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Minsheng: BesTV IPTV User Base to Grow 60% in 2012

Minsheng Securities, 2/22/12

A recent report on Shanghai Media Group IPTV subsidiary BesTV New Media (600637.SH) by Minsheng Securities predicted BesTV IPTV subscriber growth of more than 60% in 2012, to between 16 and 18 mln subscribers.

The number of BesTV IPTV subscribers grew to 10 mln in 2011, accounting for a market share of more than 70%. Value-added services currently account for 10% of the operator's revenues, a figure that the Minsheng Securities report said could grow to 30% in 2012. Following BesTV's formation of a joint venture with CCTV's national online TV station CNTV, the company's IPTV subscriber base expanded from four cities (Shanghai, Harbin, Dalian, and Xiamen) to 54 network convergence trial cities and regions around the country.

The Minsheng Securities report predicted that following the formation of the BesTV/CNTV JV, the operator's IPTV service revenues will come from two sources. Revenues derived from existing subscribers will be received exclusively by BesTV, while revenues deriving from new subscribers will be split between BesTV and CNTV, with BesTV receiving between 45% and 50% of revenues.

Internet television, online video, mobile internet, and mobile television are among the new media services planned for development by BesTV, with internet television to be a focus of the operator's efforts. As of the end of 2011, BesTV had between 5 mln and 6 mln users of its internet television service, or roughly 50% of the market. BesTV plans to sell 1 mln HD internet television set-top boxes (STBs) in Shanghai during the first half of 2011, and 10 mln STBs nationwide over the next three years.

Keywords: Shanghai Media Group Internet IPTV television users market share CCTV BesTV CNTV IPTV subscribers revenue set-top box Internet TV 600637.SH

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