But it’s easy to see why companies take on the challenge. As I describe in an article for GigaOM Pro today (sub req’d), the market indicators are, indeed, mouthwatering. With 400 million Internet users and hundreds of millions more using the mobile web, the market is potentially huge. Revenue from online games and virtual goods alone totaled $3.6 to 3.8 billion in 2009, and is projected to grow 25-30 percent in 2010.

Numbers like that lead many firms to leap headlong into what looks like virgin territory — but they tend to underestimate the challenges. For anyone serious about expanding into China, here are three tips to consider before investing time and energy there.

1. Invest in Experience — The highest priority is to line up advisers with experience in China, from venture investors to lawyers to accountants to, in some instances, market-entry firms. It’s critical to understand the competitive, regulatory, and legal topography of any given industry and sector. If you can’t afford to do the proper market-entry work and due diligence, then you probably can’t afford to operate in China.

2. Prepare for Regulatory Complexity — On a revenue basis, operating in the PRC tends to consume a vastly disproportionate amount of management bandwidth. One reason for this managerial overhead is the government’s penchant for regulating media and communications. Several government bodies share jurisdiction over the Internet, making licensing and permitting a time-consuming and frustrating process. U.S. laws also present hurdles. Public or soon-to-be-public companies need to undergo rigorous Sarbanes-Oxley disclosure requirements as well as increased risk exposure under the Foreign Corrupt Practices Act.

2. Expect Copycats — Chinese developers and engineers are skilled, fast, plentiful and much cheaper than their U.S. counterparts. Imitation in China is more than flattery; it’s expected. However, China does have laws that protect patents and intellectual property — but only if you apply to the relevant government agencies and, in most cases, do it before you’ve entered the market or even engaged in discussions with potential partners.

Foreign firms willing to play by China’s rules have had some success, especially in online gaming, and as I discuss at GigaOM Pro there are strategies that can yield positive results for both companies and investors. But it’s also worth remembering that the U.S. is still the largest Internet market by revenue and will remain so in the foreseeable future. It’s also probably the easiest place to build a business.

Disclosure: The author is an angel investor in Stocktwits, which is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

Photo courtesy of Flickr user Wolfgang Staudt

Stacey will lead the conversation, which will focus on what impact the broadband buildout will have on today’s technology markets, from web-based consumer services to cloud computing services for the enterprise.

The event itself is invite-only, but the live video stream and archive footage will be available on GigaOM Pro, our subscription research service. If you don’t already have a subscription, we’re offering a limited-time 20 percent discount off our already discounted, charter-year price of $79. Simply enter the coupon code BUNKER0204.

We hope you’ll join us!

Which one will you pick?

Not all mobile apps are created equal, and choosing the right platform on which to launch yours can be the key to its success or failure. “The App Developer’s Guide to Choosing a Mobile Platform,” a new report from Colin Gibbs over at GigaOM Pro (sub required), takes a look at the seven leading mobile platforms and suggests key tips for anyone considering where to launch their next app.

As you might expect, Gibbs is sanguine about the opportunity for developers who choose to build for the iPhone. In fact, he suggests that not building for the OS that ignited the craze would be a foolish mistake for anyone hoping to hit it big with a mobile app. But the iPhone isn’t the only opportunity out there, and he carefully weighs the pros and cons of developing for Android, BlackBerry OS, Palm’s webOS, Maemo, Symbian and Windows Mobile as well.

Choosing among the competing platforms requires a clear-eyed assessment of the audience for your app, the technical strengths (and weaknesses) of the platform, how easy it is to monetize your work and the long-term health of the platform. You’ll need to ask the following questions:

• Who is your audience? If you’re trying to reach a mass market consumer audience, the iPhone and Android are the big winners, with the most momentum and broadest reach. But size may not be the most important factor for your app, and other platforms may let you reach large pools of users with more specific needs — business-focused users or mobile users without reliable access to a full-scale computer, for example.
• What technical firepower do you need? If you’re trying to build a complex app that runs in the background while users are on the go, you’ll want to pursue a multitasking platform like Palm’s webOS rather than the iPhone. If slick graphics and an immersive user experience are important, you want to pass up the BlackBerry OS and head for Maemo. Knowing what each platform can deliver today — and what it’s likely to offer in the future — can help eliminate some options.
• Can you make money? Developers have it far better today than on carrier decks of old, but not all platforms offer the same opportunities, with different revenue-sharing models for developers, payment options for users and a wide range of median price points. If you’re looking for scale, consider platforms with large audiences and easy payment options. On the other hand, higher price points and more clicks to sale might not scare away high-powered niche users.
• Is there a future for the platform? The mobile OS landscape is changing, and the fortunes of some are rising while others are falling. Gibbs takes a look at what to watch for in each case, including casting doubt on Microsoft’s ability to freshen Windows Mobile for today’s market and raising red flags for the white-hot spread of Google’s Android.

Gibbs’ report also takes into consideration a number of game-changing developments that will alter the course of mobile apps over the next several years. App users and developers alike should find it of interest.

Photo courtesy Flickr user splodge.

To find out more about why these companies and technologies were selected, check out the full writeup at GigaOM Pro (subscription required).

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The Mobinnova Beam is one of the first netbooks expected in 2010.

Netbooks have been a rip-roaring success since they hit the market a year and a half ago. In 2009 alone, one out of every five PCs sold has reportedly been a netbook, with estimates for the full year of sales hovering at around 35 million. Almost all of the global computer manufacturers, including HP, Dell, ASUS and Acer, have netbooks in their product lines. But if you ask companies like Qualcomm, Freescale and Nvidia, they’d say there’s room for another type of uber-portable, connected, cheap and underpowered computer — the so-called “smartbook.”

A portmanteau of the words smartphone and notebook, the smartbook would combine the best of both devices, namely long battery life and Wi-Fi and 3G connectivity (smartphones) and a laptop-like clamshell design, albeit with a full screen, keyboard and mouse pad (notebook).

While smartbooks will be lighter, cheaper and more connected than netbooks, some core ingredients — such as Intel processors and Microsoft’s operating system — will be missing, which could present usability challenges to mainstream users. Over at GigaOM Pro, I take a look at whether the new crop of devices set to be available starting in early 2010 will be able to successfully penetrate the mainstream consumer market.

Image courtesy of nDevilTV via Flickr.

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While Smith didn’t give us much of an “exit interview,” he did give us some insight into what CBS and other TV networks are looking for in the push to get content onto the web. In reviewing the last three years at CBS Interactive — and a look ahead at the next three — Smith gave his “one man’s opinion” that “the future of TV is video. It doesn’t matter what screen you watch Ghost Whisperer on on Friday, Saturday, or Sunday.” What matters, instead, is that it’s viewed, those views are counted, and the people involved in making and distributing that content get paid. “That’s the next focus of the next few years,” he said. “It has to work for the user, and it has to count.”

CBS has been a high-profile partner in the push for TV Everywhere initiatives, and while Smith pointed out that there are plenty of players — from MVPDs to content companies to the “third-party referees” like Nielsen, not to mention aggregators, streaming partners and other distribution platforms — he stressed that there are critical issues for all the potential implementations of the technology: “The speed is linked to the success of how good this initiative is going to be.”

In part, he points out, that’s because of increasingly sophisticated, easy-to-use tools for acquiring content illegally. He pointed to the increasingly slick, accessible sites from which consumers can download torrents. TV Everywhere initiatives will need to compete with the ease and convenience of these sites. Given this focus on ease and convenience, Om pushed Smith to explain why he’s a Hulu hater.

He quickly denied being a Hulu hater, praising the site’s success and appearance and calling it the best place to watch streaming content online, but stressed that the business model just isn’t there yet. “Before you go putting [your content online] in full episodes, you gotta take it to the audience and make sure they know that it’s on this screen,” he said referring to the need to encourage viewers to watch broadcast television.”For now I have to enforce the big screen, because that’s where the money is.”

Despite the big-screen boosterism, Smith talked a lot about his desire to find ways to exploit the web — IP delivery of video — as a new medium. He pointed to a few examples to describe what he meant, at various points in the discussion, citing Google, fantasy sports and MySpace. MySpace’s return to its music-focused roots garnered his praise: “Discovery [of new music and new bands] is like the fantasy sports of music,” he remarked, noting that discovery tools tend to make consumers more of a fan — a bigger consumer of music, ephemera, concert tickets, merchandise and more. “We’re a media company, so how can we do something like that?” he asked.

He stressed that everything CBS does is aimed at this view of online video, though the discussion was light on examples. Om interrupted to ask the next, obvious question: “So, if its so great, why are you leaving?”

Smith’s response was that he’s not fully leaving CBS. “CBS is my first client,” he said. “[But I'm convinced] I can do more from outside than I can from inside at this point.” He noted the broad team that is now in place at CBS Interactive and CBS’ position as a top 10 Internet site in terms of worldwide visitors. “The 9 above us are all pure-play Internet companies. Nos. 11, 12, 13, 15, 22, 28 are Comcast, NBC, Viacom, Disney, the New York Times.” The challenge is no longer attracting an audience — it’s about monetizing that audience and getting paid.

Key to achieving that goal, he repeated frequently, is metrics. “Now that the web is growing up, it’s as much about target-ability and ROI as it is about mass distribution,” he said. Fortunately, “the beauty of the web is it’s an infinitely quantifiable new medium. We have to translate that into reach and frequency.” Whether through super-syndication online, TV Everywhere initiatives or other distribution strategies, Smith said CBS’ goal is the same: “Make sure your core content gets seen, gets counted, and gets paid for.”

The ultimate goal? “One day soon, I hope to be able to deliver to [Comcast Interactive Media's] Amy Bance one stream. She puts it on the air, online, on demand, wherever.” Describing ad integration in all those distribution formats, he said the ideal would be to see integrated ad delivery across platforms  — online ads for Diet Coke, say, paired with a mobile ad for 99-cent sodas at the corner store nearby. “That’s what we all want, even if we have different ways to get there,” he said.

That’s where the content companies want to get, but where does Smith want to go, come Jan. 1, when he leaves CBS Interactive?  “I might be an investment banker for the rest of my life,” he said. He denied raising a fund, and suggested that there’s a need for bankers in the Valley. “There’s a whole generation of entrepreneurs out there…that don’t fully appreciate what a banker is. That’s a bad word for people.” But for Smith, there’s a need for bankers who understand and are passionate about the technology. “Bankers put two things together and try to make ‘em work.”

Related research: TV Everywhere (subscription required)

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• Report: Monetizing Digital Content

Unlike the old days, fantasy football is no longer a game of pen and paper and small groups of friends. The Internet has made fantasy football a much bigger industry, and much of that growth has been driven through innovation online (and vice versa).

“If you think about it, fantasy was the first social network,” Goldberg remarked. You had 8-12 people sending each other messages, posting to message boards, telling each other what they were about to do. That experience translates very well into a big digital business for NFL.com. Why? “Fantasy is the base of community on our site,” she said.

As most web publishers know, building community is key to many of the strategies that monetize content online. Because fantasy requires greater engagement with a broad range of teams, games and stats, players develop a fuller understanding of the game — which makes them interested in more content. Sure, NFL.com offers fantasy platforms, both free as well as a detailed paid game — but also information such as video highlights, statistics, etc. NFL.com is the only place viewers can find highlights of every game in the league. Fantasy players consume a huge amount of that content. A recent video of Brett Favre’s touchdown was NFL.com’s most watched video ever, according to Goldberg.

For the National Football League, that community development extends beyond the online space as well. Fantasy engagement has helped expand the audience for all of the NFL’s content. “You find yourself watching games that you otherwise didn’t care about,” Goldberg noted. Instead of watching a game on Sunday or Monday or Thursday, you start watching all the games that happen. You have to watch highlights on Monday, waiver wire on Tuesday, trading, and so on. That obsessiveness has extended football from the Sunday-Monday window to the entire week. It has also helped extend the season across the entire 12 months of the year — kicking up viewer interest in combine, draft, and free agency in March — all phases of the football schedule.

It also extends player interest to other platforms: Godlberg notes that NFL.com now offer mobile apps and web sites and a special issue magazine each year. Hard-core fantasy players are likely to be subscribers to DirecTV packages and other subscription products from NFL.com as well — regional content from across the country, full DVR functionality online to watch games on-demand, and more.”We see it going across all of our media assets,” Goldberg noted.

While the week may have been extended, fantasy has also transformed Sunday into a two- or three-screen game for fans. You can go to what we call our game center and it’s essentially a simulation of the game — watching 3-D drive charts, tracking statistics and more. On Sunday, visitors spend upwards of an hour on NFL.com.

Goldberg also name three big opportunities for fantasy in the future:

• Widgets: You watch the main game, run down on the side, and see what’s going on in your league. Lots of integration opportunities for online and TV content.
• Game simulation: Goldberg said NFL is working on simulation tools that take “something like the Madden engine” and recreate a game simulation based on your league, show how you earned your points — creating a video game-like environment for bringing fantasy games to life.
• Social networking: Is there an opportunity to grow the small social communities that emerge around fantasy? Can we combine leagues and bring them into competition with each other? Social networking is a big opportunity for the NFL, Goldberg said, because it drives site engagement, which will also help us with advertising and revenue opportunities.

Related article: “Fantasy Football’s Very Real Digital Business” (subscription required)

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• In Round One, Ethan Applen, director of technology and business strategy for Warner Bros., talked about copyright enforcement as video content shifts online. While the DVD business was threatened by the emergence of digital piracy, he said that online distribution is even more vulnerable. To approach the problem, he said, the first line of defense is to make illegal consumption of content online more difficult. “That’s what we need to tackle,” he added (subscription required).

• In Round Two, Liz Gannes brought Michael Seibel, CEO of Justin.TV, and Yangbin Wang, from Vobile, up to discuss rights issues specific to real-time/live-streaming video content (subscription required). The two companies are partnering to automate unauthorized content detection and takedown. Ryan has the full scoop at NewTeeVee.

• In Round Three, Betsy Zedek, content protection counsel, Fox Group Legal, fielded questions about the future of copyright law in the digital age (sub. required), and the audience discussed the sticky issue of fair use. Paul Sweeting takes a deeper look at these issues at GigaOM Pro.

• The final section of the event was an open discussion among the audience (sub. required), which touched on the challenges posed by BitTorrent (Ryan recaps this discussion over at NewTeeVee), opportunities to monetize online content in new ways, and the future of medium-budget movies.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

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• In Round One, Ethan Applen, director of technology and business strategy for Warner Bros., talked about copyright enforcement as video content shifts online. While the DVD business was threatened by the emergence of digital piracy, he said that online distribution is even more vulnerable. To approach the problem, he said, the first line of defense is to make illegal consumption of content online more difficult. “That’s what we need to tackle,” he added (subscription required).

• In Round Two, Liz Gannes brought Michael Seibel, CEO of Justin.TV, and Yangbin Wang, from Vobile, up to discuss rights issues specific to real-time/live-streaming video content (subscription required). The two companies are partnering to automate unauthorized content detection and takedown. Ryan has the full scoop at NewTeeVee.

• In Round Three, Betsy Zedek, content protection counsel, Fox Group Legal, fielded questions about the future of copyright law in the digital age (sub. required), and the audience discussed the sticky issue of fair use. Paul Sweeting takes a deeper look at these issues at GigaOM Pro.

• The final section of the event was an open discussion among the audience (sub. required), which touched on the challenges posed by BitTorrent (Ryan recaps this discussion over at NewTeeVee), opportunities to monetize online content in new ways, and the future of medium-budget movies.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Live Event Coverage: Video Rights Roundtable
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