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Tiansheng Attracts Fewer Than 5,000 Subs in Beijing

21st Century Business Herald, 11/22/07

A spokesperson at Beijing Gehua CATV Network (600037.SH) revealed November 20 that only 5,000 of Beijing's one million DTV users have subscribed to Tiansheng's European Football channel this year. Uptake on mobile and Internet channels has also been lackluster. According to an informed source, those 5,000 users account for 50% of total subscribers - meaning the channel only has a total of 10,000 viewers. Extrapolating from the 60:40 division of income with Gehua, Tiansheng has only earned about RMB 3 mln from the channel.

A Guangdong TV official said "although we've provided a platform for the channel, and are nominally the controlling shareholder, actual operation and promotion has been carried out by Tiansheng, which has strong VC backing. Tiansheng was prepared for the poor performance, and has already made preparations for an IPO."

In April 2006 IDG invested USD 20 mln in the channel, with two representatives taking board seats. In May SIG China and Goldman Sachs invested USD 15 and USD 10 mln respectively, with IDG providing a further USD 5 mln - meaning that the channel has received a total of USD 50 mln in investment to date.

LENS: One of the major challenges facing Tiansheng in attracting more paid subscribers for its European Football channel is the availability of unauthorized online rebroadcasts of English Premier League games on other sites.

Tiansheng retains full rebroadcast rights of English Premier League games to all media in mainland China, and so far has licensed the rights for subscription-based rebroadcasts to 3 websites, 1 WAP site, and a slew of cable TV channels (see "Tiansheng European Football Channel Offered in Chongqing," MW 8/10/07 issue). However, many football fans, especially young students on tighter budgets, have balked at paying the subscription fee. Instead, they have piled onto other football game websites and online forums that provide free online rebroadcasts by transmitting free satellite signals of the game from overseas markets. Although Tiansheng has issued warnings to these sites, in light of China's weak legal system, forcing all of them to stop would be nearly impossible.

Keywords: Tiansheng Media Gehua digital media content DTV cable TV mobile TV mobile phone TV online video European Football users VC funding IDG SIG Goldman Sachs television 600037.SH

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