Jul 5, 2011 ~ Web 2.0 Asia Blog

Tuesday, July 5, 2011

Why its Difficult to Make Money from Chinese Users – Online Video Example

9:46 PM Tech News No comments

Everyone in the TMT industry likes to compare Chinese companies to its American counterparts and leaders, like China’s Google is Baidu, China’s Facebook is RenRen, China’s Twitter is Sina Weibo etc. In the online video market, China’s Youtube is often regarded as Youku.

But I investigated a bit further to see how Chinese video sites really compare with an American online video giant – Hulu. Hulu is a very popular online subscription service offering ad-supported on demand streaming video of TV shows, movies, webisodes and other new media, trailers, clips, and behind-the-scenes footage from NBC, Fox, ABC, and many other networks and studios.

I compared revenue and number of unique monthly active users across 3 Chinese video sites – Youku, Qiyi and Xunlei versus America’s Hulu. The clearest observation is that all the Chinese sites have clearly more users but vastly lower revenues compared to Hulu with only 30 million unique monthly active users but a much higher revenue base of US$240m.

The stark contrast between the Chinese companies and America’s revenue vs. user base ratios clearly indicates that American users are much more willing to pay for service compared to Chinese. Hulu makes US$8 per user but its Chinese equivalents can’t even make US0.5 per user.

This reinforces what everyone already knows about Chinese netizens – they whenever possible never pay for software or online service, they’d rather copy it or rip it off from somewhere else. There are exceptions to this, such as online dating sites where social pressure pushes them to get married and pay for it.

This cultural behavior can easily be replicated across any software based industry. This is why mobile app developers find it much harder to monetize from paid downloads, but instead rely on advertising revenue, which is much lower, less direct and harder to generate.

This is one of the biggest challenges for software and online service companies in China – how to monetize consumers. Microsoft is a prime example of how it has tried to deal with piracy in the mainland. For now, most companies see no other option but to generate most of its income from advertising. Perhaps this is not such a bad strategy, after all that’s how Google makes most of its money.

Some believe that this trend is changing and with the rising affluence of China and its speedy economic development, Chinese people will pay for software and online service when they see value in it.

On that note, I will leave a question for you to ponder upon:

Will Chinese consumers ever be prepared to pay for software or online service? When and Why?

Link to full article

Singtel Innov8 funds group buying platform company Dealised

8:30 PM Tech News No comments

Singtel Innov8, the venture capital arm of Singapore’s largest telecomms company, is participating in a US$6.5 million (S$7.97 million) Series A investment in Dealised, an Australia-based company that provides a group buying platform solution to third-party websites. Australian VC firm Yuuwa Capital is also involved in this round of funding.

Dealised was founded in late 2009 to support Spreets, an Australian daily deals site. Their other clients include SweetDeal in Denmark and Telegraph Selected in the United Kingdom. Their group-buying platform is a white-label product, meaning it allows other companies to rebrand their technology and integrate it within their own websites. They also have support for mobile deals and merchant administration.

The company also said that their regional Asian headquarters in Singapore will be used to push global business expansion and generate mobile group-buying innovations.

Link to full article

Dentsu Gets Exclusive Rights To Display Ads On Skype

8:30 PM Tech News No comments

Dentsu has struck another exclusivity deal, this time with Skype. The deal is intended to generate 1 billion of revenue (12.4 million USD) through exclusive display space on the Skype start up screen. Banner / video ads will cover roughly 1/3 of the screen as the program boots and will be cycled through daily . According to the Nikkei, this will be served to the roughly 1 million users in Japan who are using free services offered by Skype. This deal seems confined only to the PC/OS version of Skype - not mobile.

According to a recent research survey by Goo Research Portal, smartphones are the fastest growing device for Skype use, especially as smartphone sales continue to boom within Japan. Laptop and netbook usage has actually declined as a total share.

There is a possibility that this move by Skype is as a result of lower monetization of paid Skype services within Japan. The country has fewer needs to international calling, and group video calls are not necessarily a norm in day-to-day business in Japan.

Skype does however offer alternative payment options apart from credit cards (which have lower penetration when compared to other countries) or PayPal (not very successful in Japan) including credit-voucher sales at convenience stores like Lawson, Family Mart (similar to how people buy credit for services like Xbox Live), or electronic money services like Excite. There is little data as to how successful this has been in growing frequency or reach of payments.

Dentsu Gets Exclusive Rights To Display Ads On Skype

Link to full article

Chinese Video Site, Xunlei To Go IPO on Nasdaq

7:52 PM Tech News No comments

The plethora of web services that offer high quality video streaming is rapidly growing. With a lack luster choice of good entertainment content on TV, people are quickly realizing how good it is to simply go online and watch whatever you want, when you want. I’ve personally used Xunlei and am impressed with the speed and quality of video streaming.

Going IPO

Shenzhen Xunlei Network Technology Ltd, the Chinese video and music file-sharing company partly owned by Google Inc, is planning to raise about US$200 million in an initial public offering in the United States in the next few months.

As we just reported, now is probably the best time to go IPO in the US where already in the first half of this year, seven Chinese companies raised a total of $1.333 billion, accounting for 80 percent of all money raised by Chinese listings in the U.S. Timing is also critical because wide public perception senses the valuation bubble growing dangerously fast.

Plagued with piracy and copyright issues

However like many other content sites in China like Baidu, they are being plagued by accusations of piracy. The Motion Picture Association of America, in 2008 filed a civil complaint against Xunlei in Shanghai Pudong District Court for enabling piracy of movies including Spider Man 3. Due to mounting pressure from overseas and the government, Xunlei is moving towards more legitimate and licensed content.

A leader in consumer internet platform for digital media content in China

According to its SEC filing, the key advantage Xunlei claims to have is its proprietary, digital media indexing technology and a massively distributed computing network.

Based on the number of software launches Xunlei claims to have 78.7% market share in China as of February 2011. These downloads are available to internet users free of charge. Their streaming service called Xunlei Kankan is currently the 3rd largest streaming portal in China.

Revenue growth of 59.7%

Xunlei generates revenue from multiple sources including cloud-based subscription services, online advertising, and other services. By the end of March 2011, they had developed over 1.3 million subscribers from the large user base of Xunlei Downloader and Xunlei Kankan.

Revenues increased from US$16.8 million in 2008 to US$29.6 million in 2009 and to US$42.8 million in 2010, representing a compound annual growth rate, or CAGR, of 59.7%

Link to full article

China Venture Chase Heats Up With $350 Million GSR fund

12:08 PM Tech News No comments

The China venture chase heats up as GSR Ventures raises its fourth fund in six years at $350 million. Deal making and fund raising hasn't slowed down but the IPO parade has. Will the bubble pop soon?
Link to full article

Jedi Of Japanese Traditional Swordplay

10:19 AM Tech News No comments

Tenshinshō-den Katori Shintō Ryū is a Japanese martial arts said to be established around 15th century.

And the word Jedi might be from Japanese, this mash-up seems so natural.

originally from Nico Nico Douga,

The original Tenshin Shoden Katori Shinto-ryu film is here,

via @yando

Jedi Of Japanese Traditional Swordplay

Link to full article

Startup Roots Speaker Series #6 Preview – Product Management

9:07 AM Tech News No comments

On the heels of an intimate fireside chat with Bunnie last week, we are taking a practical turn in our 6th Startup Roots Speaker Series. This week: a power packed panel on product management and design. These are skills essential to every startup, which are sometimes overlooked and maligned. So, we have put together a Continue reading → Related posts:

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Introducing Christian Lanng, Speaker At UnPluggd

7:55 AM Tech News No comments

The content at UnPluggd is about ‘building business’ and not just doing a startup – and we continue to take this to the next level by bringing in Christian Lanng, founder of Tradeshift, a European startup that is building a global business.

Christian Lanng

About Christian Lanng

Christian launched his first start-up at just 19 years of age after reading Douglas Couplands Microserfs, wanting to be like the main character Michael. The start-up created one the first mobile browsers. The company was sold when he was 21, shortly before the Internet bubble burst.

Not knowing what to do next, Christian studied Sociology for 3 years, but then quit university to go full time at his student job in the Danish Science Ministry. He went on to become the youngest Head of Division in the Danish government. During this time he met the co-founders of Tradeshift and they created the world’s first open-source peer-to-peer e-business infrastructure, which became wildly popular among Danish companies attracting more than 40% of all Danish companies in 10 months. The team went on to create an open standardized cross-border framework for e-business called PEPPOL, which today is used by more than 14 European governments.

Becoming very bored with government policy Christian one day responded to a tweet by serial entrepreneur Morten Lund. Spending a week-end in Abu Dhabi they decided to launch Tradeshift as the worlds first cloud business network, mixing business and social networks. Tradeshift has so far been very successful, with users in more than 190 countries and more than 2000 companies joining every week. It has been covered by Wired, Techcrunch, Wall Street Journal and The Financial Times as one of the most innovative b2b start-ups in the last 10 years. Christian has received the Danish IT-industry’s innovation prize and the Techcrunch award for most innovative business start-up.

At UnPluggd, Christian will share his entrepreneurial journey and importantly, his experience/lessons learnt while building a global business.

The one thing that is super impressive about Christian (and why he is speaking at UnPluggd) is the fact that his startup has built a global business (which a lot of Indian entrepreneurs aspire to) and has a very common background (of a country which doesn’t necessarily has an ecosystem as vibrant as US).

In short, no excuse for not building a global business.

Block your seat right now:

India's Largest Startup Event, UnPluggd Is Back (Mindblowing Content + Exiciting Startup Demos » July 9th, Bangalore)

» Introducing Christian Lanng, Speaker At UnPluggd @Pluggd.in.

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Group-buying site MyDeal expands Malaysian network

6:42 AM Tech News No comments

Group-buying daily deals site MyDeal today announced that it is expanding its reach in Malaysia by launching dedicated portals covering cities Kota Kinabalu, Kuching, and Ipoh. The site, which operates in Kuala Lumpur and Singapore, also has plans to move aggressively into more areas such as Kuantan, Miri, Langkawi and Brunei by the year’s end.

“We’d be very satisfied if we could get 10% to 30% of the market in each of these new areas,” said co-founder and CEO Jan Croeni. He also added that each city would have its own sales office to reach out to merchants, as well as provide general support.

MyDeal was launched in June 2010, and boasts a subscriber base of 400,000 with plans to double that amount by the end of 2011. The site, along with its sister site MyDeal.com.sg, is funded by investors that include Germany-based Rebate Networks, which recently sold its stake in Thailand-based Ensogo to LivingSocial. According to the press release, the site generates RM2 million (US$664,560) revenue per month from its estimated 800 to 900 merchants in Malaysia, and expects a spike once they expand to other cities.

“It took about three to six months in both Singapore and Malaysia before people started trusting this concept of group buying, and from then on the value of the items went higher and the total volume of vouchers increased,” said Croeni.

As to what it has over the local competition like Everyday.com.my and Groupon Malaysia (formerly GroupsMore), Croeni said that MyDeal has a strong subscriber base of those over-30 years old, who have a stronger spending power than the younger crowd that Groupon Malaysia attracts, for example. Besides, Croeni said that they negotiate the percentage cut shared with merchants, as opposed to the flat 50/50 split that Groupon offers (although Business Insider reports that it may be changing that strategy to favour the merchants).

“We feel that the 50-50 deal is not fair to merchants, so we give them more of the cut,” said Croeni, but declined to give a percentage figure, saying that it varies from merchant to merchant.

He added that MyDeal would be launching a mobile app within the next couple of months, but it’s not a primary focus at the moment. “Customers don’t buy many deals on mobile, and besides with a smartphone you can browse using a web browser,” he said.

Since July, MyDeal also became the first group-deal buying site to set up a customer relations hotline, which will be staffed by 30 personnel to deal with issues such as delays in coupon issuing, field queries about deal details, and resolve other customer complaints.

Link to full article

Developer Garage Meet Up – 29 Jul

6:42 AM Tech News No comments

End of this month (29 July), Developer Garage Meet Up will present a series introducing the features and opportunities Windows Phone 7 of update ‘Mango’. Microsoft Evangelist Chris Ismael will give a talk entitled “What’s Cool About Windows Phone 7 next major update codenamed Mango” and Muhammad Mulyadi bin Sazali of SmartStream will give insights into the journey as a Windows Phone 7 developer.

Event Details

When: Fri, 29th July 2011
Time: 4pm-6pm
Where: Yellow Pages Building, 1 Lor 2 Toa Payoh #02-03, Singapore 319637 (Map)
Interested participants can RSVP here.

Link to full article

Startup Roots Speaker Series: Product Management and Design In Practice – 7 Jul

6:42 AM Tech News No comments

This Thursday (7 July), Zihuan Wee, Wen Huang and Gary Teo from Savant Degrees, as well as Andy Croll from Anideo and Nav Pawera from Bubble Motion and Opera will share about Product Management and Design In Practice during Startup Roots Speaker Series session.

Event Details

When: Thursday, 7th July 2011
Time: 630pm-730pm
Where: hackerspace.sg, 70A Bussorah Street, Singapore 199483 (Map)
Register here.

Link to full article

Baidu Teams up with Bing to Offer English-language Search Service

6:42 AM Tech News No comments

Baidu, the largest search engine which claims over 83.6% of Chinese search market share, announced this Monday that the company had struck a deal to team up with Microsoft’s search offering Bing in an effort to speed up Baidu’s overseas expansion pace.

According to the deal reached by the two parties, Baidu will show English language search results from Bing on its results page. Revenue generated through user searches will go to Baidu and the partnership doesn’t involving financial terms. The service will go online by year end.

Baidu also explained from technology side how the cooperation works: it’s all about its Box Computing platform. After users input English keywords in its search box, Baidu will leverage the Box Computing technology to analyze and understand users’ intention and desirable results, then connect to Bing for English search result before labelled and integrated Bing’s search results into Baidu’s search results.

As we mentioned before, Baidu started tapping into overseas market since 2008 with huge investment but only to find over USD 105 million in loss. Teaming up with Bing in terms of English search reflects the Chinese search giant’s eagerness to venture into markets outside China.

Also, the deal is questioned when Hongkong-based Credit Suisse analyst Wallace Cheung said “Overall it’s good news, but I think it will do little to affect Baidu’s existing businesses. Because few people use Baidu to search for English contents, usually people will choose Google to do so.”

Link to full article

Harness The Power of Cloud On Your Android Device [The AppNomy List]

6:42 AM Tech News No comments

[Reproduced from Appnomy, a site dedicated to app developers.]

Cloud seems to be the buzz word today and everyone wants their data to be available across multiple devices and at multiple locations anytime they want. Cloud power play an important role in increasing the productivity of users by letting them have access to their data anywhere, anytime. Although there are lots of apps that are available currently and allow you to sync data across devices, we pick out some of the top apps. Here’s how our list goes.

1) Google Docs
There are many apps that provide document syncing but none as comprehensive as this one. The ability to use your phone’s integrated account with Google to sync and edit documents while on the move is awesome. Add to this another cool feature, Optical Character Recognition! Just click a snap of any paper document and upload it to your Google Docs account and it will recognize the text from the snap and convert it to a compatible format, ready for editing. Although the results of OCR may vary and it is generally 95% accurate, it will surely save a lot of typing time.

Download Link .

2) SugarSync

There are many services for syncing files across desktops and laptops but this one takes it a step further . We don’t just want our devices synced but we need the right information synced with the right device. Sugar Sync will let you sync your chosen folders, files, music, photos etc and you get to choose what gets synced with which device. The app is simple to use and offers deep integration with the system. This means you can easily click a snap anywhere you are and just share it via the integrated share option on your Android phone. The main advantage of this app is the number of platforms it supports. Just awesome.

Download Link : Link.

3) Evernote
Evernote is a notes application for those who love to set reminders and tags and look at things in their free time. The app integrates well with the Android system and makes for easy sharing of all types of files to your evernote account, this account can be accessed over a pc too! The app lets you add attachments, photos, voice notes, tags to your notes making it an all in one solution for notes.

Download Link : Link.

4) Ubuntu One files and Ubuntu One Music.
This one is specially for the open source lovers. Ubuntu’s cloud file storage is now available for your Android phones too! What’s more, it offers a Cloud based streaming music player for a subscription fee, straight to your device. The Ubuntu One Music store also offers music for purchase. Once purchased, the music will sync to your personal cloud storage too. A cool combinational app if there ever was one.