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PE Interview With Mobile Blogging Company PDX.cn
Tags: Internet, Marcus Xiang, PDX, SP, WVAS, blog,
Launched in 2004, PDX.cn was one of China's first mobile blog service providers. The company operates an online web portal and a mobile WAP site under the PDX.cn domain name. PDX.cn's mobile blogging (sometimes referred to as moblogging) community has two million registered users, including 100,000 mobile bloggers.
PDX.cn CEO Marcus Xiang, from Wenzhou, spoke with Pacific Epoch about the company's development, the search for a mobile blogging business model and the bottlenecks holding back the development of China's mobile blogging industry.
Pacific Epoch: Can you give us a brief introduction to PDX's service?
Marcus Xiang: The company's only business is mobile blogging. Many people claim that mobile blogging is the killer 3G application. However, we have found that there is still a long way to go before mobile blogging really becomes a game-changing service, though we are very confident in the potential of mobile blogging. Since mobile blogging is a multi-platform application, combining SMS, WAP, mobile email, WAP Push, IVR and audio/video streaming, there are many possible combinations for the development of mobile blog services.
PE: Have Chinese mobile operators started to pay attention the development of mobile blogging?
Xiang: Yes. China Mobile has been studying the mobile blog business for six months and has invited consulting companies to research the business on their behalf. China Mobile has consulted us and other mobile blog companies on several occasions.
PE: When did PDX.cn launch its mobile blog site? How many users does PDX.cn have?
Xiang: Our site was the first mobile blog site to be launched in China when we opened it in June 2004. We plan to develop PDX.cn as a mobile blog social networking community. At present, we have two million registered users, including 100,000 mobile bloggers. The content on the web and WAP versions of our site (www.pdx.cn & wap.pdx.cn) is identical. Content posted on the website is available on the WAP site and vice versa. Our WAP site alone has two million users. Our website actually gets less traffic than our WAP site.
PE: Who are the most active bloggers on PDX.cn?
Xiang: The most active mobile bloggers are people with ample spare time who want to express themselves, including students, office workers and housewives.
PE: How many mobile blog postings have been uploaded to PDX.cn so far? What is the rate of new postings?
Xiang: More than one million mobile blog postings have been uploaded to our portal so far. However, the number of new MMS mobile blog postings [which are the majority of postings, .ed] have decreased a great deal since China Mobile canceled its MMS monthly plan. The current price of 0.5 Yuan per MMS is too expensive for most people. We are negotiating with China Mobile to offer a monthly plan again, such as five Yuan per month for 50 MMS or two Yuan per month for 20 MMS.
PE: Do you think a there is a business model in use in a foreign market that is suitable for the Chinese mobile blog market?
Xiang: No. Mmobile blog business models cannot be imitated because the business model is so closely determined by local mobile operators' policies, MMS pricing, penetration of WAP and handset camera technology and local interest in self-expression. We have to find a suitable mobile blog business model for China.
PE: Does PDX.cn charge service fees to its users? What is the company's business model?
Xiang: No. I think mobile blog should be free to users, since mobile bloggers are contributing content, not consuming it. We can make money via other channels. I believe mobile blog has three aspects: as a media source, as a community and as an application. I think our primary opportunity for monetization is to charge for premium community features. We can also sell high-quality content to an online audience or to traditional media. We cannot charge mobile bloggers for using our application.
PE: When do you think PDX.cn can start to make money?
Xiang: We were generating revenue from the website for six months after the launch. However, when China Mobile forbade service providers (SP) from advertising on free WAP sites like ours, we lost a potential revenue source that had already generated interest. We have spent several months negotiating with other advertisers to advertise on our WAP site, including overseas study agents, student visa application agents and McDonald's. Some advertisement agents that work with new media, including mobile media, have also contacted us recently. In the future we will cooperate with them instead of looking for advertisers ourselves.
PE: How have your users responded to the appearance of advertising on your WAP site?
Xiang: They are accepting of it as long as we do not abuse the WAP site with excessive advertising. We cannot release too many advertisements or ads of low quality.
PE: Have you considered cooperating with handset manufacturers?
Xiang: Yes. We are negotiating with some manufacturers but I can not reveal any details currently. Possible options for cooperation include embedding our platform in handsets, developing communities in cooperation with handset manufacturers or collaborating on promotions.
PE: Can you introduce your management team and staff?
Xiang: Our management team consists of three people who have worked together for nearly ten years. This team established an Internet technology consulting firm which was sold to Chinadotcom in 2000. Within the team, I am responsible for the company's business strategy, strategic partnerships, and public relations. The other team members are responsible for operations and technology, respectively. We also employ a staff of four.
PE: What's your company's shareholder structure? Has the company received any external investment?
Xiang: The company has been supported by our own financing from the beginning and has never received outside investment. We have been in contact with some investors but have found it requires a lot of energy to find a good investor. Since we do not have enough people to handle the required due diligence for taking on an investor, we prefer to wait for the money to come to find us rather than actively pursuing investment ourselves. When a new industry becomes mature, venture capitals will invest the top three companies in the industry. Therefore, our task is to be the top mobile blog company and wait for the industry to mature.
PE: Which mobile blog services do you consider your major competitors?
Xiang: I think there are four leading mobile blog service providers now: Sina, Blogcn, Bokee and PDX.cn.
PE: How many handsets in China presently support mobile blog services?
Xiang: MMS and WAP functions are the most important for mobile blog service. Although I don't know how many handsets have MMS and WAP functions [in China], I think that there is already a large number of these types of handsets in circulation. The problem is getting the owners of these handsets to use their phones' MMS and WAP functions. If 50 to 75 percent of these handset owners used the functions, that user base would be enough to support the mobile blog industry. However, given China Mobile and China Unicom's existing pricing strategy for MMS and WAP services, Chinese consumers are afraid to use MMS and WAP for fear of spending too much money. Therefore, MMS and WAP pricing is holding back the development of the market. Once Chinese consumers can afford to use MMS and WAP every day in the same way that they use SMS now, the industry will become mature. We should prepare for this development and be the first company to exploit this market when it is mature.
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