Tags:SMG | China Mobile | Cable | ARPU

Shanghai Media Group''s (SMG) subsidiary and China Mobile will soon lower the fees for mobile TV services, an official from the SMG subsidiary told Interfax Thursday. "We will lower the fees for mobile TV starting from November 1," Shanghai Dragon Mobile Media (DMTV) CEO Wu Chunlei told Interfax at the China Mobile TV/Video Forum 2006 in Shanghai.

DMTV is a subsidiary of SMG that operates mobile data service with a specialty on streaming media services. Local portal TheThirdMedia.com reported in mid-September that DMTV and China Mobile would lower the monthly fee for their ''Oriental Dream
World'' mobile TV service from RMB 300 (USD 37.5) to RMB 10 (USD 1.25) starting from September 20.

The fee adjustment did not happen at that time because DMTV "didn''t coordinate well with China Mobile", Wu said. DMTV''s fee cut falls in line with the opinion xpressed by the speakers at the forum that mobile TV should be more affordable than cable TV for subscribers to accept it. Cable TV charges RMB 12 (USD 1.5) monthly on average in China. DMTV''s new monthly charge of RMB 10 (USD 1.25) falls into a price range that is obviously much more agreeable than the former.

"Mobile operators have been focusing on developing new services and applications to boost ARPU growth. However, the mobile operators will ultimately become ''big pipes'' of the services run over their networks. They have not realized it is from advertising revenue that they can really make profit," Sandy Shen, an analyst from Shanghai-based Garner Research said at the conference.

User profiles, consumption patterns, and location information that can be obtained by operators are valuable resources and are an opportunity for segmented advertising, Shen said.

However, advertising over mobile TV has yet to prove successful. According to Ken Lo, Vice President, Business Development of Sony Pictures Television International (SPTI) Asia said that TU Media, a Korean mobile TV operator, incurred a great loss due to competition from the industry.

"TU Media initially charged users RMB 110 (USD 13.75) monthly for its mobile TV service. However, pressured by competition from traditional TV business, the operator started to offer services for free and tried to make profit from advertising.

However, TU Media''s subscriber base of two mln was not large enough for dvertising. Only when mobile TV has over five mln subscribers can it attract advertisers," Lo said.
In 2005, DMTV started to develop its own mobile TV mini shows that were 3-5 minutes long. The company now has 200,000 paying subscribers and 300,000 subscribers to content offered free of charge.

DMTV will soon merge with SMG''s other subsidiary New Media to jointly develop the new media business, according to Wu.

"We will work in the same office starting from next week," Wu said.


(source:INTERFAX-CHINA)