1. DTV Development in China Guo Ke DTVIA

2. 2004-05-20DTV Development in China2 Review of DTV development in China Review of DTV development in China Preview of DTV development in China Preview of DTV development in China Chinese DTV development strategy Chinese DTV development strategy Challenges Challenges

3. 2004-05-20DTV Development in China3 Review of DTV Development in China Initialization phase —— mid 80 ’ s Initialization phase —— mid 80 ’ s R&D phase —— late 80 ’ s ~ mid 90 ’ s R&D phase —— late 80 ’ s ~ mid 90 ’ s Intensive attention & promotion phase by the government and industry —— late 90 ’ s ~ now Intensive attention & promotion phase by the government and industry —— late 90 ’ s ~ now Industrial preparation and the current status Industrial preparation and the current status –Standardization –Development and industrialization of the products

4. 2004-05-20DTV Development in China4 Review of DTV Development in China Initialization phase —— mid 80’s In 1985 some survey and research projects were carried out around in China by some universities, research institutes and corporations, from which the output is so called “Digital Processing Television” (DPTV) which is based on the chips from foreign companies. During this phase the most important result is the preparation of people and capabilities for the future research work. In 1985 some survey and research projects were carried out around in China by some universities, research institutes and corporations, from which the output is so called “Digital Processing Television” (DPTV) which is based on the chips from foreign companies. During this phase the most important result is the preparation of people and capabilities for the future research work.

5. 2004-05-20DTV Development in China5 Review of DTV Development in China R&D phase —— late 80’s ~ mid 90’s For High Definition TV In 1989 the “HDTV Soft Science Expert Group” was set up by the former National Science Committee. In 1989 the “HDTV Soft Science Expert Group” was set up by the former National Science Committee. In April 1993 the “HDTV Strategy Research Expert Group” ， and spent several years on prequalification and preparation. In April 1993 the “HDTV Strategy Research Expert Group” ， and spent several years on prequalification and preparation. In May 1996 the research on HDTV functional prototype was started. In May 1996 the research on HDTV functional prototype was started. By the end of 1998 the first HDTV functional prototype had been finished. By the end of 1998 the first HDTV functional prototype had been finished.

6. 2004-05-20DTV Development in China6 Review of DTV Development in China Intensive attention & promotion phase by the government and industry —— late 90’s ~ now In early 1999, the “National DTV Research Development and Industrialization Leading Team” was founded and led by Mr. Zeng Yanpei, the Vice Prime Minister and Director of National Development Planning Commission. The current members come from the National Development and Reform Commission, MOST (Ministry of Science and Technology), MII, State Bureau of Quality Technical Supervision and SARFT. In early 1999, the “National DTV Research Development and Industrialization Leading Team” was founded and led by Mr. Zeng Yanpei, the Vice Prime Minister and Director of National Development Planning Commission. The current members come from the National Development and Reform Commission, MOST (Ministry of Science and Technology), MII, State Bureau of Quality Technical Supervision and SARFT. –Coordinate and formalize the development of Chinese DTV industry. –Organization Standardization system of DTV Standardization system of DTV Promotion schedule Promotion schedule Mission of development Mission of development Planning and policies Planning and policies –MII also set up a “DTV Industry Development Special Team” in order to push the progress of DTV industry development in China.

7. 2004-05-20DTV Development in China7 Review of DTV Development in China Intensive attention & promotion phase by the government and industry —— late 90’s ~ now Achievement of China DTV Industry over the past four years: Setup the overall strategy of DTV development in China: independent standardization and cable-based implementation ； Setup the overall strategy of DTV development in China: independent standardization and cable-based implementation ； Active standardization works by local corporations and institutions ； Active standardization works by local corporations and institutions ； The experimental broadcast of HDTV for the 50 th National Day Ceremony in Beijing in 1999 by using self-developed equipments. The experimental broadcast of HDTV for the 50 th National Day Ceremony in Beijing in 1999 by using self-developed equipments. Starting from 2001, DTV terminal testing lab and DTV system testing lab were set up in the testing areas of Beijing, Shanghai and Shenzhen ； Starting from 2001, DTV terminal testing lab and DTV system testing lab were set up in the testing areas of Beijing, Shanghai and Shenzhen ； Prepare an environment for local manufacturers to develop DTV products as well as for industrialization. Prepare an environment for local manufacturers to develop DTV products as well as for industrialization.

8. 2004-05-20DTV Development in China8 Review of DTV Development in China Industrial preparation and current status - standardization Standards of transmission systems: Standards of transmission systems: –DVB-S: has been accepted as a national standard. Home reception is still under discussion by the State Department; –DVB-T: independent R&D work has been carried out by domestic research institutions and several proposals have been submitted; –DVB-C: national standard is prepared based on the published National Cable TV Industry Standards. Other standards: Other standards: –Signal Encoding Standard, Conditional Access Standard, Terminal Performance and Functionality Standard, Interface Standard and Middleware Standard have already entered their finalization phase.

9. 2004-05-20DTV Development in China9 Review of DTV Development in China Industrial preparation and current status – product development and industrialization Local industry has made rapid progress in the area of digital TV transmission, cable front-end system, conditional access, middleware, STB, DTV receiver, MPEG decoding chip, video processing chip, HDTV tube and optical engine. Local industry has made rapid progress in the area of digital TV transmission, cable front-end system, conditional access, middleware, STB, DTV receiver, MPEG decoding chip, video processing chip, HDTV tube and optical engine. Digital Picture TV and SDTV/HDTV products by Changhong, Konka, Xoceco, TCL and West Lake have already been put to the local market as well as the foreign market. Digital Picture TV and SDTV/HDTV products by Changhong, Konka, Xoceco, TCL and West Lake have already been put to the local market as well as the foreign market.

10. 2004-05-20DTV Development in China10 Preview of DTV Development in China Transmission method and market initialization Transmission method and market initialization Business development Business development Estimation on the market and industry scale Estimation on the market and industry scale

11. 2004-05-20DTV Development in China11 Preview of DTV Development in China Transmission method and market initialization Among the three DTV transmission methods that can be used in China, DVB-S will not be widely implemented in a short time as restrained by the current policies; DVB-S will not be widely implemented in a short time as restrained by the current policies; Due to complexity in technology, difficulty in implementation, and lack of business models, DVB-T is not ready to be widely implemented. (Standardization problem) Due to complexity in technology, difficulty in implementation, and lack of business models, DVB-T is not ready to be widely implemented. (Standardization problem) DVB-C comes with inherent advantages such as good signal quality, low cost, high security level and a convenient subscription system. (more than 100 million users in China) DVB-C comes with inherent advantages such as good signal quality, low cost, high security level and a convenient subscription system. (more than 100 million users in China) It is widely accepted that DVB-C should be the entry point of China DTV industry and market. It is widely accepted that DVB-C should be the entry point of China DTV industry and market.

12. 2004-05-20DTV Development in China12 Preview of DTV Development in China Business Development The current DTV infrastructures under construction include Streaming Media Server, Content Server, Service & Channel Quality Management System and Task Management System. The current DTV infrastructures under construction include Streaming Media Server, Content Server, Service & Channel Quality Management System and Task Management System. The broadcasting methods includes Multi-program TV Broadcast, Multiplexed Audio Broadcast, Near VOD, Program Associated Data and Interactive Service. The broadcasting methods includes Multi-program TV Broadcast, Multiplexed Audio Broadcast, Near VOD, Program Associated Data and Interactive Service. DTV broadcast provides a platform for the TV stations to provide more contents and service to meet the various requirements of the users by adding more contents and specialized channels. DTV broadcast provides a platform for the TV stations to provide more contents and service to meet the various requirements of the users by adding more contents and specialized channels. And the requirements of the users will lead to new DTV integrated services. As a result the huge market effect will bring large profits to this industry. And the requirements of the users will lead to new DTV integrated services. As a result the huge market effect will bring large profits to this industry.

13. 2004-05-20DTV Development in China13 Preview of DTV Development in China Estimation of the market and industry scale Currently Currently –The installed quantity of TV set in China is about 300 million. –The number of cable TV users is about 100 million, and is expected to grow to 120 million by the year 2006. –The road map of DTV development in China will start from 2004, during which year some cities will initialize the DTV market based on cable TV; –There will be more than 100 DTV programs by the year 2005, –By the year 2008, the major cities in China should have implemented the digital HDTV commercial broadcast based on DVB-T and DVB-C, and the Beijing Olympics will be broadcasted live worldwide with digital HDTV. The DTV development will also bring us new market opportunities in the studio equipments, transmission equipments, cable front-end systems, receiver terminals as well as the specific ICs, software and display components. The DTV development will also bring us new market opportunities in the studio equipments, transmission equipments, cable front-end systems, receiver terminals as well as the specific ICs, software and display components. –A market value of more than 140 billion RMB can be estimated in 2006 for DTV and related products, –A market value of 500 billion RMB by year 2015.

14. 2004-05-20DTV Development in China14 Chinese DTV Development Strategy Self-development of Chinese DTV national standard based on existing technologies; Self-development of Chinese DTV national standard based on existing technologies; Initialization of domestic DTV market and industry with standard definition and cable-based digital TV; Initialization of domestic DTV market and industry with standard definition and cable-based digital TV; Construct the Chinese DTV industry chain; Construct the Chinese DTV industry chain; The DTV terminal products will follow the policy of “ separated CA and Box ” The DTV terminal products will follow the policy of “ separated CA and Box ”

15. 2004-05-20DTV Development in China15 Main Challenges Limited contents Limited contents Unbalanced development of the current broadcasting system and the market Unbalanced development of the current broadcasting system and the market Technical shortage and inherent defect of the relative industry Technical shortage and inherent defect of the relative industry Lack of profitable business modes Lack of profitable business modes

16. 2004-05-20DTV Development in China16 Main Challenges Limited Contents The insufficient number of available programs has been the bottleneck of our DTV development. It is necessary to enhance the overall content authoring capabilities. The insufficient number of available programs has been the bottleneck of our DTV development. It is necessary to enhance the overall content authoring capabilities. Restriction from the current content control policy. Restriction from the current content control policy.

17. 2004-05-20DTV Development in China17 Main Challenges Unbalanced development of the current broadcasting system and the market The reform of Chinese broadcasting and television industry is still in the initializing phase. The new operation system is still on the way towards market transformation. The reform of Chinese broadcasting and television industry is still in the initializing phase. The new operation system is still on the way towards market transformation.

18. 2004-05-20DTV Development in China18 Main Challenges Technical shortage and inherent defect of the relative industry The domestic industries are neither strong enough, nor well prepared for the new areas of DTV front-end, specific IC, core software, new display components and DTV testing equipments. The domestic industries are neither strong enough, nor well prepared for the new areas of DTV front-end, specific IC, core software, new display components and DTV testing equipments. The current policies are not refined for the new requirements of DTV product industrialization. The current policies are not refined for the new requirements of DTV product industrialization.

19. 2004-05-20DTV Development in China19 Main Challenges Lack of profitable business modes As a brand new multimedia service, DTV still lacks a profitable business model after several years of trial. As a brand new multimedia service, DTV still lacks a profitable business model after several years of trial.