That blob in the lower left corner being looked at by the horses is me carrying a cedar tree from the woods. For those concerned that chopping down a tree is an environmentally unfriendly way to celebrate the holidays, we only trimmed the top few meters off a rather large tree. It will grow back bigger and stronger next year!

Blogging on hold until the snow thaws in the new year. Have great holidays!

In case anyone is unfamiliar with the “Yes, Virginia” allusion, it is one of the great newspaper editorials written in 1897 by the New York Sun in response to an 8 year old child’s letter asking as to whether Santa Claus exists.

The reply, written by Francis Pharcellus Church (courtesy of Newseum):

“DEAR EDITOR: I am 8 years old.

”Some of my little friends say there is no Santa Claus.

”Papa says, ‘If you see it in THE SUN it’s so.’

”Please tell me the truth; is there a Santa Claus?

”
VIRGINIA O’HANLON.

”115 WEST NINETY-FIFTH STREET.



VIRGINIA, your little friends are wrong. They have been affected by the skepticism of a skeptical age. They do not believe except [what] they see. They think that nothing can be which is not comprehensible by their little minds. All minds, Virginia, whether they be men’s or children’s, are little. In this great universe of ours man is a mere insect, an ant, in his intellect, as compared with the boundless world about him, as measured by the intelligence capable of grasping the whole of truth and knowledge.



Yes, VIRGINIA, there is a Santa Claus. He exists as certainly as love and generosity and devotion exist, and you know that they abound and give to your life its highest beauty and joy. Alas! how dreary would be the world if there were no Santa Claus. It would be as dreary as if there were no VIRGINIAS. There would be no childlike faith then, no poetry, no romance to make tolerable this existence. We should have no enjoyment, except in sense and sight. The eternal light with which childhood fills the world would be extinguished.



Not believe in Santa Claus! You might as well not believe in fairies! You might get your papa to hire men to watch in all the chimneys on Christmas Eve to catch Santa Claus, but even if they did not see Santa Claus coming down, what would that prove? Nobody sees Santa Claus, but that is no sign that there is no Santa Claus. The most real things in the world are those that neither children nor men can see. Did you ever see fairies dancing on the lawn? Of course not, but that’s no proof that they are not there. Nobody can conceive or imagine all the wonders there are unseen and unseeable in the world.



You may tear apart the baby’s rattle and see what makes the noise inside, but there is a veil covering the unseen world which not the strongest man, nor even the united strength of all the strongest men that ever lived, could tear apart. Only faith, fancy, poetry, love, romance, can push aside that curtain and view and picture the supernal beauty and glory beyond. Is it all real? Ah, VIRGINIA, in all this world there is nothing else real and abiding.



No Santa Claus! Thank God! he lives, and he lives forever. A thousand years from now, Virginia, nay, ten times ten thousand years from now, he will continue to make glad the heart of childhood.

Hi – I recently discovered your blog and enjoy your way of doing things. However, since you’re now also posting on Danwei, I find it redundant because I follow both blogs with rss feeds. I just thought I’d let you know I’m on the verge of quitting your rss feed, as I’m sure this info is useful to you and most people who leave will probably just quit without telling you.

I’m actually a bit curious why you chose to start this arrangement with Danwei. My guess is you thought it might get you a few more subscribers from their audience? Or something else? Is it succeeding?

Dear Reader,

First, thanks for reading my postings and taking the time to write. I very much appreciate the feedback.

When I started blogging for the first time as a guest of my friend Joi Ito, I faced the same issue as I do now when blogging in French with my friend Loic Le Meur and on Danwei.

My policy then and now is to cross-post when there is something of interest to the relevant community.

For Danwei, this means China/urban life/media/advertising related issues. On Loic’s blog I tend to write about France-related issues as well as technology. During the Olympic period, there has – indeed – been heavy overlap between Danwei’s focus and that of my blog. That overlap will slack as the Olympics draw to a close.

Does blogging on Danwei drive traffic?

Posting to Danwei drives traffic moderately, but since I put up full postings, it is not excessive. What I appreciate more than traffic are the conversations that take place. That is why I like to the cross-post effect. Conversations about a topic on Loic’s blog in French are often very different from those in Danwei or on my blog.

In pure traffic terms, my blog is getting bombarded by Google searches for “Olympic P * rn”, “Olympic S x” and similar landing on this posting. (Are these hits from frustrated athletes in the Olympic Village or from fans dreaming back home?)

How did this arrangement happen?

Jeremy Goldkorn, Danwei Grand Poobah, emailed me one day to ask if I’d like to cross-post onto the site. Only interaction we’ve had since then is an occasional email helping me when I messed up formatting. I’d like to buy him a drink, but haven’t met up with him for almost half a year now.

Hope this answers your questions and convinces you not to drop either Danwei’s RSS or that of my blog!

Tom

Having left journalism to take up business development with one of Asia’s more successful serial entrepreneurs, I’m always on the lookout for new business opportunities.

This idea strikes me as quite complex to accomplish alone, but too compelling to drop.

For that reason, I wrote it up and now share the idea here online in the hopes of feedback or – who knows – potential partners. What do you think?

Executive Summary:

Taiwan companies export most of the world’s large flatscreen televisions, but Taiwanese buy relatively few.

Why? Taiwan television is bad. Really bad.

Hampered by regulations, cable companies in Taiwan have no incentive to invest in compelling content or develop new distribution models.

Stuck in the 1990s, Taiwan suffers one of the world’s biggest digital TV deficits.

Taiwan’s digital TV deficit is so great that it may actually offer a business opportunity.

For my full idea, please read below the fold.

The Business Case for Selling a New Type of Digital TV box for Taiwan

June 10, 2008
By Thomas Crampton

Taiwan is one of the world’s most high tech and developed places
- A population of 22 million with GDP per capita of around US$15,500 makes Taiwan an attractive consumer market.
- Taiwan’s broadband penetration ranks in the world’s top 20, according to the ITU.
- Taiwan companies supply the world with everything digital, from laptops to flat screen televisions.
- The Taiwan government has long nurtured high tech ambitions, with a current goal of making Taiwan the WiMax capital of the world.

Taiwan cable television penetration is among the highest in the world
One of the first markets in Asia to liberalize pay-TV, Taiwan’s cable penetration has increased from 17 percent of households in 1990 to nearly 90 percent today, according to Media Partners Asia.

Yet digital television virtually does not exist in Taiwan
Digital delivery of television, which allows High Definition TV, movies on demand, pay-per-view, etc barely reaches six percent of the population, according to CASBAA.
Irony alert: Almost nobody in Taiwan is able to use the HDTV sets so successfully exported by Taiwan’s manufacturers.

Why do Taiwan cable companies invest so little in digital TV?
No incentive. The national government restricts Taiwan cable operators to subscription fees of roughly NT$500 (US$18) per month. Local officials further influence pricing, with the Taipei mayor recently making lower cable fees part of his election platform.
Faced with dismal returns, Taiwan’s cable companies invested an annual average of US$68 per household, compared with US$230 in Hong Kong, US$281 in Singapore and US$605 in the United States, according to CASBAA.

Why are Taiwan TV programs so bad?
There are more than 100 channels, but no way for cable operators to charge a premium for special programs. The only hope is to make everything cheap, mass market and hope to sell advertising. As a result, all cable operators offer a very similar set of programs. Government regulations inhibit selling premium-priced “bouquets” of special channels. Subscription restrictions mean that revenues at cable companies are roughly 70 percent from advertising and 30 percent from subscription, I am told.

What is the market context for Taiwan’s cable companies?
Taiwan’s cable companies have divided up the market with little geographical overlap. The top 3 players control a 60 percent market share, according to the Government Information Office.

Private Equity, of course
Taiwan’s top 3 cable players received investment from private equity investors in recent years:
CNS: Former Carlyle Asia chairman Michael Kim bought a 60% stake for a reported NT$30.9 billion in 2006.
KBRO: Carlyle Group acquired KBRO in 2006.
TBC: This month (June 2008) Macquarie Korea Opportunities Fund (MKOF) is set to buy Macquarie Media Group’s 60% stake in TBC for $400 million. This is a 34% rate of return from the two years of MMG ownership.

Stagnant revenues
While private equity investors streamlined internal operations, there seems to be little opportunity for them to increase actual revenues until regulations are dropped.
The average monthly fees per user in Taiwan increased 0.4 percent over 2003 to 2006, compared with a fee increase of 14 percent in Australia, 6 percent in the UK and 5 percent in the United States, according to CASBAA.

What is Digital TV state of play?
The major cable companies have nascent digital offerings with 20 to 30 thousand subscribers, but the government-owned Chunghwa Telecom claims the largest number of set top boxes.


How many people really use Chunghwa’s digital TV?
Claiming roughly 400,000 boxes so far, Chunghwa hopes to reach 1.2 million homes by the end of this year, thanks to their exclusive rights to broadcast the Olympics online.
The only way for people in Taiwan to watch the Olympics in High Definition will be through Chunghwa’s service.
Based on calls to consumers in Taiwan, however, I really wonder how many Chunghwa boxes are actually operational.
One consumer I called described the Chunghwa broadband installer as insisting that he leave a digital TV box, even though the customer’s television was too old to use the service. “But I am not permitted to bring the box back to the office,” the repairman told the customer. That box now sits unopened in the original packaging.

What does Chunghwa offer consumers?
Chunghwa’s offering, called MOD, costs NT$89 per month, with the NT$800 installation fee waived for a 12-month contract. You get 14 channels for the basic subscription and then a range of other channels if you pay more. The extra channels heavily promote their “adult” content. Unlike Taiwan’s cable companies offerings, you can select specific channel subscriptions and even order movies on demand. Movies range from free to NT$20 to NT$90 for recent hits.

So where is the business opportunity?
So long as the restrictive regulations remain in place, Taiwan’s broadband-enabled households have televisions stuck in the analog era.

How do you bring digital TV without being a digital cable company?
There’s a number of boxes, but none I know designed to suit Taiwan’s exact situation.

You would need:

• Timeshifting: A digital video recorder such as TiVo could record the 100 cable channels and allow for a later viewing of the content, a sort of video on demand.
• On Demand: Additional content could be brought in through a system similar to Vudu, which downloads movies, TV shows and HD films over broadband.
• Wireless: Wimax, being pushed heavily by the government, could offer a wireless route for downloading content, while Fon routers could be another. Or, to simplify things, the box could be hooked up to a regular broadband connection by wire.
• Transactional: E-commerce should be built in, so that revenue could continue after selling the box.
• Cheap: It must be cheap. Super cheap. Preferably US$20 to the consumer (perhaps with subscription to make up the remaining cost).

What content?
One difficulty is cutting deals with content providers, who usually work on a geographical basis through agents. If the device were left open to show any program on the Internet, users could watch any program available online. More and more US programs are available through the web, for example. Or perhaps you work with Hulu or Joost, providing them with a direct link to Taiwan’s television sets.

The sales pitch
You must convince consumers that – in addition to their cable subscription – they should buy a box. In order to make the box business worthwhile, there should be a subscription or way to encourage further purchases.

The danger!
One inherent danger with this project is, of course, that government regulations change and cable companies can install digital boxes. Presumably they have already put the infrastructure in place for this to take place quickly.
The recently elected government of Ma Ying-Jeou has promised economic reforms and deregulation, but taken no steps on the cable TV so far.
On the other hand, such a device might be applied to other markets with similar problems and with similar potential demand. China and India come to mind.

What are your thoughts?
This is an open business pitch. If you have any further thoughts, refinements, ideas or desire to develop, co-invest or partner, contact me.

Update:
Paul Denlinger at ChinaVortex suggests looking at:
1- Gaming company Shanda’s launch of Ezpod with 1,000+ systems engineers at the height. Test launched in Yiwu flopped, leaving retailers stuck with unwanted dead boxes.
2- TiVo’s Taiwan launch could have some useful lessons. Here are Tivo Taiwan advertisements.
Bill suggests looking at Gigamedia, which may have been doing something similar before they switched from broadband/convergence into a gaming company.

I agree.

Martin finds postings in blogs like TechCrunch or GigaOm about him or his company – Fon – will bring traffic to his websites. When an article is written about him or his company in a publication like The New York Times or Forbes, however, the reputational effect is much greater (judging by people speaking to him about the article), but blog traffic hardly changes.

In addition to Martin’s Old Media Reputation Effect, I would add:

1- Old Media Action Effect

In launching a laser customization service in Paris, TagMyPod, my brother-in-law discovered a corrollary rule:

When someone blogs about TagMyPod, site traffic can increase dramatically, but sales often remain slow.

When a newspaper or magazine writes about his service, however, people start coming into the shop with ripped out clippings in hand.

2- The Old Media Search Defect

A related topic is the continued inability of Old Media to adapt to Internet search.

If I Google “Martin Varsavsky”, for example, I did not get a single link among the first 100 going to an article from a newspaper or traditional publication. (Most people don’t look beyond the first 20 results of a Google search.)

When I Google my own name – a byline that over the course of a decade appeared on more than a thousand articles in The New York Times and International Herald Tribune – I find only 4 links to articles in those publications among Google’s top 100 results.

When will traditional media figure out the importance of Google?

Not for a while, I hope. It helps traffic to my blog!

Jobs’ frustration with focus resonates with this journalist entering business. Why? Because journalism rewards voracious dilettantism, while business rewards monomaniacal focus.

Jobs’ words below on focus were not available on the online version for some reason:

People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all.

It means saying no to the 100 other good ideas that there are. You have to pick carefully.

I’m actually as proud of many of the things we haven’t done as the things we have done.

The clearest example was when we were pressured for years to do a PDA, and I realized one day that 90 percent of the people who use a PDA only take information out of it on the road. They don’t put information into it.

Pretty soon cellphones are going to do that, so the PDA market’s going to get reduced to a fraction of its current size. So we decided not to get into it.

If we had gotten into it, we wouldn’t have had the resources to do the iPod.

Note: I like his point, but find the example is a little disingenuous. The iPod focussed on functions that were already available on phones, but did them better.

IFRA – motto: Empowering the news publishing industry – has created the search engine to allow newspaper-focussed people to look at trends, strategies and issues.

UPDATE: I just found another recently launched news industry vertical search engine called Mediageeks, put together by Howard Owens.

UPDATE: Further blogging on the conference by Mari Pascual who is posting to the IFRA Magazine Multiblog.

WordPress.com, blogger.com and other free services can be blocked by the Great Firewall, so I need advice on where to host my blog. (It is currently parked with a very generous friend.)Should I use Dreamhost? A US-based service?

A Hong Kong-based service?My readership is divided between the US, China and Europe (in that order) so want to serve both as well as possible.

All thoughts welcome!

For anyone looking into Great Firewall issues, there is a nice piece by James Fallows that ran in the Atlantic. Along with this follow-up James Fallows Q and A.

This posting on the China Hosting Blog includes 6 tips to how avoid your blog getting blocked in China. (The company that runs the blog, SinoHosting.net, promised to move your blog to a new IP address within 30mn if it gets blocked. Presumably they reserve the right to decide whether they will help unblock your or not.)

Great and highly detailed advice sent to me from Alex Bowman who is based in China and has clearly studied the issue:

I am not employed by any telecom companies, so none of this is insider information.The most important factor is probably the type of site you’re hosting and as you say your readership.

US Advantage: Fast for US and because of the variety and amount of connections to Europe fast for there too. Trans-pacific is a bit slower, adding around 300ms latency. For a basic HTML page this is not a problem (a couple of seconds), for a simple database-driven blog not really much of an issue (10 seconds), but something like a complex portal or community site, one serving lots of maps, flash or many large graphics the loading speed may switch many off (30 seconds+ loading time).

Hong Kong’s advantages: Fast for mainland China and Asia in general. This fastness for mainland China depends on the section of the Great Firewall you’re going through – it seems some of the machines that filter are faster than others. Worria.com is the fastest budget host for HK to mainland China connections at the moment, but this varies monthly. IDC is not bad. Hong Kong is outside the People’s Firewall, meaning it carries the same mainland-specific disadvantage as hosting anywhere else in the world – it is possible that it will be blocked.

The reason many, if not most, sites are blocked inside China (excluding well known news organisations, political groups or pornography sites) is because the computer they’re hosted on is blocked, not the site itself. China tends to impose blocks on IP addresses (the physical address of a computer, not the domain name) – this affects many because while they’re site has done nothing ‘wrong’ in the eyes of the law or the government it still gets blocked. The reason for this is budget hosts put a few, sometimes 20, sometimes 100s of sites on the same machine (and therefore the same IP address) – if one does something wrong, like host some porn or spam other websites, the IP address takes the blame and all the sites on that IP get blocked. If this happens it is possible to test if it’s an IP address or URL block and ask your host to change IP address, or even give you a private one that is yours alone.

Avoid shared blog providers like Blogspot, WordPress.com, etc. They are blocked.

Avoid Feedburner, while their basic RSS service (counting subscribers and no more) is fine, their email and track-click functionality are blocked (email is not blocked if the server, like gmail.com is outside China, but an email server inside China like sina.com would often block these emails). english.feedsky.com is an alternative that should work in both the West and the East. Or just feed the RSS directly, some people are obsessive about it, some are not.

The one issue which caused a lot of problems last year was a cable cut caused by an earthquake off Taiwan. Most Internet communication is done by cable, at that time China and much of Asia was cut off from the rest of the world, much like Iran has been cut off by the recent cable cuts/turn offs in the Middle East/Mediterranean. More trans-Pacific cables are being completed at the moment, reducing the likelihood of this happening again.I have non-complex sites on Dreamhost which do not have a problem and the speed is acceptable from the mainland. They’re cheap, support is fine, and fully featured.

Technorati Tags: Blog Hosting, Blogging, China, Dreamhost, Fons Tuinstra, Google, Great Firewall, Internet, James Fallows, Mediatemple, Worria, wordpress.com, GFW, WordPress.com, Worria

Trend 1- Complacency by China’s established media

Buoyed by great ad sales from the Olympics, China’s traditional media companies will fail to develop their online media properties. These companies will, however, wake up with a hangover and realize their mistake when the party ends next year, so get ready to sell that Facebook clone to the People’s Daily in 2009!

Trend 2- Growth of the Internet in all ways

Surfers: China’s long march to become the world’s largest online population will move ahead this year. Currently around 210 million people online now (compared with 225 million in the US), Huang predicts 500 million users within five years.
Advertising: Huang predicts China’s online adspend – a topic discussed at length on this blog – will grow to US$1 billion this year. For scale, this compares to US$1.4 billion spent on all advertising combined in Hong Kong.
Continued concentration: Huang sees little shift from the 60 percent of market share of advertising for five sites: Sina, Sohu, QQ, Netease and Alibaba.

Trend 3- Consolidation of the clones

Even China cannot sustain 20 YouTube clones and five Facebook clones. (Huang reckons China has room to sustain two YouTube clones and one Facebook clone). Consolidation will come both through failure and international companies acquiring China sites. Foreign buyers beware, there are quite a failed foreign investments strewn along China’s information highway.

Technorati Tags: Kevin Huang, China, advertising, Pixel Media Asia, Internet trends