Joost, Tom Group launch China JV

Tom Group claims online video license

BEIJING -- Internet television service Joost and Chinese media conglomerate Tom Group launched a joint venture on Wednesday to court viewers in China, even as the government tightens restrictions on such services.

The venture will offer Chinese-language programming over the Internet and has launched the site at joost.tom.com with 16,000 hours of content licensed from local creators including CCTV, China Record Corp, BTV Media, CAV Warner Home Entertainment and Huayi Brothers Media Group.

Set up by Kazaa and Skype founders Janus Friis and Niklas Zennstrom, Joost burst onto the scene in the United States in 2007 as a high-profile free video service. The deal aims to help it tap the world's biggest Internet market.

Joost attracted the attention of big media companies including Viacom, which licensed some of its shows to the service while suing Google's YouTube for copyright infringement.

Tom Group's majority shareholder, Hong Kong tycoon Li Ka-shing, owns a minority stake in Joost.

Online advertisement rates for Tom Group have risen by 30% since the fourth quarter of 2007, partly due to increased marketing spending by companies ahead of the Olympic Games, Ken Yeung, chief executive officer of TOM Group, said in Beijing.

But rates are likely to drop back after the Aug. 8-24 games.

"During the Olympics, normally there's a rush of advertisement dollars," he said. "We expect probably they'll be back to normal (after the Olympics), just as a lot of analysts and people in the industry are forecasting."

The launch comes months after China ordered dozens of Web video services to halt in March.

By June, Chinese authorities had issued licenses to 247 companies, including Tom Online. A Joost spokeswoman said the joint venture would also be allowed to operate in China.

"So far we haven't been really affected by that," said Yeung. "We've been in Chinese Internet industry for a long time... We have a lot of understanding about the regulation side of things."

As of mid-June when the licenses were issued, Tudou.com, one of China's most popular video sites, whose operations were suspended, was not issued a license.

China aimed to curb online content, banning violent, pornographic and pirated material, according to a government statement in February. YouTube, for instance, is often blocked during high-level political events in China.

"Joost has always been a global service, and our partnership with Tom is a perfect example of the regionalized offerings we are able to bring to the market," Joost Chief Executive Mike Volpi said in a statement.
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