Tom Group, a media firm controlled by Li Ka-shing, yesterday announced a joint venture with Netherlands-based internet television service provider Joost to offer online video on the mainland with content from state-owned China Central Television and China Record Corp. Tom Group will hold 51 per cent of the venture, while Joost will hold the remaining 49 per cent. The companies are working on a profit-sharing business model. Joost last year secured US$45 million in funding from five investors including the Li Ka Shing Foundation and Sequoia Capital, Index Ventures and Viacom. Tom and Joost launched a co-branded online video portal on the mainland yesterday with simplified Chinese interface. It provides about 16,000 hours of Chinese programmes including content from CCTV's science and education studio, China Record and Beijing Television. Online video is one of the fastest-growing areas in the mainland internet market. Research firm iResearch estimates there will be 390 million users in 2010, from 170 million by the end of last year. But service providers have to cope with the government's stricter regulations, out early this year, which require all internet video portals to get a licence from the State Administration for Radio, Film and Television. 'We don't have a licensing issue,' Tom Group chief executive Ken Yeung said in a press conference in Beijing yesterday. 'We hold the online video licence already.' Sources said that because the new online video service was riding on Tom's Joost-based portal, the venture should not face the licensing hurdle. Under the joint-venture agreement, Tom will be responsible for securing advertising for the localised version of Joost, while Joost will provide the underlying technology. The Tom-Joost service focuses on the high-quality online video, which is licensed by the owners. The joint venture will explore advertising opportunities surrounding the video content. Shares of Tom Group yesterday remained flat at 44 HK cents. Web watchers Video is one of the fastest-growing areas in the mainland market By 2010, the number of online video users is set to rise from 170m to: 390m
