CyberWorks Considers Fees for Entertainment
Bloomberg News Bloomberg News
Friday, March 30, 2001
HONG KONG The chairman of Pacific Century CyberWorks Ltd., Richard Li, said Thursday that the company might ask Web site users to pay for entertainment because advertising and online shopping have not been generating enough revenue.
CyberWorks said in September it had spent $130 million on its Network of the World, or NOW, an Internet site providing games, music and sports programming. So far, there has been little sign of any financial return.
Finding a way of making money from the Internet is central to CyberWorks' growth because the value of its investments in other information technology companies has fallen and profit from its local and long-distance phone services is stagnant.
"In Hong Kong, we will reveal to you a strategy that is heavily dependent on subscription," Mr. Li told analysts. "It would not be completely dependent on advertising, whether traditional or Internet."
In other parts of Asia, Mr. Li said broadband multimedia services such as NOW would depend on non-Internet advertising. NOW also has a satellite television service.
Mr. Li said the company would make public within 90 days a plan to return its Internet services division to profit this year on a 50 percent increase in sales. He predicted the company's Web consumer services unit would break even in four years or less.
"The previous model relies on advertising and e-commerce, now they're back to a pay-TV model," said Edison Lee, head of Asian telecom research at CLSA Ltd.
Pacific Century posted a $886 million loss last year, largely because of a $667 million write-down in the value of its Internet investments. The company also paid $302 million in net interest charges, mainly related to its purchase of Cable Wireless HKT Ltd., Hong Kong's largest phone company.
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