Niklas Zennstromvia WikipediaWhen Reuters brought the news that internet TV venture Joost and the TOM group from Hong Kong would join forces in bringing free internet TV to a Chinese audience, my first reaction was: not a JV I would bet on.
Joost, as some of you might still recall, was an online platform for free TV, that could have worked as a technology if they would also have had content. Compared to YouTube and Tudou Joost was just a too heavy application for my already overloaded computer and the lack of decent content was just enough to dump it after a few trial.
The last time the TOM group appeared on my radar screen was when it joined forces with Skype, the online phone company. That was at the time a strange move, since Skype was doing on itself pretty ok and suddenly TOM started to do heavy handed promotion, at least in Shanghai. While I was and still are an avid user of Skype, I had no clue what a local partner, and especially this Hong Kong company, could add in value. Even the slightly promotional article on the TOM group in Wikipedia does not mention the Skype adventures anymore.
Skype founder Niklas Zennstrom, now one of the leading forces behind Joost, is involved, so there might be a connection.
Sometimes you need in China a local partner, especially when you want to work in the media, but TOM is from Hong Kong and can in no way provide the leverage you need in China for a media company.
And then, the Chinese market has been flooded with similar initiatives, where the most succesful ones claim now in total about USD 300 million in VC capital. The most succesful ones got into heavy water with the Chinese government on censoring the content, but seemed to haved pulled through, just because they have been more succesful that the state-owned video sharing ventures.
Why would both announce a media company focusing on the Chinese, one of the markets that are notoriously hard to enter, even when the market is not flooded with competitors. I guess, since the news was released in New York, both needed something to make their US investors happy. Those investors have no clue about the Chinese market.
My estimation: we are not going to hear too much about this venture.
4 comments:
Tom.com and Tom Group, despite having senior management changes recently, have been focused on the Greater China market for many years.
This JV is a first in terms of providing licensed content, a licensed SARFT mandated platform, and a commercially focused sales force in Greater China.
Tied with the IM database of Skype, Tom Group should succeed but for their own internal management confusion.
Internet Bars all over china have everyday chinese watching soap operas from HK, Taiwan and Korea off illegitimate platforms which will eventually be forced to close down.
I personally believe that in 3 years time, Joost in N.Asia will be equal to Hulu in the US.
Clement D Tsang, Shanghai
Tom Online is based in Beijing and run by mainlanders.
Although the company used to be listed in Hong Kong, (and Li Ka-shing is an HKer), the management are primarily from the mainland.
I agree with you about the lack of content, which is why I am not using Joost that much.
But to do any kind of deal on the mainland, you need local contacts, and that is why Joost needs Tom.
Being based in Beijing and focusing on the China market does not make the Tom group Chinese, in that way GM would now also be a Chinese company. What you need for any media operation in China is Chinese state-owned media, who will also keep you under control. Internet companies got some more freedom than traditional media, but the regulatory departments are now realizing they have made a mistake there, at least from their perspective.
For me it all comes down to content. If TOM helps Joost get exclusive content, then Joost could become the Hulu of North Asia. Otherwise, Joost has no competitive advantage.
I suspect that Fons is correct in spotting the dateline on that press release. This is an announcement tailored for NY-based investors.
Can anyone cite examples where investment by TOM has helped companies on the mainland? (This is an actual question, not a sneer. I don't know what TOM has been invested in.)
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