The central government has announced it will shut down analogue television signals in 33 major cities by 2015, and replace these with digital broadcasts on more than 120 channels. But analysts say officials will have to do more than just install digital technology if it is to achieve this ambitious target. Under the plan announced by the State Administration of Radio, Film and Television (SARFT) earlier this month, residents in major cities will be able to watch digital broadcasts of the 2008 Olympics in Beijing. The authorities had previously designated the 33 cities as trial sites for digital cable television, with the goal of signing up at least 30 million subscribers by 2005. 'It's not so much of a technical problem,' said David Wolf, a media specialist with Burson-Marsteller in Beijing, adding the target is 'certainly feasible.' However, Mr Wolf said good programming was needed to persuade Chinese viewers to pay money for decoders and monthly subscription fees, which would in turn attract investors. He pointed out that few TV sets in China were built to receive direct digital signals, but 'bare bones' set-top decoders sold for under US$100. Terence Tsang, president of Digital Media, said the government would either have to give away set-top boxes or delay pay TV. 'It's an option that a lot of other markets have taken,' he said. 'You can ask people to put up the money to buy or rent a box, or you can give them away.' Mr Wolf said the cost would be prohibitive for the government. 'Multiply 120 million set-top boxes by US$100 and you are talking of the order of 100 billion yuan [HK$94 billion],' says Mr Wolf. 'Given that their space programme costs that much, it's hard to make a case for that kind of government expenditure.' Some pioneer companies have offered special deals to attract subscribers. Shanghai Interactive Television, part of the state-owned Shanghai Media Group, offered customers a two-year subscription for 888 yuan in August with the set-top box thrown in for free. When the service was first launched, the company was charging 50 yuan a month, more than three times the 12-15 yuan that families are paying now for cable TV, while decoders cost between 950 yuan and 1,400 yuan. Analysts agree that unless programmers can beef up the quality of their offerings, viewers will be reluctant to take the plunge. 'You can buy a decoder for about US$100,' said Mr Tsang, 'but why should I buy one if there's no content?' Right now, said Mr Wolf, TV stations were not doing a good job of providing quality programming. 'What many channels offer now is a jumble of content,' he said. 'They don't have a service mentality. They think 'if we broadcast what we want, people will watch it'. It's supply-side driven rather than demand-side.' Mr Tsang said his company was building up a digital library of imported programming and had already assembled about 8,000 hours of content in anticipation of digital TV taking off. But for the investment to be feasible, he said, consumers must be willing to spend more than 12 yuan a month on the programme subscriptions. Even then, experts estimate such payments would probably only keep one channel going for a year. 'One channel alone broadcasts over 8,000 hours of content a year,' said Mr Wolf. 'Even if you assume programmes are being repeated four times a day, that's still not a lot of content.' Private entrepreneurs are keen to invest, but, as with the internet, they are not sure where revenue can be generated. 'Everyone knows they have to move in this direction and everyone is trying to come up with a way to make the business case,' said Mr Wolf. 'But it's been slow because no one knows yet if they're going to get their money back. Everyone knows there's a pot at the end of the rainbow, but no one knows where the rainbow is.' The industry is looking at interactivity as a possible money earner, for example, in pay-for-view movies or other services which require the viewer to communicate with providers or advertisers. Noting that China had the second-highest number of digital cinemas in the world after the US, Mr Tsang argued that beaming encrypted digital films directly to movie theatres around the country would save money and prevent the piracy that occurred with the distribution of disks. Industry players are upset because the regulator has been slow to set policy. 'No one knows for sure what's happening because SARFT hasn't really come up with a plan,' said an industry source. 'You don't know what you can believe.' 'SARFT still owns the whole system,' he said. 'They want to be the master and the regulator.' He said the regulatory body was using the need to monitor content to justify its unique role in the sector. 'I call it hiding behind the ideology,' he says. 'In reality, they want the whole pie for themselves.' The analyst said that the regulatory body was bogged down in trying to decide what to do. 'The fact is that there are factions in SARFT; each has its own ideas and there's no cohesion.'