Thursday, April 28, 2005

Chinese Digital Download Service Profits from Piracy

I've got no idea what proposed download prices are in relation to an average Chinese income, but digital download service 99Bill.com aims at taking 50% of the revenue:
With 99Bill.com's service, DVD-quality movies will be made available for Chinese users to download at a price between 2 renminbi to 10 renminbi, with the proceeds split evenly between 99Bill.com and the content providers, he said. [1 renmibi = US$0,12 - RL].

That may seem like a steep cut for content providers to give up, but under the current system most -- if not all -- of their profits are going to the pirates instead of the content providers. In this context, giving up 50 percent of the revenue in exchange for the ability to generate a profit may seem reasonable. "You're still going to make a lot of money," (99Bill.com's) Kwan said.
Now, either piracy here isn't as rampant as in China and the steel on the entertainment industry's throat isn't that cold to lower its margins. Or this Kwan man is one hell of a negotiator. But then he hasn't negotiated with Hollywood, yet.

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