Beijing e-License – Principal Business

The Group’s member company, Beijing e-License Technology Company Limited (“Beijing e-License”) was established in October 2007 as a 50-50 joint venture company between the subsidiary of the Group, Far Glory Limited and e-License Inc. (Japan). Beijing e-License is the only joint venture company of e-License Inc. (Japan) in the Greater China region for the localization of this digital copyrights management system, together with its full technical support.

Beijing e-License entered into a ten-year full technical collaboration agreement with CAVCA. Leveraging on China’s national policy of “3-Network Convergence (the telecommunication, broadcast TV and the Internet)” (三網融合), the parties will work together to provide e-License digital copyrights management system and services to major service providers of the fixed and wireless networks (i.e. the telecommunication and the Internet) and other digital media service providers in China. Beijing e-License will fully cooperate with CAVCA, telecommunication provider A in China, a major Internet portal in China and major record labels nationwide in the first quarter of 2010.

1.

e-License digital copyrights management system
Will commence provision of digital copyrights management system for the telecommunication and the Internet in the first quarter of 2010 nationwide; will further extend to in-car navigation system, BGM and Karaoke (Web-based), etc.
 
2.

Digital content licensing / investment
Provision of licensed/invested digital contents in the digital domains.


e-License digital copyrights management system – business development strategies

(i) Telecommunication
  • Entered into a tripartite agreement with CAVCA and telecommunication provider A in China for the provision of e-License digital copyrights management system and allocation of copyrights income on the central music platform of the telecommunication provider.
  • Will commence full operation nationwide in the first quarter< of 2010.
  • Using the above operation model as a reference, in final stage of negotiation with telecommunication provider B in China.
(ii) Internet
  • Will collaborate with a major Internet portal in China for the provision of information, music, animation and comics, Japanese audio and video contents and comprehensive e-License digital copyrights management system and will extend its services to other major Internet portals.
  • Cooperate with CAVCA and major record labels to provide e-License digital copyrights management system nationwide on the Internet.
(iii) In-car navigation system
  • In-car navigation system is a revolutionary service which integrates with GPS, 3G and the Internet to provide users interactive information such as navigation, entertainment, communication, e-commerce and mobile KTV anytime and anywhere.
  • The navigation system is jointly developed by Toyota Group and e-License Inc. (Japan), targets high-ended vehicles of Toyota and Japanese automakers in the first stage and will extend to other high-ended brands in the later stage.
  • Provision of an integrated copyrights protected music, entertainment contents and other value-added services and using e-License digital copyrights management system for allocation of copyrights income.
(iv) Other digital media to be developed
  • To provide digital copyrights management system and licensed contents for BGM, Internet bar and Karaoke (Web-based) via fixed line and broadband network and set the industry standard for digital copyrights protection nationwide.
Note: The State Council (國務院) issued “The temporary measure for payment for broadcasting by radio and television stations" in November 2009. From 2010 onwards, radio and television stations are required to pay copyrights owners based on the advertising income or length of broadcasted music. This indicates the beginning of public broadcasting fee era in China.

Digital content licensing / investment

(1) Music
  • Collaborate with CAVCA for the establishment of a national music and video database.
  • Authorization from record labels for music contents in selected areas:
    • avex: Asia’s largest record label, apart from Japan’s popular idols Ai Otsuka (大塚愛), Ayumi Hamasaki (濱崎步), its Asia Pacific famous artists include Shin Band (信樂團), AlanDawa Dolma (阿蘭), Joseph Cheng (鄭元暢), Ariel Lin (林依晨), etc. Collaborate with avex to develop an international music and video database (a-WORCS).
    • Warner/Chappell: the only wholly owned subsidiary of Warner Music in China. Warner Music is one of the world’s top 4 record labels, in addition to those international superstars, its Asia’s famous artists include Jolin Tsai (蔡依林), Vivian Hsu (徐若瑄), Khalil Fong (方大同), etc.
    • AsiaMuse (亞神音樂): a major record label in Taiwan focusing on Chinese pop music. It has business operations across China, Taiwan and Japan. Famous artists include Tan Kheng Seong (阿牛), Sky Wu (伍思凱), Tanya Chua (蔡健雅), etc.
    • Wind Music (風潮音樂): The largest acoustics record label in Taiwan. Some of its major publications include folk music, religious music and music for therapy.
(2) Multimedia / Digital Video Content
  • The sole agent of Japanese popular multi-media drama series “Revolution station 5 + 25”* (「革命 station 5+25」) in China, Hong Kong, Taiwan, Macau and in negotiation with major multi-media corporations on broadcasting plans.
* “ Revolution station 5 +25” is filmed by the same production team of “ Crying Out Love in the Centre of the World”(「 在世界中心呼喚愛」) and “ 20th Century Boys” (「 二十世紀少年」), including its director, Yukihiko Tsutsumi (堤幸彥).

(3) Japanese Content Portal
  • In the final negotiation stage with China Multimedia Mobile Broadcasting (“CMMB”,中廣衛星移動廣播有限公司)* on the introduction of audio and video contents from Japan and Taiwan.
* CMMB is a wholly owned subsidiary of the State Administration of Radio, Film and Television (廣電總局), responsible for the investment, business operation and system design of national mobile satellite mobile multimedia broadcasting projects, development of satellite broadcasting related technology and signal transmission services.

(4) The Japanese music portal for one of the major Internet portals in China
  • Entered into a cooperation agreement with one of the major Internet portals in China on the establishment of the first Japanese music portal in China; will further develop into a broad-range Japanese content portal that includes animation and comics, drama series, games and advertisement, etc.