CHINA launched a pilot project in early July to integrate television, Internet and mobile networks in Shanghai and 11 other places in the country.
While still in its infancy, with obstacles to overcome, the so-called "three network convergence policy" has spawned new cross-platform services in the three sectors, and expansion of those services is expected in 2011.
Although China has the world's largest number of Internet users, now at more than 420 million, the traditional TV set still remains the most popular and affordable way for ordinary people to access information and entertainment.
While current TV networks are still single-way transmissions, the three network convergence has provided new opportunities for TV operators to embrace new technology, giving viewers more options in what they can choose and when they can watch their favorite programs.
Network convergence has also forced telecom carriers and content providers to think in each other's boxes and reorient their original businesses to a more integrated platform. The new model that's emerging will help boost the operations of online video websites, TV stations and broadband providers.
Platform operators
"TV program makers and platform operators are the most likely to ambitiously expand their business strategies because online video is one of the hottest Internet industry sectors," said Henry Yang, president of iResearch Inc. "We expect that sector to show 100 percent growth in the next few years."
Yang pointed out that Chinese netizens spend about 10 percent of their online time watching videos and TV programs. He said that figure will continue to grow as the number of Internet users expands.
China National TV, the online video site operated by the state-owned China Central Television, is also working on an integrated platform that would bring most of the programs made by national-level TV stations to the website.
"We were focused on making our own programs in the past, but now we have to open our platform and work with partners from all industry chains, including patent-content owners and smaller TV stations," said Wang Wenbin, general manager of CNTV.
Officially launched at the end of December 2009, CNTV now has 55 channels, including six in foreign languages such as Spanish and French.
After the launch, industry watchers dubbed CNTV the "national team" to differentiate it from successful, privately owned video websites such as Youku and Tudou.
Youku surged 161 percent on its debut on the New York Stock Exchange in early December after raising US$233 million, while Tudou is also expected to complete its initial public offering in the next few weeks on the Nasdaq.
CNTV has rich experience in live broadcasts of big events, such as the opening ceremony of the Olympic Games in Beijing in 2008. Now it has turned its focus to adapting to a cyber-era that allows users to access the latest news and sports results via the Internet on smart handsets.
Ensuring good content and well-made programs for web users and TV watchers has become a necessity for CNTV's expansion. "Combining the broadcasting platform and the rich content of local TV stations is our strategy, and the new technology has enabled us to spread our content on other wireless platforms and smart handsets," Wang said.
An integrated platform will be launched in the first half of next year to provide technical support to allow local TV stations and to share advertising income on CNTV's website, Wang said. "We want fellow TV stations to fully utilize this new platform because only by partnering with other content providers can the public platform realize its core value," he added.
Shanghai's TV network operator is also upbeat about deepening its convergence with the expanding Internet sector.