up dishes to watch FTA (free-to-air) satellite TV.... Pay TV-type DTH is not likely to happen in China soon — not this year — but it might happen after the launch of the Cuncuntong project when a large satellite audience is established."
The project, seen as key in reducing the digital divide between rural and urban areas in China, also will raise several issues on access and regulations, says Liu. "This may create a lot of demand in certain areas in China, not just the rural areas. There may even be strong demand in urban and city areas," he says. "This will present a challenge for the local governments to monitor who is watching legal Cuncuntong satellite TV or illegal foreign satellite broadcasting and will bring out the questions on whether it is a good idea to have pay DTH services."
The government also must relax its regulations on the use of satellite dishes — which often are ignored anyway — for the market to really gain momentum, says Iris Hong, head of the TMT team at Interfax China. "The use of satellite dishes is now highly restricted in China. Individuals are banned from using satellite dishes. By law, only foreigner-oriented hotels and residences, hotels of or above a three-star rating, and authorized facilities, such as journalism schools, are allowed to install satellite dishes to receive programs with foreign content. However, the regulations are often flouted by satellite dish sellers who supply Chinese families. Many Chinese families use pirated satellite TV and do not pay any subscription fees.... After Chinasat-9 is launched, the government is expected to relax its restrictions about satellite receiving devices. DTH services will first be offered free to remote and underdeveloped areas in China which are not covered by cable TV networks or terrestrial signals. The government has not announced which company will provide DTH satellite services, and the business model that will be employed to offer such services. It will take time for China’s DTH market to take off."
Graham Kill, the CEO of Irdeto, a provider of content security solutions to pay-TV operators, relocated in October from the company’s Amsterdam office to Beijing to spearhead Irdeto’s effort to improve its performance in emerging markets. Asia contributes around 30 percent of Irdeto’s overall revenues, and the Beijing office will be the center for its Chinese operations and its Asia-Pacific regional headquarters, as well as a base for part of Irdeto’s corporate management. The broadcasting market has been developing slowly in the country because the government "has been somewhat cautious in developing the DTH industry," he says. Despite this, satellites are everywhere in China and rules may need to be changed for the market to really accelerate. "You only have to drive around any part of the country, and you will see dishes on houses," says Kill. "However, dishes are only legal in certain sanctioned circumstances such as three-star-and-above hotels, foreign compounds, etc., and regulation 129 says you can’t use satellite dishes. Satellite dishes will become legitimate when that regulation changes and there is a mainstream service. Then I think you will see dishes and equipment in the high street electronic stores with simple-to- install packages. Clearly, you can’t see that right now. I think when you have got a satellite operational and a state-endorsed operator with the mandate to offer commercial DTH services, the scene is set to change. Every day of the week the country is increasingly progressing its digital industry and is becoming open to other influences."
| "When you live here you see the myriad of micro changes in your everyday life that contribute to the macro changes in the country. Things get done. This country can move mountains if it wants to." — Kill, Irdeto |
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