Letv cooperates with Netease and CNTV for online video distribution

On February 6, the online video portal Letv.com and the website Netease signed a cooperation agreement to jointly build up an online video platform. The same week, letv announced another cooperation with CCTV’s subsidiary, CNTV

Under the first agreement, the 2 partnbers will co-manage the new platform, with a new domain name: 163.letv.com.

Leshi Internet Information and Technique Corp., Beijing. (szse:300104), Letv.com will be responsible for CDN (content delivery network) distribution and and will provide video-related information, video contents and technological support on video broadcasting. NetEase.com Inc. (NTES), Netease will operate the platform and will also contol the platform’s advertising business. On the cooperative platform 163.letv.com, NetEase will preferentially choose the video contents solely provided by Leshi Internet Information and Technique and recommend them on advantageous positions.

In the agreement, NetEase is asked to totally pay CNY 100 million (15,9 M$) minimum operating revenue to Leshi Internet Information and Technique. The total amount will be split into CNY 30 million, CNY 50 million and CNY 20 million and be paid in three times. The 2 operators will share the operating revenue which will be gerenated by the new platform.

Leshi said that the cooperation with Netease “is an important strategic development planning,  complementary advantages each other. With the aid of netease huge user resources and global fame, leshi can give full play to the economic value of resources in film and television play copyright, which will help to improve the awareness of the leshi, increase the number of users of the leshi web site and browse the web site, even to improve the commercial value and advertising income scale.”

IPTV cooperation with CNTV

At same time, Letv.com announced that it has recently signed a Strategic Cooperation Agreement with CCTV’s subisidiary, CNTV, under which the two will work together on developing the IPTV (set-top-box) market in China. Under the agreement, Letv.com content will be available on the CNTV platform. Furthermore, set-top-box products jointly-developed by the two will abide by Chinese regulations (indicating the products will become commercially available). At present, Letv.com has been only promoting its set-top-box business in Shanghai, Hangzhou, and Changsha, three Chinese cities appointed as trial cities for “three-network convergence”. CNTV is one of seven organizations in China with a national license for IPTV operation.

In the first 3 quarters of 2011, LeTV.com earned overall 133 million yuan of revenues. 

SOURCES: letv, Netease, tmcnet.com (07 & 08/02/12)

ON CSN WEBSITE:

. Tudou and LeTV announce content sourcing joint venture

. China video platform LeTV pays $1 million for online rights to popular Chinese films

. Chinese LeTV announces profitability and heavy investments in film content

ON THE WEB:

. Letv.com and NetEase.com Reached an Agreement

news.investors.com 07/02/12

. Netease to invest RMB100 mln in LeTV.com over future 3 years

tmcnet.com  09/02/12

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