[February 24, 2006]

Digital Music Thrives Online

(Comtex Business Via Thomson Dialog NewsEdge)SHENZHEN, Feb 24, 2006 (SinoCast China IT Watch via COMTEX) --"No, not this posture," says Yang Jiahong, chief executive officer of Rock Mobile, a budding value-added telecom service and digital music provider in China, when he was asked by a magazine to pose for taking a picture.

Mr. Yang says that he does not want to be thought of following his competitor's example, who just appeared in the cover of a magazine recently in the same posture.

Since early 2005, driven by colorful ring tones and IVR services, China's online digital music sector has been booming, with Rock Mobile and A8.com fighting with each other in the front line.

There are several points the two adversaries have in common: venture capital receivers, making a beeline to NASDAQ, and similarly focusing on same services.

"There will be a Chinese online digital music website takes itself public this year, " says Mr. Yang. "

Though A8.com chief executive officer Liu Xiaosong, refuses to say more about the IPO issue, other executives of the website disclose that their company may bring it to pass within 2006.

Industry watchers, however, say that it will finally depend on the attitude of investors from Wall Street.

Looking back at 2004, several Chinese Internet service providers such as Linktone, Kongzhong.com, Tom Online, and Hurray! were highly pursued by foreign investors and successfully listed on NASDAQ. Over time, there was no Chinese Internet service providers landed on NASDAQ in 2005.

In the perspective of Yang, it should be mainly attributed to the relentless crackdown of the Chinese telecom regulators on the rough-and-tumble Internet service sector.

And Rock Mobile will not be affected by the trend because it is actually a digital music and service provider rather than an Internet service provider, even though its Internet service sales make up majority of its total revenue.

In the same way, A8.com also positions itself as "telecom service provider that exclusively offers digital music".

In the later part of 2005, Rock Mobile and A8.com received respectively USD 30 million and USD 20 million from venture capital firms.

Latest figures from Rock Mobile indicate that it saw total sales of USD 9 million in 2004, and USD 20 million in 2005, and the number is expected to be USD 40 million for 2006.

Hit by piracy, traditional record industry has been shrinking. Since the third quarter of 2005, some Internet service providers have expanded their footprints to online digital music field such as trmusic.com, Hurray!, and Tom Online, besides Rock Mobile and A8.com.

Founded in May 2000 by Alvin Liu, A8.com has a work force of more than 300. Headquartered in Shenzhen's Hi-tech Park, A8.com has set up a branch office and research and development division in Beijing, and also branch and sales offices in 13 provinces and cities in China.

Liu said that A8.com will not acquire music production companies but will cooperate with music producers, including providing funds to support music production. The website has been profitable for three years and currently has about CNY 20 million in monthly revenues.

A8.com is among the top ten brands in mobile telecommunication value-added service in China. With core business in music, A8.com has established a comprehensive mobile telecommunication value-added service platform across SMS, MMS, WAP and IVR.

Rock Mobile Corporation originally started as a digital division of Rock Records Group in January 2001, the company spun off in 2002 as RMC received USD 2.5 million funding from Acer Technology and Siemens GmbH.

By Tinmin (tinmin2003@hotmail.com)

[USD 1 = CNY 8.06178552]

From dycj.ynet.com, Page 1, Thursday, February 23, 2006
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