As part of our over-the-top experiment, this was the business proposal and design for digitizing Zhengzhou Cable (China) and establishing a value-added-service-operator (VASO) in China
1. M O R N I N G F O R E S T , L L C
...so l u ti on s i n th e m aki n g
DIGITAL ZBN
A DESIGN FOR ZHENGZHOU CABLE (ZBN) TO CREATE A BROADBAND PLATFORM
FOR VALUE-ADDED SERVICES BEYOND LINEAR CABLE TV
July, 20, 2005
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2. What is this all about?
First Over-The-Top Experiment
After some detail investigation about China cable industry and related power-bases, we
decided to experiment the over-the-top solution with one of the major cable operators in
China - the Zhengzhou Broadcast Network (ZBN), or the Zhengzhou Cable.
It was owned by the Zhengzhou city-government, and covered the entire city that is the
capital of the Henan province. Given its unique location in China (center of China and
the hub of all sorts of transportations and communications), it has always been THE
place everybody want to occupy. As it was said: who own the central plains of China,
who own the Country.
At that time, the provincial government owned another provincial cable company that
is much smaller but was also the shareholder of ZBN. There is a sever political battle
between the two governments in grabbing the valuable asset - ZBN. So, ZBN was very
aggressive in upgrading their infrastructure to enable more services, therefore increas-
ing its barging power with the provincial government - a good opportunity for us to en-
ter this market.
Strategy and Tactics
A two-step strategy is used, which we believe is still a feasible solution for anyone en-
tering China cable industry.
First, help them to establish the infrastructure. This is a one-stone, two birds approach.
On one side we establish trust and good working relationship with ZBN, and on the
other hand, we build up the infrastructure for value-added services, at zero-cost.
The second part is to aggregate all the contents from inside and outside China, and
build up a platform to “line up” all the contents that are attractive to consumers. Most
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3. important, the platform should include an attractive user-interface and consumer
behavior-stimulator that could tailor the type of contents for every individual.
By doing so, you assured the other party your trustworthy and willingness to help, and
at the same time controlled the key fundamentals for providing services that are more
valuable than broadcast free TV.
Results
In 2005, we completed the implementation of IBD-2000 which is a flagship of our prod-
uct line. It consists of mini-fiber node technology, dense CMTS/DOCSIS for IP trans-
port, and backend intelligent management system. First time, China has a new cable in-
frastructure equivalent to that of the US.
At the same time, we developed an ITV platform called the iShow that provided per-
sonal video experience by cultivating mainstream videos, grass-root productions, and
information services - a combination of Hollywood, Youtube, Facebook, and govern-
ment social services.
Also we aggregated mainstream productions from China major production houses, Ju-
piter Communication (Japan), Sony Studio, BBC, and UPC Latin America.
We are ready to launch, but...
The regulatory reform and cable commercialization process move much slower than we
anticipated. The cable-asset ownership battle between different government agencies,
which affect many executives’ “career” (and their incomes) made them not willing to
take any risk. So even we had a legal contract with ZBN on providing value-added serv-
ices over their networks, they backed off and we could do nothing, especially consider-
ing we were a US startup.
So, we moved our software to Internet and established the BOCOO Online. At least
over Internet, everyone could be an over-the-top with much less regulatory constraint.
This would be another story.
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4. After Math
Over-the-top is a great rule-breaking business model, but it must be really over-the-top.
Any dependency would make it not compelling, unless you are a thousands-ponds go-
rilla having deep-pocket. In that case, it will work as your goal should be creating assets
over a long period of time. As a startup, we could not afford it.
This document is our design for the end-to-end ITV platform, and related business
planning. It includes:
1. Market Analysis
2. System Design
2.1. HFC network design
2.2. IP Network Design
2.3. Streaming and VOD system design
3. Content Management System Design
4. OSS/BSS Design
5. Financial Planning
6. Implementation Planning
Sorry that the rest of this document is in Mandarin as it was for the ZBN. For those who
could read Mandarin - happy reading!
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