This guy came shimmying down to my 27th floor window within minutes of my arriving in my hotel in China. One small misstep would send him hurtling to his death. You can see Beijing’s Western business district behind him. A good metaphor for the widening chasm between China’s upper class and the low-paid workers who are creating the wealth.
Posted under Michael's Blog, iHollywood China
This post was written by Michael Stroud on September 21, 2009
A few days ago, I met a waitress at a Thai restaurant who exemplifies everything that’s right about China’s economy and wrong about ours.
I’m visiting my brother in Columbus, Ohio, and she’s an ethnic Chinese from Indonesia who recently graduated from Ohio State University with a degree in industrial engineering. She’s been looking for a job since last March with no success. She’ll go anywhere in the country. Nada. Or, as they say in Mandarin, mei-you sheme.
Building a bridge in China
So guess where she’s going? Shanghai. She’ll go to a Chinese language institute to bone up on her language for a few months, then look for a job there. She’ll be snapped up instantly. Probably she’ll end up helping design and manufacture products sold to U.S. consumers. Commissioned by hollowed out giants like Target or Wal-Mart.
Ironically, she’s desperate to stay in the U.S., but can’t stand working at a restaurant any more to survive.
This comes as I read a sobering story about China in today’s New York Times. The lede says it all:
“In past global slowdowns, the United States invariably led the way out, followed by Europe and the rest of the world. But for the first time, the catalyst is coming from China and the rest of Asia, where resurgent economies are helping the still-shaky West recover from the deepest recession since World War II.”
Anyone know of any good jobs for a great industrial engineer? I’m serious.
Posted under Michael's Blog, iHollywood China
This post was written by Michael Stroud on August 24, 2009
There are two ways to view the WTO’s ruling today that China is violating free trade rules by restricting imports of books, newspapers and movies. One is a slap at China for unfair trade practices. The other is an opportunity to do deals with China.
The Chinese government has a strong incentive to find ways to mollify international sentiment on its restrictive import policies and its laxity toward pirates . It would prefer to do so through joint ventures, rather than straight-out imports. Nationalistic, yes. But it’s the reality on the ground right now. If you’re willing to cede a degree of control, you’ll get a lot farther faster than if you insist on going it on your own, selling directly to the Chinese public.
This September, I’m traveling to Shenyang, a North-Eastern Chinese city, to speak at an international multimedia conference. The city wants to create a media park, and is prepared (along with Beijing) to fund it. We’ll be joined by Chinese venture capitalists seeking to invest in Western digital media startups.
I’m not saying the U.S. and Western countries shouldn’t be pushing to open up the Chinese media market as quickly as possible. But it seems to me there’s a lot of low-hanging fruit they can grab along the way, too.
Posted under Michael's Blog
This post was written by Michael Stroud on August 12, 2009
Google’s China plans could end up having a big impact on the music industry.
The search giant is reportedly planning to join with China’s Top100.cn to provide free, licensed music to the Chinese masses – a direct swipe at home-grown competitor Baidu, which controls more than 60 percent of China’s search market and turns a blind eye toward the millions of users who download pirated content.
Google would cover labels’ royalty fees by selling advertising and offering premium services such as tickets or ringtones through Top100.cn, according to the Wall Street Journal.
Google’s goal, of course, is to increase its meager 66 percent share of China’s search market. But it could also the biggest test yet of whether ad-supported music can be profitable.
Pay-per-download’s future is dim at best for a simple reason: no one has to do it. Even if every pirate in the world were shut down, you’d still have upstanding citizens trading their music libraries freely over the Internet and using every imaginable storage medium. The halcyon days of CDs are over for good.
So the old music industry arguments that free or low-priced songs “devalue” their best product just don’t hold water. It’s hard to see how free songs that make the labels money devalue the product more than overpriced CDs and downloads that are slowly driving them out of business.
Google will be able to amass invaluable information about the Chinese public by the music they download and tailor its search ads accordingly. That could finally make music a profitable endeavor in China. More importantly for Google, it gives consumers a reason to hang out on Google instead of Baidu.
It’s the same logic that drove Target and Wal-Mart to start selling CDs. They certainly don’t make much of their money from selling the discs (although it was enough to bankrupt the record stores). But people browsing for music are likely to buy something else on the way out.
That’s not devaluing music, anymore than listening to jazz while catching brunch at a restaurant devalues jazz.
Universal, Sony BMG and EMI – the three big labels that will probably accompany Google on its Chinese adventure – have a low-risk opportunity to test the feasibility of ad-supported, free music in a market that’s already stealing their product anyway. How ironic if the country most vilified for music piracy helped validate a system for making money from free music at home.
Posted under Uncategorized
This post was written by Michael Stroud on February 13, 2008
Premium sports content heading to the web in China shows the challenges facing Pay TV
By scooping live broadcasting rights for the hugely popular English Premier League (EPL) for the next three years, leading Chinese portal Sina.com has put the power of web media in
When Win TV beat out ESPN/STAR for EPL rights for the next three seasons, it hoped this would be a catalyst to kick-start digital Pay TV in China. But as we earlier reported here, the operator has been struggling to gain subscribers and carriage for its soccer priced at US$24 a month, and now it has decided to sell-on its rights to Sina.
Sina web users will be able to subscribe on an annual, monthly, and per-game basis at Rmb380 (US$50), Rmb38 and Rmb3.8, respectively to watch full and live games streamed on the web. [It should be noted that Sina’s deal is distinct from the worldwide EPL internet rights awarded to Nimbus reported today on Moconews. These are downloadable clip rights (2 minutes clips per match) and are sold to broadband/IP platforms and mobile platforms and are subject to DRM.]
The move of premium content to internet TV must be vexing to telecom operators with IPTV plans and their digital cable peers. Despite the additional investment, viewers may well shun their managed network. Already the numbers using P2P platform in
As it stands, the main benefit to telcos of customers watching Sina’s soccer streamed on the web is driving growth in broadband connections. The flip side is it will also drive additional bandwidth usage. If P2P plays a lasting role in legitimate broadcasting, I imagine telecom operators will be pushing hard for a cut of that subscription fee. This is not the first time this issue has been heard, but expect the protests will increase in tandem with traffic.
Notably over the weekend the UK’s Independent on Sunday reported internet groups threatened to ‘pull the plug’ on the BBC’s new iPlayer unless the corporation contributes to the cost of streaming its videos over the internet.
Posted under Michael's Blog
This post was written by Michael Stroud on August 13, 2007
Most of us know from the experience of inboxes clogged with mobile text spam, successful models of mobile advertising are in short supply.
This was underscored by a survey this week by GfK NOP in the
The potential of the vast mobile audience means people will still keep trying to crack this market. An interesting company in
Here at least customer can control the process. Plus the advertiser will pay for any data charges which is likely to keep both the customer and mobile operator happy. So far the service is launched with all six of
You still need to get customers interested, however. One recent promotion was with Lipton Tea where users get interactive “Hiremaki” pop content when they use Myclick. For Lipton, it helps to give its brand a younger image engaging customers in relevant content. Anything that gets advertisers paying for my content gets the thumbs up. This after all is the model that works so well on the web today.
According to MyClick CEO Rupert Purser a new service is photo blogging on a portal where ads are assigned a Myclick code. For instance someone can search for beer and get happy hour promotions. That sounds more like a service that could win over mobile ad weary customers.
Posted under Michael's Blog
This post was written by Michael Stroud on August 10, 2007
As the 2008 Beijing Olympics gets closer,
One thing is certain, that come what may
But already there are some comments that even if networks are running, foreign tourists with 3G phones will not be able to use it which will reflect badly on
But is that fair? Given the high prices for roaming charges on voice calls, its unlikely there would be much demand for roaming on 3G data even if it were possible. And most of these 3G phone carrying tourists should have dual mode handsets allowing voice calls roaming onto 2G networks.
The peculiar thing is these discussions are taking place even before Chinese 3G licences have been issued. China Mobile’s parent is rolling out TD-SCDMA networks in various cities only as part of a trial.
It is still unclear what the network will eventually look like. Last year there was much discussion about building hybrid networks although analysts noted this could be costly. Chinese vendor ZTE for instance demonstrated TD-SCDMA/HSDPA and WCDMA/HSDPA services connecting to the same radio frequency controller.
Back then the expectation was at least three 3G licences would be issued including WCDMA and CDMA2000. One problem with this grey area of building 3G networks without official licences is what should the handset makers do?
Investing in handsets with dual mode chipsets only to find the project stays in limbo could be costly. Still, my bet is one way or another the Olympics will be showing on mobile handsets next summer whether it’s via TD-SCDMA or broadcast by satellite.
After all the South Koreans demonstrated wireless broadband Wibro video handsets as long ago as the 2002 football World Cup. In 2008 you will expect
Posted under Michael's Blog
This post was written by Michael Stroud on August 9, 2007
First mover advantage can be good for bragging rights but in telecoms holding back to let others test markets can be a smart ploy, especially when dealing with much-hyped new technologies. This looks to be the case for WiMax where regulators and operators in Asia are still grappling with the best way to deploy it.
Hong Kong has always been a proud telecoms leader (who else has 5 built out fixed-line operators!) and two years ago was setting the WiMax pace with eight potential bidders for licences. However a speedy rethink was needed as it was shown the interference on the C-band satellite downlink meant using 3.5Ghz band for WiMax could blackout TV sets across the territory. Now the regulator is back to the drawing board and looking to licence the 2.5Ghz band. The interference is mainly a problem in Asia where C band is widely used in satellite delivery due to the heavy rain. But this issue is now causing some serious head scratching across the region, not least because interference can travel 100km, and across borders.
Last week the market got a jolt when the Communications minister urged the operators to pool resources and share infrastructure and compete on services and prices. He added the cost to build WiMax could reach US$600 million and bankrupt individual operators.
Perhaps commercial decisions on forming alliances and profit forecasts are best left to the operators but it’s good at least to see governments looking beyond maximising spectrum licence fees.
These discussions will be watched closely in China as it contemplates how best to move forward with 3G licencing and next generation wireless broadband technologies. Given the vast size of China, the sums involved are that much larger and owning 75% of the listed telecom operators, the government is acutely aware of the perils of infrastructure overbuild. Copying Hong Kong which still has operating six 2G wireless networks and four 3G is not an option.
Just now China has allocated the majority of its available spectrum for TD-SCDMA which looks to have put WiMax’s hopes on the backburner. But with 3G policy in flux that could change. The WiMax supporters think they have a better chance as China puts more emphasis on a 4G type solution, perhaps even leapfrogging 3G.
Arguably sitting back and letting others do the running on 3G was a smart tactic. For that China probably owes some thanks to Hong Kong’s Hutchison Whampoa who have poured billions of dollars into 3G with still no convincing business case.
by Craig Stephen
Posted under Michael's Blog
This post was written by Michael Stroud on August 1, 2007
A total of 40.56 million mobile phone users signed up in the first half to reach 501 million, an average of 6.76 million a month. But there is still room for growth with 38 out of every 100 people in the mainland owining a phone. Short message service traffic continues to go gangbusters, up 37.5 per cent to 279 billion messages. These figures also show China Mobile’s dominance continues as it takes the lion’s share of the market. It added over five million users on average each month since March, and 31.1 million users in the first six months. It is dwarfing smaller rival China Unicom, which had 151 million subscribers split across its GSM and CDMA networks. 112 million of those are GSM, the rest CDMA. China Mobile’s success is also coming at the expense of the fixed-line industry (China Netcom and China Telecom) which is struggling with mobile substitution. Across The lopsided industry where China Mobile’s pre-tax profits accounts for more than China Netcom, China Unicom and China Telecom put together is one reason speculation over industry restructuring fails to go away. It is another reason the fixed line players have been lobbying hard for mobile and IPTV licences.
Of course, broadband continues to be a bright spot for the fixed line carriers with users now reaching 122 million according to latest figures. 
This week the Ministry of Information Industry (MII),
Posted under Michael's Blog
This post was written by Michael Stroud on July 26, 2007
by Craig Stephen
All Pay-TV operators face the challenge of putting on content that viewers are willing to pay a premium rate for. In
But if there is one programme that is surely a dead cert in
That fervour was in evidence this week as Manchester United takes their sold-out Asian soccer tour from Macau to
But reports from journal TV Sports Market say Chinese digital Pay TV outfit Win TV who paid $50m for the EPL rights for the next 3 seasons could struggle to recoup its fee.
The problem is
Some of this could be noise behind negotiations. Win TV have been looking to charge Chinese EPL fans US$24 a month which will come as a shock when analogue cable rates are US$2-3 a month.
These regulatory minefields illustrate some of the challenges facing
US$24 a month in
In the past
For next season ESPN/Star not only lost EPL rights but also landing rights in
For many in the industry, the purchase of rights by Win TV was seen as a pivotal move – now a Chinese company had an interest protecting its content from piracy and its investment. This should set an encouraging precedent for foreign content owners too.
But depriving soccer fans of their weekly fix of EPL could be troublesome for authorities if not handed carefully.
Regulation of both Pay-TV pricing and what content can move to the digital tier is not uncommon In Asia. In
Posted under Michael's Blog
This post was written by Michael Stroud on July 24, 2007
