ASIA On-Line, one of Hong Kong's largest Internet service providers, is introducing on-line shopping and a multi-lingual newspaper and magazine database. This new collection of services tentatively called 'Asia On-Line Interactive' is part of the ISP's retooling into a proprietary network along the lines of CompuServe or Prodigy. Asia On-Line plans to become an Asia-Pacific region-wide on-line powerhouse, with 200,000 subscribers by the middle of next year, and 500,000 by the middle of 1998. Asia On-Line, which is beta-testing the Interactive service, will have initial services ready by late next month. Asia On-Line says it will be the first Hong Kong ISP to provide true on-line retailing. Hongkong Telecom's Interactive Multimedia Services (IMS) subsidiary, which will offer video-on-demand (VOD) also plans to offer interactive shopping and local Hong Kong content. Interactive services would be open to all Asia On-Line subscribers on a pay-per-view or pay-on-demand basis, said Michael Dunn, Asia On-Line's chief operating officer. With these new offerings, Asia On-Line is bucking the trend among large semi-private on-line services to put up content on the World-Wide Web for free to non-subscribers. Mr Dunn argues that companies producing and offering high-quality Internet content will inevitably have to charge fees. 'People will not continue to offer content on the Internet for free,' Mr Dunn said. 'There's no big return and companies can't afford it.' Regular Asia On-Line subscribers will be able to continue to write e-mail and access the Internet and the World-Wide Web at a cost competitive to other ISPs. All users, with a special 'front-end' software only available for PCs, will also be able to search and download articles from magazine and newspaper databases in English, Chinese, Korean and Japanese, browse classified ads, buy movie and event tickets and do regular shopping on-line. Mr Dunn predicted that downloaded articles could cost up to US$2 per article. Asia On-Line will rely on PGP - the Pretty Good Privacy data encryption scheme - for customers to safely send credit card numbers electronically when paying for merchandise. Many Internet experts predict electronic commerce, including banking and shopping, will make slow progress this year. 'We don't expect people to change their buying habits overnight,' said Mr Dunn. But he predicted that Interactive services would bring in US$1 million a month within two years.