The coming revolution
Crystal Ren

WITH a set-top box worth about 1000 yuan installed on your ordinary TV set, you can not only view hundreds of TV programs, but also speculate on stocks, send e-mails, shop online and request programs. Such a computer-like multifunctional TV is the highly anticipated “digital TV.”
By the end of 2006, the number of China’s digital cable TV users had hit 12.67 million. According to the market research firm Analysys International, this number will increase to 25.73 million by 2007 and over 100 million by 2010.
By 2015, China will have seen an analog-to-digital transition take place nationwide, during which time the value of the domestic digital TV market will increase considerably from the 2002 mark of 40 billion yuan to an expected 500 billion yuan. The total value of the digital TV market is expected to reach 1.5 trillion yuan with immense market potential.
Integrated digital TV to prevail
The latest forecast by iSuppli shows that integrated digital TV will outnumber ordinary analog TV by the end of 2008. This indicates that terrestrial integrated digital TV will become the mainstream of the future digital TV thanks to its broad application prospects.
It has been three years since China started its migration to digital TV. Zhang Haitao, Vice Director of the State Administration of Radio, Film and Television (SARFT) said that 25 cities have completed their initial digitization of cable television.
Back in 2003, SARFT began to digitize radio and television service through cable TV and has worked out a preliminary digital cable TV migration mode that makes television a multimedia terminal offering comprehensive information and services.
According to industry experts, TV digitization requires the fusion of communication, radio and TV broadcasting networks. In addition, a new digital TV industry chain must be developed so that the content providers, content integrators and distributors, transmission platform operators and terminal equipment suppliers can find their right place on this chain.
Much has been invested in the radio and television industries for digitization. Some core technologies with independent intellectual property rights have been developed, including mobile multimedia broadcasting, a new generation of satellite transmission and digital movie mobile playing system, said Zhang.
The introduction of the new standards has further stimulated TV manufacturers. Tempted by huge profits, TV manufacturers have sped up production and are focusing on the new, related products. It has been reported that major television makers such as Hisense, Skyworth, Konka, Changhong and TCL have begun to release integrated digital TVs and are trying to market their new products with help from local radio and TV operators.
GB chip takes the lead
The two standards of digital TV proposed by Tsinghua University and Shanghai Jiao Tong University have always been a topic of discussion among digital TV chip vendors. The dispute over which chip to favor was finally settled on August 1. Domestic digital TV will adopt the mature technology of the 0.18 micron chip. This type of unification of key technologies will hopefully bring along further fusion of industry standards.
Not wanting to miss the opportunity, domestic chip vendors have launched GB (guo biao: China national standard) supportive chips and have provided solution proposals in order to seize more market share in the future.
Zhou Bengen, Vice President of Shanghai Fudan Mironano Electronics Co. Ltd., said, “The Zhongshi No.2 demodulation chip is fully conformable to the national standards and will be launched very soon.”
At the 15th annual conference of China Content Broadcasting Network (CCBN) held from March 30 to April 1 this year, Shanghai High Definition Digital Technology Industrial Co., one of the leading domestic companies focusing on terrestrial digital TV transmission standards, officially released their digital TV demodulation chip which conforms to industry standards.
Legend Silicon Corp. also exhibited their series of GB supportive demodulation chips at the show. Some of their latest products incorporating demodulation chips were also displayed, including terrestrial digital TV set-top boxes, integrated digital TV sets, and digital TV signal transmitters and receivers.
International semiconductor giants ST Microelectronics and ADI have also cooperated with Legend Silicon Corp. and released their solution for GB supportive terrestrial digital TV transmission standards.
Post-transition era
Ever since the official launch of the integral shift to digital TV last year, there has been a great increase in digital TV user numbers throughout China. For instance, Beijing Gehua CATV Network Co. Ltd. has converted 300,000 households to digital, accounting for one 10th of all cable TV subscribers in Beijing. This number is expected to hit 800,000 by the end of the year.
As the user scale rapidly expands, the digital cable TV industry is transitioning from quantitative to qualitative changes and is gradually entering a “post-transition era.”
Industry insiders believe that the “post-transition era” is characterized by the shift of focus from the amount of digital cable TV subscribers to the building of a sustainable profit-making model for the industry. In other words, investors will pay more attention to the growth of user satisfaction over the course of digitization.
In the “post-transition era,” the revenue of digital TV operators will come from three major channels. First, operators will raise the basic subscription fee to obtain clear cash flow. Second, a multi-layered charging system based on various video services, including pay TV and video-on-demand, will develop. It is routine practice that cable TV network operators, TV program producers and channel integrators share the revenue 5:3:2 or 5:4:1, respectively. Hence the boom of pay TV will greatly promote the performance of the cable network. Lastly, operators will cash in on new value-added services after the network digitization is complete.
More content should be offered to users in the “post-transition era” as program quality becomes the decisive factor in the pay TV market. The success of cable TV in the United States lies in its massive wave of content to cater to general, segmented and niche viewer groups. A major hurdle to the development of digital TV in China has been revealed to be the lack of compelling content.
At present, despite that nearly 100 digital pay channels are offering programs in China, only four companies, namely CCTV, Shanghai Media Group, Top DTV and China Film Group, have obtained licenses to integrate digital TV content nationwide.
Cable operators benefit
The direct beneficiaries of the rapid development of digital TV are cable TV operators. Their regional monopolies will be manifested more profoundly. Earlier this year, SARFT made it clear at the CCBN general assembly that this year’s target is to open at least 10 pay TV/movie channels and various digital cable TV and radio programs, launch a variety of value-added services, establish brand names, secure the market and develop new operational models. Currently there are 50-80 pay TV/movie channels under SARFT.
The rapid development of the business will directly enhance the revenue of cable TV operators. It is reported that in the fiercely competitive U.S. digital TV industry, 60 percent of the business revenue comes from new services, including interactive TV, data broadcasting, value-added services, and high-speed broadband Internet access.
It is self-evident that the launch of new business will benefit the monopolistic cable TV operators. As soon as the new business begins, the revenue and profit will increase accordingly.
The arrival of the digital TV era will facilitate the gradual rise of the cable TV subscription fee and make it possible for pay TV to develop. On one hand, the subscription fee will be raised as average household incomes grow; and on the other hand, quality and quantity will determine the price.
Digital TV requires more investment in capital and technology and enjoys many advantages compared to analog TV, such as its multiplied channels, high definition and superior video-audio effects. Thus, the price hike is reasonable. For example, the subscription fee in Suzhou, one of the digital TV trial cities, is 40 yuan per month. Effective from July 1, the Beijing Municipal Government raised the cable TV fee from 12 yuan to 18 yuan per month, which in turn, adds 0.3 yuan to the annual earnings per share of the Beijing Gehua CATV Network.
Defining television
As high definition technology and the high definition market grow, high definition becomes the direction to which the set-top box technology will turn. The progress in compression and transmission technology has significantly reduced the signal transmission and storage costs of high definition television (HDTV).
Zhang said that CCTV is going to test terrestrial HDTV broadcasting in Beijing this October. He pointed out that this year’s focus is to strengthen the production capability of HDTV programs and expand the channel coverage of HDTV in order to become prepared for the broadcasting of the Beijing 2008 Olympic Games via HDTV. At present China is nearly ready to promote HDTV, in terms of conditions such as the hardware and software, user demand and the policy environment. Fuelled by the Beijing 2008 Olympic Games, China’s HDTV is expected to step into its boom period from 2008 to 2010.
Statistics from CMP Consulting show that the entire scale of the digital TV industry reached 33 billion yuan last year, 93 percent of which came from the high definition terminal market consisting mainly of HDTV sets and set-top boxes. The content production and the network transmission market accounted for only 1.2 percent. From 2007 to 2011 the digital HDTV market will continue its fast growing pace. It is believed that the market scale will exceed 100 billion yuan with a balanced industry structure so that the proportion of the program production market will rise year by year.

(The Daily Mail-Beijing Review Articles Exchange Item)
 

Gordon’s lost battle
William Rees-Mogg

GORDON Brown is a serious Prime Minister who has developed a serious way of taking his decisions. He starts by asking his staff and associates to assemble the evidence. He analyses the evidence carefully himself. Then he reaches his decision and is very reluctant to change it. He is closely involved in the presentation; that is where the spin comes in.
This is a proper way for a cautious politician to act. But it has a number of disadvantages. Like everyone else, Gordon Brown makes some bad decisions, which cannot be maintained. His process of decision-making is a lonely one which depends too much on his own views and those of a small number of long-term associates and subordinates. This narrowness makes him seem detached from the currents of public opinion. His decisions can also seem to be too indecisive, because this process is a secretive one which takes time. Gordon Brown seems to find political crises a good deal more difficult than purely administrative ones. He was as self-confident as a permanent secretary might have been in handling the summer floods and foot-and-mouth disease, but has vacillated over the decision of an early general election which is the biggest political decision of his administration so far.
He now has decided not to call an early election. During the summer, he allowed expectation to run away with him. The public expectation of an autumn election could have been deflated at any time by an early denial from the prime minister. It was allowed to grow until almost everyone was expecting an election, whether they thought it was a good idea or not. Until last weekend, the public opinion polls tended to support the idea of an early election. Labour support in the polls was moving up, as a result of Gordon Brown’s own initial honeymoon and then as a usual response to the Labour Party conference. Ten days ago, two polls even gave the Labour Party a lead in double figures. At that point, Gordon Brown himself had almost certainly succumbed to the temptation of an election.
One can understand that. Gordon Brown has dreamt of becoming Prime Minister for many years. His tense ambition prevented him from having a good relationship with Tony Blair. If he could have won a new majority at a new election for a new parliament, that would have boosted his personal confidence and strengthened his political position. He must have read those late September polls with relief as well as enthusiasm. However, the prime minister was creating a trap for himself. He was right to take account of the polls, but they were never as good as they looked. After an artificial summer with publicity concentrated on the new prime minister and his party, public opinion was volatile and so were the polls.
In recent elections the Liberal Democrats have taken votes from Labour during the campaign itself. The average is about five per cent. No allowance was made for that in the form in which the polls were published.
The combination of buoyant polls, the Brown honeymoon, and the party conferences created a new image for the prime minister, but they also created a new image for David Cameron. He is an exceptionally effective conference speaker, the best I have heard since the days of Iain Macleod, a minister under Anthony Eden, Harold Macmillan and Edward Heath. Cameron is much better than Brown, but he is also much better than the most recent Conservative leaders, except for William Hague. The newspapers rightly perceived that the threat of an early Election had put David Cameron under great pressure. He was going to have to make a speech at the Conservative Party conference which had to be better than good — it had to be sensational.
If Gordon Brown had been employed to build up interest in the Cameron speech, he could hardly have done a better job. David Cameron duly delivered a brilliant speech. In late September Cameron seemed to be fighting for his political life; in early October he had set himself free. Naturally enough, the opinion polls in the last week have recorded a very favourable public reaction. Labour have themselves enjoyed a somewhat artificial lead in the polls, at a very volatile period. Within a week that has vanished, and has now been replaced by a substantial Conservative lead. Gordon Brown would probably have needed a ten-point lead for three months before he could safely have called an autumn election. He got a ten-point lead but it only lasted for three days. The polls at present suggest that there might be a hung Parliament if there were an early election.
Any ordinary analysis of the polling evidence suggests that an early election would be an unthinkable risk for Gordon Brown. It is not a risk one could expect him to take. Of course, with hindsight one can see that Brown should never have allowed the expectation of an autumn election to get out of hand. He should have discouraged it at a time when his closest associates were actually talking it up. That was a serious mistake, which strengthened David Cameron who is now naturally perceived as the victor. Cameron had the task of making it difficult or impossible for Labour to hold an early election without unacceptable risk. He has succeeded, which is a victory for the Conservatives. No prime minister would go to the country two and a half years before he has to, after only four months in office, if he is behind in the polls. The public are likely to see this as the outcome of a contest of wills, and strength of will is decisive in political leadership. The electorate is often a better judge of personality than of policy. The most successful prime minister is the one whose will prevails.

—Khaleej Times



Peace Summit: Historic moment or big Yawn?
Linda Heard

ISN’T it wonderful? Aren’t you simply brimming over with excitement that the US has finally got its act together and organized a Middle East peace summit? All the big cheeses will be there from Russia, China, France, Britain, Spain, Greece, Japan, Canada and Indonesia. Egypt, Jordan and the GCC states have been invited and so has Turkey. That dove of peace and goodwill Condoleezza Rice is handling arrangements. Israeli Prime Minister Ehud Olmert sounds enthusiastic. What’s that? You’re rolling your eyes?
Frankly speaking, unless you’re a chronic naysayer or a terminal pessimist, who can blame you when the much trumpeted Oslo came to naught while the only road map around was one that led to Baghdad. Still, the past isn’t always an indicator of the future and, this time, with the right set of attitudes on the part of involved parties the tide could finally turn. But wait! Most involved parties won’t even be there. Hamas, for instance, has been kept entirely out of the loop and its leader Ismail Haniyeh calls on Arab nations to boycott the summit. Understandable perhaps when Gaza is strangled, bombarded, starved and faced with the prospect of a massive Israeli military onslaught.
Remember that Hamas was the party overwhelmingly elected to form a government and although today it only holds sway over a large open-air prison, it still retains a substantial following. This marks this peace summit as unusual. It seems that the US and Israel desire to make peace only with their friends and allies. Sounds like an oxymoron? It is. It’s true that Syria and Lebanon have been invited but only in a limited capacity as members of an Arab League panel with a limited scope for discussions.
If Syria doesn’t go, it’s doubtful Lebanon will and, in any event, the Siniora government wouldn’t be able to promise anything without a nod from most major Lebanese parties, including Hezbollah. And what about Iran? If it has as much influence upon Hezbollah and Hamas as the West alleges, then it should be invited too. Another obstacle is the preconditions that are being imposed even before talks begin. Syria says it will decline unless the return of the Golan is up for discussion. Palestinian President Mahmoud Abbas demands a framework on such issues as Jerusalem, water rights, the right of return, and the dismantling of Jewish settlements.
On the other hand, Olmert, the Israeli prime minister, is thinking in terms of a flimsier statement of intent. Tellingly he refers to Abbas as his “new partner in Ramallah”. Indeed, his new Ramallah partner is just about the only leader bursting with enthusiasm. Abbas optimistically believes a peace treaty is achievable within six months. Perhaps nobody has told him that a treaty without the participation of Gaza, Syria and Lebanon won’t be worth the paper it’s written on. Come on folks! What’s this really about?
Personally, I feel it’s little more than a PR exercise to put the US, Israel and Fatah into the “good guys” camp while further isolating everyone else. Representatives from around the world will be there to give it legitimacy, and even if nothing comes out of it Bush, Olmert and Abbas would be in the position to trumpet their own saintly intentions and, thus, elevate their status with their respective electorates.—Arab News