GigaMedia to focus on content, lower cost


William C. Pao, The China Post

GigaMedia, one of Taiwan’s largest broadband Internet service providers, plans to break even on cash flow around the middle of next year by concentrating on content ranging from e-learning to entertainment, said the company’s vice president, Wayne Chen, yesterday. The company, the first to be listed on the Nasdaq where its stock dropped sharply in recent months, also seeks to achieve its financial goals by lowering costs, Chen said. The company’s content network, www.gigigaga.com, has entered strategic partnerships with several major content producers to deliver content focusing on three areas: e-learning, games and entertainment, Chen stated.

To develop e-learning content, the company plans to bring to the site the Chinese version of ALFY, the largest U.S. children Web portal, so that local kids from 3 to 9 years of age could safely and easily explore what the Web has to offer, Chen said. As for games, the company has partnered with gamania.com, a popular online game provider. The two companies have launched online game packages, sold at 7-11 stores, that give customers special offers when they sign on with GigaMedia’s ADSL service, Chen said. During the first phase of the promotion, all 100,000 packages were sold and 20,000 of the purchasers signed on with GigaMedia, he added. Finally, GigaMedia has partnered with Yahoo!Kimo, EMI Music Asia and Rock Internet Corporation to bring the music of Rock artists online, said Raymond Chang, GigaMedia’s CEO, adding that the collaboration is a cost-saving way to push up traffic. “For example, Mayday fans will come to us to hear everything about their idol, instead of us spending time and money to find them,” said Chang, referring to the popular Taiwan rock group. The company also seeks to cut cost during the economic downturn, said Chen. “The slump did not affect us much, due to lower spending on equipment purchasing and advertising,” Chen said. Chen also cited the company’s plan to gradually phase out its cable service in an effort to create a cost structure that is more consistent with the size of the company, adding that GigaMedia will instead focus on ADSL (asymmetric digital subscriber line). ADSL is a technology that uses regular telephone copper wire to transmit data at a download bandwidth of 512 kilobits per second (kbps) to 1.544 megabits per second (mbps) and upload bandwidth of up to 128 kbps. GigaMedia currently provides ADSL customers with maximum download bandwidth of 768 kbps, which Chang said could be increased if circumstances allow. “We want to make sure that there’s content worth increasing the bandwidth to 1.5 mbps for,” said Chang. The CEO added that he does not envision GigaMedia as the No. 1 local broadband service, a role currently assumed by ChungHwa Telecom. “We want GigaMedia to be a company that provides value to our customers,” Chang stated.