China Embraces MP3s

Houston InterWeb Design Tuesday formed a joint venture with the Chinese government and a Chinese investment
company to build the first governmentally approved MP3 music site in China.

The new joint venture, Beijing Artists Online L.L.C. plans to launch a
Chinese MP3 music site similar to the popular within 60 days.

Although the Chinese government has adopted an open-door policy toward
letting its citizens download and use MP3 players, every Chinese song posted
on a Web site still requires approval by the Ministry of Culture. Houston
InterWeb’s proprietary technology allows the Ministry to administrate the

The objective of the joint venture is to promote and develop Chinese music
through the use of Houston InterWeb’s Internet technology both in China and
overseas. By creating an MP3 portal for its 1.2 billion people, the Chinese
government can promote and develop China music industry and also create a
new, financially sustainable music distribution platform for its artists.

The joint venture is an ideal tool for the Chinese Ministry of Culture. By
taking an active role in the MP3 market, the Ministry of Culture can also
continue monitoring and controlling the content. Even though the artists are
given a full liberty to build and update their own Web sites and upload their
songs – all at no cost to them – the site will still make the decisions on
whether the material is acceptable and should be posted on the Internet.

The new site will be based on Houston InterWeb’s SiteBlazer technology.
Artists will be able to design and update their own Web sites, and upload
their own music and graphics. The artists will have access to Web visit
statistics to see the real-time number of downloads and page views. Even
though the joint venture is partly owned by the government, it is a private
enterprise and therefore a commercial, for-profit operation. By teaming up
with Houston InterWeb, the new venture can import InterWeb’s expertise and
experience as well as utilize the technology and Internet business models
applied by its Western counterparts.

“An MP3 site is an ideal way for China to start promoting its hundreds of
thousands of artists, not only in China, but worldwide. There are over 21
million Chinese speaking Internet users who reside outside China and have
therefore had limited access to Chinese music in the past. Our new site will
change all this,” says Harry White, CEO of Houston InterWeb.

“Our service will be uniquely positioned to become the first major
governmentally approved and owned MP3 site. We believe that the market
opportunity is huge. Currently, China has only approximately 10 million
Internet users, but according to the Yankee Group, Asian Internet usage is
expected to reach nearly 374 million people by 2005. This combined with
China’s rapid economic growth will create an ideal marketplace for the MP3
site as well as our other products and technologies. We should be announcing
additional joint ventures with China in the very near future,” states White.

The English version of the new MP3 music site will be launched within 60
days, and the Chinese version should be completed within 120 days. At the
time of the launch, the site will have an unprecedented amount of existing
Chinese music available to the Internet users. The new company is already in
the process of collecting and uploading a database of Chinese classical and
folk music.

The new Beijing-based company, Beijing Artists Online L.L.C. is jointly owned
by Houston InterWeb, China Culture Information Net, an
Internet arm of the Chinese Ministry of Culture, and Hainan Dingshen
Investment Co. Ltd. In addition to its ownership, Houston InterWeb will
receive a significant license fee for its SiteBlazer technology.

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