OECD figures to June 2006 indicate Korea is ranked fourth globally with 26.4 per cent of the population having access to broadband — it should be one of the world’s leading markets for IPTV — TV delivered over the internet with a suite of interactive services — but it isn’t.
A drawn-out turf war between industry, broadcasting and telecom regulatory bodies over control of the IPTV industry has hindered its introduction for more than two years, prompting consternation and frustration among the media and telecom industries.
But the Government is attempting to resolve the impasse, by drawing up a bill to establish a Broadcasting and Communication Committee. It will be debated by South Korea’s National Assembly in early February, but not everyone’s convinced it will pass, let alone solve the problem.
1 So what’s the issue? In a nutshell, the Korean Broadcasting Commission (KBC), which regulates the television industry, and the Ministry of Information and Communication (MIC) each feel they should be solely responsible for governing content, distribution and revenue models for IPTV. To date, there have been plenty of conversations between the two, but little in the way of resolving issues past the ‘in principle’ stage.
2While the KBC and MIC have emerged as key protagonists, the waters have been muddied with the Ministry of Culture and Tourism and the Ministry of Commerce, Industry and Energy recently entering the fray, creating a four-way tug-of-war.
3 The nation’s leading telcos, KT and Hanaro Telecom, are sorely aware of missed revenue opportunities. KT recently estimated that each year of delay in the introduction of IPTV has cost the company 130 billion won (US$139 million) in lost revenue, along with 350 billion won for telecom equipment makers and 700 billion won for content providers.
4 Frustrated with the lack of progress between the bodies, the Government stepped in in July last year. It established an exploratory committee chaired by Professor Ahn Moon-suk from Korea University, consisting of 20 members from both bodies, along with industry experts, to examine the formation of a new body covering both the broadcasting and telecom fields, tentatively named the Broadcasting and Communication Committee (BCC). This will ultimately be a merged version of the two currently separate bodies.
5 There remain concerns that the BCC is little more than a Government attempt to increase its hold over the nation’s leading media operators, which include TV networks KBS, EBS and MBC. As it stands, the BCC will be set up as a subordinate body to the Government, rather than an independent entity. This will give the Korean president direct control over selecting the heads of the three networks, which media heads argue will reduce broadcasting independence.
6 Should the BCC become reality however — it may be established in full by the middle of 2007, according to local reports, if it is given the green light — many expect it will spark an IPTV explosion across the nation, as industry players move to capitalise on a fibre optic infrastructure which is ready and waiting. Experts predict a host of converging services — TV, phone and internet — will be offered in bundled packages.
7 In terms of reach, the potential is clear. The Electronics and Telecommunications Research Institute in Korea expects IPTV subscriber numbers to rocket 35 per cent annually once the channel is introduced on a mass scale, with conservative estimates tipping two million subscribers by 2010. Optimistic estimates forecast four million by the same year, or close to nine per cent of the population in South Korea.
8 But will advertisers rush to the channel? Perhaps. Hong Kong’s IPTV market, generally regarded as one of the most developed globally, has seen a relatively slow uptake of brands shifting from the more traditional terrestrial platform to IPTV, due in part to infrastructure and audience numbers. But with Korea’s impressive broadband market, brands may buck this trend.
