TVnGO Ltd., which has developed a system for displaying Internet content on television screens, has signed a large contract in China. The company will integrate its system with digital set-top boxes distributed by BTTV, a cable television company in the Xinjiang Province in northwest China with one million subscribers. The contract will reportedly generate tens of millions of dollars over the next five years.
BTTV is converting its analog set-top boxes to digital, for which TVnGO will be the chief contractor under the contract. 300,000 set-top boxes will be converted in the first stage over the next five years, of which 100,000 will have TVnGO’s complete system installed, and the rest will have part of the system.
TVnGo is a joint Israeli-Taiwanese venture founded by CEO Kobi Merlin and David Chang. The company has developed a system that easily displays Internet information and services on television screens. The company’s business model includes the distribution of hardware and software to end customers for free with revenue coming from advertising. In Israel, Icon TV Media Ltd. (TASE:ICTV), which markets TVnGO in Israel, has been conducting a pilot for several months at hundreds of homes in Ra’anana.
TVnGO estimates revenue from sales of advertising will total $7-8 per subscriber per month. Over a period of several years, when the number of installations of the company’s system reaches 300,000, revenue is predicted to reach almost $30 million a year.
Merlin says the contract with BTTV is global marketing breakthrough for the company. “The possibility of installing our system in the rapidly growing Chinese market will help us penetrate other countries.”
Published by Globes [online], Israel business news - www.globes.co.il - on October 5, 2006
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