Tencent Holdings Ltd officially entered the Internet television industry on Wednesday by launching an exclusive partnership with China Network Television, or CNTV, the online branch of China's dominant television broadcaster, the State-run China Central Television.
The move will help Tencent, the country's largest Internet company by revenue, extend its services for all "four screens"- computers, tablets, mobile phones and televisions.
The agreement might also offer the Internet giant a short cut to benefiting from the Internet TV market, analysts said. Tencent has fallen behind domestic rivals such as Baidu Inc and Alibaba Group Holding Ltd in the field of Internet TV.
As early as June 2010, Taobao.com, the consumer-to-consumer shopping platform of Alibaba Group, formed a joint venture with Hangzhou-based Wasu Digital Television Media Group, to provide Taobao services on TV.
That partnership allows customers to buy products listed on Taobao directly through TV.
Wasu and Baidu linked up in TV search services in July 2011, and the two companies plan to roll out the services in more than 100 Chinese cities in the near future.
"Internet TV would emerge as the next most promising Internet industry after the personal computer Internet and mobile Internet," Pony Ma, chief executive officer of Tencent Holdings Ltd, said at a news briefing on Wednesday.
It has become a trend for people to use Internet applications and services in their living rooms, rather than in rooms set aside for study, he said.
However, Ma said the development of the Internet TV market in China is still in its infancy, and instead of surfing the Internet, most households still use an Internet TV for watching TV programs.
CNTV got the first Internet TV license from the State Administration of Radio, Film and Television in March 2010.
CNTV and Tencent formed a joint venture - Future TV Co Ltd - in December 2011, to run the Internet TV business, according to Mao Jun, senior director of Future TV's product department. CNTV has the majority stake in the joint venture, she said.
"We have 1.2 billion TV viewers and close to 500,000 hours of TV content. Together with Tencent's experience in the Internet, Future TV is going to become a leading brand in China's Internet TV industry," said Wang Wenbin, president of Future TV.
Wang is also the general manager of CNTV.
Under the strategic partnership pact announced on Wednesday, Tencent, which has more than 1,200 Internet services and applications, said it would initially put QQ, the most popular instant-messaging tool in China, on TV.
The company also plans to introduce more services, such as entertainment and e-commerce services, to TV sets.
Chinese residents own the largest number of TV sets in the world.
The domestic Internet TV industry is expected to grow to $1.38 billion by 2016 from $50 million in 2010, according to the UK-based research firm Digital TV Research Ltd.