A consortium that includes New World Development has been formed to study the establishment of Hong Kong's first on-line video service. The consortium will be owned by New World subsidiary Chinaland (25 per cent), Hanny Holdings (25 per cent), Hong Kong's largest video distributor Mei Ah International (30 per cent), and one of the territory's largest film-makers, Win's Movie Investments (20 per cent). Analysts said the shareholders in the new group would use existing businesses to promote and develop the project. New World would be able to run the service through its residential apartment blocks while Hanny Holdings, in which Li Ka-shing is a major shareholder, could channel the service to Cheung Kong properties, controlled by Mr Li. The move offers the potential of a large challenge to the Hongkong Telecom's video-on-demand (VOD) service, which will be launched in July, and Wharf Cable's home video pay-TV service. A digital server would be installed in each selected building, according to a statement issued by Mei Ah. Analysts said the service was similar to the 'close-circuit' pay-TV available in hotels, which could only be viewed by hotel occupants. They said the consortium might not need a licence from the Government if the service was to be provided in this form. Mei Ah did not state whether the service needed to be licensed. It claimed the on-line-video rental system would be the most efficient, handy and inexpensive way to enjoy movies at home. Each server can be programmed to suit the various demographics and tastes of each residential building where the server is located. Unlike the pay-TV provided by Wharf Cable, viewers would not need to watch according to schedule. They could use the service at any time, within a maximum waiting time of 10 minutes - a feature similar to Hongkong Telecom's VOD.