Media maven sets digital drive

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[hong kong] Gutsy Hong Kong media entrepreneur Richard Li is challenging the might of Western media giants such as Time Warner and News Corp. to dominate digital media.

On July 4 in London, he launched Network of the World, a converged broadband Internet and TV portal ( billed as an "interactive version of CNN." Content will be delivered by satellite and cable systems and dial-up Internet service providers through pricey $300 set-top TV boxes, as well as wireless devices, including wireless application protocol. At the moment, only the handful of worldwide consumers with a broadband Internet connection will derive any real benefit, such as streaming video.

The $1.5 billion investment is the flagship of Mr. Li's growing digital media empire, Pacific Century CyberWorks, already the largest Internet company in Asia outside Japan.

But NOW is by no means the first foray into mass media by Mr. Li, the company's 33-year-old founder and chairman, who is known in his native Hong Kong as the "golden bachelor" and "Superman Junior," a reference to his father Li Ka-shing, one of the world's richest businessmen.

After graduating from Stanford University and the London Business School, he returned to Hong Kong in 1990 and founded Star TV, a Hong Kong-based regional satellite broadcaster which he sold to Rupert Murdoch for a total of $950 million in two separate deals in 1993 and 1995.


He is a legend in Hong Kong, where even the territory's super-rich raised their eyebrows when he hosted a private Whitney Houston concert on New Year's Eve for his millennium party.

In February, his nascent Internet company made headlines again with a bold $36 billion takeover of Cable & Wireless HKT, the dominant Hong Kong telecom player Mr. Li coveted for its broadband network.

The service could potentially reach AsiaSat3's 130 million Asian satellite TV subscribers stretching from the Middle East to Australia, providing local cable operators agree to carry the programming. But widespread global distribution depends on lower tariffs for Internet connections and growth of broadband services.

Only two pocket-size Asian markets, Singapore and Taiwan, have built broadband networks, while Hong Kong has about 100,000 broadband households.

In North America, meanwhile, Jupiter Communications estimates 13.4 million homes will have access to broadband content through either cable modems or DSL networks by 2003, up from just 3.8 million this year.

In Europe, Forrester Research says, 21.3 million homes in the U.K., France, Germany, the Netherlands and Sweden will be broadband-enabled, compared with 11.2 million this year.

NOW's revenue will depend on advertising initially, but Pacific Century also hopes to generate fees from e-commerce transacted through its sites and subscription fees--difficult to collect in countries like India and China, key markets for the company.


Content is another dilemma. NOW offers just 4 hours of original content daily--little more than English-language pop culture with a few extras like free e-mail and instant messaging.

So the Internet company has a long way to go before challenging global media like CNN International.

"CNN is the market leader in global news, and we fully expect to maintain leadership across new media. CNN has an aggressive strategy for delivering news and information on broadband, WAP and of course on the Web," said Hong Kong-based Bill Baggitt, CNN managing editor for Asia/Pacific.

Pacific Century plans an 18-month rollout to expand both its content and reach. The goal is to enter millions of households worldwide over the next few years, as well as adding Chinese-, Hindi-and Japanese-language services.

"We have created a new medium, and we will build it one step at a time," said Michael Johnson, Hong Kong-based executive creative director of Pacific Century and NOW's driving force. "We've been working for two years to take the lead in converged TV-Web content."

The broadband service was conceived in 1998 when Pacific Century Group formed a joint venture with Intel Corp., designer of the set-top boxes. Production studios and satellite delivery systems were established in Hong Kong in late 1999, but content is developed in a 75,000-square-foot digital facility in London.

Pacific Century's rivals are not idle. AOL and Time Warner are looking for broadband synergies, and News Corp.'s Star TV in Hong Kong is anxiously sorting out its own convergence strategy since ending a 7-month-old interactive TV joint venture with Cable & Wireless HKT in June.

Star TV's association with HKT was doomed by all accounts when Mr. Li upstaged Rupert Murdoch by beating Singapore Telecommunications, partly backed by Mr. Murdoch, in the race to buy HKT.

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